Exhibit 4.2.13


 




 





 


TRUST INDENTURE


 


BETWEEN


 


NEW YORK STATE ENERGY RESEARCH

AND DEVELOPMENT AUTHORITY


 


 


AND


 


 


THE BANK OF NEW YORK,

as Trustee




 


Dated as of January 1, 2004


 


 


-relating to-


 


$146,975,000 Facilities Revenue Bonds, Series
2004B

(Consolidated Edison Company of New York, Inc. Project)


 


 




 




















 


Table of Contents


 


	
  ARTICLE I

  
	
   

  	
   

  
	
  DEFINITIONS; COMPUTATIONS; CERTIFICATES AND
  OPINIONS; EVIDENCE OF

  ACTION BY AUTHORITY

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions of Specific Terms

  	
   

  
	
  SECTION 1.02.

  	
  Definitions of General Terms

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  AUTHORIZATION OF BONDS

  
	
   

  	
   

  
	
  SECTION 2.01.

  	
  Limitation on Issuance of Bonds

  	
   

  
	
  SECTION 2.02.

  	
  Authorization of Bonds

  	
   

  
	
  SECTION 2.03.

  	
  Global Form; Securities Depository

  	
   

  
	
  SECTION 2.04.

  	
  Limitations on Transfer

  	
   

  
	
  SECTION 2.05.

  	
  Application of Bond Proceeds

  	
   

  
	
  SECTION 2.06.

  	
  Delivery of the Bonds

  	
   

  
	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  
	
  INTEREST
  ON BONDS

  
	
   

  	
   

  
	
  SECTION 3.01.

  	
  Interest
  on Bonds-General

  	
   

  
	
  SECTION 3.02.

  	
  Commercial
  Paper Rate

  	
   

  
	
  SECTION 3.03.

  	
  Auction
  Rate Period - Auction Rate: Auction Period -  General

  	
   

  
	
  SECTION 3.04.

  	
  Auction
  Rate Period - Auction Rate Bonds: Change of Auction Period by Authority

  	
   

  
	
  SECTION 3.05.

  	
  Auction
  Rate Period - Auction Rate Bonds: Change of Auction Date by Market Agents

  	
   

  
	
  SECTION 3.06.

  	
  Auction
  Rate Period - Auction Rate Bonds: Orders by Existing Holders and Potential
  Holders

  	
   

  
	
  SECTION 3.07.

  	
  Auction
  Rate Period - Auction Rate Bonds: Submission of Orders by Broker-Dealers to
  Auction Agent

  	
   

  
	
  SECTION 3.08.

  	
  Auction
  Rate Period - Auction Rate Bonds: Determination of Sufficient Clearing Bids,
  Winning Bid Rate and Auction Rate

  	
   

  
	
  SECTION 3.09.

  	
  Auction
  Rate Period - Auction Rate Bonds: Acceptance and Rejection of Submitted Bids
  and Submitted Sell Orders and Allocation of Auction Rate Bonds

  	
   

  



 


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  SECTION 3.10.

  	
  Auction
  Rate Period - Auction Rate Bonds: Adjustment in Percentage

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  
	
  CHANGES IN THE INTEREST RATE MODE

  
	
   

  	
   

  
	
  SECTION 4.01.

  	
  Optional
  Conversion to an Adjustable Rate by Authority

  	
   

  
	
  SECTION 4.02.

  	
  Optional
  Conversion to a Fixed Rate

  	
   

  
	
  SECTION 4.03.

  	
  Conversion
  Generally

  	
   

  
	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  
	
  REDEMPTION AND PURCHASE OF BONDS

  
	
   

  	
   

  
	
  SECTION 5.01.

  	
  Optional
  Redemption

  	
   

  
	
  SECTION 5.02.

  	
  [Reserved]

  	
   

  
	
  SECTION 5.03.

  	
  Tender
  for and Purchase upon Election of Holder.

  	
   

  
	
  SECTION 5.04.

  	
  Mandatory
  Tender for Purchase upon Change in the Interest Rate Mode or on Business Day
  Following Certain Calculation Periods

  	
   

  
	
  SECTION 5.05.

  	
  Extraordinary
  Optional Redemption

  	
   

  
	
  SECTION 5.06.

  	
  Special
  Tax Redemption Provisions

  	
   

  
	
  SECTION 5.07.

  	
  Redemption
  at Demand of the State of New York

  	
   

  
	
  SECTION 5.08.

  	
  Mandatory
  Tender for Purchase Upon Expiration of any Support  Facility or
  Upon Delivery of an Alternate Support Facility

  	
   

  
	
  SECTION 5.09.

  	
  Mandatory
  Tender Upon Occurrence of any Terminating Event

  	
   

  
	
  SECTION 5.10.

  	
  General
  Provisions Applicable to Mandatory and Optional Tenders for Purchase of Bonds

  	
   

  
	
  SECTION 5.11.

  	
  Selection
  of Bonds to be Redeemed

  	
   

  
	
  SECTION 5.12.

  	
  Notice
  of Redemption

  	
   

  
	
  SECTION 5.13.

  	
  Bonds
  Purchased for Account of Liquidity Facility Issuer

  	
   

  
	
  SECTION 5.14.

  	
  Effect
  of Redemption

  	
   

  
	
  SECTION 5.15.

  	
  Cancellation
  of Redeemed Bonds

  	
   

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  
	
  SUPPORT
  FACILITY

  
	
   

  	
   

  
	
  SECTION 6.01.

  	
  Support
  Facility - General

  	
   

  
	
  SECTION 6.02.

  	
  Support
  Facility - Delivery of an initial Liquidity Facility and Alternate Support
  Facility

  	
   

  
	
  SECTION 6.03.

  	
  Trustee
  not Responsible for Enforcement of Support Facility

  	
   

  



 


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  SECTION 6.04.

  	
  Payments
  Pursuant to the Policies

  	
   

  
	
  SECTION 6.05.

  	
  Rights
  of Credit Facility Issuer After an Event of Default

  	
   

  
	
  SECTION 6.06.

  	
  Additional
  Rights of Bond Insurer

  	
   

  
	
  SECTION 6.07.

  	
  Qualification
  of Bond Insurer’s Right to Consent

  	
   

  
	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  
	
  GENERAL TERMS AND PROVISIONS OF BONDS

  
	
   

  	
   

  
	
  SECTION 7.01.

  	
  Execution
  and Authentication of Bonds

  	
   

  
	
  SECTION 7.02.

  	
  Books
  of Registry

  	
   

  
	
  SECTION 7.03.

  	
  Transfer,
  Registration and Exchange of Bonds

  	
   

  
	
  SECTION 7.04.

  	
  Mutilated,
  Lost, Stolen, or Destroyed Bonds

  	
   

  
	
  SECTION 7.05.

  	
  Temporary
  Bonds

  	
   

  
	
  SECTION 7.06.

  	
  Disposition
  of Bonds

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  
	
  ESTABLISHMENT OF THE PROJECT FUND

  
	
   

  	
   

  
	
  SECTION 8.01.

  	
  Project
  Fund

  	
   

  
	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  
	
  CREATION OF SPECIAL FUNDS AND
  ACCOUNTS;APPLICATION AND

  INVESTMENT OF REVENUES

  
	
   

  	
   

  
	
  SECTION 9.01.

  	
  Creation
  of Funds and Accounts

  	
   

  
	
  SECTION 9.02.

  	
  Deposit
  of Note Payments

  	
   

  
	
  SECTION 9.03.

  	
  Application
  of Monies in the Bond Fund and the Bond Purchase Fund

  	
   

  
	
  SECTION 9.04.

  	
  Investment
  of Funds

  	
   

  
	
   

  	
   

  
	
  ARTICLE X

  
	
   

  	
   

  
	
  PARTICULAR COVENANTS OF THE AUTHORITY

  
	
   

  	
   

  
	
  SECTION 10.01.

  	
  Payment
  of Principal of and Interest and Redemption Premium on Bonds

  	
   

  
	
  SECTION 10.02.

  	
  Performance
  of Covenants

  	
   

  
	
  SECTION 10.03.

  	
  Further
  Instruments

  	
   

  



 


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  SECTION 10.04.

  	
  Inspection
  of Project Books

  	
   

  
	
  SECTION 10.05.

  	
  No
  Extension of Time of Payment of Interest

  	
   

  
	
  SECTION 10.06.

  	
  Trustee’s,
  Auction Agent’s, Remarketing Agent’s, Broker-Dealers’, Registrar and Paying
  Agent’s and Indexing Agent’s Fees, Charges and Expenses

  	
   

  
	
  SECTION 10.07.

  	
  Agreement
  of the State of New York

  	
   

  
	
  SECTION 10.08.

  	
  Recording
  and Filing

  	
   

  
	
  SECTION 10.09.

  	
  Rights
  Under the Participation Agreement and the Note

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  	
   

  	
   

  
	
  CONCERNING THE TRUSTEE; APPOINTMENT
  OFREGISTRAR AND PAYING

  AGENT, REMARKETING AGENT, AUCTION AGENT AND INDEXING AGENT

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Appointment
  of Trustee

  	
   

  
	
  SECTION 11.02.

  	
  Indemnification
  of Trustee as Condition for Remedial Action

  	
   

  
	
  SECTION 11.03.

  	
  Trustee
  Not Liable for Failure of the Authority or Company to Act

  	
   

  
	
  SECTION 11.04.

  	
  Certain
  Duties and Responsibilities of the Trustee

  	
   

  
	
  SECTION 11.05.

  	
  Limitations
  on Obligations and Responsibilities of Trustee

  	
   

  
	
  SECTION 11.06.

  	
  Compensation
  and Indemnification of Trustee

  	
   

  
	
  SECTION 11.07.

  	
  Statements
  from Trustee

  	
   

  
	
  SECTION 11.08.

  	
  Notice
  of Default

  	
   

  
	
  SECTION 11.09.

  	
  Trustee
  May Deal in Bonds

  	
   

  
	
  SECTION 11.10.

  	
  Trustee
  Not Responsible For Recitals

  	
   

  
	
  SECTION 11.11.

  	
  Qualification
  of the Trustee

  	
   

  
	
  SECTION 11.12.

  	
  Resignation
  and Removal of Trustee

  	
   

  
	
  SECTION 11.13.

  	
  Successor
  Trustee

  	
   

  
	
  SECTION 11.14.

  	
  Appointment
  of Remarketing Agent

  	
   

  
	
  SECTION 11.15.

  	
  Appointment
  of Registrar and Paying Agent

  	
   

  
	
  SECTION 11.16.

  	
  General
  Provisions Regarding Registrar and Paying Agent

  	
   

  
	
  SECTION 11.17.

  	
  Payment
  of Registrar and Paying Agent; Indemnification

  	
   

  
	
  SECTION 11.18.

  	
  Registrar
  and Paying Agent’s Performance; Duty of Care

  	
   

  
	
  SECTION 11.19.

  	
  Qualifications
  of Registrar and Paying Agent

  	
   

  
	
  SECTION 11.20.

  	
  Resignation
  or Removal of Registrar and Paying Agent and Successor to Registrar and
  Paying Agent; Termination of Registrar and Paying Agent’s Obligations

  	
   

  
	
  SECTION 11.21.

  	
  Appointment
  of Auction Agent; Qualifications of Auction Agent, Resignation; Removal

  	
   

  
	
  SECTION 11.22.

  	
  Appointment
  of Broker-Dealers

  	
   

  
	
  SECTION 11.23.

  	
  Appointment
  of Additional Paying Agents; Each Paying Agent to Hold Money in Trust

  	
   

  



 


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  SECTION 11.24.

  	
  Appointment
  and Duties of Indexing Agents

  	
   

  
	
  SECTION 11.25.

  	
  Qualifications
  of Indexing Agents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT; REMEDIES UPON OCCURRENCE
  THEREOF

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
  Events
  of Default

  	
   

  
	
  SECTION 12.02.

  	
  Notice
  to Holders and Others Upon Occurrence of an Event of Default or a Payment
  Default

  	
   

  
	
  SECTION 12.03.

  	
  Declaration
  of Principal and Interest As Due

  	
   

  
	
  SECTION 12.04.

  	
  Action
  by Trustee Upon Occurrence of Event of Default

  	
   

  
	
  SECTION 12.05.

  	
  Powers
  of Trustee With Respect to Participation Agreement and Other Agreements

  	
   

  
	
  SECTION 12.06.

  	
  Disposition
  of Monies in Event of Insufficiencies in Funds and Accounts

  	
   

  
	
  SECTION 12.07.

  	
  Effect
  of Delay or Omission; Waiver of Default; Direction of Remedial Proceedings by
  the Holders

  	
   

  
	
  SECTION 12.08.

  	
  Suits
  or Actions by Holders; Any Holder May Enforce Overdue Payment of His or Her
  Bond or Interest Thereon

  	
   

  
	
  SECTION 12.09.

  	
  Remedies
  Not Exclusive

  	
   

  
	
  SECTION 12.10.

  	
  Effect
  of Abandonment of Proceedings on Default

  	
   

  
	
  SECTION 12.11.

  	
  Interest
  on Overdue Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  
	
   

  	
   

  	
   

  
	
  EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
  OWNERSHIP OF

  BONDS; EXCLUSION OF BONDS

  OWNED BY THE AUTHORITY OR THE COMPANY

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
  Execution
  of Requests, Directions and Consents and Other Instruments and Proof of Same;
  Ownership of Bonds and Proof of Same

  	
   

  
	
  SECTION 13.02.

  	
  Meetings
  of Holders

  	
   

  
	
  SECTION 13.03.

  	
  Exclusion
  of Bonds Held by or for the Authority, the Company and of Bonds No Longer
  Deemed Outstanding Hereunder

  	
   

  



 


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  ARTICLE XIV

  
	
   

  	
   

  	
   

  
	
  AMENDING AND SUPPLEMENTING THE
  INDENTURE,THE PARTICIPATION

  AGREEMENT, THE REMARKETING AGREEMENT, AUCTION AGENCY

  AGREEMENT, BROKER-DEALER AGREEMENTS, BOND PURCHASE TRUST

  AGREEMENT

  
	
   

  	
   

  	
   

  
	
  SECTION 14.01.

  	
  Amending
  and Supplementing Indenture Without Consent of Holders

  	
   

  
	
  SECTION 14.02.

  	
  Amending
  and Supplementing Indenture with Consent of Holders

  	
   

  
	
  SECTION 14.03.

  	
  Notation
  upon Bonds; New Bonds Issued upon Amendments

  	
   

  
	
  SECTION 14.04.

  	
  Effectiveness
  of Supplemental Indentures

  	
   

  
	
  SECTION 14.05.

  	
  Supplemental
  Indenture Affecting Support Facility Provider

  	
   

  
	
  SECTION 14.06.

  	
  Supplemental
  Participation Agreements Not Requiring the Consent of the Holders

  	
   

  
	
  SECTION 14.07.

  	
  Notice
  and Consent for Supplemental Participation Agreements Requiring the Consent
  of the Holders

  	
   

  
	
  SECTION 14.08.

  	
  Effectiveness
  of Supplemental Participation Agreement

  	
   

  
	
  SECTION 14.09.

  	
  Amending
  and Supplementing the Remarketing Agreement, Auction Agency Agreement,
  Broker-Dealer Agreements or Bond Purchase Trust Agreement

  	
   

  
	
  SECTION 14.10.

  	
  Supplemental
  Participation Agreement Affecting Support Facility Provider

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV

  
	
   

  	
   

  	
   

  
	
  DEFEASANCE; MONEYS HELD FOR PAYMENT OF
  DEFEASED BONDS

  
	
   

  	
   

  	
   

  
	
  SECTION 15.01.

  	
  Discharge
  of Liens and Pledges; Bonds No Longer Deemed to be Outstanding Hereunder

  	
   

  
	
  SECTION 15.02.

  	
  Release
  of Indenture, Termination of Right, Title and Interest of Trustee

  	
   

  
	
  SECTION 15.03.

  	
  Bonds
  Not Presented for Payment When Due; Monies Held for the Bonds after Due Date
  of Bonds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  
	
   

  	
   

  	
   

  
	
  FORM OF BONDS AND ENDORSEMENT AND ASSIGNMENT
  PROVISIONS

  
	
   

  	
   

  	
   

  
	
  SECTION 16.01.

  	
  Form
  of Bonds and Endorsement and Assignment Provisions

  	
   

  



 


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  ARTICLE XVII

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION 17.01.

  	
  Benefits
  of Indenture Limited to Authority, Company, Trustee, Registrar and Paying
  Agent, Support Facility Issuer, and Auction Agent and Holders of the Bonds

  	
   

  
	
  SECTION 17.02.

  	
  Indenture
  a Contract; Indenture Binding Upon Successors or Assigns of the Authority

  	
   

  
	
  SECTION 17.03.

  	
  Notice
  to Holders of Bonds

  	
   

  
	
  SECTION 17.04.

  	
  Waiver
  of Notice

  	
   

  
	
  SECTION 17.05.

  	
  Effect
  of Saturdays, Sundays and Non-Business Days

  	
   

  
	
  SECTION 17.06.

  	
  Partial
  Invalidity

  	
   

  
	
  SECTION 17.07.

  	
  Law
  and Place of Enforcement of Indenture

  	
   

  
	
  SECTION 17.08.

  	
  Requests,
  Approvals and Directions of Authority

  	
   

  
	
  SECTION 17.09.

  	
  Notices,
  Demands; Requests

  	
   

  
	
  SECTION 17.10.

  	
  Effect
  of Article and Section Headings and Table of Contents

  	
   

  
	
  SECTION 17.11.

  	
  Indenture
  May be Executed in Counterparts; Effectiveness of Indenture

  	
   

  
	
  SECTION 17.12.

  	
  Liability
  of Authority Limited to Revenues

  	
   

  
	
  SECTION 17.13.

  	
  Waiver
  of Personal Liability

  	
   

  



 


vii

















 


THIS
TRUST INDENTURE, made and dated as of January 1, 2004, by and between New
York State Energy Research and Development Authority (the “Authority”), a body
corporate and politic, constituting a public benefit corporation, and The Bank
of New York, as trustee (the “Trustee”), a banking corporation organized and
existing under and by virtue of the laws of the State of New York with its
principal corporate trust office located in The City of New York.


 


W I T N E S S E T H  T H A T:


 


WHEREAS,
pursuant to a special act of the Legislature of the State of New York (Title 9
of Article 8 of the Public Authorities Law of New York, as from time to
time amended and supplemented, herein called the “Act”), the Authority has been
established, as a body corporate and politic, constituting a public benefit
corporation; and


 


WHEREAS,
pursuant to the Act, the Authority is empowered to contract with any power
company to participate in the construction of facilities for the furnishing of
electric energy and the furnishing of gas to the extent required by the public
interest in development, health, recreation, safety, conservation of natural resources
and aesthetics; and


 


WHEREAS,
pursuant to the Act, the Authority is also authorized to extend credit and make
loans from bond proceeds to any person for the construction, acquisition,
installation, reconstruction, improvement, maintenance, equipping, furnishing
or leasing of any special energy project (as defined in the Act) including, but
not limited to, facilities for the distribution of steam or for the
reimbursement to any person for costs incurred in connection with a special
energy project completed or not completed at the time of such credit or loan,
which credits or loans may, but need not, be secured by mortgages, contracts,
leases or other instruments, upon such terms and conditions as the Authority
shall determine reasonable in connection with such credits or loans; and


 


WHEREAS,
the Authority is also authorized under the Act to borrow money and issue its
negotiable bonds and notes to provide sufficient monies for achieving its
corporate purposes, including the refunding of its outstanding obligations; and


 


WHEREAS,
the Authority is also authorized under the Act to enter into any contracts and
to execute all instruments necessary or convenient for the exercise of its
corporate powers and the fulfillment of its corporate purposes; and


 


WHEREAS,
the Company has requested that the Authority issue bonds for the purpose of
refunding the Authority’s 5 1/4% Facilities Refunding Revenue Bonds, Series
1993 B (Consolidated Edison Company of New York, Inc. Project), in the
aggregate principal amount of $127,715,000 and the Authority’s 5 3/8%
Facilities Refunding Revenue Bonds, Series 1993C (Consolidated Edison Company
of New York, Inc. Project), in the aggregate principal amount of $19,760,000
(the “Prior Bonds”).  The Prior Bonds
were issued for the purpose of refunding a portion of the Authority’s 9%
Electric Facilities Revenue Bonds, Series 1985A (Consolidated Edison Company of
New York, Inc. Project) and 9 1/4% Electric Facilities Revenue Bonds, Series
1987B (Consolidated Edison Company of New York, Inc. Project), which were
issued to


 


1

















 


finance the acquisition, construction, and installation (or any
combination thereof) of certain facilities of the Company for the local
furnishing of electric energy within the Company’s electric energy service
area;


 


WHEREAS,
pursuant to Resolution No. 1039 adopted September 22, 2003, the Authority
has determined to issue the Bonds, in an aggregate principal amount not to
exceed $101,000,000, for the purpose of refunding the Prior Bonds, all such
Bonds to be issued under and secured by this Trust Indenture; and


 


WHEREAS,
contemporaneously with the execution hereof, the Company and the Authority have
entered into a Participation Agreement of even date herewith (herein referred
to as the “Participation Agreement”); and


 


WHEREAS,
the bonds to be issued will be in the aggregate principal amount of
$146,975,000 and will be designated as Facilities Revenue Bonds, Series 2004B
(Consolidated Edison Company of New York, Inc. Project) (the “Bonds”), which
will be used, together with Company funds, to refund the Prior Bonds, such
Bonds to be issued under and secured by this Trust Indenture; and


 


WHEREAS,
simultaneously with the issuance and delivery of such bonds, the Company will execute
and deliver a promissory note dated the date of issuance of such bonds (the
“Note”) as evidence of its obligation to make payments required by the
Participation Agreement; and


 


WHEREAS,
all acts, conditions and things necessary or required by the Constitution and
statutes of the State of New York, or otherwise, to exist, happen, and be
performed as prerequisites to the passage of this Indenture, do exist, have
happened, and have been performed; and


 


WHEREAS,
the Trustee has accepted the trusts created by this Trust Indenture and in
evidence thereof has joined in the execution hereof;


 


NOW,
THEREFORE, THIS TRUST INDENTURE WITNESSETH:


 


That
in order to declare the terms and conditions upon which the Bonds are
authenticated, issued and delivered, and 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 thereof, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, and in
order to secure payment of the principal of and premium, if any, and interest
on the Bonds according to their tenor and effect and the performance and
observance by the Authority of all covenants, agreements and conditions herein
and in the Bonds contained, the Authority has acknowledged, executed, signed
and delivered this Indenture and hereby assigns, confirms, pledges with and
sets over and entrusts to the Trustee hereunder, its successors in trust and
assigns, subject to the provisions of this Indenture (the following being
called the “Trust Estate”):  (1) the
Revenues (as hereinafter defined); (2) the Participation Agreement and the Note
and all rights, remedies and interest of the Authority under the Participation
Agreement and the


 


2

















 


Note, and any other agreement relating to the Project (exclusive of the
Authority’s rights with respect to (a) administrative compensation, attorney’s
fees and indemnification, (b) the receipt of notices, opinions, reports, copies
of instruments and other items of a similar nature required to be delivered to
the Authority under the Participation Agreement, (c) granting approvals and
consents and making determinations when required under the Participation
Agreement, (d) making requests for information and inspections in accordance
with the Participation Agreement, (e) Article III and Sections 4.02(f),
4.14 and 5.09 of the Participation Agreement and, insofar as the obligations of
the Company under Section 4.12 relate to taxes and assessments imposed
upon the Authority and not the Trustee, Section 4.12 thereof, and (f) the
right to amend the Participation Agreement); (3) the Tax Regulatory Agreement
(as hereinafter defined), and all rights, remedies and interest of the Authority
thereunder, subject to the provisions of the Tax Regulatory Agreement relating
to the amendment thereof and to a reservation by the Authority of the right to
enforce the obligations of the Company thereunder independently of the Trustee;
(4) all other monies, rights and properties held by the Trustee or other
depositary under this Indenture including, but only for the benefit of the
persons specified herein, the proceeds of any draw, borrowing or payment under
any Credit Facility (other than the Policies (as hereinafter defined)), and the
securities (and the interest, income and profits therefrom) in which such
monies may from time to time be invested (exclusive of the proceeds of a
Liquidity Facility (as hereinafter defined) or the Project Fund (as hereinafter
defined)); and (5) any and all other real or personal property of every nature
from time to time hereafter by delivery or by writing of any kind specially
mortgaged, pledged, or hypothecated, as and for additional security hereunder,
by the Company in favor of the Trustee or the Authority which are hereby
authorized to receive any and all such property at any and all times and to
hold and apply the same subject to the terms hereof.


 


TO HAVE AND TO HOLD, all and singular of said Trust Estate unto the
Trustee, its successors in trust and assigns, forever, in trust, nevertheless,
to inure to the use and benefit of the Holders of all the Bonds, for the
securing of the observance or performance of all the terms, provisions and
conditions therein and herein contained and for the equal and proportionate
benefit and security of all and singular the present and future Holders of the
Bonds, without preference, priority, prejudice or distinction as to lien or
otherwise of any Bond over any other Bond, to the end that each Holder of a
Bond shall have the same rights, privileges and lien under and by virtue of
this Trust Indenture, except as hereinafter otherwise specifically provided;


 


AND
UPON THE CONDITION THAT, if the Authority shall cause to be paid fully and
promptly and indefeasibly when due all of its indebtedness, liabilities,
obligations and sums at any time secured hereby, including interest, the
Trustee’s fees and reasonable expenses (including reasonable attorneys’ fees
and expenses), and shall promptly, faithfully and strictly keep, perform and
observe, or cause to be kept, performed and observed, all of its covenants,
obligations, warranties and agreements contained herein, then and in such
event, this Trust Indenture shall be and become void and of no further force
and effect, otherwise the same shall remain in full force and effect.


 


THIS
TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all
Bonds issued and secured hereunder are to be issued, authenticated and
delivered and all said income and Revenues hereby pledged are to be dealt with
and disposed of


 


3

















 


under, upon and subject to the terms, conditions, stipulations,
covenants, agreements, trusts, uses and purposes as hereinafter expressed, and
the Authority has agreed and covenanted, and does hereby agree and covenant,
with the Trustee and with the respective Holders, from time to time, of the
said Bonds, or any part thereof, as follows (provided that in the performance of
the agreements of the Authority herein contained any obligation it may thereby
incur for the payment of money shall never constitute a general or moral
obligation of the State of New York or any political subdivision thereof within
the meaning of any state constitutional provision or statutory limitation, and
shall not be secured directly or indirectly by the full faith and credit, the
general credit or any revenue or taxes of the State of New York or any
political subdivision thereof, but shall be payable solely out of the income
and Revenues derived under the Participation Agreement and the Note and from
drawings under the Credit Facility (paid to the Insurance Trustee (as
hereinafter defined) in the case of the Policies), if any, and other monies,
rights and properties of the Trust Estate), that is to say:


 


4

















 


ARTICLE I


 


DEFINITIONS;
COMPUTATIONS; CERTIFICATES

AND OPINIONS; EVIDENCE OF ACTION BY AUTHORITY


 


SECTION 1.01.                                 Definitions of Specific Terms.  Unless the context shall clearly indicate
some other meaning or may otherwise require, the terms defined in this
Section shall, for all purposes of this Indenture and of any indenture,
resolution or other instrument amendatory hereof or supplemental hereto and of
any certificate, opinion, instrument or document herein or therein mentioned,
have the meanings herein specified, with the following definitions to be
equally applicable to both the singular and plural forms of any terms herein
defined and vice versa.


 


“Act”
shall mean the New York State Energy Research and Development Authority Act,
Title 9 of Article 8 of the Public Authorities Law of the State of New
York, as from time to time amended and supplemented.


 


“Additional
Payments” shall mean the Additional Payments as defined in
Section 4.02(f) of the Participation Agreement.


 


“Adjustable
Rate” shall mean any of the following types of interest rates: a Commercial
Paper Rate, an Auction Rate, a Daily Rate, a Weekly Rate, a Monthly Rate, a
Semi-annual Rate and a Term Rate.


 


“Administration
Fees” shall mean the amounts payable by the Company to the Authority
pursuant to Section 4.02(f) of the Participation Agreement to defray a
portion of the expenses incurred by the Authority in conducting and
administering its special energy project programs and the amount payable as
state bond issuance charge pursuant to Section 4.02(f) of the
Participation Agreement.


 


“Affiliate”
shall mean any person known to the Auction Agent to be controlled by, in
control of or under common control with the Company; provided that no
Broker-Dealer controlled by, in control of or under common control with the
Company shall be an Affiliate nor shall any corporation or any person
controlled by, in control of or in common control with such corporation be an
Affiliate solely because a director or executive officer of such Broker-Dealer
is also a director of the Company.


 


“After-Tax
Equivalent Rate” on any date of determination shall mean with respect to
Auction Rate Bonds, the interest rate per annum equal to the product of (x)
Commercial Paper/Treasury Rate on such date and (y) (1.00 minus the Statutory
Corporate Tax Rate on such date).


 


“Agent
Member” shall mean a member of, or participant in, the Securities
Depository.


 


5

















 


“All
Hold Rate” shall mean for any subseries of Bonds on any date of
determination with respect to Auction Rate Bonds the rate per annum equal to
85% (as such percentage may be adjusted pursuant to Section 3.10) of the
lesser of (i) the BMA Index on such date and (ii) the After-Tax Equivalent Rate
on such date; provided, however, that in no event shall such All
Hold Rate exceed the Maximum Allowed Rate.


 


“Alternate
Support Facility” shall mean any Support Facility obtained pursuant to the
provisions of Section 6.02 in replacement of an existing Support Facility.


 


“Applicable
Percentage” on any date of determination for any subseries of Bonds shall
mean the percentage determined as set forth below (as such percentage may be
adjusted for Auction Rate Bonds pursuant to Section 3.10) based on the
prevailing long-term rating of the Auction Rate Bonds in effect at the close of
business on the Business Day immediately preceding such date of determination:


 


	
  Prevailing Rating

  	
   

  	
  Applicable Percentage

  	
   

  
	
  AAA/”Aaa”

  	
   

  	
  175

  	
  %

  
	
  AA/”Aa”

  	
   

  	
  175

  	
  %

  
	
  A/”A”

  	
   

  	
  175

  	
  %

  
	
  BBB/”Baa”

  	
   

  	
  200

  	
  %

  
	
  Below BBB/”Baa”

  	
   

  	
  265

  	
  %

  



 


For
purposes of this definition, the “prevailing rating” of the Auction Rate Bonds
will be (a) AAA/”Aaa,” if the Auction Rate Bonds have a rating of AAA or better
by S&P and a rating of “Aaa” or better by Moody’s, or the equivalent of
such ratings by a substitute rating agency or agencies selected as provided
below, (b) if not AAA/”Aaa,” then AA/”Aa” if the Auction Rate Bonds have a
rating of AA- or better by S&P and a rating of “Aa3” or better by Moody’s,
or the equivalent of such ratings by a substitute rating agency or agencies
selected as provided below, (c) if not AAA/”Aaa” or AA/”Aa,” then A/”A” if the
Auction Rate Bonds have a rating of A- or better by S&P and a rating of
“A3” or better by Moody’s, or the equivalent of such ratings by a substitute
rating agency or agencies selected as provided below, (d) if not AAA/”Aaa,”
AA/”Aa” or A/”A,” then BBB/”Baa,” if the Auction Rate Bonds have a rating of
BBB- or better by S&P and a rating of “Baa3” or better by Moody’s, or the
equivalent of such ratings by a substitute rating agency or agencies selected
as provided below, and (e) if not AAA/”Aaa,” AA/”Aa”, A/”A” or BBB/”Baa,” then
below BBB/”Baa,” whether or not the Auction Rate Bonds are rated by any
securities rating agency.


 


If
(x) the Auction Rate Bonds, are rated by a rating agency or agencies other than
Moody’s or S&P and (y) the Company has delivered on behalf of the Authority
to the Trustee and the Auction Agent an instrument designating one or two of
such rating agencies to replace Moody’s or S&P, or both, then for purposes
of the definition of “prevailing rating” Moody’s or S&P, or both, will be
deemed to have been replaced in accordance with such instrument; provided,
however, that such instrument must be accompanied by the consent of the
applicable Market Agent.  For purposes
of this definition, S&P’s rating categories of AAA, AA-, A- and BBB-, and
Moody’s rating categories of “Aaa,” “Aa3,” “A3” and “Baa3,” refer to and
include the respective rating categories correlative thereto in the event that
either or both of such rating


 


6

















 


agencies have changed or modified their generic rating categories.  If the prevailing ratings for the Bonds are
split between the categories set forth above, the lower rating will determine
the prevailing rating.


 


“Auction”
shall mean each periodic implementation of the Auction Procedures for Auction
Rate Bonds.


 


“Auction
Agency Agreement” shall mean the Auction Agency Agreement to be entered
into between the Company and the Auction Agent with respect to the Auction Rate
Bonds, as from time to time amended and supplemented.


 


“Auction
Agent” shall mean any entity appointed as such pursuant to
Section 11.21 and its successors and assigns.


 


“Auction
Date” shall mean with respect to each Auction Period, the last Wednesday of
the immediately preceding Auction Period (or such other day that the applicable
Market Agent shall establish as the Auction Date therefor pursuant to
Section 3.05); provided, that if such day is not a Business Day, the
Auction Date shall be the next succeeding Business Day.


 


“Auction
Period” shall mean for any subseries of Bonds the period from and including
the Closing Date to and including the initial Auction Date for such subseries
and thereafter, or after a Change in the Interest Rate Mode to an Auction Rate,
until the effective date of a Change in the Interest Rate Mode or the Stated
Maturity, each period from and including the last Interest Payment Date for the
immediately preceding Auction Period or Calculation Period, as the case may be,
to and including the next succeeding Auction Date or, in the event of a Change
in the Interest Rate Mode, to but excluding the effective date of such change,
provided, if any day that would be the last day of any such period does not
immediately precede a Business Day, such period shall end on the next day which
immediately precedes a Business Day.


 


“Auction
Procedures” shall mean with respect to the Auction Rate Bonds the
procedures set forth in Sections 3.03 through 3.10.


 


“Auction
Rate” shall mean with respect to Auction Rate Bonds and each Auction Period
for such Auction Rate Bonds, the rate of interest per annum determined for the
Bonds pursuant to Article III.


 


“Auction
Rate Bonds” shall mean with respect to an Auction Rate Period, any Bonds or
subseries of Bonds which bear interest at the Auction Rate.


 


“Auction
Rate Bonds Period Record Date” shall mean, with respect to each Interest
Payment Date during an Auction Rate Period, the Business Day immediately
preceding such Interest Payment Date.


 


“Auction
Rate Period” shall mean any period during which the Auction Rate Bonds bear
interest at an Auction Rate determined pursuant to the implementation of
Auction Procedures established under Article III, which period shall
commence on the Closing Date or on


 


7

















 


the effective date of a Change in the Interest Rate Mode to an Auction
Rate and shall extend through the day immediately preceding the earlier of (a)
the effective date of a Change in the Interest Rate Mode or (b) the Stated
Maturity.


 


“Authority”
shall mean New York State Energy Research and Development Authority, the public
benefit corporation created by the Act, and its successors and assigns.


 


“Authorized
Company Representative” shall mean any officer or other employee of the
Company at the time designated to act on behalf of the Company by written
certificate furnished to the Authority and the Trustee containing the specimen
signature of such person and signed on behalf of the Company by its Chairman,
President or a Vice President and its Secretary or an Assistant Secretary.


 


“Authorized
Officer” shall mean the Chair, Vice-Chair, President, Vice President,
Treasurer, Assistant Treasurer or Secretary of the Authority.


 


“Available
Auction Rate Bonds” shall mean with respect to the Auction Rate Bonds,
Available Auction Rate Bonds as defined in Section 3.08.


 


“Bid”
shall mean with respect to the Auction Rate Bonds, Bid as defined in
Section 3.06.


 


“Bidder”
shall mean with respect to the Auction Rate Bonds, Bidder as defined in
Section 3.06.


 


“BMA
Index” shall mean, as of any date of determination, The Bond Market
Association Municipal Swap Index that is most recently released by Municipal
Market Data to its subscribers prior to such date of determination; provided,
however, that if the BMA Index is unavailable for a period of over 21
days preceding such date of determination, references to the BMA Index shall be
replaced by the After-Tax Equivalent Rate.


 


“Bond
Counsel” shall mean an attorney or firm or firms of attorneys, satisfactory
to the Authority and the Trustee, nationally recognized and experienced in
matters relating to tax exemption of interest on bonds issued by states and
their political subdivisions.


 


“Bond
Fund” shall mean the special trust fund of the Authority designated as
“Consolidated Edison Company of New York, Inc. Series 2004B Project Bond Fund”
created and established under, and to be held and administered by the Trustee
as provided in Section 9.01 and, unless the context shall clearly indicate
otherwise, shall include the “Interest Account,” the “Principal Account,” and
the “Redemption Account” created and established therein.


 


“Bond
Insurer” shall mean XL Capital Assurance Inc., or any successor thereto.


 


“Bond
Insurer Default” shall mean the occurrence and continuance of one or more
of the following events:  (a) the
failure of the Bond Insurer to pay principal of or interest on the Bonds when
and to the extent required by a Policy; (b) the issuance of an order of
liquidation or


 


8

















 


dissolution of a Bond Insurer; (c) the commencement by a Bond Insurer
of a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect including, without
limitation, the appointment of a trustee, receiver, liquidator, custodian or
other similar official for itself or any substantial part of its property; (d)
the consent of a Bond Insurer to any relief referred to in the preceding clause
(c) in an involuntary case or other proceeding commenced against it; (e) the
making by a Bond Insurer of an assignment for the benefit of creditors; (f) the
failure of a Bond Insurer to generally pay its debts as they become due; (g) a
default by the Bond Insurer under a Policy; or (h) the initiation by a Bond Insurer
of any actions to authorize any of the foregoing; provided that the events
described in clauses (b) - (e) above shall constitute a Bond Insurer Default
only if such event has the effect of lowering the rating assigned to the bonds
insured by the Bond Insurer to less than “AA” by S&P or “Aa2” by Moody’s or
“A” by Fitch.


 


“Bond
Purchase Agreement” shall mean the Bond Purchase Agreement, dated as of
January 28, 2004, among the Authority, the Company and the underwriters
named therein.


 


“Bond
Purchase Fund” shall mean the Bond Purchase Fund established pursuant to
the Bond Purchase Trust Agreement.


 


“Bond
Purchase Trust Agreement” shall mean the Bond Purchase Trust Agreement
dated as of the date hereof between the Authority and the Registrar and Paying
Agent, as from time to time amended or supplemented.


 


“Bond
Year” shall have the meaning set forth in the Tax Regulatory Agreement.


 


“Bondholder”,
“Holder of a Bond” or “Holder” shall mean any registered owner of
a Bond.


 


“Bonds”
shall mean $146,975,000 aggregate principal amount of the “Facilities Revenue
Bonds, Series 2004B (Consolidated Edison Company of New York, Inc. Project)”
issued as authorized in Section 2.02 at any time Outstanding.


 


“Broker-Dealer”
shall mean any broker-dealer (as defined in the Securities Exchange Act),
commercial bank or other entity permitted by law to perform the functions
required of a Broker-Dealer set forth in the Auction Procedures (i) that is an
Agent Member (or an affiliate of an Agent Member), (ii) that has been selected
by the Auction Agent and the Company with the consent of the Authority, and
(iii) that has entered into a Broker-Dealer Agreement with the Auction Agent
and the Company that remains effective.


 


“Broker-Dealer
Agreement” shall mean each agreement applicable to the Auction Rate Bonds,
between a Broker-Dealer, the Company and the Auction Agent pursuant to which
the Broker-Dealer, among other things, agrees to participate in Auctions as set
forth in the Auction Procedures, as from time to time amended and supplemented.


 


9

















 


“Business
Day” shall mean any day other than (a) a Saturday or Sunday or (b) a day on
which banking institutions in the State of New York, or any city in which is
located the principal corporate trust office of the Trustee or the Auction
Agent, or the fiscal agent appointed by the Bond Insurer are authorized or
required by law or executive order to remain closed.


 


“Calculation
Period” shall mean (a) during any Commercial Paper Rate Period following a
Change in the Interest Rate Mode to a Commercial Paper Rate Period, the  period from and including the effective date
of the Change in the Interest Rate Mode to a Commercial Paper Rate Period to
but not including any day not more than 270 days thereafter which is a day
immediately preceding a Business Day established by a Remarketing Agent
pursuant to Section 3.02 and, thereafter, any Calculation Period
established by such Remarketing Agent pursuant to Section 3.02 which shall
end on a day not later than 270 days from the commencement thereof; (b) during
any Daily Rate Period, the period from and including a Business Day to but not
including the next succeeding Business Day; (c) during any Weekly Rate Period
following a Change in the Interest Rate Mode to a Weekly Rate, the period from
and including the effective date of the Change in the Interest Rate Mode to and
including the following Tuesday, and, thereafter, the period from and including
Wednesday of each week to and including the following Tuesday; (d) during any
Monthly Rate Period following a Change in the Interest Rate Mode to a Monthly
Rate, the period from and including the effective date of the Change in the
Interest Rate Mode to but excluding the first Business Day of the following
month, and, thereafter each period from and including the first Business Day of
the month to but excluding the first Business Day of the following month; (e)
during any Semi-annual Rate Period following a Change in the Interest Rate Mode
to a Semi-annual Rate, the period from and including the effective date of the
Change in the Interest Rate Mode to but excluding the next succeeding Interest
Payment Date and, thereafter, each period from and including the day following
the end of the last Calculation Period to but excluding the next succeeding
Interest Payment Date; (f) during any Term Rate Period, any period of not less
than 365 days from and including a Business Day to and including any day
(established by the Authority, at the request of the Company, pursuant to Section 4.01.1)
not later than the day prior to the Stated Maturity; and (g) during any Fixed
Rate Period following a Change in the Interest Rate Mode to a Fixed Rate, the
period from and including the effective date of the Change in the Interest Rate
Mode through the day immediately preceding the Stated Maturity.


 


“Change
in the Interest Rate Mode” shall mean any change in the type of interest
rate borne by the Bonds pursuant to Section 4.01 or Section 4.02.


 


“Change
of Preference Law” shall mean any amendment to the Code or other statute
enacted by the Congress of the United States or any temporary, proposed or
final regulation promulgated by the United States Treasury, after the date
hereof which (a) changes or would change any deduction, credit or other allowance
allowable in computing liability for any Federal tax with respect to, or (b)
imposes, or would impose, or increases or would increase any Federal tax
(including, but not limited to, preference or excise taxes) upon, any interest
earned by any holder of bonds the interest on which is excluded from Federal
gross income under Section 103 of the Code.


 


10

















 


“Closing
Date” shall mean the date on which the Note becomes legally effective, the
same being the date on which the Bonds are paid for by and delivered to the
original purchasers thereof.


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.
Each reference to a section of the Code herein shall be deemed to include
the United States Treasury Regulations proposed or in effect thereunder and
applied to the Bonds or the use of proceeds thereof, and also includes all
amendments and successor provisions unless the context clearly requires
otherwise.


 


“Commercial
Paper Dealers” shall mean Lehman Commercial Paper Inc. and CS First Boston
Corporation or any other commercial paper dealers specified by the Authority at
the request of the Company, or in lieu of any thereof, their respective
affiliates or successors, provided that any such entity is a commercial paper
dealer and, if not, as replaced by the Substitute Commercial Paper Dealer.


 


“Commercial
Paper Period Record Date” shall mean, with respect to each Interest Payment
Date during a Commercial Paper Rate Period, the Business Day next preceding
such Interest Payment Date.


 


“Commercial
Paper Rate” shall mean with respect to each Calculation Period during a
Commercial Paper Rate Period, a rate or rates of interest equal to the rate or
rates of interest per annum established and certified to the Trustee (with a
copy to the Authority, the Registrar and Paying Agent and the Company) by a
Remarketing Agent no later than 12:00 noon (New York City time) on and as of
the Determination Date as the minimum rate or rates of interest per annum which,
in the opinion of such Remarketing Agent, would be necessary on and as of such
day to remarket Bonds in a secondary market transaction at a price equal to the
principal amount thereof; provided that such rate or rates of interest shall
not exceed the lesser of  110% of the
Commercial Paper Rate Index on and as of such date and the Maximum Allowed
Rate.


 


“Commercial
Paper Rate Index” shall mean with respect to the Determination Date of each
Calculation Period during a Commercial Paper Rate Period, the average of yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued) all of which shall have a term as near as practicable to
such Calculation Period or which are subject to optional or mandatory tender by
the owner thereof at the end of a term as near as practicable to such
Calculation Period, the interest on which is not included in gross income for
Federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent, including issuers of commercial paper, project notes, bond
anticipation notes and tax anticipation notes, computed by the Indexing Agent
on and as of such day.  If the Bonds are
rated by a Rating Agency in its highest note or commercial paper rating
category or one of its two highest long-term debt rating categories, each
Component Issuer must (a) have outstanding securities rated by a Rating Agency
in its highest note or commercial paper rating category or (b) not have
outstanding notes or commercial paper rated by a Rating Agency but have
outstanding securities rated by a Rating Agency in one of its two highest
long-term debt rating categories.  If
the Bonds are rated by a Rating Agency in a rating category that is lower than its


 


11

















 


highest note or commercial paper rating category or its two highest
long-term debt rating categories (and the Bonds are not rated in one of such
categories by the other Rating Agency), each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its note or commercial paper
rating category which is the same or correlative, in the Indexing Agent’s
judgment, to the note or commercial paper rating category or the long-term debt
rating category of the Bonds or (b) have outstanding securities rated by a
Rating Agency in the same long-term debt rating category as the Bonds are rated
by that Rating Agency and not have any outstanding notes or commercial paper
rated by such Rating Agency.  The
Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements.  In addition, at the request of the Company and upon delivery to
the Trustee of an Opinion of Bond Counsel that such action will not adversely
affect the exclusion of interest on the Bonds from gross income of the owners
thereof for Federal income tax purposes, the Authority, with the consent of the
Company, may designate a new method of setting the Commercial Paper Rate Index
in the event any of the above-described methods are determined by the Authority
to be unavailable, impracticable or unrealistic in the market place.


 


“Commercial
Paper Rate Period” shall mean any period during which the Bonds bear
interest at a Commercial Paper Rate or Rates, which period shall commence on
the effective date of a Change in the Interest Rate Mode to a Commercial Paper
Rate or Rates, as the case may be, and extend through the day immediately
preceding the earlier of (a) the effective date of another Change in the
Interest Rate Mode or (b) the Stated Maturity.


 


“Commercial
Paper/Treasury Rate” on any date of determination shall mean with respect
to Auction Rate Bonds (i) in the case of any Auction Period of less than 49
days, the interest equivalent of the 30-day rate, (ii)  in the case of any Auction Period of 49 days
or more and but less than 70 days, the interest equivalent of the 60-day
rate,  (iii) in the case of any Auction
Period of 70 days or more but less than 85 days, the arithmetic average of the
interest equivalent of the 60-day and 90-day rates, (iv)  in the case of any Auction Period of 85 days
or more but less than 99 days, the interest equivalent of the 90-day rate; (v)
in the case of any Auction Period of 99 days or more but less than 120 days,
the arithmetic average of the interest equivalent of the 90-day and 120-day
rates, (vi)  in the case of any Auction
Period of 120 days or more but less than 141 days, the interest equivalent of
the 120-day rate,  (vii) in the case of
any Auction Period of 141 days or more but less than 162 days, the arithmetic
average of the interest equivalent of the 120-day and 180-day rates,
(viii)  in the case of any Auction
Period of 162 days or more but less than 183 days, the interest equivalent of
the 180-day rate, and (ix) in the case of any Auction Period of 183 days or
more, the Treasury Rate for such Auction Period. The foregoing rates shall in
all cases, except with respect to the Treasury Rate, be rates on commercial
paper placed on behalf of issuers whose corporate bonds are rated “AA” by
S&P, or the equivalent of such rating by Moody’s, as made available on a
discount basis or otherwise by the Federal Reserve Bank of New York for the
Business Day immediately preceding such date of determination, or in the event
that the Federal Reserve Bank of New York does not make available any such
rate, then the arithmetic average of such rates, as quoted on a discount basis
or otherwise, by the Commercial Paper Dealers, to the Auction Agent for the
close of business on the Business Day immediately preceding such date of
determination.


 


12

















 


If any Commercial Paper Dealer does not quote a commercial paper rate
required to determine the Commercial Paper/Treasury Rate, the Commercial
Paper/Treasury Rate shall be determined on the basis of a commercial paper
quotation or quotations furnished by the remaining Commercial Paper Dealer or
Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Authority at the request of
the Company to provide such quotation or quotations not being supplied by any
Commercial Paper Dealer or Commercial Paper Dealers, as the case may be, or if
the Authority does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer
or Commercial Paper Dealers. For purposes of this definition, the “interest
equivalent” of a rate stated on a discount basis (a “discount rate”) for
commercial paper of a given day’s maturity shall be equal to the product of (A)
100 times (B) the quotient (rounded upwards to the next higher one-thousandth
(.001) of 1%) of (x) the discount rate (expressed in decimals) divided by (y)
the difference between (1) 1.00 and (2) a fraction the numerator of which shall
be the product of the discount rate (expressed in decimals) times the number of
days in which such commercial paper matures and the denominator of which shall
be 360.  In no event shall the
Commercial Paper/Treasury Rate be greater than the lesser of 15% or the maximum
rate permitted by applicable law.


 


“Commission”
shall mean the Securities and Exchange Commission.


 


“Company”
shall mean Consolidated Edison Company of New York, Inc., and any surviving,
resulting or transferee corporation as provided in Section 5.18 of the
Participation Agreement.


 


“Company
Account” shall mean the account created pursuant to Section 2.01(a) of
the Bond Purchase Trust Agreement.


 


“Component
Issuers” shall mean issuers of securities, the interest on which is
excluded from gross income for Federal income tax purposes, selected by the
Indexing Agent.


 


“Computation
Date” shall mean each date which is one (1) Business Day prior to any
Determination Date.


 


“Computation
Period” shall have the meaning set forth in the Tax Regulatory Agreement.


 


“Credit
Facility” shall mean any Support Facility which provides for the payments
referred to in clause (ii) of the definition thereof.  The initial Credit Facilities are the Policies.


 


“Credit
Facility Issuer” shall mean any bank or banks or other financial
institution or institutions, having issued any Credit Facility.  The initial Credit Facility Issuer is the
Bond Insurer.


 


“Current
Adjustable Rate” shall mean the interest rate borne by Bonds immediately
prior to a Change in the Interest Rate Mode or the establishment of a Fixed
Rate.


 


13

















 


“Daily
Period Record Date” shall mean, with respect to each Interest Payment Date
during a Daily Rate Period, the Business Day next preceding such Interest
Payment Date.


 


“Daily
Rate” shall mean with respect to each Calculation Period during a Daily
Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent and the Company) by a Remarketing Agent no later
than 12:00 noon (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of such Remarketing Agent,
would be necessary on and as of such day to remarket Bonds in a secondary
market transaction at a price equal to the principal amount thereof plus
accrued interest thereon; provided that such rate of interest shall not
exceed the lesser of 110% of the Daily Rate Index on and as of such day and the
Maximum Allowed Rate.


 


“Daily
Rate Index” shall mean with respect to the Determination Date of each
Calculation Period during a Daily Rate Period, the average of one-day yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), the interest on which is not included in gross income for
Federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent and which have redemption or tender provisions comparable to
the then applicable provisions of the Bonds, computed by the Indexing Agent on
and as of the Determination Date.  If
the Bonds are rated by a Rating Agency, each Component Issuer must have
outstanding securities rated by a Rating Agency in a short-term debt rating
category which is the same as the short-term debt rating category in which the
Bonds are rated.  The specific issuers
included in the Component Issuers may be changed from time to time by the
Indexing Agent in its discretion and shall be issuers whose securities, in the
judgment of the Indexing Agent, have characteristics similar to the Bonds.  In addition, at the request of the Company
and upon delivery to the Trustee of an Opinion of Bond Counsel that such action
will not adversely affect the exclusion of interest on the Bonds from gross
income of the owners thereof for Federal income tax purposes, the Authority,
with the consent of the Company, may designate a new method of setting the
Daily Rate Index in the event any of the above-described methods are determined
by the Authority to be unavailable, impracticable or unrealistic in the market
place.


 


“Daily
Rate Period” shall mean any period during which Bonds bear interest at a
Daily Rate which period shall commence on the effective date of the Change in
the Interest Rate Mode to a Daily Rate and shall extend through the day
immediately preceding the earlier of (a) the effective date of a Change in the
Interest Rate Mode or (b) the Stated Maturity.


 


“Determination
Date” shall mean, for any Calculation Period, the first Business Day
occurring during such Calculation Period; provided, however, with respect to
Bonds which bear interest at the Weekly Rate, each Wednesday or, if such
Wednesday is not a Business Day, the Business Day next preceding such
Wednesday.


 


“Direct-Pay
Credit Facility” shall mean any Credit Facility which by its terms permits
the Trustee to draw moneys thereunder for deposit in the Bond Fund.


 


“Event
of Default” shall mean Event of Default as defined in Section 12.01.


 


14

















 


“Existing
Holder” shall mean with respect to Auction Rate Bonds a person that is
listed as the beneficial owner of Auction Rate Bonds in the records of the
Auction Agent.


 


“Fiscal
Year” shall mean the fiscal year of the Company as established from time to
time by the Company which as of the Closing Date is the twelve-month period
commencing on January 1 of each calendar year and ending on
December 31 of the next calendar year.


 


“Fitch”
shall mean Fitch Ratings and its successor or successors, and if such
corporation shall for any reason no longer perform the functions of a
securities rating agency or shall be replaced by some other nationally
recognized rating agency by the Authority at the request of the Company,
“Fitch” shall be deemed to refer to such other nationally recognized rating
agency designated by the Authority at the request of the Company.


 


“Fixed
Rate” shall mean, with respect to a Fixed Rate Period, the rate of interest
per annum established and certified to the Trustee (with a copy to the
Authority, the Registrar and Paying Agent and the Company) by a Remarketing
Agent no later than 12:00 noon (New York City time) on and as of such date as
the minimum rate of interest per annum which, in the opinion of such
Remarketing Agent, would be necessary on and as of such date to remarket the
Bonds in a secondary market transaction at a price equal to 100% of the
Outstanding principal amount thereof; provided that such rate of interest shall
not exceed the lesser of 110% of the Fixed Rate Index on and as of such date
and 18% per annum;


 


“Fixed
Rate Conversion Date” shall have the meaning set forth in
Section 4.02.


 


“Fixed Rate Index” shall mean with respect to a Fixed Rate Conversion Date,  the average of the yield evaluations (on the
basis of full coupon securities trading at par with a term approximately equal
to the Fixed Rate Period) of securities (whether or not actually issued), the
interest on which is not included in gross income for Federal income tax
purposes, of no fewer than ten Component Issuers selected by the Indexing Agent
and which have a long-term rating by a Rating Agency in the same rating
category as the Bonds are rated at the time by such Rating Agency or, if no
such bonds are so rated, shall be debt which, in the judgment of the Indexing
Agent, is of credit quality comparable to that of the Bonds, computed by the
Indexing Agent on and as of the Fixed Rate Conversion Date.  In the event that the Indexing Agent fails
to compute the Fixed Rate Index and no other qualified municipal securities
evaluation service can be appointed Indexing Agent by the Authority, the Fixed
Rate Index shall be determined by the 
applicable Remarketing Agent and shall be 90% of the average yield shown
for the most recent calendar month for United States Treasury notes or bonds
having the same number of years to maturity as the number of 12-month periods
(or months if the Fixed Rate Period is less than one year) in the Fixed Rate
Period, as published in the Federal Reserve Bulletin in the last issue before
the Fixed Rate Conversion Date.  If that
issue does not contain such a yield, the Fixed Rate Index will be determined by
linear interpolation between the yields shown in that issue for United States
Treasury notes and bonds having the next shorter and next longer number of
years (or months) to maturity.  In
addition, at the request of the Company and upon delivery to the Trustee of an
Opinion of Bond Counsel that such action will not adversely affect the
exclusion of interest on the Bonds from gross income of the owners thereof for
Federal income tax purposes, the Authority, with the consent of the Company,
may designate a new method of setting the


 


15

















 


Fixed Rate Index in the event any of the above-described methods are
determined by the Authority to be unavailable, impracticable or unrealistic in
the market place.


 


“Fixed
Rate Period” shall mean any period during which Bonds bear interest at a
Fixed Rate, which period shall commence on the effective date of a Change in
the Interest Rate Mode to a Fixed Rate, and shall extend through the day
immediately preceding the Stated Maturity.


 


“Fixed
Rate Record Date” shall mean, with respect to each Interest Payment Date
during a Fixed Rate Period, the fifteenth day of the month next preceding such
Interest Payment Date, or, if such day shall not be a Business Day, the next
preceding Business Day.


 


“Governmental
Obligations” shall mean any of the following which are non-callable:


 


(a)                                  direct obligations of, or obligations the
payment of the principal of and interest on which is unconditionally guaranteed
by, the United States of America; and


 


(b)                                 bonds, debentures or notes issued by the
Federal Financing Bank, Farmers Home Administration, or any other comparable
Federal agency hereafter created to the extent that said obligations are
unconditionally guaranteed by the United States of America.


 


“Hold
Order” shall mean with respect to the Auction Rate Bonds, Hold Order as
defined in Section 3.06.


 


“Indenture”
shall mean this Trust Indenture dated as of January 1, 2004 between the
Authority and the Trustee, as the same may be amended or supplemented.


 


“Indexing
Agent” shall mean the Indexing Agent appointed in accordance with
Section 11.24.


 


“Interest
Payment Date” shall mean:


 


(a)                                  during each Commercial Paper Rate Period, the
Business Day immediately succeeding the last day of any Calculation Period;


 


(b)                                 during an Auction Rate Period (i) for an
Auction Period of 91 days or less, the Business Day immediately succeeding such
Auction Period and (ii) for an Auction Period of more than 91 days, each 13th
Thursday after the first day of such Auction Period or the next Business Day if
such Thursday is not a Business Day, and the Business Day immediately
succeeding the last day of each such Auction Period;


 


(c)                                  during each Daily Rate Period, the first
Business Day of each month thereof;


 


16

















 


(d)                                 during each Weekly Rate Period, the first
Business Day of each month thereof;


 


(e)                                  during each Monthly Rate Period, the first
Business Day of each month thereof;


 


(f)                                    during each Semi-annual Rate Period, (i) the
first Business Day of the sixth calendar month following the month in which the
first day of such Semi-annual Rate Period occurred, (ii) each anniversary of
the date so determined, and (iii) each anniversary of the first day of the
first month of such Semi-annual Rate Period;


 


(g)                                 during each Term Rate Period, the
April 1 or October 1 next succeeding the first day of a Calculation
Period and each April 1 or October 1 thereafter; provided, however,
that if the April 1 or October 1 next succeeding the first day of a
Calculation Period occurs less than twenty-one (21) days after the first day of
such Calculation Period, the first Interest Payment Date shall be the second
such date following the first day of such Calculation Period;


 


(h)                                 the April 1 or October 1 next
succeeding a Fixed Rate Conversion Date and each April 1 or October 1
thereafter; provided, however, that if the April 1 or October 1 next
succeeding a Fixed Rate Conversion Date occurs less than twenty-one (21) days
after such Fixed Rate Conversion Date, the first Interest Payment Date shall be
the second such date following the first day of the Fixed Rate Period;


 


(i)                                     a Fixed Rate Conversion Date;


 


(j)                                     any day on which Bonds are subject to
mandatory tender for purchase pursuant to Section 5.04, 5.08 or 5.09 or
redemption in whole pursuant to Section 5.01, 5.05, 5.06 or 5.07; and


 


(k)                                  the Stated Maturity;


 


provided, however, that if
any such date determined in any of the foregoing clauses is not a Business Day,
the Interest Payment Date shall be the next succeeding day which is a Business
Day.


 


“Investment
Securities” shall mean any of the following which at the time are legal
investments under the laws of the State of New York for the monies held
hereunder:


 


(a)                                  direct obligations of the United States of
America (including obligations issued or held in book-entry form on the books
of the Department of the Treasury, and CATS and TIGRS) or obligations the
principal of and interest of which are unconditionally guaranteed by the United
States of America (“Direct U.S. governments”).


 


(b)                                 bonds, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the following federal agencies and
provided such obligations are


 


17

















 


backed
by the full faith and credit of the United States of America, including (stripped
securities are only permitted if they have been stripped by the agency itself):


 


(i)                                     U.S. Export-Import Bank (Eximbank).  Direct obligations or fully guaranteed
certificates of beneficial ownership;


 


(ii)                                  Farmers Home Administration (FmHA).  Certificates of Beneficial Ownership;


 


(iii)                               U.S. Maritime Administration. 
Guaranteed Title XI financing;


 


(iv)                              General Service Administration. 
Participation Certificates;


 


(v)                                 U.S. Department of Housing & Urban
Development (HUD).  Project Notes; Local
Authority Bonds; New Communities Debentures - U.S. government guaranteed
debentures; and U.S. Public Housing Notes and Bonds - U.S. government
guaranteed, public housing notes and bonds;


 


(vi)                              Federal Housing Administration (FHA Debentures);


 


(vii)                           Federal Financing Bank; and


 


(viii)                        Government National Mortgage Association (GNMA or “Ginnie Mae”).  GNMA - guaranteed mortgage-backed bonds;
GNMA - guaranteed pass-through obligations


 


(c)                                  bonds, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the following federal agencies
which are not backed by the full faith and credit of the United States of
America (stripped securities are only permitted if they have been stripped by
the agency itself):


 


(i)                                     Federal Home Loan Bank System.  Senior debt obligations;


 


(ii)                                  Federal Home Loan Mortgage Corporation (FHLMC
or “Freddie Mac”).  Participation
Certificate; Senior debt obligations;


 


(iii)                               Resolution Funding Corporation (REFCORP) obligations;


 


(iv)                              Federal National Mortgage Association (FNMA or “Fannie Mae”).  Mortgage-backed securities and senior debt
obligations;


 


(v)                                 Student Loan Marketing Association (SLMA or
“Sallie Mae”).  Senior debt obligations;
and


 


(vi)                              Farm Credit System. 
Consolidated system-wide bonds and notes.


 


18

















 


(d)                                 Federal funds and bankers acceptances with a
maximum term of one year  of any bank
which has an unsecured, uninsured and unguaranteed obligation rating  of “Prime-1” or “A3” or better by Moody’s
and “A-1” or “A” or better by S&P.;


 


(e)                                  commercial paper rated, at the time of
purchase,  “Prime-1” by Moody’s and
“A-1” or better by S&P;


 


(f)                                    bonds or notes issued by any state or
municipality which are rated by Moody’s and S&P in one of the two highest
rating categories assigned by such agencies;


 


(g)                                 money market funds registered under the
Federal Investment Company Act of 1940, whose shares are registered under the
Federal Securities Act of 1933, and having a rating by S&P of AAAm-G;
AAA-m; or AA-m and if rated by Moody’s rated Aaa, Aa1 or Aa2;


 


(h)                                 certificates of deposit secured at all times
by collateral described in (a) and/or                      (b) above.  Such certificates
must be issued by commercial banks, savings and loan associations or mutual
savings banks.  The collateral must be held
by a third party and the bondholders must have a perfected first security
interest in the collateral;


 


(i)                                     certificate
of deposit, savings account, deposit accounts or market deposits which are
fully insured by FDIC, including BIF and SAIF;


 


(j)                                     investment
agreements, including GIC’s, Forward Purchase Agreements and Reserve Fund Put
Agreements acceptable to the Bond Insurer;


 


(k)                                  repurchase agreements (“Repos”) for 30 days
or less must follow the following criteria. 
Repos which exceed 30 days must be acceptable to the Bond Insurer.  Repos provide for the transfer of securities
from a dealer bank or securities firm (seller/borrower) to a municipal entity
(buyer/lender), and the transfer of cash from a municipal entity to the dealer
bank or securities firm with an agreement that the dealer bank or securities
firm will repay the cash plus a yield to the municipal entity in exchange for
the securities at a specified date:


 


(i)                                     Repos must be between the municipal entity
and a dealer bank or securities firm:


 


(A)                              Primary dealers on the Federal Reserve reporting dealer list which are
rated A or better by Standard & Poor’s Corporation and Moody’s Investor
Services, or


 


(B)                                Banks rated “A” or above by Standard & Poor’s Corporation and
Moody’s Investor Services;


 


(ii)                                  The written Repo contract must include the
following:


 


19

















 


(A)                              Securities which are acceptable for transfer are: (1) Direct U.S.
governments, or (2) obligations of federal agencies referred to in (b) above,
and (3) obligations of FNMA and FHLMC;


 


(B)                                The term of the Repo may be up to 30 days;


 


(C)                                The collateral must be delivered to the municipal entity, trustee (if
trustee is not supplying the collateral) or third party acting as agent for the
trustee (if the trustee supplying the collateral) before/simultaneous with
payment (perfection by possession of certified securities);


 


(D)                               Valuation of Collateral (1) the securities must be valued weekly,
marked-to-market at current market price plus accrued interest, (2) The
value of collateral must be equal to 104% of the amount of cash transferred by
the municipal entity to the dealer bank or security firm under the repo plus
accrued interest.  If the value of
securities held as collateral slips below 104% of the value of the cash
transferred by municipality, then additional cash and/or acceptable securities
must be transferred.  If, however, the
securities used as collateral are FNMA or FHLMC, then the value of collateral must
equal 105%.


 


(iii)                               A legal opinion which must be delivered to the municipal entity that
states that the Repo meets guidelines under state law for legal investment of
public funds.


 


Any such Investment
Securities may be held by the Trustee in book entry form, whereby certificated
securities are held by an independent custodian and the Trustee is the
beneficial owner of all or a portion of such certificated securities.


 


“Liquidity
Facility” shall mean a Support Facility which provides for the payments
referred to in clause (i) of the definition thereof.


 


“Liquidity
Facility Issuer” shall mean any bank or banks or other financial
institution or institutions, having issued any Liquidity Facility.


 


“Market
Agent” shall mean the Remarketing Agent or Remarketing Agents appointed
pursuant to Section 11.14 to perform certain duties and obligations
hereunder with respect to the Bonds of a subseries while  Bonds of such subseries are in an Auction
Rate Period.


 


“Market
Agent Agreement” shall mean an agreement among the Company and a Market
Agent dated the Closing Date and any similar agreement or agreements entered
into between the Company and one or more successor Market Agents, as from time
to time amended,  pursuant to which the
applicable Market Agent undertakes to perform its duties and obligations hereunder
while Bonds of a subseries are in an Auction Rate Period.


 


“Maximum
Allowed Rate” shall mean as of any date 15% per annum, or if lower, the
rate specified as such in any Support Facility then in effect, provided,
however, that such Maximum Allowed Rate shall not exceed the maximum
rate, if any, permitted by applicable law.


 


20

















 


“Maximum
Auction Rate” shall mean on any date of determination with respect to
Auction Rate Bonds, the lesser of the Maximum Allowed Rate and the following:
(i)  in all cases other than as provided
in (ii) or (iii) below, the interest rate per annum equal to the Applicable
Percentage of the higher of the After-Tax Equivalent Rate determined on such
date with respect to a Standard Auction Period and the BMA Index, (ii) with
respect to any change in an Auction Period and/or the Standard Auction Period
pursuant to Section 3.04, including any automatic reversion to a Standard
Auction Period pursuant to Section 3.03, the interest rate per annum equal
to the highest of (a) the Applicable Percentage of the higher of the After-Tax
Equivalent Rate determined on such date with respect to a Standard Auction
Period, and the BMA Index, (b) the Applicable Percentage of the higher of the
After-Tax Equivalent Rate determined on such date with respect to the Auction
Period which is proposed to be established and the BMA Index, and (c) the
Applicable Percentage of the higher of the After-Tax Equivalent Rate determined
on such date with respect to the Auction Period in effect immediately prior to
such proposed change in the Auction Period and the BMA Index, or (iii) with
respect to any Change in the Interest Rate Mode from an Auction Rate pursuant
to Section 4.01 or any change from an Auction Rate to a Fixed Rate
pursuant to Section 4.02, the interest rate per annum equal to the higher
of (a) the Applicable Percentage of the higher of the After-Tax Equivalent Rate
determined on such date with respect to a Standard Auction Period and the BMA
Index, and (b) the Applicable Percentage of the higher of the After-Tax
Equivalent Rate determined on such date with respect to the Auction Period in
effect immediately prior to such proposed change and the BMA Index.


 


“Monthly
Period Record Date” shall mean, with respect to each Interest Payment Date
during a Monthly Period, the Business Day next preceding such Interest Payment
Date.


 


“Monthly
Rate” shall mean with respect to each Calculation Period during a Monthly
Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent, and the Company) by a Remarketing Agent no later
than 12:00 noon (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of such Remarketing
Agent, would be necessary on and as of such day to remarket Bonds in a
secondary market transaction at a price equal to the principal amount thereof;
provided that such rate of interest shall not exceed the lesser of 110% of the
Monthly Rate Index on and as of such date and the Maximum Allowed Rate.


 


“Monthly
Rate Index” shall mean with respect to the Determination Date of each
Calculation Period during a Monthly Rate Period, the average of 30-day yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), the interest on which is not included in gross income for
Federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent, including issuers of commercial paper, project notes, bond
anticipation notes and tax anticipation notes, computed by the Indexing Agent
on and as of such day.  If the Bonds are
rated by a Rating Agency in its highest note or commercial paper rating
category or one of its two highest long-term debt rating categories, each
Component Issuer must (a) have outstanding securities rated by a Rating Agency
in its highest note or commercial paper rating category or (b) not have
outstanding notes or commercial paper rated by a Rating Agency but have
outstanding securities rated by a Rating Agency in one of its


 


21

















 


two highest long-term debt rating categories.  If the Bonds are rated by a Rating Agency in a rating category
that is lower than its highest note or commercial paper rating category or its
two highest long-term debt rating categories (and the Bonds are not rated in
one of such categories by the other Rating Agency), each Component Issuer must
(a) have outstanding securities rated by a Rating Agency in its note or
commercial paper rating category which is the same or correlative, in the
Indexing Agent’s judgment, to the note or commercial paper rating category or
the long-term debt rating category of the Bonds or (b) have outstanding
securities rated by a Rating Agency in the same long-term debt rating category
as the Bonds are rated by that Rating Agency and not have any outstanding notes
or commercial paper rated by such Rating Agency.  The Indexing Agent may change the Component Issuers from time to
time in its discretion, subject to the foregoing requirements.  In addition, at the request of the Company
and upon delivery to the Trustee of an Opinion of Bond Counsel that such action
will not adversely affect the exclusion of interest on the Bonds from gross
income of the owners thereof for Federal income tax purposes, the Authority,
with the consent of the Company, may designate a new method of setting the
Monthly Rate Index in the event any of the above-described methods are
determined by the Authority to be unavailable, impracticable or unrealistic in
the market place.


 


“Monthly
Rate Period” shall mean any period during which Bonds bear interest at a
Monthly Rate which period shall commence with the effective date of the Change
in the Interest Rate Mode to a Monthly Rate and shall extend through the day
immediately preceding the earlier of (a) the effective date of another Change
in the Interest Rate Mode or (b) the Stated Maturity.


 


“Moody’s”
shall mean Moody’s Investors Service, Inc., a corporation organized and
existing under the laws of the State of Delaware and its successor or
successors, and if such corporation shall for any reason no longer perform the
functions of a securities rating agency or if Moody’s shall be replaced,
subject to the definition of “prevailing rating” in the definition of
Applicable Percentage, by some other nationally recognized rating agency by the
Authority at the request of the Company, “Moody’s” shall be deemed to refer to
such other nationally recognized rating agency designated by the Authority at
the request of the Company.


 


“Note”
shall mean the promissory note of the Company executed by the Company and
delivered to the Trustee, to evidence the obligations of the Company to repay
the loan to be made by the Authority pursuant to the Participation Agreement.


 


“Note
Payments” shall mean the portion of the Payments required to be made
pursuant to Section 4.02 of the Participation Agreement and the Note to be
applied to the payment of principal of, premium, if any, and interest on the
Bonds.


 


“Notice
of Election to Tender” shall mean the notice given by a Holder of Bonds
pursuant to Section 5.03.


 


“Opinion
of Bond Counsel” shall mean a written opinion of Bond Counsel.


 


22

















 


“Option
to Convert” shall mean the Authority’s right and option to convert the rate
of interest payable on the Bonds from an Adjustable Rate to a Fixed Rate as
provided in Section 4.02.


 


“Order”
shall mean with respect to Auction Rate Bonds, an Order as defined in
Section 3.06.


 


“Outstanding”,
whether appearing in upper or lower case, when used with respect to any Bond
shall mean, as of any date, any Bond theretofore or thereupon being authenticated
and delivered pursuant to this Indenture, except:


 


1.                               a Bond cancelled by the Trustee or delivered
to the Trustee for cancellation at or prior to such date;


 


2.                               a Bond in lieu of or in substitution for
which another Bond shall have been issued under Sections 5.10, 5.11, 7.03, 7.04
or 7.05; and


 


3.                               a Bond or portion thereof deemed to have been
paid in accordance with Section 15.01;


 


provided,
however, that with respect to Auction Rate Bonds for the purposes of the
Auction Procedures on any Auction Date, Auction Rate Bonds as to which the
Company or any person known to the Auction Agent to be an Affiliate of the
Company is the Existing Holder thereof shall be disregarded and deemed not to
be Outstanding; and provided further, however, that to the extent the principal
of or interest due on the Bonds is paid by the Bond Insurer pursuant to the
applicable Policy, such Bonds shall remain Outstanding for all purposes until
the Bond Insurer receives full payment therefor.


 


“Overdue
Rate” shall mean on any date of determination 265% of the higher of the
After-Tax Equivalent Rate determined on such date with respect to a Standard
Auction Period and the BMA Index on such date of determination; provided that
in no event shall the Overdue Rate exceed the Maximum Allowed Rate.


 


“Participation
Agreement” shall mean the Participation Agreement dated as of the date
hereof, between the Authority and the Company, as amended and supplemented by
Supplemental Participation Agreements from time to time.


 


“Payments”
shall mean collectively the Note Payments and the Additional Payments.


 


“Payment
Default” shall mean the receipt by the Auction Agent of a notice from the
Trustee of (i) failure to make payments of principal of and premium, if any, or
interest on any  subseries of the Bonds
when the same shall become due and payable and (ii) the occurrence of a default
by the Bond Insurer under the Policy applicable to such subseries of the Bonds.


 


“Policy”
shall mean each Credit Facility issued by the Bond Insurer on the Closing Date in
the form of a financial guaranty insurance policy insuring the regularly


 


23

















 


scheduled payments of principal of and interest on a subseries of the
Bonds (collectively, the “Policies”).


 


“Potential
Holder” shall mean a person, including any Existing Holder, who may be
interested in acquiring a beneficial interest in Auction Rate Bonds in addition
to Auction Rate Bonds currently owned by such person, if any.


 


“Principal
Corporate Trust Office” shall mean the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 101 Barclay Street
- 21W, New York, New York 10286.


 


“Project”
shall mean any acquisition, purchase, construction, reconstruction,
improvement, betterment, extension and equipping, as described in Exhibit A and Exhibit B to the Participation Agreement as the same may be
revised from time to time to reflect any changes or substitutions therein, additions
thereto, or deletions therefrom permitted by the Participation Agreement.


 


“Project
Fund” shall mean the special trust fund designated as “Consolidated Edison
Company of New York, Inc. Series 2004B Project Fund” created and established
under, and to be held and administered by the Trustee as provided in,
Section 8.01.


 


“Purchase
Price” shall mean the purchase price of Bonds tendered or deemed tendered
for purchase pursuant to Section 5.03, 5.04, 5.08 or 5.09, consisting of
the principal amount of such Bonds together with any accrued and unpaid
interest plus, in the event Bonds bearing interest at a Term Rate or a Fixed
Rate are subject to tender for purchase pursuant to Section 5.04, any
premium which would have been required to be paid as part of redemption price
on any date on which such Bonds are subject to tender for purchase if such
Bonds were subject to optional redemption pursuant to Section 5.01 on such
date.  With respect to Bonds tendered
for purchase on an Interest Payment Date, Purchase Price shall include any
accrued interest on such Bonds which is not otherwise being paid pursuant to
Section 9.03(a).


 


“Rate
Index” means the Daily Rate Index, the Fixed Rate Index, the Commercial
Paper Rate Index, the Monthly Rate Index, the Semi-annual Rate Index, the Term
Rate Index, or the Weekly Rate Index.


 


“Rating
Agency” means Moody’s, if the Bonds are then rated by Moody’s, S&P, if
the Bonds are then rated by S&P, and Fitch, if the Bonds are then rated by
Fitch.


 


“rating
category” shall mean one of the generic rating categories of a Rating
Agency, without regard to any refinement or gradation of such rating category
by a numerical modifier, plus or minus sign, or otherwise.


 


“Record
Date”, at any time, shall mean each Commercial Paper Period Record Date
during a Commercial Paper Rate Period, each Auction Rate Bonds Period Record
Date during an Auction Rate Period, each Daily Period Record Date during a
Daily Rate Period, each Weekly Period Record Date during a Weekly Rate Period,
each Monthly Period Record Date


 


24

















 


during a Monthly Rate Period, each Semi-annual Period Record Date
during a Semi-annual Rate Period, each Term Period Record Date during a Term
Rate Period and each Fixed Rate Record Date during a Fixed Rate Period.


 


“Registrar
and Paying Agent” shall mean The Bank of New York in its separate capacity
as Registrar and Paying Agent for the Bonds, or its successors or assigns.


 


“Remarketing
Agent” shall mean the Remarketing Agent or Remarketing Agents appointed
pursuant to Section 11.14, its or their successors or assigns, including
without limitation  any Market Agent
appointed in connection with Auction Rate Bonds of a subseries.


 


“Remarketing
Agreement” shall mean any Market Agent Agreement between the Company and a
Market Agent dated the Closing Date and any agreement or agreements entered
into between the Company and one or more successor Remarketing Agents, as from
time to time amended, including without limitation any Market Agent Agreement,
pursuant to which the applicable Remarketing Agent undertakes to perform its
duties and obligations hereunder during a period of time specified in such
agreement.


 


“Responsible
Officer” shall mean, 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 secretary, 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
such 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
Indenture.


 


“Revenues”
shall mean and include all income, revenues and monies derived by the Authority
under the Participation Agreement and the Note (except administrative
compensation and indemnification payable under the Participation Agreement),
and, without limiting the generality of the foregoing, shall include to the
extent provided in this Indenture, earnings on the investment of monies held
under this Indenture and the proceeds of the sale of any such investments.  The term “Revenues” shall not include monies
received as proceeds from the sale of the Bonds or any other bonds, notes or
evidences of indebtedness or as grants or gifts.


 


“S&P”
shall mean Standard & Poor’s, a division of The McGraw-Hill Companies and
its successor or successors, and if such corporation shall for any reason no
longer perform the functions of a securities rating agency or if S&P shall
be replaced, subject to the definition of “prevailing rating” in the definition
of Applicable Percentage, by some other nationally recognized rating agency by
the Authority at the request of the Company, “S&P” shall be deemed to refer
to such other nationally recognized rating agency designated by the Authority
at the request of the Company.


 


“Securities
Depository” shall mean The Depository Trust Company and its successors and
assigns or if (i) the then Securities Depository resigns from its functions as
depository of the Bonds or (ii) the Authority discontinues use of the then
Securities Depository pursuant to Section 2.03, any other securities
depository which agrees to follow the procedures


 


25

















 


required to be followed by a Securities Depository in connection with
the Bonds and which is selected by the Authority, with the consent of the
Company, the Trustee, the Auction Agent and the applicable Remarketing Agent
pursuant to Section 2.03.


 


“Securities
Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.


 


“Sell
Order” shall mean with respect to Auction Rate Bonds, Sell Order as defined
in Section 3.06.


 


“Semi-annual
Period Record Date” shall mean, with respect to each Interest Payment Date
during a Semi-annual Rate Period, the fifteenth day of the calendar month next
preceding such Interest Payment Date.


 


“Semi-annual
Rate” shall mean with respect to each Calculation Period during a
Semi-annual Rate Period, a rate of interest equal to the rate of interest per
annum established and certified to the Trustee (with a copy to the Authority,
the Registrar and Paying Agent and the Company) by a Remarketing Agent no later
than 12:00 noon (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of such Remarketing
Agent, would be necessary on and as of such day to remarket Bonds in a
secondary market transaction at a price equal to the principal amount thereof;
provided that such rate of interest shall not exceed the lesser of 110% of the
Semi-annual Rate Index on and as of such date and the Maximum Allowed Rate.


 


“Semi-annual
Rate Index” shall mean with respect to the Determination Date of each
Calculation Period during a Semi-annual Rate Period, the average of six-month
yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in
gross income for Federal income tax purposes, of no fewer than ten Component
Issuers selected by the Indexing Agent, including issuers of commercial paper,
project notes, bond anticipation notes and tax anticipation notes, computed by
the Indexing Agent on and as of such day. 
If the Bonds are rated by a Rating Agency in its highest note or
commercial paper rating category or one of its two highest long-term debt
rating categories, each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its highest note or commercial paper rating
category or (b) not have outstanding notes or commercial paper rated by a
Rating Agency but have outstanding securities rated by a Rating Agency in one
of its two highest long-term debt rating categories.  If the Bonds are rated by a Rating Agency in a rating category
that is lower than its highest note or commercial paper rating category or its
two highest long-term debt rating categories (and the Bonds are not rated in
one of such categories by the other Rating Agency), each Component Issuer must
(a) have outstanding securities rated by a Rating Agency in its note or
commercial paper rating category which is the same or correlative, in the Indexing
Agent’s judgment, to the note or commercial paper rating category or the
long-term debt rating category of the Bonds or the other debt obligations
supported by support facilities issued by the issuer of a Support Facility or
(b) have outstanding securities rated by a Rating Agency in the same long-term
debt rating category as the Bonds are rated by that Rating Agency and not have
any outstanding notes or commercial paper rated by such Rating Agency.  The Indexing  Agent may change the Component Issuers from


 


26

















 


time to time in its discretion, subject to the foregoing
requirements.  In addition, at the
request of the Company and upon delivery to the Trustee of an Opinion of Bond
Counsel that such action will not adversely affect the exclusion of interest on
the Bonds from gross income of the owners thereof for Federal income tax
purposes, the Authority, with the consent of the Company, may designate a new
method of setting the Semi-annual Rate Index in the event any of the
above-described methods are determined by the Authority to be unavailable,
impracticable or unrealistic in the market place.


 


“Semi-annual
Rate Period” shall mean any period during which Bonds bear interest at a
Semi-annual Rate, which period shall commence on the effective date of a Change
in the Interest Rate Mode to a Semi-annual Rate, and shall extend through the
day immediately preceding the earlier of (a) the effective date of another
Change in the Interest Rate Mode, or (b) the Stated Maturity.


 


“Standard
Auction Period” initially shall mean an Auction Period of 35 days, and
after the establishment of a different Standard Auction Period pursuant to
Section 3.04, shall mean such different Standard Auction Period.


 


“State”
shall mean any state of the United States of America.


 


“Stated
Maturity” with respect to the Bonds shall mean January  1, 2039,
provided that, subject to the next sentence, in any case where the date of
maturity of, or payment of premium on, interest on, or principal of, the Bonds
or the date fixed for redemption of any Bonds shall be on a day other than a
Business Day, then payment of interest, principal and premium, if any, need not
be made on such date but may be made (without additional interest) on the next
succeeding Business Day, with the same force and effect as if made on the date
of maturity or the date fixed for redemption. 
Notwithstanding anything in this Indenture to the contrary, in no event
shall the final maturity date of the Bonds extend beyond 35 years from the
Closing Date, and the length of any Auction Period shall be reduced at the
discretion of the Authority to the extent necessary to ensure compliance with
the provisions of this sentence.


 


“Statutory
Corporate Tax Rate” shall mean as of any date of determination the highest
tax rate bracket (expressed in decimals) now or hereafter applicable in each
taxable year on the taxable income of every corporation as set forth in
Section 11 of the Code or any successor section without regard to any
minimum additional tax provision or provisions regarding changes in rates
during a taxable year, which on the date hereof is .35.  Any change in the Statutory Corporate Tax
Rate shall be evidenced by a certificate of the Company.


 


“Submission
Deadline” shall mean 1:00 p.m., New York City time, on any Auction Date or
such other time on any such Auction Date by which Broker-Dealers are required
to submit Orders to the Auction Agent as specified by the Auction Agent from
time to time.


 


“Submitted
Bid” shall mean with respect to Auction Rate Bonds, Submitted Bid as
defined in Section 3.08.


 


27

















 


“Submitted
Hold Order” shall mean with respect to Auction Rate Bonds, Submitted Hold
Order as defined in Section 3.08.


 


“Submitted
Order” shall mean with respect to Auction Rate Bonds, Submitted Order as
defined in Section 3.08.


 


“Submitted
Sell Order” shall mean with respect to Auction Rate Bonds, Submitted Sell
Order as defined in Section 3.08.


 


“Substitute
Commercial Paper Dealers” shall mean Merrill Lynch, Pierce, Fenner &
Smith Incorporated or any other commercial paper dealers specified by the
Authority at the request of the Company or their respective affiliates or
successors, if any such person is a commercial paper dealer, provided that none
of such persons nor any of their affiliates or successors shall be a Commercial
Paper Dealer.


 


“Substitute
U.S. Government Securities Dealer” shall mean Merrill Lynch, Pierce, Fenner
& Smith Incorporated or any other dealer or dealers in U.S. government
securities that may be specified by the Authority at the request of the Company
at the time of a Change in the Interest Rate Mode to an Auction Rate, or their
respective affiliates or successors, if any such person is a dealer in U.S. government
securities, provided that none of such persons nor any of their affiliates or
successors shall be  a U.S. Government
Securities Dealer.


 


“Sufficient
Clearing Bids” shall mean with respect to Auction Rate Bonds, Sufficient
Clearing Bids as defined in Section 3.08.


 


“Supplemental
Indenture” shall mean any indenture between the Trustee and the Authority
entered into pursuant to and in compliance with the provisions of
Article XIV hereof amending or supplementing the provisions of this
Indenture as originally executed or as theretofore amended or supplemented.


 


“Supplemental
Participation Agreement” shall mean an agreement supplementing or amending
the Participation Agreement entered into pursuant to and in compliance with the
provisions of Article XIV.


 


“Support
Facility” shall mean any instrument satisfactory to the Authority entered
into or obtained in connection with the Bonds, such as a letter of credit,
committed line of credit, insurance policy, surety bond or standby bond
purchase agreement, or any combination of the foregoing, and issued by a bank
or banks, insurance company, other financial institution or institutions, or
any combination of the foregoing which provides for the payment of (i) the
Purchase Price on Bonds tendered for purchase pursuant to the provisions hereof
and the Bond Purchase Trust Agreement and/or (ii) principal of and interest on
all Bonds coming due and payable during the term thereof.


 


“Support
Facility Issuer” shall mean any bank or banks, or other financial
institution or institutions which is the issuer of any Support Facility.


 


28

















 


“Tax
Regulatory Agreement” shall mean the Tax Regulatory Agreement, dated the
Closing Date, between the Authority and the Company, and any and all
modifications, alterations, amendments and supplements thereto.


 


“Term
Period Record Date” shall mean, with respect to each Interest Payment Date
during a Term Rate Period, the fifteenth day of the month next preceding such
Interest Payment Date.


 


“Term
Rate” shall mean with respect to each Calculation Period during a Term Rate
Period, a rate of interest equal to the rate of interest per annum established
and certified to the Trustee (with a copy to the Authority, the Registrar and
Paying Agent and the Company) by a Remarketing Agent no later than 12:00 noon
(New York City time) on and as of the Determination Date as the minimum rate of
interest per annum which, in the opinion of such Remarketing Agent, would be
necessary on and as of such day to remarket such Bonds in a secondary market
transaction at a price equal to the principal amount thereof; provided that
such rate of interest shall not exceed the lesser of 110% of the Term Rate
Index on and as of such date and the Maximum Allowed Rate.


 


“Term
Rate Index” shall mean with respect to the Determination Date of each
Calculation Period during a Term Rate Period, the average of the yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), having a term approximately equal to the Term Rate Period
or which are subject to optional or mandatory tender by the owner thereof at
the end of a term approximately equal to the Term Rate Period, the interest on
which is not included in gross income for Federal income tax purposes, of no
fewer than ten Component Issuers selected by the Indexing Agent, computed by
the Indexing Agent on and as of such day. 
If the Bonds are rated by a Rating Agency in one of its two highest
long-term debt rating categories, each Component Issuer must have outstanding
securities rated by a Rating Agency in one of its two highest long-term debt
rating categories.  If the Bonds are
rated by a Rating Agency in a rating category that is lower than its two highest
long-term debt rating categories (and the Bonds are not rated in one of the two
highest such categories by the other Rating Agency), each Component Issuer must
have outstanding securities rated by a Rating Agency in the same long-term debt
rating category as the Bonds are rated by that Rating Agency.  The Indexing Agent may change the Component
Issuers from time to time in its discretion, subject to the foregoing
requirements.  In addition, at the
request of the Company and upon delivery to the Trustee of an Opinion of Bond
Counsel that such action will not adversely affect the exclusion of interest on
the Bonds from gross income of the owners thereof for Federal income tax
purposes, the Authority, with the consent of the Company, may designate a new
method of setting the Term Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place.


 


“Term
Rate Period” shall mean any period during which Bonds bear interest at a
Term Rate which period shall commence with the effective date of the Change in
the Interest Rate Mode to a Term Rate and shall extend through the day
immediately preceding the earlier of (a) the effective date of another Change
in the Interest Rate Mode or (b) the Stated Maturity.


 


“Terminating
Event” shall mean:


 


29

















 


(a)                                  Any event or events under the terms of a
Support Facility or any agreement providing for the issuance of such Support
Facility which would cause the termination of such Support Facility but would
specifically allow for the mandatory tender of Bonds pursuant to
Section 5.09 with a draw on or borrowing or payment under such Support
Facility prior to such termination; or


 


(b)                                 Receipt by the Trustee of written notice from
the financial institution providing any Direct-Pay Credit Facility following a
draw on or borrowing or payment under such Direct-Pay Credit Facility for
payment of interest on the Bonds that the amount so drawn, borrowed or paid has
not been reinstated in the amount of such drawing.


 


“Treasury
Rate” on any date, shall mean (i) the yield, calculated in accordance with
prevailing industry convention, of the rate on the most recently auctioned
direct obligations of the U.S. Government having a maturity at the time of
issuance of 364 days or less with a remaining maturity closest to the length of
such Auction Period, as quoted in The Wall Street Journal on such date for the
Business Day next preceding such date; or (ii) in the event that any such rate
is not published in The Wall Street Journal, then the bond equivalent yield,
calculated in accordance with prevailing industry convention, as calculated by
reference to the arithmetic average of the bid price quotations of the most
recently auctioned direct obligation of the U.S. Government having a maturity
at the time of issuance of 364 days or less with a remaining maturity closest
to the length of such Auction Period, based on bid price quotations on such
date obtained by the Auction Agent from a U.S. Government Securities Dealer. If
any U.S. Government Securities Dealer does not quote a rate required to
determine the Treasury Rate, the Treasury Rate shall be determined on the basis
of the quotation or quotations furnished by the remaining U.S. Government
Securities Dealer or Dealers and any Substitute U.S. Government Securities
Dealer or Dealers selected by the Authority at the request of the Company to
provide such rate or rates not being supplied by any U.S. Government Securities
Dealer or U.S. Government Securities Dealers, as the case may be, or, if the
Authority does not select any such Substitute U.S. Government Securities Dealer
or Substitute U.S. Government Securities Dealers, by the remaining U.S.
Government Securities Dealer or U.S. Government Securities Dealers.


 


“Trust
Estate” shall mean the meaning assigned to such term in the first paragraph
following the recitals herein.


 


“Trustee”
shall mean the corporation having trust powers appointed by the Authority as
Trustee hereunder and serving as such hereunder, and any surviving, resulting
or transferee corporation as provided in Section 11.13.  References to principal office of the
Trustee shall mean the Principal Corporate Trust Office of the Trustee.


 


 “U.S. Government” shall mean the
Federal government of the United States of America.


 


“U.S.
Government Securities Dealers” shall mean the Market Agents for any Auction
Rate Bonds, or, in lieu of any thereof, their respective affiliates or
successors, provided that any such entity is a U.S. Government securities
dealer.


 


30

















 


“Weekly
Period Record Date” shall mean, with respect to each Interest Payment Date
during a Weekly Rate Period, the Business Day next preceding such Interest
Payment Date.


 


“Weekly
Rate” shall mean with respect to each Calculation Period during a Weekly
Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent and the Company) by a Remarketing Agent no later
than 12:00 noon (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of such Remarketing
Agent, would be necessary on and as of such day to remarket Bonds in a
secondary market transaction at a price equal to the principal amount thereof
plus accrued interest thereon; provided that such rate of interest shall not
exceed the lesser of 110% of the Weekly Rate Index on and as of such date and
the Maximum Allowed Rate.


 


“Weekly
Rate Index” shall mean with respect to the Determination Date of each
Calculation Period during a Weekly Rate Period, the average of 30-day yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), the interest on which is not included in gross income for
Federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent, including issuers of commercial paper, project notes, bond
anticipation notes and tax anticipation notes, computed by the Indexing Agent
on and as of such day.  If the Bonds are
rated by a Rating Agency in its highest note or commercial paper rating
category or one of its two highest long-term debt rating categories, each
Component Issuer must (a) have outstanding securities rated by a Rating Agency
in its highest note or commercial paper rating category or (b) not have
outstanding notes or commercial paper rated by a Rating Agency but have
outstanding securities rated by a Rating Agency in one of its two highest
long-term debt rating categories.  If
the Bonds are rated by a Rating Agency in a rating category that is lower than
its highest note or commercial paper rating category or its two highest
long-term debt rating categories (and the Bonds are not rated in one of such
categories by the other Rating Agency), each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its note or commercial paper
rating category which is the same or correlative, in the Indexing Agent’s
judgment, to the note or commercial paper rating category or the long-term debt
rating category of the Bonds or (b) have outstanding securities rated by a
Rating Agency in the  same long-term
debt rating category as the Bonds are rated by that Rating Agency and not have
any outstanding notes or commercial paper rated by such Rating Agency.  The Indexing Agent may change the Component
Issuers from time to time in its discretion, subject to the foregoing
requirements.  In addition, at the
request of the Company and upon delivery to the Trustee of an Opinion of Bond
Counsel that such action will not adversely affect the exclusion of interest on
the Bonds from gross income of the owners thereof for Federal income tax
purposes, the Authority, with the consent of the Company, may designate a new
method of setting the Weekly Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place.


 


“Weekly
Rate Period” shall mean any period during which the Bonds bear interest at
a Weekly Rate; the first such period shall commence on the effective date of a
Change in the Interest Rate Mode to a Weekly Rate and shall extend through the
day immediately preceding the earlier of (a) the effective date of a successive
Change in the Interest Rate Mode or (b) the Stated Maturity.


 


31

















 


“Winning
Bid Rate” shall mean with respect to Auction Rate Bonds, Winning Bid Rate
as defined in Section 3.08.


 


SECTION 1.02.                                 Definitions of General Terms.  Whenever in this Indenture any
governmental unit including the Authority or any official, officer, director or
department of a governmental unit, is defined or referred to, such definition
or reference shall be deemed to include the governmental unit or official,
officer, board, agency, commission, body or department succeeding to or in whom
or in which is vested, the functions, rights, powers, duties and obligations of
such governmental unit, official, officer, director or department, as the case
may be, encompassed by this Indenture.


 


Unless
the context shall clearly indicate otherwise or may otherwise require, in this
Indenture words importing persons include firms, partnerships, associations,
corporations (public and private), public bodies and natural persons, and also
include executors, administrators, trustees, receivers or other
representatives.


 


Unless
the context shall clearly indicate otherwise or may otherwise require
computation on other than an annual basis, in this Indenture whenever any
interest rate or rate of interest is defined or referred to, such rate shall be
a rate per annum.


 


Unless
the context shall clearly indicate otherwise or may otherwise require, in this
Indenture:  (i) references to articles,
sections and other subdivisions, whether by number or letter or otherwise, are
to the respective or corresponding articles, sections and subdivisions of this
Indenture, as such articles, sections or subdivisions may be amended from time
to time; (ii) the terms “herein,” “hereunder,” “hereby,” “hereto,” “hereof,”
and any similar terms, refer to this Indenture and to this Indenture as a whole
and not to any particular article, section or subdivision hereof; and
(iii) the word “heretofore” means before the time of effectiveness of this
Indenture; and the word “hereafter” means after the time of effectiveness of
this Indenture.


 


32

















 


ARTICLE II


 


AUTHORIZATION
OF BONDS


 


SECTION 2.01.                                 Limitation on Issuance of Bonds.  No Bonds may be issued under
the provisions of this Indenture except in accordance with the provisions of
this Article.


 


SECTION 2.02.                                 Authorization of Bonds.  1. There is hereby created and established
under this Indenture one issue of revenue bonds of the Authority, limited to
$146,975,000 in aggregate principal amount, of “Facilities Revenue Bonds,
Series 2004B (Consolidated Edison Company of New York, Inc. Project)”.  In order to distinguish between Bonds which
are subject to different interest rate determination methods and other features
and to distinguish the portion of the Bonds to be offered or  remarketed by any particular underwriter or
Remarketing Agent, the Bonds may be designated and redesignated from time to
time by the Authority in such a way as to identify one or more subseries of the
Bonds.  Such subseries may be designated
as subseries B-1, subseries B-2, or subseries B-3, as the case may be, or may
be further redesignated as subseries B-1-1, subseries B-1-2, or subseries B-1-3,
as the case may be, and so forth.  Each
Bond shall bear upon the face thereof such designation or redesignation, if
any.  In the event any Bonds are
designated as one or more subseries, all references to a series of the Bonds in
this Indenture shall refer to each such subseries unless the context otherwise
requires.  The Bonds, upon original
issuance, shall be issued in five separate subseries designated as “2004B-1-1”
in the principal amount of $36,750,000 (the “Series 2004B-1-1 Bonds”),
“2004B-1-2” in the principal amount of $36,750,000 (the “Series 2004B-1-2
Bonds”), “2004B-1-3” in the principal amount of $36,750,000 (the “Series
2004B-1-3 Bonds”), “2004B-1-4” in the principal amount of $16,975,000 (the
“Series 2004B-1-4 Bonds”) and “2004B-2” in the principal amount of $19,750,000
(the “Series 2004B-2 Bonds”).


 


2.                               The Bonds shall be secured by the Trust
Estate.  The lien, pledge, charge and
assignment of the Trust Estate created hereby shall be valid and binding from
the time of the effectiveness of this Indenture, as set forth in
Section 17.11, and the Note Payments made under the Note and the
Participation Agreement shall be immediately subject thereto upon receipt by
the Trustee.


 


3.                               The Bonds are limited obligations of the
Authority payable solely from payments to be made by the Company pursuant to
the Note and the Participation Agreement and the other monies, rights and
properties pledged hereunder, hereafter obtained with respect thereto and
secured by a pledge from the Authority to the Trustee of the Participation
Agreement and the Note.  The Bonds shall
not be a debt of the State of New York, and the State of New York shall not be
liable thereon.


 


4.                               The covenants and agreements herein set forth
to be performed by the Authority shall be for the benefit, security and
protection of any Holder of the Bonds and the Bond Insurer.


 


5.                               The Bonds shall be issued under this
Indenture for the purpose of paying a portion of the redemption price of the
Prior Bonds.


 


33

















 


6.                               The Bonds bearing a Commercial Paper Rate, a
Daily Rate, a Weekly Rate or a Monthly Rate shall be fully registered Bonds in
the denomination of $100,000 or any integral multiple thereof. The Bonds
bearing an Auction Rate shall be fully registered Bonds in the denomination of
$25,000 or any integral multiple thereof. 
The Bonds bearing a Semi-annual Rate, a Term Rate or a Fixed Rate shall
be fully registered Bonds in the denomination of $5,000 or any integral
multiple thereof.


 


7.                               The Bonds shall be numbered consecutively
from “2004B- [insert “1-1, 1-2, 1-3, 1-4 or 2”, as appropriate]-1” upwards as
issued, or as otherwise provided by the Registrar and Paying Agent.  If the Bonds are redesignated to identify one
or more additional subseries, the Bonds shall be numbered in accordance with
their subseries designation.  The Bonds
shall mature on the Stated Maturity.


 


8.                               The Bonds shall be initially issued in fully
registered form, without coupons, and dated their date of first authentication
and delivery.


 


9.                               Upon any partial Change in the Interest Rate
Mode for a subseries of Bonds from an Auction Rate for an Auction Rate Period,
there shall be Outstanding an aggregate principal amount of not less than
$10,000,000 of Auction Rate Bonds for such subseries and in the applicable
denominations set forth in Section 2.02.7.


 


10.                         Neither the Trustee nor any Holder of the
Bonds shall be required to see that monies derived from such Bonds are applied
to the purpose or purposes for which such Bonds are issued.


 


SECTION 2.03.                                 Global Form; Securities Depository. 
1.  Except as otherwise provided
in this Section 2.03, the Bonds in the form of one separate global bond
for each subseries shall be registered in the name of the Securities Depository
or its nominee and ownership thereof shall be maintained in book entry form by
the Securities Depository for the account of the Agent Members thereof.


 


Except
as provided in Subsections (3) and (4) of this Section 2.03, the Bonds of
any subseries may be transferred, in whole but not in part, only to the
Securities Depository or a nominee of the Securities Depository, or to a
successor Securities Depository selected or approved by the Authority, with the
consent of the Company, the Trustee, the Auction Agent (if any) and the Remarketing
Agent for such subseries, or to a nominee of such successor Securities
Depository.  Each global certificate for
the Bonds shall bear a legend substantially to the following effect: “Except as
otherwise provided in Section 2.03 of the Indenture, this global bond may
be transferred, in whole but not in part, only to the Securities Depository as
defined in the Indenture or a nominee of the Securities Depository or to a
successor Securities Depository or to a nominee of a successor Securities
Depository.”


 


2.                               The Authority, the Company, the Trustee, the
Registrar and Paying Agent, the Auction Agent (if any) and the applicable
Remarketing Agent shall have no responsibility or obligation with respect to:


 


34

















 


(a)                                  the accuracy of the records of the Securities
Depository or any Agent Member with respect to any beneficial ownership
interest in the Bonds;


 


(b)                                 the delivery to any Agent Member, beneficial
owner of the Bonds or other person, other than the Securities Depository or its
nominee as registered owner, of any notice with respect to the Bonds;


 


(c)                                  the payment to any Agent Member, beneficial
owner of the Bonds or other person, other than the Securities Depository or its
nominee as registered owner, of any amount with respect to the principal or
premium, if any, or interest on the Bonds;


 


(d)                                 its acceptance of any consent given by the
Securities Depository or other action taken by the Securities Depository as
registered owner; or


 


(e)                                  the selection by the Securities Depository or
any Agent Members of any beneficial owners to receive payment in the event of a
partial redemption of Bonds, except for the Trustee’s obligations under
Section 5.12.


 


So long as the certificates
for the Bonds of any subseries issued under the Indenture are not issued
pursuant to Subsection (4) of this Section 2.03, the Authority, the
Company, the Trustee, the Auction Agent (if any), the applicable Remarketing
Agent and the Registrar and Paying Agent may treat the Securities Depository
as, and deem the Securities Depository to be, the absolute owner of such series
or subseries of Bonds for all purposes whatsoever, including without
limitation:


 


(a)                                  the payment of principal and premium, if any,
and interest on such series or subseries of the Bonds;


 


(b)                                 giving notices of redemption and other
matters with respect to such series or subseries of the Bonds; and


 


(c)                                  registering transfers with respect to such
series or subseries of the Bonds.


 


Payment
by the Trustee of principal or redemption price, if any, of and premium, if
any, and interest on such Bonds to or upon the order of the Securities
Depository or its nominee during any period when it is the registered owner of
such Bonds shall be valid and effective to satisfy and discharge fully the
Authority’s obligation with respect to the amounts so paid.


 


3.                               (a) 
The Authority may discontinue the use of a Securities Depository for the
Bonds at the time of a Change in the Interest Rate Mode.


 


(b)                                 Registered ownership of the Bonds may be
transferred on the registration books of the Authority maintained by the
Registrar and Paying Agent and the Bonds may be delivered in physical form to
the following:  (i)  any successor Securities Depository or its
nominee; or (ii)  any person, upon (A)
the resignation of the Securities Depository or (B) the termination by the
Authority of the use of the Securities Depository from its


 


35

















 


functions
as depository as set forth in this section, or (C) upon any Change in the
Interest Rate Mode to any Adjustable Rate other than an Auction Rate.


 


(c)                                  Upon any Change in the Interest Rate Mode to
an Auction Rate, the Registrar and Paying Agent shall register the Auction Rate
Bonds in the name of the Securities Depository or its nominee and on the
effective date of such change provide the Company with a list of the Existing
Holders of the Auction Rate Bonds.


 


4.                               If at any time the Securities Depository
notifies the Authority and the Company that it is unwilling or unable to continue
as Securities Depository with respect to the Bonds or if at any time the
Securities Depository shall no longer be registered or in good standing under
the Securities Exchange Act or other applicable statute or regulation and a
successor Securities Depository is not appointed by the Authority with the
consent of the Company, the Trustee, the Auction Agent (if any) and the
applicable Remarketing Agent, within 90 days after the Authority and the
Company receive notice or become aware of such condition, as the case may be,
this Section shall no longer be applicable and the Authority shall execute
and the Trustee shall authenticate and deliver certificates representing the
Bonds of such series or subseries as provided below.  In addition, the Authority may determine at any time, at the
request of the applicable Remarketing Agent, that the Bonds shall no longer be
represented by global bonds and that the provisions of Subsections (1) and (2)
above shall no longer apply to such series or subseries of Bonds.  In any such event the Authority shall
execute and the Trustee shall authenticate and deliver certificates
representing the Bonds of such series or subseries as provided below.  Certificates for the Bonds of any series or
subseries issued in exchange for a global bond pursuant to this
Subsection shall be registered in such names in authorized denominations
as the Securities Depository, pursuant to instructions from the Agent Members
or otherwise, shall instruct the Authority and the Trustee.  The Trustee shall deliver such certificates
representing the Bonds of such series or subseries to the persons in whose
names such Bonds are so registered on the Business Day immediately preceding
the first day of an Auction Period (with respect to Auction Rate Bonds during
any Auction Rate Period), or the effective date of a Change in the Interest
Rate Mode (with respect to any other Change in the Interest Rate Mode), as the
case may be.


 


5.                               The Authority and the Trustee are hereby
authorized to enter into any arrangements determined necessary or desirable
with any Securities Depository in order to effectuate this Section and
both of them shall act in accordance with this Indenture and any such
agreement.  Without limiting the generality
of the foregoing, any such arrangements may alter the manner of effecting
delivery of Bonds and the transfer of funds for the payment of Bonds to the
Securities Depository.


 


SECTION 2.04.                                 Limitations on Transfer.  So
long as the ownership of the Auction Rate Bonds is maintained in book-entry
form by the Securities Depository, a beneficial owner or an Existing Holder may
sell, transfer or otherwise dispose of Auction Rate Bonds only pursuant to a
Bid or Sell Order placed in an Auction or to a Broker-Dealer, provided, however,
that (a) sale, transfer or other disposition of Auction Rate Bonds from a
customer of a Broker-Dealer who is listed on the records of that Broker-Dealer
as the holder of such Auction Rate Bonds to that Broker-Dealer or another
customer of that Broker-Dealer shall not be deemed to


 


36

















 


be a sale, transfer or other disposition for purposes of this
Section 2.04 if such Broker-Dealer remains the Existing Holder of the
Auction Rate Bonds so sold, transferred or disposed of immediately after such
sale, transfer or disposition and (b) in the case of all transfers other than
pursuant to Auctions such Broker-Dealer to whom such transfer is made shall
advise the Auction Agent of such transfer.


 


SECTION 2.05.                                 Application of Bond Proceeds.  The proceeds of sale of the Bonds shall be
deposited with the Trustee for deposit in the Project Fund to be paid out in
accordance with Section 8.01.


 


SECTION 2.06.                                 Delivery of the Bonds.  The Bonds shall be executed by the Authority
substantially in the form prescribed by Section 16.01 and in the manner
herein set forth and shall be deposited with the Trustee for authentication,
but before the Bonds shall initially be delivered by the Trustee, there shall
be filed with the Trustee the following:


 


(a)                                  an order executed by an Authorized Officer
directing the authentication and delivery of the Bonds to or upon the order of
the Securities Depository or its nominee, upon payment to the Trustee of the
purchase price therein set forth;


 


(b)                                 a fully executed counterpart of this
Indenture;


 


(c)                                  a fully executed counterpart of the
Participation Agreement;


 


(d)                                 a fully executed counterpart of each Market
Agent Agreement;


 


(e)                                  the fully executed Policies;


 


(f)                                    the fully executed Note;


 


(g)                                 a fully executed counterpart of the Bond
Purchase Trust Agreement;


 


(h)                                 a fully executed counterpart of the Tax
Regulatory Agreement;


 


(i)                                     an opinion of counsel to the Company,
addressed to the Underwriters (as defined in the Bond Purchase Agreement), with
reliance letter addressed to the Authority, 
the Trustee and the Bond Insurer, substantially to the effect, and dated
as, required by Section 7(d)(9)(ii) of the Bond Purchase Agreement;


 


(j)                                     opinion of counsel to the Bond Insurer,
addressed to the Authority, the Company, and the Trustee, substantially to the
effect required by Section 7(d)(9)(iv) of the Bond Purchase Agreement;


 


(k)                                  Opinion of Bond Counsel to the Authority and
the Trustee (i) as to the validity of the Bonds and (ii) that all conditions
precedent to the issuance of the Bonds have been met.


 


37

















 


When
the documents mentioned in clauses (a) to (k), inclusive, of this
Section shall have been filed with the Trustee, and when the Bonds shall
have been executed and authenticated as required by this Indenture, the Trustee
shall deliver the Bonds to the Securities Depository, but only upon payment to
the Trustee of the purchase price of the Bonds specified in said order.


 


38

















 


ARTICLE III


 


INTEREST ON
BONDS


 


SECTION 3.01.                                 Interest on Bonds-General.


 


1.                               Interest accruing on Bonds bearing interest
at a Commercial Paper Rate, a Daily Rate, a Weekly Rate, a Monthly Rate or a
Semi-annual Rate, shall be computed on the basis of a 365 or 366-day year, as
applicable, for the number of days actually elapsed.  Interest accruing on Bonds bearing interest at a Term Rate or a
Fixed Rate shall be computed on the basis of a 360-day year, consisting of
twelve (12) thirty (30) day months. 
Interest accruing on Bonds bearing interest at an Auction Rate during an
Auction Period of 180 days or less shall be computed on the basis of a 360-day
year for the number of days actually elapsed. 
Interest accruing on Bonds bearing interest at an Auction Rate during an
Auction Period of over 180 days shall be computed on the basis of a 360-day
year, consisting of twelve (12) thirty (30) day months.  Bonds shall bear interest from the date of
issuance thereof payable in arrears on each Interest Payment Date.  The Bonds issued upon registration of
transfers or exchanges of Bonds shall bear interest from the Interest Payment
Date next preceding their date of authentication, unless the date of
authentication is an Interest Payment Date in which case such Bonds shall bear
interest from such date, or unless the date of authentication is after the
Record Date next preceding the next succeeding Interest Payment Date, in which
case such Bonds shall bear interest from such next succeeding Interest Payment
Date.


 


2.                               The Bonds shall initially bear interest at an
Auction Rate as specified in Section 3.03.1.  From and after any Change in the Interest Rate Mode pursuant to
Section 4.01 or 4.02, the Bonds with respect to which such change is
effective shall bear interest determined in accordance with the provisions of
this Indenture pertaining to the new Adjustable Rate or the Fixed Rate, as the
case may be.  Bonds shall bear interest
for each Calculation Period, Auction Period or Fixed Rate Period, as the case
may be, at the rate of interest per annum for such Calculation Period, Auction
Period or Fixed Rate Period established in accordance with this Indenture.   Interest shall be payable on each Interest
Payment Date by check mailed to the registered owner at his or her address as
it appears on the registration books kept by the Registrar and Paying Agent
pursuant to the Indenture at the close of business on the applicable Record
Date; provided, that (i) while the Securities Depository is the registered
owner of the Bonds, all payments of principal of, premium, if any, and interest
on the Bonds shall be paid to the Securities Depository or its nominee by wire
transfer, (ii) prior to and including a Fixed Rate Conversion Date, interest on
the Bonds shall be payable to any registered owner of at least one million
dollars ($1,000,000) in aggregate principal amount of Bonds by wire transfer,
upon written notice received by the Registrar and Paying Agent at least five
days prior to the applicable Record Date, from such registered owner containing
the wire transfer address (which shall be in the continental United States) to
which such registered owner wishes to have such wire directed and (iii) during
a Commercial Paper Rate Period, interest shall be payable on the Bonds only
upon presentation and surrender thereof to the Registrar and Paying Agent upon
purchase thereof pursuant to Section 5.03 and if such presentation and
surrender is made by 2:00 p.m. (New York City time) such payment shall be by
wire transfer.  If and to the extent
that there shall be a default in the payment of the interest due on any
Interest Payment Date,


 


39

















 


such
interest shall cease to be payable to the person in whose name each Bond of
such series was registered on such applicable Record Date and shall be payable,
when and if paid to the person in whose name each Bond of such series is
registered at the close of business on the record date fixed therefor by the
Trustee, which shall be the fifth Business Day next preceding the date of the
proposed payment.  Except as provided
above, payment of the principal of and premium, if any, on all Bonds shall be
made upon the presentation and surrender of such Bonds at the principal office
of the Registrar and Paying Agent as the same shall become due and
payable.  The principal of and premium,
if any, and interest on the Bonds shall be payable in lawful money of the
United States of America.


 


3.                               Not less than one Business Day prior to each
Computation Date and two Business Days prior to a Fixed Rate Conversion Date,
the Indexing Agent shall establish and provide to the applicable Remarketing
Agent the related rate index as set forth in the definition of such rate index
in Section 1.01; provided that, for each Calculation Period during a Daily
Rate Period, the Indexing Agent shall establish and provide the related rate
index to the applicable Remarketing Agent on each Determination Date; and
provided further that, for each Calculation Period during a Monthly Rate
Period, the Indexing Agent shall establish and provide the related rate index
to the applicable Remarketing Agent not later than each Computation Date.  Notwithstanding the foregoing, in the event
that the applicable Remarketing Agent, in its sole judgment, shall determine on
a Determination Date that any Daily Rate Index, Weekly Rate Index or any
Commercial Paper Rate Index so established is sufficiently non-representative
of current market conditions that the Bonds may not be remarketed at par if
such rate is set at a rate not greater than 110% of the applicable rate index,
the applicable Remarketing Agent may establish a new rate index on a
Determination Date in accordance with the procedures and standards described in
the definition of such rate index and for purposes of such rate index so
established, all references to Indexing Agent in this Indenture shall be deemed
to refer to the applicable Remarketing Agent. 
On any date when any Weekly Rate Index or any Commercial Paper Rate Index
is established by a Remarketing Agent pursuant to this paragraph, such rate
index shall have the respective meaning set forth in Section 1.01 (except
as otherwise provided in the preceding sentence); provided that for any
Commercial Paper Rate Index, the applicable Remarketing Agent shall select
securities (whether or not actually issued) having a term approximately equal
to the applicable Commercial Paper Rate Period or which are subject to optional
or mandatory tender by the owner thereof at the end of a term approximately
equal to (or as close thereto as is practicably available) the applicable
Commercial Paper Rate Period.


 


4.                               By 12:00 noon (New York City time) on each
Determination Date or by 3:00 p.m. (New York City time) on each Auction Date,
as the case may be, the applicable Remarketing Agent or the Auction Agent, as
the case may be, shall make available to the Authority, the Trustee, the
Registrar and Paying Agent, any issuer of a Support Facility, the Company, any
Broker-Dealer or any registered owner of a Bond the interest rate or rates
determined on such Determination Date or Auction Date.


 


5.                               If for any reason on any Determination Date
(A) any rate of interest for a Calculation Period is not determined by the
applicable Remarketing Agent, (B) no Remarketing Agent is serving as such
hereunder or (C) the rate so determined is held to be invalid or


 


40

















 


unenforceable
by a final judgment of a court of competent jurisdiction, (i) during any Daily
Rate Period, the interest rate for the next succeeding Calculation Period shall
be the last interest rate in effect, or, if a Daily Rate is not determined by
the applicable Remarketing Agent hereunder for five or more consecutive
Business Days on the next and each succeeding Determination Date, the Daily
Rate shall be a rate per annum equal to 80% of the latest 30-day dealer taxable
commercial paper rate published by the Federal Reserve Bank of New York on or
immediately before such Determination Date, (ii) during any Weekly Rate Period,
the interest rate for the next succeeding Calculation Period shall be the last
interest rate in effect, or, if a Weekly Rate is not determined by the
applicable Remarketing Agent for two or more consecutive Calculation Periods,
the Weekly Rate shall be equal to 85% of the latest 30-day dealer taxable
commercial paper rate published by the Federal Reserve Bank of New York on or
before the day next preceding such Determination Date, (iii) during any Monthly
Rate, Semi-annual Rate or Term Rate Period, the interest rate per annum for the
next succeeding Calculation Period shall be equal to 85% of the rate listed in
the table most recently circulated by the United States Treasury Department
known as “Table [applicable dates shown on the most recent Table], Maximum
Interest Rate Payable on United States Treasury Certificates of Indebtedness,
Notes and Bonds-State and Local Government Series Subscribed for During Period
[applicable dates shown on the most recent Table]” or any substantially
equivalent table circulated by the United States Treasury Department for the
maturity most closely approximating the Calculation Period, and (iv) during any
Commercial Paper Rate Period, the next succeeding Calculation Period shall be a
Calculation Period which shall consist of the period from and including the
prior Interest Payment Date to but excluding the first Business Day of the
following calendar month and the Commercial Paper Rate shall be equal to 85% of
the interest rate applicable to 90-day United States Treasury Bills determined
on the basis of the average per annum discount rate at which such 90-day
Treasury Bills shall have been sold at the most recent Treasury auction within
the 30 days next preceding such Calculation Period, or if there shall have been
no such auction within the 30 days next preceding such Calculation Period, the
Commercial Paper Rate shall be equal to the rate of interest borne by such Bond
during the next preceding Calculation Period for such Bond.  The rate of interest or Calculation Period
and related Commercial Paper Rate shall be established pursuant to this
Subsection 5 until the applicable Remarketing Agent again determines the
rates of interest or Calculation Periods and related Commercial Paper Rates in
accordance with this Indenture.  The
Trustee shall, upon the direction of the Company, select any person otherwise
meeting the qualifications of Section 11.14 to obtain, calculate and
prepare any of the information required by this Subsection 5.


 


6.                               The determination of any rate of interest for
a subseries of Bonds by a Remarketing Agent in accordance with this Indenture
or by the Auction Agent in accordance with the Auction Procedures applicable to
Auction Rate Bonds, or the establishment of Calculation Periods or Auction
Periods by a Remarketing Agent as provided in this Indenture shall be
conclusive and binding upon the Authority, the Company, the Trustee, the
Registrar and Paying Agent, such Remarketing Agent, the Auction Agent, any
issuer of a Support Facility, the Broker-Dealers for such subseries of Bonds
and the registered or beneficial owners of such subseries of Bonds.  Failure of such Remarketing Agent, the
Trustee, the Registrar and Paying Agent, the Auction Agent or the Securities
Depository or any Securities Depository


 


41

















 


participant
to give any of the notices described in this Indenture, or any defect therein,
shall not affect the interest rate to be borne by any of the Bonds nor the
applicable Calculation Period or Auction Period nor in any way change the
rights of the registered owners of the Bonds to tender their Bonds for purchase
or to have them redeemed in accordance with this Indenture.


 


7.                               No transfer or exchange of Bonds shall be
required to be made by the Registrar and Paying Agent after a Record Date until
the next succeeding Interest Payment Date.


 


8.                               Except as otherwise provided in this
Subsection 8, the Trustee shall calculate and notify the Registrar and
Paying Agent of the amount of interest due and payable on each Interest Payment
Date or date on which a Bond is subject to purchase by 10:00 a.m. on the
Business Day next preceding such Interest Payment Date or date set for
purchase, as the case may be, unless such date is a date on which the interest
rate is determined, in which case the amount of interest due and payable shall
be calculated by 12:15 p.m. on such date. 
In preparing such calculation the Trustee may conclusively rely on
calculations or other services provided by the Auction Agent, the applicable
Remarketing Agent, the Company or any person or persons selected by the Trustee
in its discretion.  During a Commercial
Paper Rate Period, the applicable Remarketing Agent shall notify the Trustee,
the Registrar and Paying Agent and the Company of the amount of interest due and
payable on each Interest Payment Date by 10:00 a.m. on the Business Day next
preceding such Interest Payment Date.


 


9.                               Anything herein to the contrary
notwithstanding, in no event shall the interest rate borne by any Bond exceed
the Maximum Allowed Rate.


 


10.                         Notwithstanding anything in this Indenture to
the contrary, if Bonds have been in a Term Rate Period and there has been a
failure to pay the Purchase Price of such Bonds on the Business Day immediately
following a Calculation Period, such Bonds shall continue, to the extent
permitted by applicable law, to bear interest at the then-existing Term Rate
until such Purchase Price has been paid.


 


SECTION 3.02.                                 Commercial Paper Rate.


 


1.                               During any Commercial Paper Rate Period, at
or prior to 12:00 noon (New York City time) on each Determination Date, each
Remarketing Agent shall establish Calculation Periods and related Commercial
Paper Rates.  In determining Calculation
Periods, each Remarketing Agent shall take the following factors into account:
(i) existing short-term taxable and 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 or obligations having a credit rating that is comparable
to the Bonds, (iv) general economic conditions, (v) economic and financial
factors present in the securities industry that may affect or that may be
relevant to the Bonds and (vi) any information available to such Remarketing
Agent pertaining to the Company regarding any events or anticipated events
which could have a direct impact on the marketability of or interest rates on
the Bonds.  Each Remarketing Agent shall
select the Calculation Periods and the applicable Commercial Paper Rates that,
together with all other Calculation Periods and related


 


42

















 


Commercial
Paper Rates, in the sole judgment of the applicable Remarketing Agent, will
result in the lowest overall borrowing cost on the Bonds or are otherwise in
the best financial interests of the Company, as determined in consultation with
the Company.  Any Calculation Period
established hereunder may not extend beyond the second Business Day next
preceding the expiration date of the Support Facility or the day prior to the
Stated Maturity.


 


2.                               The Authority, at the request of the Company,
may place such limitations upon the establishment of Calculation Periods
pursuant to Subsection 1 hereof as may be set forth in a written direction
from the Authority, which direction must be received by the Trustee and the
applicable Remarketing Agent prior to 10:00 a.m. (New York City time) on the
day prior to any Determination Date to be effective on such date, but only if
the Trustee receives an Opinion of Bond Counsel to the effect that such action
is authorized by this Indenture, is permitted under the Act and will not have
an adverse effect on the exclusion of interest on the Bonds from gross income
for Federal income tax purposes.


 


SECTION 3.03.                                 Auction Rate Period - Auction Rate: Auction
Period -  General.


 


1.                               During any Auction Rate Period, the Auction
Rate Bonds shall bear interest at the Auction Rate determined as set forth in
this Section 3.03 and Sections 3.04 through 3.10.  The initial Auction Period for each
subseries of the Bonds immediately after the Closing Date shall be a period
from and including the Closing Date to and including the initial Auction Date
for each such subseries.  The initial
Auction Date immediately after the Closing Date shall be March 3, 2004 for
all subseries of the Bonds.  The Auction
Rate for the initial Auction Period immediately after the Closing Date shall be
0.85% in the case of the Series 2004B-1-1 Bonds, 0.75% in the case of the Series
2004 B-1-2 Bonds, 0.85% in the case of the Series 2004 B-1-3 Bonds, 0.85% in
the case of the Series 2004 B-1-4 Bonds and 0.90% in the case of the Series
2004 B-2 Bonds.  The initial Auction
Period for each subseries of the Bonds immediately after any Change in the
Interest Rate Mode to an Auction Rate, shall be a period from and including the
effective date of such Change in the Interest Rate Mode to and including the
initial Auction Date which shall be determined by the Authority, with notice to
the Trustee, on or prior to the effective date of the Change in the Interest
Rate Mode.  The Auction Rate for any
initial Auction Period immediately after any Change in the Interest Rate Mode
to an Auction Rate for an Auction Rate Period, shall be the rate of interest
per annum determined by the applicable Remarketing Agent, with notice to the
Trustee, the Authority, the Registrar and Paying Agent and the Company, on a
date not later than the effective date of such Change in the Interest Rate Mode
as the minimum rate of interest which, in the opinion of such Remarketing
Agent, would be necessary as of such date to market Auction Rate Bonds in a
secondary market transaction at a price equal to the principal amount thereof;
provided that such interest rate shall not exceed the Maximum Allowed
Rate.  For any other Auction Period, the
Auction Rate shall be the rate of interest per annum that results from
implementation of the Auction Procedures. 
If on any Auction Date the Auction Agent shall fail to determine, or for
any reason fail to timely provide, a rate of interest pursuant to the Auction
Procedures, the Auction Rate for the next succeeding Auction Period shall be
extended at the same rate and such Auction Period and each succeeding Auction
Period shall be a seven-day Auction Period until an Auction Period for which
the Auction Agent shall determine and timely provide the


 


43

















 


rate
of interest pursuant to the Auction Procedures; provided, that, after three
such periods during which such failure occurs, the Auction Rate shall become
the Maximum Auction Rate until an Auction Period for which the Auction Agent
shall determine and timely provide the rate of interest pursuant to the Auction
Procedures.  Determination of an Auction
Rate pursuant to the Auction Procedures shall be suspended upon a Change in the
Interest Rate Mode or the occurrence of a Payment Default.  The Auction Rate for any Auction Period or
remaining portion thereof following the occurrence of a Payment Default shall
be equal to the Overdue Rate as determined on and as of the immediately
preceding Auction Date.  Upon the
occurrence of a Payment Default that has not been waived or cured on or prior
to any Auction Date, no Auction will be held, all Submitted Bids and Submitted
Sell Orders shall be rejected, the existence of Sufficient Clearing Bids shall
be of no effect and the Auction Rate for the next succeeding Auction Period
shall equal the Overdue Rate on and as of such Auction Date.  In the event of the suspension of the
Auction Procedures due to a Payment Default, the Auction Procedures shall
resume two Business Days after the date on which the Auction Agent receives
notice from the Trustee that the Payment Default has been cured, with the next
Auction to occur on the next regularly scheduled Auction Date occurring
thereafter.  The Overdue Rate shall be
determined by the Trustee on each succeeding Auction Date.


 


2.                               Auction Periods may be established pursuant
to Section 3.04 at any time unless a Payment Default has occurred and has
not been cured.  Each Auction Period
shall be a Standard Auction Period unless a different Auction Period is
established pursuant to Section 3.04 and each Auction Period which immediately
succeeds a non-Standard Auction Period shall be a Standard Auction Period
unless a different Auction Period is established pursuant to Section 3.04.


 


SECTION 3.04.                                 Auction Rate Period - Auction Rate Bonds:
Change of Auction Period by Authority.


 


1.                               During an Auction Rate Period, the Authority,
at the request of the Company, may change the length of a single Auction Period
or the Standard Auction Period by means of a written notice delivered at least
10 days prior to the Auction Date for such Auction Period to the Trustee, the
applicable Market Agents, the Auction Agent, the Bond Insurer and the Company
in substantially the form furnished to the Trustee and the Auction Agent at the
time of a Change in the Interest Rate Mode to an Auction Rate.  Any Auction Period or Standard Auction
Period established by the Authority pursuant to this Section 3.04 may not
exceed 365 days in duration.  If such
Auction Period will be of less than 28 days, such notice shall be effective
only if it is accompanied by a written statement of the Registrar and Paying
Agent, the Trustee, the applicable Market Agents and the Auction Agent to the
effect that they are capable of performing their duties hereunder and under the
related Market Agent Agreements and the Auction Agency Agreement with respect
to such Auction Period.  If such notice
specifies a change in the length of the Standard Auction Period, such notice
shall be effective only if it is accompanied by the written consent of such
Market Agents to such change.  The
length of an Auction Period or the Standard Auction Period may not be changed
pursuant to this Section 3.04 unless Sufficient Clearing Bids existed at
both the Auction immediately preceding the date the notice of such change was
given and the Auction


 


44

















 


immediately
preceding such changed Auction Period or Standard Auction Period or if a
Payment Default has occurred and has not been cured.


 


2.                               The change in length of an Auction Period or
the Standard Auction Period by the Authority at the request of the Company
shall take effect only if (A) the Trustee, the Credit Facility Issuer and the
Auction Agent receive, by 11:00 a.m. (New York City time) on the Business Day
immediately preceding the Auction Date for such Auction Period, a certificate
from the Authority, on behalf of the Company, by telecopy or similar means in
substantially the form furnished to the Trustee and the Auction Agent at the
time of a Change in the Interest Rate Mode to an Auction Rate authorizing
establishment of and specifying the length of the new Auction Period or the
Standard Auction Period, which shall be specified in such certificate, and
confirming that Bond Counsel expects to be able to give an Opinion of Bond
Counsel on the first day of the Auction Period for which such change is being
required, (B) the Trustee shall not have delivered to the Auction Agent by
12:00 noon (New York City time) on the Auction Date for such Auction Period
notice that a Payment Default has occurred, (C) Sufficient Clearing Bids exist
at the Auction on the Auction Date for such Auction Period, and (D) the
Trustee, the Credit Facility Issuer and the Auction Agent receive by 9:30 a.m.
(New York City time) on the first day of such Auction Period, an Opinion of
Bond Counsel to the effect that the change in the Auction Period or the
Standard Auction Period is authorized by this Indenture, is permitted under the
Act and will not have an adverse effect on the exclusion of interest on such
Bonds from gross income for Federal income tax purposes.  If the condition referred to in (A) above is
not met, the Auction Rate for the next succeeding Auction Period shall be
determined pursuant to the Auction Procedures and the next succeeding Auction
Period shall be a Standard Auction Period. 
If any of the conditions referred to in (B), (C) or (D) above is not
met, the Auction Rate for the next succeeding Auction Period shall equal the
Maximum Auction Rate as determined as of such Auction Date and the next
succeeding Auction Period shall be a seven-day Auction Period.


 


3.                               On the Auction Date immediately preceding the
effective date of any change in the length of an Auction Period or the Standard
Auction Period, any Bonds which are not the subject of a specific Order shall
be deemed to be subject to a Sell Order.


 


4.                               In the event of a Change in the Interest Rate
Mode to an Auction Rate, the Authority, at the request of the Company, shall
determine the length of the initial Auction Period and may change the length of
a single or the Standard Auction Period by means of a written notice delivered
on or prior to the effective date of such Change in the Interest Rate Mode to
an Auction Rate to the Trustee, the applicable Market Agents, the Auction Agent
and the Credit Facility Issuer. 
Notwithstanding anything to the contrary in paragraphs 1 and 2 of this
Section 3.04, the determination of the initial Auction Period shall take
effect on the effective date of such Change in the Interest Rate Mode to an
Auction Rate.  Notwithstanding anything
to the contrary in paragraphs 1 and 2 of this Section 3.04, the change in
the length of a single Auction Period or the Standard Auction Period shall take
effect only if the Trustee, the Credit Facility Issuer and the Auction Agent
receive on the effective date of such Change in the Interest Rate Mode to an
Auction Rate, an Opinion of Bond Counsel to the effect that the change in the
Auction Period or the Standard Auction Period is authorized by this Indenture,
is


 


45

















 


permitted
under the Act and will not have an adverse effect on the exclusion of interest
on such Bonds from gross income for Federal income tax purposes.


 


SECTION 3.05.                                 Auction Rate Period - Auction Rate Bonds:
Change of Auction Date by Market Agents.  During an Auction Rate Period
the Market Agent for a subseries of Bonds, with the written consent of the
Company, may change, in order to conform with then-current market practice with
respect to similar securities or to accommodate economic and financial factors
that may affect or be relevant to the day of the week constituting an Auction
Date, the Auction Date for all future Auction Periods relating to the
applicable subseries of Bonds to a different day, so long as the first such
Auction Date will be a Business Day in the calendar week in which the next
succeeding Auction Date is then scheduled to occur.  If a change in an Auction Date is undertaken in conjunction with
a change in an Auction Period and the conditions for the establishment of such
change in Auction Period are not met, the Auction Date may be, and the next
succeeding Auction Period may be adjusted to end on, a Business Day in the
calendar week in which such Auction Date was scheduled to occur and such
Auction Period was scheduled to end to accommodate the change in the Auction
Date.  Such Market Agent shall
communicate its determination to change an Auction Date by means of a written
notice delivered at least 10 days prior to the Auction Date immediately
preceding such Auction Date, or with respect to a Change in the Interest Rate
Mode to an Auction Rate on or prior to the effective date of such Change in the
Interest Rate Mode, to the Authority, the Trustee, the Bond Insurer, the
Auction Agent and the Company which shall state (i) the determination of such
Market Agent to change the Auction Date, (ii) the new Auction Date and (iii)
the date on which such Auction Date shall be changed.  If as a result of any proposed change in the Auction Date any
Auction Period would be less than 28 days in duration, such notice shall be
effective only if it is accompanied by a written statement of the Auction
Agent, the Registrar and Paying Agent and the Trustee to the effect that they
are capable of performing their duties hereunder and under the Auction Agency
Agreement with respect to any such Auction Period.


 


SECTION 3.06.                                 Auction Rate Period - Auction Rate Bonds:
Orders by Existing Holders and Potential Holders.  (a)
Prior to the Submission Deadline on each Auction Date during the Auction Rate
Period, the following orders may be submitted:


 


(i)                                     each Existing Holder may submit to the
Broker-Dealer by telephone or otherwise information as to:


 


(A)                              the principal amount of Auction Rate Bonds,
if any, held by such Existing Holder which such Existing Holder desires to
continue to hold without regard to the Auction Rate for the next succeeding
Auction Period;


 


(B)                                                                                the principal amount of Auction Rate Bonds,
if any, held by such Existing Holder which such Existing Holder offers to sell
if the Auction Rate for the next succeeding Auction Period shall be less than
the rate per annum specified by such Existing Holder; and/or


 


46

















 


(C)                                the principal amount of Auction Rate Bonds,
if any, held by such Existing Holder which such Existing Holder offers to sell
without regard to the Auction Rate for the next succeeding Auction Period;


 


(ii)                                  one or more Broker-Dealers may contact
Potential Holders by telephone or otherwise to determine the principal amount
of Auction Rate Bonds which each such Potential Holder offers to purchase if
the Auction Rate for the next succeeding Auction Period shall not be less than
the interest rate per annum specified by such Potential Holder.


 


For
the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B) or (i)(C) or clause (ii) above is
hereinafter referred to as an “Order” and collectively as “Orders” and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a “Bidder” and collectively as “Bidders”; an Order containing
the information referred to in clause (i)(A) above is hereinafter referred to
as a “Hold Order” and collectively as “Hold Orders”; an Order containing the
information referred to in clause (i)(B) or clause (ii) above is hereinafter
referred to as a “Bid” and collectively as “Bids”; and an Order containing the
information referred to in clause (i)(C) above is hereinafter referred to as a
“Sell Order” and collectively as “Sell Orders”.  The submission by a Broker-Dealer of an Order to the Auction
Agent shall likewise be referred to herein as an “Order” and collectively as
“Orders”.


 


Orders
may be submitted only in principal amounts of $25,000 or any integral multiple
thereof.


 


(b)(i)                      Subject to the provisions of
Section 3.07, a Bid by an Existing Holder shall constitute an irrevocable
offer to sell:


 


(A)                           the principal amount of Auction Rate Bonds specified in such Bid if the
Auction Rate determined on such Auction Date shall be less than the interest
rate per annum specified therein; or


 


(B)                             such principal amount or a lesser principal amount of Auction Rate
Bonds to be determined as set forth in Subsection (a)(iv) of
Section 3.09 if the Auction Rate determined on such Auction Date shall be
equal to the interest rate per annum specified therein; or


 


(C)                             such principal amount or a lesser principal amount of Auction Rate
Bonds to be determined as set forth in Subsection (b)(iii) of
Section 3.09 if such specified rate shall be higher than the Maximum
Auction Rate and Sufficient Clearing Bids do not exist.


 


(ii)                                  Subject to the provisions of
Section 3.07, a Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:


 


(A)                           the principal amount of Auction Rate Bonds specified in such Sell
Order; or


 


47

















 


(B)                             such principal amount or a lesser principal amount of Auction Rate
Bonds as set forth in Subsection (b)(iii) of Section 3.09 if
Sufficient Clearing Bids do not exist.


 


(iii)                               Subject to the provisions of Section 3.07, a Bid by a Potential
Holder shall constitute an irrevocable offer to purchase:


 


(A)                           the principal amount of Auction Rate Bonds specified in such Bid if the
Auction Rate determined on such Auction Date shall be higher than the rate
specified therein; or


 


(B)                             such principal amount or a lesser principal amount of Auction Rate
Bonds as set forth in Subsection (a)(v) of Section 3.09 if the
Auction Rate determined on such Auction Date shall be equal to such specified
rate.


 


SECTION 3.07.                                 Auction Rate Period - Auction Rate Bonds: Submission
of Orders by Broker-Dealers to Auction Agent.  (a)  During an Auction Rate Period each Broker-Dealer shall submit in
writing to the Auction Agent prior to the Submission Deadline on each Auction
Date, all Orders obtained by such Broker-Dealer, and shall specify with respect
to each such Order:


 


(i)                                     the name of the Bidder placing such Order;


 


(ii)                                  the aggregate principal amount of Auction
Rate Bonds that are subject to such Order;


 


(iii)                               to the extent that such Bidder is an Existing Holder:


 


(A)                           the principal amount of Auction Rate Bonds, if any, subject to any Hold
Order placed by such Existing Holder;


 


(B)                             the principal amount of Auction Rate Bonds, if any, subject to any Bid
placed by such Existing Holder and the rate specified in such Bid; and


 


(C)                             the principal amount of Auction Rate Bonds, if any, subject to any Sell
Order placed by such Existing Holder; and


 


(iv)                              to the extent such Bidder is a Potential Holder, the principal amount
of Auction Rate Bonds subject to any Bid placed by such Potential Holder and
the rate specified in such Bid.


 


(b)                                 If any rate specified in any Bid contains
more than three figures to the right of the decimal point, the Auction Agent
shall round such rate up to the next highest one thousandth (.001) of 1%.


 


48

















 


(c)                                  If an Order or Orders covering all Auction
Rate Bonds held by an Existing Holder is not submitted to the Auction Agent
prior to the Submission Deadline, the Auction Agent shall deem a Hold Order to
have been submitted on behalf of such Existing Holder covering the principal
amount of Auction Rate Bonds held by such Existing Holder and not subject to
Orders submitted to the Auction Agent; provided, however, that if
there is a change in the length of the Auction Period or the Standard Auction
Period in accordance with Section 3.04 hereof or an amendment or
modification to the Indenture or the Participation Agreement in accordance with
Section 14.02 or 14.07 hereof, as the case may be, and Orders  have not been submitted to the Auction Agent
prior to the Submission Deadline covering the aggregate principal amount of
Auction Rate Bonds that are subject to such change in the length of the Auction
Period or the Standard Auction Period or amendment or modification, as the case
may be, the Auction Agent shall deem a Sell Order to have been submitted on
behalf of such Existing Holder covering the principal amount of Auction Rate
Bonds subject to such change or modification or amendment and not subject to
Orders submitted to the Auction Agent.


 


(d)                                 Neither the Authority, the Company, the
Trustee nor the Auction Agent shall be responsible for any failure of a
Broker-Dealer to submit an Order to the Auction Agent on behalf of any Existing
Holder or Potential Holder.


 


(e)                                  If any Existing Holder submits through a
Broker-Dealer to the Auction Agent one or more Orders covering in the aggregate
more than the principal amount of Auction Rate Bonds held by such Existing
Holder, such Orders shall be considered valid as follows and in the following
order of priority:


 


(i)                                     all Hold Orders shall be considered valid,
but only up to and including the principal amount of Auction Rate Bonds held by
such Existing Holder, and, if the aggregate principal amount of Auction Rate
Bonds subject to such Hold Orders exceeds the aggregate principal amount of
Auction Rate Bonds held by such Existing Holder, the aggregate principal amount
of Auction Rate Bonds subject to each such Hold Order shall be reduced pro rata
to cover the aggregate principal amount of 
Auction Rate Bonds held by such Existing Holder;


 


(ii)                                  (A)                              any Bid shall be considered valid up to and including the excess of the
principal amount of Auction Rate Bonds held by such Existing Holder over the
aggregate principal amount of Auction Rate Bonds subject to any Hold Orders
referred to in paragraph (i) above;


 


(B)                                subject to clause (A) above, if more than one Bid with the same rate is
submitted on behalf of such Existing Holder and the aggregate principal amount
of Auction Rate Bonds subject to such Bids is greater than such excess, such
Bids shall be considered valid up to and including the amount of such excess,
and, the principal amount of Auction Rate Bonds subject to each Bid with the
same rate shall be reduced pro rata to cover the principal amount of Auction
Rate Bonds equal to such excess;


 


49

















 


(C)                                subject to clauses (A) and (B) above, if more than one Bid with
different rates is submitted on behalf of such Existing Holder, such Bids shall
be considered valid in the ascending order of their respective rates until the
highest rate is reached at which such excess exists and then at such rate up to
and including the amount of such excess; and


 


(D)                               in any such event, the aggregate principal amount of Auction Rate
Bonds, if any, subject to any portion of Bids not valid under this paragraph
(ii) shall be treated as the subject of a Bid by a Potential Holder at the rate
therein specified; and


 


(iii)                               all Sell Orders shall be considered valid up to and including the
excess of the principal amount of Auction Rate Bonds held by such Existing
Holder over the aggregate principal amount of Auction Rate Bonds subject to
valid Hold Orders referred to in paragraph (i) of this Subsection (e) and
valid Bids referred to in paragraph (ii) of this Subsection (e).


 


(f)                                    If more than one Bid for Auction Rate Bonds
is submitted on behalf of any Potential Holder, each Bid submitted shall be a
separate Bid for Auction Rate Bonds with the rate and principal amount therein specified.


 


(g)                                 Any Bid or Sell Order submitted by an
Existing Holder covering an aggregate principal amount of Auction Rate Bonds
not equal to $25,000 or an integral multiple thereof shall be rejected and
shall be deemed a Hold Order.  Any Bid
submitted by a Potential Holder covering an aggregate principal amount of
Auction Rate Bonds not equal to $25,000 or an integral multiple thereof shall
be rejected.


 


SECTION 3.08.                                 Auction Rate Period - Auction Rate Bonds:
Determination of Sufficient Clearing Bids, Winning Bid Rate and Auction Rate.  (a)
During an Auction Rate Period not earlier than the Submission Deadline on each
Auction Date, the Auction Agent shall assemble all valid Orders submitted or
deemed submitted to it by the Broker-Dealers (each such Order as submitted or
deemed submitted by a Broker-Dealer being hereinafter referred to as a
“Submitted Hold Order,” a “Submitted Bid” or a “Submitted Sell Order,” as the
case may be, or as a “Submitted Order”) and shall determine:


 


(i)                                     the excess of the total principal amount of
Auction Rate Bonds over the aggregate principal amount of Auction Rate Bonds
subject to Submitted Hold Orders (such excess being hereinafter referred to as
the “Available Auction Rate Bonds”); and


 


(ii)                                  from the Submitted Orders whether the
aggregate principal amount of Auction Rate Bonds subject to Submitted Bids by
Potential Holders specifying one or more rates equal to or lower than the
Maximum Auction Rate exceeds or is equal to the sum of:


 


50

















 


(A)                              the aggregate principal amount of Auction Rate Bonds subject to
Submitted Bids by Existing Holders specifying one or more rates higher than the
Maximum Auction Rate; and


 


(B)                                the aggregate principal amount of Auction Rate Bonds subject to Submitted
Sell Orders


 


(in
the event of such excess or such equality (other than because the sum of the
principal amounts of Auction Rate Bonds in clauses (A) and (B) above is zero
because all of the Auction Rate Bonds are subject to Submitted Hold Orders), such
Submitted Bids by Potential Holders are hereinafter referred to collectively as
“Sufficient Clearing Bids”); and


 


(iii)                               if Sufficient Clearing Bids exist, the lowest rate specified in the
Submitted Bids (the “Winning Bid Rate”) which if:


 


(A)(I) each Submitted Bid from Existing Holders
specifying such lowest rate and (II) all other Submitted Bids from Existing
Holders specifying lower rates were rejected, thus requiring such Existing
Holders to continue to hold the principal amount of Auction Rate Bonds that are
the subject of such Submitted Bids; and


 


(B)(I) each Submitted Bid from Potential Holders
specifying such lowest rate and (II) all other Submitted Bids from Potential
Holders specifying lower rates were accepted,


 


would
result in such Existing Holders described in clause (A) above continuing to
hold an aggregate principal amount of Auction Rate Bonds which, when added to
the aggregate principal amount of Auction Rate Bonds to be purchased by such
Potential Holders described in clause (B) above, would equal not less than the
Available Auction Rate Bonds.


 


(b)                                 Promptly after the Auction Agent has made the
determinations pursuant to Subsection (a) of this Section 3.08, the
Auction Agent, by telecopy confirmed in writing, shall advise the Company, the Trustee
and the Broker-Dealers of the Maximum Auction Rate and the components thereof
on the Auction Date and, based on such determinations, the Auction Rate for the
next succeeding Auction Period as follows:


 


(i)                                     if Sufficient Clearing Bids exist, the Auction
Rate for the next succeeding Auction Period therefor shall be equal to the
Winning Bid Rate so determined;


 


(ii)                                  if Sufficient Clearing Bids do not exist
(other than because all of the Auction Rate Bonds are the subject of Submitted
Hold Orders), the Auction Rate for the next succeeding Auction Period therefor
shall be equal to the Maximum Auction Rate; and


 


51

















 


(iii)                               if all of the Auction Rate Bonds are subject to Submitted Hold Orders,
the Auction Rate for the next succeeding Auction Period therefor shall be equal
to the All Hold Rate.


 


SECTION 3.09.                                 Auction Rate Period - Auction Rate Bonds:
Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Auction Rate Bonds.  During an Auction Rate Period
Existing Holders shall continue to hold the principal amounts of Auction Rate
Bonds that are subject to Submitted Hold Orders, and, based on the
determinations made pursuant to Subsection (a) of this Section 3.09,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected, and
the Auction Agent shall take such other actions as are set forth below:


 


(a)                                  If Sufficient Clearing Bids exist, all
Submitted Sell Orders shall be accepted and, subject to the provisions of paragraphs
(e) and (f) of this Section 3.09, Submitted Bids shall be accepted or
rejected as follows in the following order of priority:


 


(i)                                             Existing Holders’ Submitted Bids specifying
any rate that is higher than the Winning Bid Rate shall be accepted, thus
requiring each such Existing Holder to sell the aggregate principal amount of
Auction Rate Bonds subject to such Submitted Bids;


 


(ii)                                          Existing Holders’ Submitted Bids specifying
any rate that is lower than the Winning Bid Rate shall be rejected, thus requiring
each such Existing Holder to continue to hold the aggregate principal amount of
Auction Rate Bonds subject to such Submitted Bids;


 


(iii)                                       Potential Holders’ Submitted Bids specifying
any rate that is lower than the Winning Bid Rate shall be accepted, thus
requiring each such Potential Holder to purchase the aggregate principal amount
of Auction Rate Bonds subject to such Submitted Bids;


 


(iv)                                      each Existing Holder’s Submitted Bid
specifying a rate that is equal to the Winning Bid Rate shall be rejected, thus
requiring such Existing Holder to continue to hold the aggregate principal
amount of Auction Rate Bonds subject to such Submitted Bid, unless the
aggregate principal amount of Auction Rate Bonds subject to all such Submitted
Bids shall be greater than the principal amount of Auction Rate Bonds (the
“remaining principal amount”) equal to the excess of Available Auction Rate
Bonds over the aggregate principal amount of the Auction Rate Bonds subject to
Submitted Bids described in paragraphs (ii) and (iii) of this
Subsection (a), in which event such Submitted Bid of such Existing Holder
shall be rejected in part, and such Existing Holder shall be entitled to
continue to hold the principal amount of Auction Rate Bonds subject to such
Submitted Bid, but only in an amount equal to the principal amount of Auction
Rate Bonds obtained by multiplying the remaining principal amount by a
fraction, the numerator of which shall be the principal amount of Auction Rate
Bonds held by such Existing Holder subject to such Submitted Bid and the


 


52

















 


denominator
of which shall be the sum of the principal amounts of Auction Rate Bonds
subject to such Submitted Bids made by all such Existing Holders that specified
a rate equal to the Winning Bid Rate; and


 


(v)                                         each Potential Holder’s Submitted Bid
specifying a rate that is equal to the Winning Bid Rate shall be accepted but
only in an amount equal to the principal amount of Auction Rate Bonds obtained
by multiplying the excess of the Available Auction Rate Bonds over the
aggregate principal amount of Auction Rate Bonds subject to Submitted Bids
described in paragraphs (ii), (iii) and (iv) of this Subsection (a) by a
fraction the numerator of which shall be the aggregate principal amount of
Auction Rate Bonds subject to such Submitted Bid of such Potential Holder and
the denominator of which shall be the sum of the principal amount of Auction
Rate Bonds subject to Submitted Bids made by all such Potential Holders that
specified a rate equal to the Winning Bid Rate.


 


(b)                                 If Sufficient Clearing Bids do not exist
(other than because all of the Auction Rate Bonds are subject to Submitted Hold
Orders), subject to the provisions of Subsection (e) of this
Section 3.09, Submitted Orders shall be accepted or rejected as follows in
the following order of priority:


 


(i)                                     Existing Holders’ Submitted Bids specifying
any rate that is equal to or lower than the Maximum Auction Rate shall be
rejected, thus requiring each such Existing Holder to continue to hold the
aggregate principal amount of Auction Rate Bonds subject to such Submitted
Bids;


 


(ii)                                  Potential Holders’ Submitted Bids specifying
any rate that is equal to or lower than the Maximum Auction Rate shall be
accepted, thus requiring each such Potential Holder to purchase the aggregate
principal amount of Auction Rate Bonds subject to such Submitted Bids; and


 


(iii)                               each Existing Holder’s Submitted Bid specifying any rate that is higher
than the Maximum Auction Rate and the Submitted Sell Order of each Existing
Holder shall be accepted, thus requiring each Existing Holder that submitted
any such Submitted Bid or Submitted Sell Order to sell the Auction Rate Bonds
subject to such Submitted Bid or Submitted Sell Order, but in both cases only
in an amount equal to the aggregate principal amount of Auction Rate Bonds
obtained by multiplying the aggregate principal amount of Auction Rate Bonds
subject to Submitted Bids described in paragraph (ii) of this
Subsection (b) by a fraction, the numerator of which shall be the
aggregate principal amount of Auction Rate Bonds held by such Existing Holder
subject to such Submitted Bid or Submitted Sell Order and the denominator of
which shall be the aggregate principal amount of Auction Rate Bonds subject to all
such Submitted Bids and Submitted Sell Orders.


 


(c)                                  If all Auction Rate Bonds are subject to
Submitted Hold Orders, all Submitted Bids shall be rejected.


 


53

















 


(d)                                 If (i) the Auction Agent shall fail to determine,
or for any reason fail to timely provide, an interest rate pursuant to the
Auction Procedures or (ii) the conditions set forth in Subsection 2 of
Section 3.04 to effect a change in the Auction Period are not met, all
Submitted Bids and Submitted Sell Orders shall be rejected and the existence of
Sufficient Clearing Bids shall be of no effect.


 


(e)                                  If, as a result of the procedures described
in Subsection (a) or (b) of this Section 3.09, any Existing Holder
would be required to sell, or any Potential Holder would be required to
purchase, a principal amount of Auction Rate Bonds that is not equal to $25,000
or an integral multiple thereof, the Auction Agent shall, in such manner as, in
its sole discretion, it shall determine, round up or down the principal amount
of such Auction Rate Bonds to be purchased or sold by any Existing Holder or
Potential Holder so that the principal amount purchased or sold by each
Existing Holder or Potential Holder shall be equal to $25,000 or an integral
multiple thereof.


 


(f)                                    If, as a result of the procedures described
in Subsection (a) of this Section 3.09, any Potential Holder would be
entitled or required to purchase less than $25,000 in aggregate principal
amount of Auction Rate Bonds, the Auction Agent shall, in such manner as, in
its sole discretion, it shall determine, allocate Auction Rate Bonds for
purchase among Potential Holders so that only Auction Rate Bonds in principal
amounts of $25,000 or an integral multiple thereof are purchased by any
Potential Holder, even if such allocation results in one or more of such
Potential Holders not purchasing any Auction Rate Bonds.


 


(g)                                 Based on the results of each Auction, the
Auction Agent shall determine the aggregate principal amounts of Auction Rate
Bonds to be purchased and the aggregate principal amounts of Auction Rate Bonds
to be sold by Potential Holders and Existing Holders on whose behalf each
Broker-Dealer submitted Bids or Sell Orders and, with respect to each
Broker-Dealer, to the extent that such aggregate principal amount of Auction
Rate Bonds to be sold differs from such aggregate principal amount of Auction
Rate Bonds to be purchased, determine to which other Broker-Dealer or
Broker-Dealers acting for one or more purchasers or Auction Rate Bonds such
Broker-Dealer shall deliver, or from which other Broker-Dealer or
Broker-Dealers acting for one or more sellers of Auction Rate Bonds such
Broker-Dealer shall receive, as the case may be, Auction Rate Bonds.


 


(h)                                 None of the Authority, the Company or any
Affiliate thereof may submit an Order in any Auction except as set forth in the
next sentence.  Any Broker-Dealer that
is an Affiliate of the Company may submit Orders in an Auction but only if such
Orders are not for its own account, except that if such affiliated
Broker-Dealer holds Auction Rate Bonds for its own account, it must submit a
Sell Order on the next Auction Date with respect to such Auction Rate Bonds.


 


54

















 


SECTION 3.10.                                 Auction Rate Period - Auction Rate Bonds:
Adjustment in Percentage.


 


1.                               During an Auction Rate Period, the Market
Agent for a subseries of Bonds may adjust the percentage used in determining
the All Hold Rate and the Applicable Percentages used in determining the
Maximum Auction Rate for such subseries of Bonds if any such adjustment is
necessary, in the judgment of such Market Agent, to reflect any Change of
Preference Law such that the All Hold Rate and Maximum Auction Rate shall have
substantially equal market values before and after such Change of Preference
Law.  In making any such adjustment,
such Market Agent shall take the following factors, as in existence both before
and after such Change of Preference Law, into account: (i)  short-term taxable and tax-exempt market
rates and indices of such short-term rates, (ii)  the market supply and demand for short-term tax-exempt
securities, (iii)  yield curves for
short-term and long-term tax-exempt securities or obligations having a credit
rating that is comparable to the Bonds, (iv) 
general economic conditions and (v) 
economic and financial factors present in the securities industry that
may affect or that may be relevant to the Bonds.


 


2.                               A Market Agent shall communicate its
determination to adjust the percentage used in determining the All Hold Rate
and the Applicable Percentages used in determining the Maximum Auction Rate
pursuant to Subsection 1 hereof by means of a written notice delivered at
least ten days prior to the Auction Date on which such Market Agent desires to
effect the change to the Authority, the Bond Insurer, the Trustee, the Auction
Agent and the Company.  Such notice is
required to state the determination of such Market Agent to change such
percentage and the date such adjustment is proposed to take effect (which date
shall be an Auction Date).  Such notice
shall be effective only if it is accompanied by the form of opinion that Bond
Counsel expects to be able to give on such Auction Date to the effect that such
adjustment is authorized by this Indenture, is permitted under the Act and will
not have an adverse effect on the exclusion of interest on the Auction Rate
Bonds from gross income for Federal income tax purposes.  The Auction Agent is required to mail notice
thereof to the Existing Holders within two Business Days of receipt thereof.


 


3.                               An adjustment in the percentage used in
determining the All Hold Rate and the Applicable Percentages used in
determining the Maximum Auction Rate shall take effect on an Auction Date only
if (A) the Trustee, the Credit Facility Issuer and the Auction Agent receive,
by 11:00 a.m. (New York City time) on the Business Day immediately preceding
such Auction Date, a certificate from the applicable Market Agent by telecopy
or similar means, (i) authorizing the adjustment of the percentage used in
determining the All Hold Rate and the Applicable Percentages used in
determining the Maximum Auction Rate which shall be specified in such
authorization, and (ii) confirming that Bond Counsel expects to be able to give
an opinion on such Auction Date to the effect that the adjustment in the
percentage used in determining the All Hold Rate and the Applicable Percentages
used in determining the Maximum Auction Rate is authorized by this Indenture,
is permitted under the Act and will not have an adverse effect on the exclusion
of interest on the Auction Rate Bonds from gross income for Federal income tax
purposes, and (B) the Trustee, the Credit Facility Issuer and the Auction Agent
receive by 9:30 a.m. (New York City time) on such Auction Date, an Opinion of
Bond Counsel to the effect that the adjustment in the percentage used in


 


55

















 


determining
the All Hold Rate and the Applicable Percentages used in determining the
Maximum Auction Rate is authorized by this Indenture, is permitted under the
Act and will not have an adverse effect on the exclusion of interest on the
Auction Rate Bonds from gross income for Federal income tax purposes.  If the condition referred to in (A) above is
not met, the existing percentage used in determining the All Hold Rate and the
Applicable Percentages used in determining the Maximum Auction Rate shall
remain in effect and the Auction Rate for the next succeeding Auction Period
shall be determined pursuant to the Auction Procedures.  If the condition referred to in (B) above is
not met, the existing percentage used in determining the All Hold Rate and the
Applicable Percentages used in determining the Maximum Auction Rate shall
remain in effect and the Auction Rate for the next succeeding Auction Period
shall equal the Maximum Auction Rate as determined on such Auction Date and the
Auction Period shall be a seven-day Auction Period.


 


56

















 


ARTICLE IV


 


CHANGES IN
THE INTEREST RATE MODE


 


SECTION 4.01.                                         Optional Conversion to an Adjustable Rate by
Authority.


 


1.                                       (A)                              At the times specified below, the Bonds, in whole or in part, shall
cease to bear interest at the Adjustable Rate or the Fixed Rate then borne by
the Bonds and shall bear interest at an Adjustable Rate to be specified as
hereinafter provided by the Authority, at the written request of the Company,
in a written notice delivered at least 30 days prior to the proposed effective
date of the Change in the Interest Rate Mode to the Trustee, the applicable
Remarketing Agent, the Bond Insurer, the Registrar and Paying Agent, and the
Company (and to the Auction Agent and the Securities Depository if such Change
in the Interest Rate Mode is to or from an Auction Rate), in substantially the
form attached hereto as, or containing substantially the information contained
in, Exhibit A hereto.  The written notice of the Authority must
further state that the Indenture provides that the conversion is conditioned on
the Bonds being rated no less than “A” by S&P, “A2” by Moody’s or “A” by
Fitch as of the effective date of the Change in the Interest Rate Mode.  A Change in the Interest Rate Mode may only
be effected on a day on which the affected Bonds may be redeemed at the option
of the Authority.


 


(B)                                [Intentionally Omitted]


 


(C)                                In the case of any Change in the Interest
Rate Mode to a Term Rate, at least 15 days prior to the proposed effective date
of the Change in Interest Rate Mode, the Authority, at the written request of
the Company, shall notify the Trustee of the length of the Calculation Period
and, unless otherwise specified, such Calculation Period shall thereafter apply
to the Bonds until a Change in the Interest Rate Mode effected pursuant to this
Section 4.01 or Section 4.02. 
Notwithstanding the foregoing, no Calculation Period shall be
established during a Term Rate Period unless the Trustee shall receive by 2:00
p.m., New York City time, on the first day of such Calculation Period, evidence
satisfactory to it that the Bonds shall be rated at least “A” by S&P or
“A2” by Moody’s or “A” by Fitch or an equivalent rating by any nationally
recognized rating agency on such date. 
Any change in the Calculation Period during a Term Rate Period shall be
deemed an optional conversion pursuant to this Section 4.01 and may not be
made unless all the requirements of a conversion pursuant to this
Section 4.01 are met.


 


2.                                       The Trustee shall mail, or cause the
Registrar and Paying Agent to mail, the notice received pursuant to clause (A)
of this Section 4.01.1 to the Holders at least 15 days prior to the
proposed effective date of the Change in the Interest Rate Mode.


 


3.                                       A Change in the Interest Rate Mode to an
Adjustable Rate shall be effective pursuant to Subsection 1 of this
Section 4.01 only if


 


(A)                              with respect to any Change in the Interest
Rate Mode from an Auction Rate or from a Fixed Rate to an Adjustable Rate, the
Trustee and the Auction Agent (if any) shall receive:


 


57

















 


(i)                                     a certificate of an Authorized Company
Representative by no later than the tenth day prior to the effective date of
such Change in the Interest Rate Mode stating that a written agreement between
the Company and the applicable Remarketing Agent to remarket the Bonds on such effective
date at a price of 100% of the principal amount thereof has been entered into,
which agreement (i) may be subject to such reasonable terms and conditions
imposed by such Remarketing Agent which in the judgment of that Remarketing
Agent reflect the current market standards regarding investment banking risk
and (ii) must include a provision requiring payment by such Remarketing Agent
in same-day funds for any Bond tendered or deemed tendered; and, if a Liquidity
Facility is required by Section 4.01.3(D), a Liquidity Facility, meeting
the requirements of this Indenture, including Section 6.02.3, and the
Participation Agreement, has or will be obtained by the Company and, by its
terms, be in effect on or prior to the effective date of such Change in the
Interest Rate Mode;


 


(ii)                                  by 11:00 a.m. (New York City time) on the
second Business Day prior to the effective date of such Change in the Interest
Rate Mode, by telecopy or other similar means, a certificate in substantially
the form attached hereto as, or containing substantially the information
contained in, Exhibit B hereto,
from the Authority on behalf of the Company (y) authorizing the establishment
of the new Adjustable Rate and (z) confirming that Bond Counsel has advised the
Authority that it expects to be able to give an opinion on the effective date
of such Change in the Interest Rate Mode to the effect that such Change in the
Interest Rate Mode is authorized by this Indenture, is permitted under the Act
and will not have an adverse effect on the exclusion of interest on the
affected Bonds from gross income for Federal income tax purposes; and


 


(iii)                               by 4:00 p.m. (New York City time) on the effective date of such Change
in the Interest Rate Mode, a certificate from an Authorized Company Representative
to the effect that all of the Bonds tendered or deemed tendered have been
purchased at a price equal to the principal amount thereof with funds provided
from the remarketing of such Bonds in accordance with the Remarketing Agreement
and that premium, if any, and any accrued and unpaid interest on such Bonds has
been paid from funds deposited with the Trustee or the Registrar and Paying
Agent; and


 


(B)                                with respect to any Change in the Interest
Rate Mode, the Trustee (and the Auction Agent in the case of any Change in the
Interest Rate Mode to an Auction Rate), shall receive by 4:00 p.m., New York
City time, on the effective date of such Change in the Interest Rate Mode, a
certificate in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit
C hereto, from an Authorized Company Representative that all of the
Bonds tendered or deemed tendered have been purchased at a price equal to the
principal amount thereof plus premium, if any, plus any accrued and unpaid
interest with funds provided from the remarketing of such Bonds in accordance
with the Remarketing Agreement, from the proceeds of a Support Facility, or
from funds deposited with the Trustee or the Registrar and Paying Agent;
provided that in case of a Change in the Interest Rate Mode from an


 


58

















 


Auction Rate, receipt of such certificate shall not override the
requirements of Section 4.01(3)(A)(iii) herein;


 


(C)                                with respect to any Change in the Interest
Rate Mode, the Trustee (and the Auction Agent in the case of any Change in the
Interest Rate Mode to or from an Auction Rate) shall receive, by 9:30 a.m. (New
York City time) on the effective date of such Change in the Interest Rate Mode,
an Opinion of Bond Counsel to the effect that such Change in the Interest Rate
Mode is authorized by this Indenture, is permitted under the Act and will not
have an adverse effect on the exclusion of interest on such Bonds from gross
income for Federal income tax purposes;


 


(D)                               with respect to any Change in the Interest
Rate Mode to an Adjustable Rate (other than to an Auction Rate or a Term Rate
for a Calculation Period of five years or more), the Trustee shall receive a
Liquidity Facility meeting the requirements of this Indenture, including
Section 6.02.3, and the Participation Agreement on or prior to the
effective date of such Change in the Interest Rate Mode which is, by its terms,
in effect on or prior to such effective date; and


 


(E)                                 with respect to any Change in the Interest
Rate Mode to an Adjustable Rate, the Trustee shall receive by 2:00 p.m., New
York City time, on the effective date of such Change in the Interest Rate Mode,
evidence satisfactory to it that the Bonds shall be rated at least “A” by
S&P or “A2” by Moody’s or “A” by Fitch or an equivalent rating by any
nationally recognized rating agency on the effective date of such Change in the
Interest Rate Mode.


 


If
any of the conditions referred to in (A)(i) or (ii) above is not met with
respect to any Change in the Interest Rate Mode from an Auction Rate, the
Auction Rate for the next succeeding Auction Period shall be determined
pursuant to the Auction Procedures applicable to the Auction Rate Bonds.  If any of the conditions referred to in
(A)(iii), (B), (C), (D) or (E) above is not met with respect to any Change in
the Interest Rate Mode from an Auction Rate, the Auction Rate for the next
succeeding Auction Period shall equal the Maximum Auction Rate as determined on
such Auction Date and the Auction Period shall be a seven-day Auction
Period.  If any of the conditions
referred to in (A)(iii), (B), (C), (D) or (E) above is not met with respect to
any Change in the Interest Rate Mode from a Term Rate or a Fixed Rate, the
Bonds shall continue to bear interest at the current Term Rate or Fixed Rate,
as the case may be, and be subject to the provisions of this Indenture
applicable thereto while the Bonds bear interest at such current Term Rate or
Fixed Rate, as the case may be. If any of the conditions referred to in
(A)(iii), (B), (C) or (D) above is not met with respect to any Change in the
Interest Rate Mode from an Adjustable Rate (other than an Auction Rate or a
Term Rate), the Bonds shall continue to bear interest at the Current Adjustable
Rate and be subject to the provisions of this Indenture applicable thereto
while the Bonds bear interest at such Current Adjustable Rate; provided,
however, that notwithstanding the failure to meet such conditions, the Bonds
shall remain subject to mandatory tender for purchase on the date that would
have been the effective date of the new interest rate mode if all of such
conditions were met on such date.  If
any of the foregoing conditions for a Change in the Interest Rate Mode from a
Term Rate or a Fixed Rate is not met, the Trustee shall mail, or cause the
Registrar and Paying Agent to mail to the Authority, the Company and the
Holders notice thereof in substantially the form attached hereto as, or


 


59

















 


containing
substantially the information contained in, Exhibit
D hereto within 3 Business Days after the failure to meet any of
such conditions.


 


4.                                       Notwithstanding anything herein to the
contrary, any Change in the Interest Rate Mode to an Adjustable Rate (other
than to an Auction Rate or a Term Rate for a Calculation Period of five years
or more) shall be effective only if the Trustee shall receive a Liquidity
Facility meeting the requirements of this Indenture, including
Section 6.02.3, and the Participation Agreement on or prior to the
effective date of such Change in the Interest Rate Mode which is, by its terms,
in effect on or prior to such effective date.


 


SECTION 4.02.                                 Optional Conversion to a Fixed Rate.


 


1.                               The Authority reserves the right, at the
request of the Company, to fix the rate of interest per annum which  Bonds will bear, in whole or in part, for
the balance of the term thereof or until the effective date of a Change in the
Interest Rate Mode; provided however, that the Authority shall not exercise
such right and the Company shall not request the Authority to exercise such
right except on a day on which the affected Bonds may be redeemed at the option
of the Authority.  In the event the
Authority, at the request of the Company, as herein provided, exercises its
Option to Convert, the Bonds so converted shall cease to bear interest at the
Adjustable Rate then borne by the Bonds and shall bear interest at a Fixed Rate
until maturity or until the effective date of a Change in the Interest Rate
Mode, subject to the terms and conditions hereof (the date on which a Fixed
Rate shall take effect being herein called a “Fixed Rate Conversion
Date”).  The Option to Convert may be
exercised at any time through a written notice given by the Authority, at the
written direction of the Company.  Such
written notice of the Authority must be delivered not less than 30 nor more
than 45 days prior to the proposed Fixed Rate Conversion Date to the Trustee,
the Bond Insurer, the Registrar and Paying Agent and the applicable Remarketing
Agent (and the Auction Agent and the Securities Depository in the case of any
change to a Fixed Rate from an Auction Rate), in substantially the form
attached hereto as, or containing substantially the information contained in, Exhibit A hereto.  A notice of conversion to a Fixed Rate shall note that the
Indenture provides that a proposed conversion to a Fixed Rate is conditioned on
the Bonds being rated no less than “A” by S&P, “A2” by Moody’s or “A” by
Fitch as of the effective date of such Change in the Interest Rate Mode.


 


2.                               The Trustee shall mail, or cause the
Registrar and Paying Agent to mail, the notice received pursuant to
Subsection 1 of this Section 4.02 to the Holders at least 15 days
prior to the proposed effective date of the Change in the Interest Rate Mode.


 


3.                               A Fixed Rate shall take effect only if


 


(A)                              with respect to a change to a Fixed Rate from
an Auction Rate, the Trustee and the Auction Agent shall receive:


 


(i)                                     a certificate of an Authorized Company
Representative by no later than the tenth day prior to a Fixed Rate Conversion
Date stating that a written


 


60

















 


agreement
has been entered into by the Company and the applicable Remarketing Agent to
remarket the Bonds affected on a Fixed Rate Conversion Date at a price of 100%
of the principal amount thereof, which written agreement (i) may be subject to
reasonable terms and conditions imposed by such Remarketing Agent which in the
judgment of that Remarketing Agent reflect current market standards regarding
investment banking risk; and (ii) must include a provision requiring payment by
such Remarketing Agent in same-day funds for any Auction Rate Bonds tendered or
deemed tendered; and


 


(ii)                                  by 11:00 a.m. (New York City time) on the
second Business Day prior to a Fixed Rate Conversion Date, by telecopy or other
similar means, a certificate  on behalf
of the Company in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit
B hereto, from the Authority (y) authorizing the establishment of a
Fixed Rate and (z) confirming that Bond Counsel has advised the Authority that
it expects to be able to give an opinion on a Fixed Rate Conversion Date to the
effect that the change to a Fixed Rate is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the exclusion of
interest on the Bonds from gross income for Federal income tax purposes; and


 


(iii)                               by 4:00 p.m. (New York City time) on the effective date of such Change
in the Interest Rate Mode, a certificate from an Authorized Company
Representative to the effect that all of the Bonds tendered or deemed tendered
have been purchased at a price equal to the principal amount thereof with funds
provided from the remarketing of such Bonds in accordance with the Remarketing
Agreement and that any accrued and unpaid interest on such Bonds has been paid
from funds deposited with the Trustee or the Registrar and Paying Agent;


 


(B)                                with respect to any change to a Fixed Rate
the Trustee (and the Auction Agent in the case of any change to a Fixed Rate
from an Auction Rate) receives on a Fixed Rate Conversion Date:


 


(i)                                     by 9:30 a.m. (New York City time) an Opinion
of Bond Counsel to the effect that the conversion to a Fixed Rate is authorized
by this Indenture, is permitted under the Act and will not have an adverse
effect on the exclusion of interest on such Bonds from gross income for Federal
income tax purposes;


 


(ii)                                  by 4:00 p.m. (New York City time) a
certificate in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit
C hereto, from an Authorized Company Representative that all of the
Bonds tendered or deemed tendered have been purchased at a price equal to the
principal amount thereof plus premium, if any, plus any accrued and unpaid
interest with funds provided from the remarketing of such Bonds in accordance
with the Remarketing Agreement, from the proceeds of a Support Facility, or
from funds deposited with the Trustee or the Registrar and Paying Agent;


 


61

















 


provided
that receipt of such certificate shall not override the requirements of
Section 4.02(3)(A)(iii) herein; and


 


(iii)                               by 2:00 p.m. (New York City time) evidence satisfactory to it that the
Bonds shall be rated at least “A” by S&P or “A2” by Moody’s or “A” by Fitch
or an equivalent rating by any nationally recognized rating agency on the Fixed
Rate Conversion Date.


 


If
any of the conditions referred to in (A)(i) or (A)(ii) above is not met with
respect to any Change in the Interest Rate Mode from an Auction Rate to a Fixed
Rate, the Auction Rate for the next succeeding Auction Period shall be
determined pursuant to the Auction Procedures applicable to the Auction Rate
Bonds.  If any of the conditions
referred to in (A)(iii) or (B) above is not met with respect to any Change in
the Interest Rate Mode from an Auction Rate to a Fixed Rate, the Auction Rate
for the next succeeding Auction Period shall be equal to the Maximum Auction
Rate as determined as of such Auction Date and the Auction Period shall be a
seven-day Auction Period.  If any of the
conditions referred to in (B) above is not met with respect to any Change in the
Interest Rate Mode from a Term Rate to a Fixed Rate, the Bonds shall continue
to bear interest at the current Term Rate and be subject to the provisions of
this Indenture applicable thereto while the Bonds bear interest at such current
Term Rate. If any of the conditions referred to in (B) above is not met with
respect to any other Change in the Interest Rate Mode from an Adjustable Rate
(other than an Auction Rate or a Term Rate) to a Fixed Rate, the Bonds shall
continue to bear interest at the Current Adjustable Rate and be subject to the provisions
of this Indenture applicable thereto while the Bonds bear interest at such
Current Adjustable Rate; provided, however, that notwithstanding the failure to
meet such conditions, the Bonds shall remain subject to mandatory tender for
purchase on the date that would have been the effective date of the Fixed Rate
if all of such conditions were met on such date.  If any of the foregoing conditions for a Change in the Interest
Rate Mode from a Term Rate to a Fixed Rate is not met, the Trustee shall mail,
or cause the Registrar and Paying Agent to mail to the Authority, the Company
and the Holders notice thereof in substantially the form attached hereto as, or
containing substantially the information contained in, Exhibit D hereto within 3 Business Days after
the failure to meet any of such conditions.


 


SECTION 4.03.                                 Conversion Generally. 
1.  In the event of a Change in
the Interest Rate Mode on less than all the Bonds of a series or subseries to
or from an Auction Rate, the minimum aggregate principal amount of Bonds of a
subseries that continue to bear, or are adjusted to bear interest at an Auction
Rate for an Auction Rate Period, shall not be less than $10,000,000 for such
Auction Rate Bonds.


 


2.                                       Upon any Change in the Interest Rate Mode to
an Auction Rate, the Authority and the Trustee, shall take all steps necessary
to comply with any agreement entered into with a Securities Depository or its
nominee pursuant to Section 2.03(5) with respect to such Change in the
Interest Rate Mode, including, without limitation, the purchase and designation
of sufficient CUSIP numbers to comply with the requirements of such Securities
Depository following any such Change in the Interest Rate Mode.


 


62

















 


3.                                       If the interest rate on less than all Bonds
of a subseries is to be converted to a new Adjustable Rate pursuant to
Section 4.01 or to a Fixed Rate pursuant to Section 4.02, the
particular Bonds to be converted shall be chosen by the Trustee by lot, or the
Trustee shall direct the Registrar and Paying Agent to so choose, by lot;
provided, however, that the portion of any Bond to be converted shall be in the
principal amount of $100,000 or any integral multiple of such amount during a
Commercial Paper Rate Period, a Daily Rate Period, a Weekly Rate Period or a
Monthly Rate Period, $25,000 or any integral multiple thereof during an Auction
Rate Period, or $5,000 or any integral multiple thereof at any other time and
that, in selecting Bonds for conversion, the Trustee or Registrar and Paying
Agent shall treat each Bond as representing that number of Bonds which is
obtained by dividing the principal amount of such registered Bond in excess of
$100,000 by $100,000 during a Commercial Paper Rate Period, a Daily Rate
Period, a Weekly Rate Period or a Monthly Rate Period, $25,000 during an
Auction Rate Period, and $5,000 at any other time (such amounts being
hereinafter referred to as the “applicable units of principal amount”).  If it is determined that one or more, but
not all of the $100,000, $25,000 or $5,000 units of principal amount
represented by any such Bond is to be converted, then upon notice of intention
to convert such $100,000, $25,000 or $5,000 unit or units pursuant to Sections
4.01 or 4.02, as the case may be, the Holders of such Bonds shall forthwith
surrender such Bonds to the Registrar and Paying Agent for (1) payment of the
purchase price (including the premium, if any, and accrued and unpaid interest
to the date fixed for conversion) of the $100,000, $25,000 or $5,000 unit or
units of principal amount called for conversion and (2) exchange for a new Bond
or Bonds in the aggregate principal amount of the balance of the principal of
such Bonds not subject to conversion. 
If the Holders of any such Bond of a denomination greater than $100,000,
$25,000 or $5,000 shall fail to present such Bond to the Registrar and Paying
Agent, for payment and exchange as aforesaid, such Bond shall, nevertheless,
become due and payable on the date fixed for conversion to the extent of the
$100,000, $25,000 or $5,000 unit or units of principal amount subject to such
conversion (and to that extent only).


 


4.                                       Notwithstanding anything in this
Article IV to the contrary, the Authority may not effect a Change in the
Interest Rate Mode pursuant to Section 4.01 and the Authority may not
exercise its option to convert to a Fixed Rate pursuant to Section 4.02 if
such action would require the payment of a premium upon purchase of Bonds
pursuant to Section 5.04 unless there shall have been deposited the full
amount of such premium in trust with the Trustee prior to any notification of a
change pursuant to Section 4.01 or 4.02.


 


63

















 


ARTICLE V


 


REDEMPTION
AND PURCHASE OF BONDS


 


SECTION 5.01.                                 Optional Redemption.  The
Bonds shall be subject to redemption, in whole or in part, at the option of the
Authority upon the request of the Company, from related payments made by the
Company pursuant to Section 6.02 of the Participation Agreement and any
other monies held by the Trustee and available to be applied to the redemption
of Bonds as provided in this Section 5.01 and Section 9.03 hereof:


 


(a)                                  During any Commercial Paper Rate Period, such
Bonds shall be subject to redemption on each Interest Payment Date, as a whole
or in part, at the principal amount thereof, at a redemption price equal to
100% of the principal amount.


 


(b)                                 During any Auction Rate Period, Auction Rate
Bonds shall be subject to redemption on the Business Day immediately succeeding
each Auction Date, as a whole or in part, at a redemption price equal to 100%
of the principal amount thereof plus accrued and unpaid interest to the date
fixed for redemption.


 


(c)                                  During any Daily Rate Period, such Bonds
shall be subject to redemption on any Business Day, as a whole or in part, at
the principal amount thereof, plus accrued and unpaid interest to the date
fixed for redemption, if any.


 


(d)                                 During any Weekly Rate Period, such Bonds
shall be subject to redemption on any Business Day, as a whole or in part, at
the principal amount thereof, plus accrued and unpaid interest to the date
fixed for redemption, if any.


 


(e)                                  During any Monthly Rate Period, such Bonds
shall be subject to redemption on each Interest Payment Date, as a whole or in
part, at the principal amount thereof.


 


(f)                                    During any Semi-annual Rate Period, such
Bonds shall be subject to redemption on each Interest Payment Date, as a whole
or in part, at the principal amount thereof.


 


(g)                                 During any Term Rate or Fixed Rate Period,
such Bonds shall be subject to redemption in whole or in part at any time as
follows:  after the No-Call Period shown
below, which shall begin on the first day of the Calculation Period applicable
to such Bonds or on a Fixed Rate Conversion Date, as the case may be, and end
on the enumerated anniversary thereof, at a redemption price equal, initially,
to the principal amount thereof, plus a premium equal to the percentage of the
principal amount to be redeemed shown in the Initial Premium column, plus
accrued and unpaid interest if paid on a Business Day other than an Interest
Payment Date.  The premium percentage,
if any, shall decline by the percentage shown in the Reduction in Premium
column on each anniversary of the date on which such Bonds are first redeemable
until the Bonds shall be redeemable without premium.


 


64

















 


 


Calculation
Period or Period to Maturity

Applicable to Subject Bonds


 


	
  Equal to or

  Greater Than

  	
   

  	
  But Less

  Than

  	
   

  	
  No Call

  Period

  	
   

  	
  Initial

  Premium

  	
   

  	
  Reduction

  in Premium

  	
   

  
	
  18

  	
   

  	
  years

  	
   

  	
  N/A

  	
   

  	
  8

  	
  Years

  	
   

  	
   

  	
   

  	
  11⁄2%

  	
   

  	
  1⁄2%

  	
   

  
	
  12

  	
   

  	
  years

  	
   

  	
  18

  	
   

  	
  Years

  	
   

  	
  6

  	
  Years

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  1⁄2

  	
   

  
	
  7

  	
   

  	
  Years

  	
   

  	
  12

  	
   

  	
  Years

  	
   

  	
  3

  	
  Years

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  5

  	
   

  	
  Years

  	
   

  	
  7

  	
   

  	
  Years

  	
   

  	
  2

  	
  Years

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  4

  	
   

  	
  Years

  	
   

  	
  5

  	
   

  	
  Years

  	
   

  	
  2

  	
  Years

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  3

  	
   

  	
  Years

  	
   

  	
  4

  	
   

  	
  Years

  	
   

  	
  2

  	
  Years

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  0

  	
   

  	
  Years

  	
   

  	
  3

  	
   

  	
  Years

  	
   

  	
  Not callable

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


If
upon establishment of a Term Rate Period or a Fixed Rate Period, as the case
may be, the applicable Remarketing Agent certifies to the Trustee, Bond Counsel
and the Authority in writing that the foregoing schedule is not consistent
with then-prevailing market conditions, the Authority at the request of the
Company may revise the foregoing Initial Premium, Reductions in Premium and
No-Call Periods with respect to Bonds for which a Term Rate Period or Fixed
Rate Period is then being established without the approval of the Holders to
reflect then-prevailing market conditions, upon receipt of an Opinion of Bond
Counsel to the effect that any revisions pursuant to this paragraph, either by
itself or in conjunction with the establishment of a Calculation Period or a
Fixed Rate, as the case may be, are made in accordance with this Indenture, is
permitted under the Act and will not adversely affect the exclusion of interest
on the Bonds from gross income for Federal income tax purposes.


 


SECTION 5.02.                                 [Reserved]


 


SECTION 5.03.                                 Tender for and Purchase upon Election of
Holder.


 


1.                               During any Daily Rate Period or Weekly Rate
Period, any Bond or portion thereof in a principal amount equal to an
authorized denomination (so long as the principal amount not purchased is an
authorized denomination) shall be purchased on the demand of the Holder thereof
on any Business Day at a price equal to the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase, upon delivery to
the Registrar and Paying Agent and the applicable Remarketing Agent at their
respective principal offices, by the close of business on any Business Day of a
Notice of Election to Tender in substantially the form attached hereto as, or
containing substantially the information contained in, Exhibit E hereto; provided, however, that
the substance of such Notice of Election to Tender must also be given
telephonically to the applicable Remarketing Agent prior to or simultaneously
with delivery of such written Notice of Election to Tender to such Remarketing
Agent.  The date on which such Bond
shall be purchased shall, at the request of the Holder thereof (i) if the Bond
then bears interest at a Daily Rate, be the date of delivery of such Notice of
Election to Tender if such Notice of Election to Tender is delivered to the
Registrar and Paying Agent and the applicable Remarketing Agent by 10:00 a.m.
(New York City time) on such date or may be any Business Day thereafter, and
(ii) if the Bond then bears interest at a Weekly Rate, shall be a Business Day
not prior to the 7th day next succeeding the date on which, by 10:00 a.m., such


 


65

















 


Notice
of Election to Tender is delivered to the Registrar and Paying Agent and the
Remarketing Agent.


 


2.                               During any Monthly Rate Period or Semi-annual
Rate Period, any Bond or portion thereof in a principal amount equal to an
authorized denomination (so long as the principal amount not purchased is an
authorized denomination) shall be purchased on the demand of the Holder thereof
on the first Business Day following each Calculation Period at a price equal to
the principal amount thereof, upon delivery to the Registrar and Paying Agent
and the applicable Remarketing Agent, at their respective principal offices of
a Notice of Election to Tender in substantially the form attached hereto as or
containing substantially the information contained in Exhibit E on or prior to a Business Day
which is not less than 10 days, in the case of Bonds bearing interest at a
Semi-annual Rate, or 7 days, in the case of Bonds bearing interest at a Monthly
Rate, prior to the proposed date of purchase; provided, however, that the
substance of such Notice of Election to Tender must also be given telephonically
to the applicable Remarketing Agent prior to or simultaneously with delivery of
such written Notice of Election to Tender to such Remarketing Agent.


 


3.                               Immediately upon receipt of a Notice of
Election to Tender delivered pursuant to the provisions of this
Section 5.03, the Registrar and Paying Agent shall notify, or cause to be
notified, the Trustee, the Company, the Authority and the applicable
Remarketing Agent, by telephone, promptly confirmed in writing, of such
receipt, specifying the contents thereof.


 


4.                               Any Notice of Election to Tender shall be
irrevocable.  If a Holder fails to
deliver the Bonds referred to in such notice to the Registrar and Paying Agent,
such Bonds shall nevertheless be deemed to have been purchased on the date
established for the purchase thereof, no interest shall accrue on such Bonds
from and after the date of purchase and such Holder shall have no rights
hereunder thereafter as the owner of such Bonds except the right to receive the
purchase price of such Bonds.


 


5.                               A Holder may not tender a Bond to the
Registrar and Paying Agent  pursuant to
this Section while such Bond bears interest at an Auction Rate, Commercial
Paper Rate, Term Rate or Fixed Rate.


 


SECTION 5.04.                                 Mandatory Tender for Purchase upon Change in
the Interest Rate Mode or on Business Day Following Certain Calculation Periods.


 


1.                               Upon a Change in the Interest Rate Mode, the
Bonds shall be subject to mandatory tender for purchase in accordance with the
terms hereof, on the effective date of such Change in the Interest Rate Mode at
the Purchase Price.


 


2.                               During any Term Rate Period or Commercial
Paper Rate Period, the Bonds shall be subject to mandatory tender for purchase
in accordance with the terms hereof on the Business Day immediately following
each Calculation Period, each at a price equal to the Purchase Price.


 


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3.                               Notice of mandatory tender for purchase upon
a Change in the Interest Rate Mode shall be in substantially the form attached
hereto as, or contain substantially the information contained in, Exhibit A hereto.


 


4.                               Any such notice of mandatory tender for
purchase required by this Section 5.04 shall be given by the Trustee, in
the name of the Authority, or the Trustee shall cause the Registrar and Paying
Agent to give such notice (with copies thereof to be given to the Remarketing
Agent, the Registrar and Paying Agent, the Company, and in the case of Auction
Rate Bonds, the Auction Agent and the Authority) by first-class mail to the
Holders of the Bonds subject to purchase at their addresses shown on the books
of registry.


 


5.                               Bonds held by or for the account of the
Company or the issuer of a Support Facility are not subject to mandatory tender
for purchase pursuant to this Section 5.04.


 


SECTION 5.05.                                 Extraordinary Optional Redemption. 
During any Term Rate Period or Fixed Rate Period, the Bonds are also
subject to redemption prior to maturity in whole at any time at the option of
the Authority, exercised at the direction of the Company, upon notice given as
provided in the Indenture, at a redemption price equal to the principal amount
thereof, together with unpaid interest accrued thereon to the date fixed for
redemption, in any of the following events:


 


(i)                                     All or substantially all of the Project shall
have been damaged or destroyed or title to, or the temporary use of, all or a
substantial portion of the Project shall have been taken under the exercise of
the power of eminent domain by any governmental authority, or person, firm or
corporation acting under governmental authority, as in each case renders the
Project unsatisfactory to the Company for its intended use;


 


(ii)                                  Unreasonable burdens or excessive liabilities
shall have been imposed upon the Authority or the Company with respect to all
or substantially all of the Project, including without limitation the
imposition of Federal, State or other ad valorem property, income or other
taxes other than ad valorem taxes in effect on the date of original issuance of
the Bonds levied upon privately owned property used for the same general
purpose as the Project; or


 


(iii)                               Any court or regulatory or administrative body shall enter or adopt, or
fail to enter or adopt, a judgment, order, approval, decree, rule or
regulation, as a result of which the Company elects to cease operation of all
or substantially all of the Project.


 


SECTION 5.06.                                 Special Tax Redemption Provisions.


 


1.                               During any Semi-annual Rate Period, Term Rate
Period or Fixed Rate Period, the Bonds shall be subject to mandatory redemption
as a whole (provided, however, that the Bonds shall be redeemed in part if the
Company obtains an Opinion of Bond Counsel to the effect that, by redeeming
such portion of the Bonds, the interest on the remaining Bonds will


 


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not
be included for Federal income tax purposes in the gross income of any owner of
the Bonds (other than an owner who is a “substantial user” of the Project or a
“related person” within the meaning of Section 147(a)(1) of the Code)) at
any time at a redemption price equal to 100% of the principal amount thereof,
together with unpaid interest accrued thereon to the redemption date, if, in a
published or private ruling of the Internal Revenue Service or in a final,
nonappealable judicial decision by a court of competent jurisdiction (provided
that the Company has been afforded the opportunity to participate at its own
expense in the proceeding resulting in such ruling or in the litigation
resulting in such decision, as the case may be), it is determined that, as a
result of a failure by the Company to observe any covenant, agreement or
representation in the Participation Agreement or the Tax Regulatory Agreement,
interest on the Bonds is included for Federal income tax purposes in the gross
income (as defined in Section 61 of the Code) of any owner of a Bond
(other than a “substantial user” of the Project or a “related person” within
the meaning of Section 147(a)(1) of the Code), and, in such event, the
Bonds shall be subject to such mandatory redemption not more than one hundred
eighty (180) days after receipt by the Trustee of notice of such published or
private ruling or judicial decision and a demand for redemption of the
Bonds.  The occurrence of an event
requiring the redemption of the Bonds under this paragraph does not constitute
an event of default under any Note or under the Indenture and the sole
obligation in such event shall be for the Company to prepay the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.


 


2.                               During any Semi-annual Rate Period, Term Rate
Period or Fixed Rate Period, the Bonds may be redeemed in whole or in part at
any time at a redemption price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest thereon to the redemption date, if
the Company has determined, on the basis of the advice of Bond Counsel that, as
a result of any action taken or expected to be taken, or failure to take
action, a reasonable risk exists that interest on the bonds will not be
excludable from gross income for Federal tax purposes.  Such conclusion and certification shall be
evidenced by delivery to the Trustee of a written certificate of an Authorized
Company Representative to the effect that the Company has reached such conclusion,
together with a copy of such advice of Bond Counsel.  The occurrence of an event permitting the redemption of the Bonds
under this paragraph does not constitute an event of default under any Note or
under the Indenture and the sole obligation in such event shall be for the
Company to prepay the Note in an amount sufficient to redeem the  Bonds to the extent required by this
paragraph.


 


3.                               During any Semi-annual Rate Period, Term Rate
Period or Fixed Rate Period, the Bonds will also be subject to mandatory
redemption at a redemption price equal to one hundred three percent (103%) of
the principal amount thereof plus unpaid interest accrued thereon to the
redemption date if the Company reasonably concludes and certifies to the
Trustee that the business, properties, condition (financial or otherwise),
operations or business prospects of the Company will be materially and
adversely affected unless the Company takes or omits to take a specified action
and that the Company has been advised in writing by Bond Counsel that the
specified action or omission would cause the use of the Project to be such
that, pursuant to Section 150 of the Code, the Company would not be
entitled to deduct the interest on the Bonds for purposes of determining the
Company’s Federal taxable income, for a period of not less than ninety (90)
consecutive or nonconsecutive days during a twelve-month period.  Such 


 


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conclusion
and certification shall be evidenced by delivery to the Trustee of a written
certificate of an Authorized Company Representative to the effect that the
Company has reached such conclusion, together with a certified copy of a
resolution of the Board of Trustees of the Company authorizing such certificate
and a copy of such advice of Bond Counsel. 
In the event that the Bonds become subject to redemption as provided in
this paragraph, the Bonds will be redeemed in whole unless redemption of a
portion of the Bonds outstanding would, in the Opinion of Bond Counsel, have
the result that interest payable on the Bonds remaining outstanding after such
redemption would be deductible for purposes of determining the Federal taxable
income of the Company, and, in such event, the Bonds to be redeemed shall be
selected (in the principal amount of $5,000 or any integral multiple thereof)
by lot, in such amount as is necessary to accomplish that result.  The occurrence of an event requiring the
redemption of the Bonds under this paragraph does not constitute an event of
default under any Note or under the Indenture and the sole obligation in such
event shall be for the Company to prepay the Note in an amount sufficient to
redeem the Bonds to the extent required by this paragraph.


 


SECTION 5.07.                                 Redemption at Demand of the State of New York.  In
accordance with the provisions of Section 1864 of the Act, the State of
New York may, upon furnishing sufficient funds therefor, require the Authority
to redeem prior to maturity, as a whole, the Bonds on any Interest Payment Date
not less than twenty years after the Closing Date.  Any such redemption shall be at a redemption price equal to the
optional redemption price, if any, applicable on such date set forth in
Section 5.01 or if no such optional redemption price is applicable at a
redemption price equal to the principal amount thereof, in either case,
together with accrued and unpaid interest, if any, to the date fixed for
redemption, all in the manner provided in this Article V.  The Authority shall deposit any such funds
received by it with the Trustee.  During
any period during which no Direct-Pay Credit Facility is in effect, the Trustee
shall deposit any such funds in the Bond Fund and, upon notice published in the
manner provided in Section 1864 of the Act, shall apply such funds to the
redemption of the Bonds.  During any
period in which a Direct-Pay Credit Facility is in effect, the Trustee shall
deposit any such funds received by it in a segregated sub-account in the Bond
Fund, and upon notice published in the manner provided in Section 1864 of
the Act, shall draw monies under the related Credit Facility pursuant to
Article IX and apply such payment to the redemption of the Bonds at the
price and in the manner specified in the preceding sentence.  Upon the application of such Credit Facility
payments, the Trustee shall pay the funds furnished by the State of New York to
the issuer of the Credit Facility with instructions to apply such funds to the
reimbursement of the issuer of the Credit Facility for such Credit Facility
payment.  Upon such redemption and
notwithstanding anything to the contrary in this Indenture, the Trustee shall
assign the Note relating to the Bonds to or as directed by the Authority.


 


SECTION 5.08.                                 Mandatory Tender for Purchase Upon Expiration
of any Support  Facility or Upon
Delivery of an Alternate Support Facility.


 


1.                               Except as otherwise set forth in the last
sentence of this Subsection 1, on the second Business Day next preceding
the date of expiration of any Support Facility, the Bonds shall be subject to
mandatory purchase at the Purchase Price, unless on or prior to the 35th day
prior to such date of expiration the Company on behalf of the Authority has
furnished to the Trustee an extension of such Support Facility.  The Bonds shall also be subject to


 


69

















 


mandatory
purchase at the Purchase Price, on the date there is delivered an Alternate
Support Facility meeting the requirements of Section 6.02. No tender for
purchase of any Bonds shall be required pursuant to this Section 5.08
during an Auction Rate Period or a Fixed Rate Period.


 


2.                               Notice of the mandatory tender for purchase
pursuant to this Section 5.08 shall be given on or prior to the 30th day
before the expiration date of the expiring Support Facility or on or prior to
the 30th day before the delivery of any Alternate Support Facility, as the case
may be, by the Trustee in the name of the Authority (with copies thereof given
to the Authority, the Remarketing Agent, the issuer of a Support Facility, the
Company and the Registrar and Paying Agent) by first-class mail to the Holders
of the Bonds subject to mandatory tender for purchase at their addresses shown
on the books of registry. Such notice shall be in substantially the form
attached hereto as, or contain substantially the information contained in, Exhibit F hereto.


 


3.                               Bonds held by or for the account of the
Company or the issuer of a Liquidity Facility are not subject to mandatory
tender for purchase pursuant to this Section 5.08.


 


SECTION 5.09.                                 Mandatory Tender Upon Occurrence of any
Terminating Event.


 


1.                               Except as otherwise set forth in the last
sentence of this Subsection 1, upon the occurrence of any Terminating
Event, the Bonds shall be subject to mandatory tender for purchase at the
Purchase Price on a Business Day selected by the Trustee; provided, however,
that (i) such mandatory tender shall not occur later than the 5th day after
receipt of notice of the Terminating Event by the Trustee and (ii) such
mandatory tender date shall be a Business Day. 
The Bonds will not be subject to mandatory tender for purchase pursuant
to this Section 5.09 during any Auction Rate Period or any Fixed Rate
Period.


 


2.                               Notice of the mandatory tender for purchase
required by this Section 5.09 shall be in substantially the form attached
hereto as, or contain substantially the information contained in, Exhibit F hereto and shall be given to the
Holders of the Bonds subject to mandatory tender for purchase at their
addresses shown on the books of registry on or before the first Business Day
after receipt of notice of a Terminating Event from the issuer of the Support
Facility by the Trustee, in the name of the Authority, or the Trustee shall
cause the Registrar and Paying Agent to give such notice, by first-class mail
to the Holders of the Bonds subject to purchase at their address shown on the
books of registry (with copies thereof given to the Authority, the Remarketing
Agent, the Company and the Registrar and Paying Agent).


 


3.                               Bonds held by or for the account of the
Company or the issuer of a Liquidity Facility are not subject to mandatory
tender for purchase pursuant to this Section 5.09.


 


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SECTION 5.10.                                 General Provisions Applicable to Mandatory
and Optional Tenders for Purchase of Bonds.


 


1.                               If interest has been paid on the Bonds, or an
amount sufficient to pay interest thereon has been deposited in the Bond Fund,
or an amount sufficient to pay accrued interest thereon, if any, has been set
aside in the Bond Purchase Fund held under the Bond Purchase Trust Agreement,
and the Purchase Price shall be available in the Bond Purchase Fund for payment
of Bonds subject to tender for purchase pursuant to Section 5.03, 5.04,
5.08 or 5.09, and if any Holder fails to deliver or does not properly deliver
the Bonds to the Registrar and Paying Agent for which a Notice of Election to
Tender has been properly filed or which are subject to mandatory tender for
purchase on the purchase date therefor, such Bonds shall nevertheless be deemed
tendered and purchased on the date established for the purchase thereof, no
interest shall accrue on such Bonds from and after the date of purchase and
such former Holders shall have no rights hereunder as the registered owners of
such Bonds, except the right to receive the Purchase Price of and interest to
the purchase date, if any, on such Bonds upon delivery thereof to the Registrar
and Paying Agent in accordance with the provisions hereof.  The purchaser of any such Bonds remarketed
by the Remarketing Agent, or the issuer of any Support Facility, to the extent
Bonds are purchased with the proceeds of a draw on, or borrowing or payment
under, the Support Facility available therefor, shall be treated as the
registered owner thereof for all purposes of the Indenture.  The payment of Bonds pursuant to
Section 5.03 shall be subject to delivery of such Bonds duly endorsed in
blank for transfer or accompanied by an instrument of transfer thereof in form
satisfactory to the Registrar and Paying Agent executed in blank for transfer
at the principal office of the Registrar and Paying Agent at or prior to 10:00
a.m. (11:30 a.m. for Bonds bearing interest at the Weekly Rate and 12:00 noon,
for Bonds bearing interest at the Daily Rate) (New York City time), on a
specified purchase date.  The Registrar
and Paying Agent may refuse to make payment with respect to any Bonds tendered
for purchase pursuant to Sections 5.03, 5.04, 5.08 or 5.09 not endorsed in
blank or for which an instrument of transfer satisfactory to the Registrar and
Paying Agent has not been provided.


 


2.                               The Purchase Price of Bonds subject to tender
for purchase pursuant to Section 5.03, 5.04, 5.08 or 5.09 in an aggregate
principal amount of at least one million dollars ($1,000,000) shall be payable
in immediately available funds or by wire transfer upon written notice from the
Holder thereof containing the wire transfer address (which shall be in the
continental United States) to which such Holder wishes to have such wire
directed, if such written notice is received by the Registrar and Paying Agent
not less than five days prior to the related purchase date.


 


3.                               Bonds subject to mandatory tender for
purchase pursuant to Sections 5.08 or 5.09 shall not be remarketed unless and
until an Alternate Support Facility meeting the requirements of
Section 6.02 of the Indenture is in full force and effect; provided,
however, that Bonds may be remarketed and no such Alternate Support Facility is
required to be in effect if, at the time the Bonds are sought to be remarketed,
the Bonds bear interest at an Auction Rate or a Fixed Rate.


 


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4.                               In the event Bonds tendered for purchase
pursuant to Section 5.03 or 5.04 shall be paid from a drawing under a
Liquidity Facility, such Bonds shall not be remarketed unless and until the
Trustee or the Registrar and Paying Agent has been notified by the Liquidity
Facility Issuer and, upon receipt of such notice, the Trustee or the Registrar
and Paying Agent has notified the applicable Remarketing Agent that the amount
available for a drawing under such Liquidity Facility has been restored.


 


SECTION 5.11.                                 Selection of Bonds to be Redeemed.  A
redemption of Bonds shall be a redemption of the whole or of any part of the
Bonds from any funds available for that purpose in a principal amount equal to
an authorized denomination (so long as the principal amount not redeemed is an
authorized denomination).  If less than
all Bonds shall be redeemed, the particular Bonds to be redeemed shall be
chosen by the Trustee, or the Trustee shall direct the Registrar and Paying
Agent to so choose, as hereinafter provided. 
If less than all the Bonds shall be called for redemption under any
provision of this Indenture permitting such partial redemption, the particular
Bonds or portions of Bonds to be redeemed shall be selected (a) first, from
Bonds held or owned by or for the issuer of a Support Facility pursuant to any
Support Facility, (b) second, from Bonds for which the Registrar and Paying
Agent has received, prior to such selection, a Notice of Election to Tender
requiring the Registrar and Paying Agent to purchase such Bonds on the date on
which the Bonds being selected are to be redeemed and (c) third, from all other
Bonds then Outstanding, by lot or on a pro rata basis by the Trustee or, upon
direction of the Trustee, by lot by the Registrar and Paying Agent; provided,
however, that the portion of any Bond to be redeemed shall be in the principal
amount of $100,000 or any integral multiple thereof during a Commercial Paper
Rate Period, a Daily Rate Period, a Weekly Rate Period or a Monthly Rate
Period, $25,000 or any integral multiple thereof during an Auction Rate Period,
or $5,000 or any integral multiple thereof at any other time and that, in selecting
Bonds for redemption, the Trustee or Registrar and Paying Agent shall treat
each Bond as representing that number of Bonds which is obtained by dividing
the principal amount of such registered Bond in excess of $100,000 by $100,000
during a Commercial Paper Rate Period, a Daily Rate Period, a Weekly Rate
Period or a Monthly Rate Period, $25,000 during an Auction Rate Period, and
$5,000 at any other time (such amounts being hereinafter referred to as the
“applicable units of principal amount”). 
If it is determined that one or more, but not all of the $100,000,
$25,000 or $5,000 units of principal amount represented by any such Bond is to
be called for redemption, then upon notice of intention to redeem such
$100,000, $25,000 or $5,000 unit or units, the Holders of such Bonds shall
forthwith surrender such Bonds to the Registrar and Paying Agent for (1)
payment of the redemption price (including the redemption premium, if any, and
accrued interest to the date fixed for redemption) of the $100,000, $25,000 or
$5,000 unit or units of principal amount called for redemption and (2) exchange
for a new Bond or Bonds of the aggregate principal amount of the unredeemed
balance of the principal of such Bonds. 
If the Holders of any such Bond of a denomination greater than $100,000,
$25,000 or $5,000 shall fail to present such Bond to the Registrar and Paying
Agent, for payment and exchange as aforesaid, such Bond shall, nevertheless,
become due and payable on the date fixed for redemption to the extent of the $100,000,
$25,000 or $5,000 unit or units of principal amount called for redemption (and
to that extent only).


 


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SECTION 5.12.                                 Notice of Redemption.


 


1.                               Notice of redemption shall be given by the
Trustee by mailing a copy of the redemption notice by first-class mail at least
30 days prior to the date fixed for redemption to the Holders of the Bonds to
be redeemed at the addresses shown on the registration books maintained by the
Registrar and Paying Agent.  A copy of
such notice of redemption shall be given by the Trustee to the Bond Insurer and
the Auction Agent at least 30 days prior to the date fixed for redemption.  Any redemption may be conditioned on the
receipt of moneys by the Registrar and Paying Agent sufficient to pay the
redemption price on the Redemption Date of Bonds called for redemption, if the
notice of redemption so states.


 


2.                               The Registrar and Paying Agent shall not be
required to transfer or exchange Bonds during any period beginning at the
opening of business fifteen (15) days before the day of mailing of a notice of
redemption and ending at the close of business on the day fixed for redemption;
provided, however, that the foregoing shall not apply during a Daily Rate
Period, a Weekly Rate Period, a Commercial Paper Rate Period or an Auction Rate
Period.


 


3.                               Each notice of redemption shall state: (i)
the full title of the Bonds, the redemption date, the place of redemption and
the redemption price payable upon such redemption; (ii) that the interest on
the Bonds, or on the principal amount thereof to be redeemed, shall cease to
accrue from and after such redemption date and (iii) that on said date there
will become due and payable on the Bonds the principal amount thereof to be
redeemed and the interest accrued on such principal amount to the redemption
date, if any, and the premium, if any, thereon. Each notice of redemption
mailed to the Holder of the Bonds shall, if less than the entire principal sum
thereof is to be redeemed, also state the principal amount thereof and the
distinctive numbers of the Bonds to be redeemed and that such Bonds must be
surrendered to the Trustee in exchange for the payment of the principal amount
thereof to be redeemed and the issuance of a new Bond equaling in principal
amount that portion of the principal sum not to be redeemed of the Bonds to be
surrendered. The failure to give notice to any Holder of a Bond or any defects
in such notice shall not affect the proceedings for the redemption of the Bonds
for which notice has been properly given.


 


SECTION 5.13.                                 Bonds Purchased for Account of Liquidity
Facility Issuer.  Bonds subject to mandatory purchase pursuant
to Section 5.03, 5.04, 5.08 or 5.09 shall be deemed to be purchased by the
Company except to the extent the Liquidity Facility expressly provides that the
Bonds are to be purchased by the issuer of the Liquidity Facility in which
event such Bonds shall be deemed to be purchased by the issuer of the Liquidity
Facility in a principal amount equal to the amount of a draw on, or borrowing
or payment under, the Liquidity Facility for the payment of Bonds subject to
purchase, upon the deposit with the Registrar and Paying Agent of the proceeds
of such draw on, or borrowing or payment under, the Liquidity Facility in an
amount equal to the principal of such Bonds plus accrued interest thereon to
the purchase date, and such Bonds shall not be deemed paid and shall remain
outstanding hereunder until the issuer of the Liquidity Facility has been
reimbursed for such draws on, or borrowings or payments under, the Liquidity
Facility to pay such principal and interest. 
Unless the issuer of any Liquidity Facility shall otherwise direct, any
Bonds purchased by the issuer of the Liquidity Facility shall be immediately
registered in the name of the Company except to the extent the Liquidity
Facility expressly provides that the Bonds are to be purchased by the issuer of
the Liquidity Facility in which event such Bonds shall be registered


 


73

















 


in
the name of the issuer of the Liquidity Facility as a Holder and the issuer of
the Liquidity Facility shall have all rights of a Holder of Bonds under this
Indenture.


 


SECTION 5.14.                                 Effect of Redemption.  If
the Bonds have been duly called for redemption and notice of the redemption
thereof has been duly given or provided for as hereinbefore provided and if
monies for the payment of the Bonds (or of the principal amount thereof to be
redeemed) and the interest to accrue to the redemption date on the Bonds (or of
the principal amount thereof to be redeemed), if any, and the premium, if any,
thereon are held for the purpose of such payment by the Trustee, then the Bonds
(or the principal amount thereof to be redeemed) shall on the redemption date
designated in such notice, become due and payable and interest on the Bonds (or
the principal amount thereof to be redeemed) so called for redemption shall
cease to accrue from such date and the Holder thereof shall thereafter have no
rights hereunder as the Holder of such Bonds (or the principal amount thereof
to be redeemed) except to receive the principal amount thereof and premium (if
any) thereon and interest to the redemption date.


 


SECTION 5.15.                                 Cancellation of Redeemed Bonds.  Any
Bonds surrendered or redeemed pursuant to the provisions of this
Article shall be cancelled by the Registrar and Paying Agent.


 


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ARTICLE VI


 


SUPPORT
FACILITY


 


SECTION 6.01.                                 Support Facility - General. 
Pursuant to the Participation Agreement, the Company has agreed not to
request that the interest rate mode applicable to the Bonds be adjusted to an
Adjustable Rate or a Fixed Rate unless on the effective date of the applicable
Change in the Interest Rate Mode the Bonds shall be rated at least “A” by
S&P or “A2” by Moody’s or “A” by Fitch or an equivalent rating by any
nationally recognized rating agency. 
Subject to the requirements of the Participation Agreement, such rating
of the Bonds may, but is not required to, be achieved by obtaining a Support
Facility which meets the requirements of this Article VI.  The Company has further agreed to maintain a
Liquidity Facility meeting the requirements of the Participation Agreement with
respect to the Bonds at all times, except with respect to Bonds bearing
interest at an Auction Rate, a Fixed Rate applicable to the stated maturity
date of the Bonds or a Term Rate for a period of at least five years.  A Liquidity Facility also must be in effect
on or prior to the effective date of (i) any Change in the Interest Rate Mode
from an Auction Rate to another Adjustable Rate (other than a Change in the
Interest Rate Mode to an Auction Rate), and (ii) any change in the Interest
Rate Mode from a Fixed Rate to an Adjustable Rate (other than a Change in the
Interest Rate Mode to an Auction Rate). 
The Trustee shall be furnished with a certified copy of any Support
Facility obtained pursuant to this Section 6.01.


 


Notwithstanding anything herein to the contrary, for so long as no Bond
Insurer Default has occurred and is continuing, neither the Company nor the
Authority shall obtain or put into effect any Credit Facility other than such
Policy for the applicable subseries of the Bonds, nor consent to or approve any
such action.


 


SECTION 6.02.                                 Support Facility - Delivery of an initial
Liquidity Facility and Alternate Support Facility.


 


1.                               At any time, the Authority may, at the
request of the Company, provide for the delivery to the Trustee of an initial
Liquidity Facility or an Alternate Support Facility.  The termination date of such initial Liquidity Facility or such
Alternate Support Facility, as the case may be, shall be a date not earlier
than 364 days from its date of issuance, subject to earlier termination upon
the occurrence of (i) a Terminating Event or another event of default under the
related reimbursement agreement or other corresponding agreement relating to
such initial Liquidity Facility or Alternate Support Facility, as the case may
be, (ii) the issuance of an alternate Liquidity Facility or a subsequent
Alternate Support Facility, as the case may be, (iii)  payment in full of the Outstanding Bonds or (iv) in the case of
an alternate Liquidity Facility, a Change in the Interest Rate Mode to an
Auction Rate or a Fixed Rate.  Any Liquidity
Facility shall specifically allow, in the case of occurrence of any event or
events which under the terms of such Liquidity Facility or any agreement
providing for the issuance thereof would cause the termination or expiration of
such Liquidity Facility, for the mandatory tender of Bonds pursuant to
Section 5.09 with a draw on or borrowing or payment under such Liquidity
Facility prior to such termination or expiration.  On or prior to the date of the delivery of an initial Liquidity
Facility or an Alternate Support Facility to the Trustee, the Company shall
furnish to the


 


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Trustee
on behalf of the Authority (a) an Opinion of Bond Counsel stating that the
delivery of such initial Liquidity Facility or Alternate Support Facility, as
the case may be, to the Trustee is authorized under this Indenture and complies
with the terms hereof and (b) in the case of an Alternate Support Facility,
confirmation from S&P, if the Bonds are then rated by S&P, from Moody’s,
if the Bonds are then rated by Moody’s, or another rating agency, if the Bonds
are then rated by such rating agency, to the effect that such rating agency has
reviewed the proposed Alternate Support Facility and that the substitution of
the proposed Alternate Support Facility for the Support Facility will not, by
itself, result in a reduction or withdrawal of its long or short-term rating of
the Bonds below the rating category of S&P or Moody’s or such other rating
agency, as the case may be, then in effect with respect to the Bonds.


 


2.                               Nothing contained herein shall prevent the
Authority, at the request of the Company, from delivering an Alternate Support
Facility in substitution for a Support Facility which will result in a decline
in the short-term or long-term rating or both assigned to such Bonds by Moody’s
or S&P or such other rating agency as a result of the Alternate Support
Facility; provided, that (i) the Opinion of Bond Counsel referred to in the
preceding paragraph is obtained; 
provided that such opinion shall also be to the effect that delivery of
such Alternate Support Facility will not adversely affect the exclusion from
gross income of interest on the Bonds for Federal income tax purposes and (ii)
all Outstanding Bonds are subject to mandatory tender for purchase pursuant to
Section 5.08 (unless the Bonds bear an Auction Rate or a Fixed Rate).  The Authority, or the Company on behalf of
the Authority, shall deliver notice to the Trustee of the substitution of an
Alternate Support Facility which will result in a decline in the short-term or
long-term ratings assigned to the Bonds pursuant to this Subsection 2 of
Section 6.02 at least forty-five (45) days before the date of
substitution.


 


3.                               Each Liquidity Facility and each Liquidity
Facility Issuer shall be subject to the prior written approval of the Bond
Insurer, which approval shall not be unreasonably withheld.


 


SECTION 6.03.                                 Trustee not Responsible for Enforcement of
Support Facility.  The Trustee shall have no responsibility
with respect to the enforcement of any Support Facility obtained hereunder.


 


SECTION 6.04.                                 Payments Pursuant to the Policies.  At
any time a Policy has been issued by the Bond Insurer:


 


1.                               The Trustee shall, at least one Business Day
prior to each scheduled Interest Payment Date and each date on which payment of
principal of the Bonds is scheduled to be due (each such date being a
“Principal Payment Date”), determine whether there will be sufficient funds in
the Bond Fund to pay the principal of and/or interest on the Bonds on such
Interest Payment Date or Principal Payment Date.  If the Trustee determines that there will be insufficient funds
in the Bond Fund, the Trustee shall so notify the Bond Insurer and its
designated agent (if any) (the “Insurance Trustee”).  Such notice shall specify the amount of the anticipated
deficiency, the Bonds to which such deficiency is applicable and whether such
Bonds will be deficient as to principal or interest, or both.  If the Trustee has not so notified the Bond
Insurer and the Insurance Trustee (if any) and made a claim under the Policy
relating to


 


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the
applicable subseries of the Bonds at least one Business Day prior to an
Interest Payment Date or Principal Payment Date, the Bond Insurer will make
payments of principal or interest due on the Bonds on or before the first
Business Day next following the date on which the Bond Insurer shall have
received notice of nonpayment from the Trustee.


 


2.                               The Trustee shall after giving notice to the
Bond Insurer and the Insurance Trustee (if any) as provided in paragraph 1 of
this Section 6.04, make available to the Bond Insurer and the Insurance
Trustee (if any), the registration books of the Authority maintained by the
Trustee and all records relating to the Bond Fund maintained under this
Indenture.


 


3.                               The Trustee shall provide the Bond Insurer
and the Insurance Trustee with a list of Holders of the Bonds entitled to
receive principal or interest payments from the Bond Insurer under the terms of
the applicable Policy, and shall make arrangements with the Bond Insurer or the
Insurance Trustee (if any) (i) to mail checks or drafts to the Holders of the
Bonds entitled to receive full or partial interest payments from the Bond
Insurer and (ii) to pay principal upon Bonds surrendered to the Insurance
Trustee by the Holders of Bonds entitled to receive full or partial principal
payments from the Bond Insurer.


 


4.                               The Trustee shall, at the time it provides
notice to the Bond Insurer pursuant to paragraph 1 of this Section 6.04,
notify Holders of Bonds entitled to receive the payment of principal or
interest thereon from the Bond Insurer (i) as to the fact of such entitlement,
(ii) that the Bond Insurer will remit to them all or a part of the interest
payments next coming due upon proof of the Holders’ entitlement to interest
payments and delivery to the Bond Insurer or the Insurance Trustee (if any), in
form satisfactory to the Bond Insurer or the Insurance Trustee (if any), of an
appropriate assignment of the Holder’s right to payment, (iii) that should they
be entitled to receive full payment of principal from the Bond Insurer, they
must surrender their Bonds (along with an appropriate instrument of assignment
in form satisfactory to the Insurance Trustee to permit ownership of such Bonds
to be registered in the name of the Bond Insurer) for payment to the Bond
Insurer or the Insurance Trustee (if any), and not the Trustee, and (iv) that
should they be entitled to receive partial payment of principal from the Bond
Insurer, they must surrender their Bonds for payment thereon first to the
Trustee, who shall note on such Bonds the portion of the principal paid by the
Trustee and then, along with an appropriate instrument of assignment of the
Holder’s right to payment in form satisfactory to the Bond Insurer or the
Insurance Trustee (if any), to the Bond Insurer or the Insurance Trustee (if
any), which will then pay the unpaid portion of principal.


 


5.                               In the event that the Trustee has notice that
any payment of principal of or interest on a subseries of the Bonds which has
become Due for Payment (as defined in the Bond Insurer’s Policy applicable to
such subseries) and which is made to a Holder of a Bond by or on behalf of the
Authority has been deemed a preferential transfer and theretofore recovered
from its Holder pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable order of a court having
competent jurisdiction, the Trustee shall, at the time the Bond Insurer is
notified pursuant to paragraph 1 of this Section 6.04, notify all Holders
of the Bonds that in the event that any Holder’s payment is so recovered, such
Holder will be entitled to payment from the Bond Insurer to the extent of such
recovery if sufficient funds are not otherwise available, and the Trustee shall
furnish to the


 


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Bond
Insurer its records evidencing the payments of principal of and interest on the
Bonds which have been made by the Trustee and subsequently recovered from
Holders of the Bonds and the dates on which such payments were made.


 


6.                               In addition to those rights granted to the
Bond Insurer under this Indenture, the Bond Insurer shall, to the extent it
makes payment of principal of or interest on Bonds, become subrogated to the
rights of the recipients of such payments in accordance with the terms of the
applicable Policy, and to evidence such subrogation (i) in the case of
subrogation as to claims for past due interest, the Trustee shall note the Bond
Insurer’s rights as subrogee on the registration books upon receipt from the
Bond Insurer of proof of the payment of interest thereon to the Holders of the
Bonds, and (ii) in the case of subrogation as to claims for past due principal,
the Trustee shall note the Bond Insurer’s rights as subrogee on the
registration books upon surrender of the Bonds by the Holders thereof together
with proof of the payment of principal thereof to the Holders of the Bonds.


 


7.                               If the Trustee provides a notice to the Bond
Insurer pursuant to paragraph 1 of this Section 6.04, then, so long as any
Bonds bear interest at an Auction Rate, the Trustee shall confirm with the Bond
Insurer and the Insurance Trustee (if any) on or prior to the Business Day
immediately following the day on which such notice was given that the Bond
Insurer made payments under the applicable Policy in an amount that is equal to
or exceeds the deficiency in the Bond Fund. 
If by the end of business on the Business Day immediately following the
day on which a notice was given pursuant to paragraph 1 of this
Section 6.04 the Trustee was unable to confirm, upon its communication
with the Bond Insurer and the Insurance Trustee (if any), that the Bond Insurer
made payments under the applicable Policy in an amount that is equal to or
exceeds the deficiency in the Bond Fund, then the Trustee shall immediately
send a notice to the Auction Agent and Holders of each subseries of Bonds by
telex, telecopy or similar means of the occurrence of a Payment Default.  If at any time after the occurrence of a
Payment Default the Trustee confirms with the Bond Insurer and the Insurance
Trustee (if any) that the Bond Insurer made payments under the applicable
Policy in an amount that is equal to or exceeds the deficiency in the Bond
Fund, the Trustee shall immediately give a notice to the Auction Agent and
Holders of each subseries of the Bonds that the Bond Insurer has cured the
default under such Policy by making all scheduled payments thereunder.


 


	
  8.

  	
  The notice address for the Bond Insurer shall be:

  
	
   

  	
   

  
	
   

  	
  XL Capital Assurance Inc.

  
	
   

  	
  1221 Avenue of the Americas

  
	
   

  	
  31st Floor

  
	
   

  	
  New York, NY 10020-1001

  



 


SECTION 6.05.                                 Rights of Credit Facility Issuer After an
Event of Default.  Notwithstanding any other provision of this
Indenture, upon the occurrence of an Event of Default and so long as no Bond
Insurer Default has occurred and is continuing, then, in all such events, the
Bond Insurer shall be deemed to be the sole owner of the Bonds when the approval,
consent, direction or any other action of the owners of such Bonds is required
or may be exercised under this Indenture, and shall be entitled to control and
direct the enforcement of all


 


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rights
and remedies granted to the Holders or the Trustee for the benefit of the
Holders, including, without limitation, (i) the right to control and direct the
declaration of principal of and accrued interest on all the Bonds then
Outstanding to be due and payable immediately as described herein, (ii) the
right to rescind and annul such declaration and the consequences of such
declaration, (iii) the right to waive any Event of Default and its consequences
and (iv) the rights and remedies granted to the Trustee pursuant to
Section 12.05.


 


SECTION 6.06.                                 Additional Rights of Bond Insurer.  For
so long as no Bond Insurer Default has occurred and is continuing, the
following provisions shall apply:


 


(a)                                  the Bond Insurer’s consent shall be required
in addition to Holder consent, when required, for the initiation or approval of
any action which requires Holder consent;


 


(b)                                 to the extent that the Company has entered
into a continuing disclosure agreement with respect to the Bonds, the Bond
Insurer shall be included as a party to be notified; and


 


(c)                                  To the extent that this Indenture confers
upon or gives or grants to the Bond Insurer any right, remedy or claim under or
by reason of this Indenture, the Bond Insurer is hereby explicitly recognized
as being a third-party beneficiary hereunder and may enforce any such right,
remedy or claim conferred, given or granted hereunder.


 


SECTION 6.07.                                 Qualification of Bond Insurer’s Right to
Consent.  A Bond Insurer’s right to consent pursuant
to the provisions of this Indenture shall not exist when a Bond Insurer Default
has occurred and is continuing.


 


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ARTICLE VII


 


GENERAL
TERMS AND PROVISIONS OF BONDS


 


SECTION 7.01.                                 Execution and Authentication of Bonds.  The
Bonds shall be executed on behalf of the Authority by the manual or facsimile
signature of its Chair, Vice-Chair, President, Treasurer or any Vice President
and shall be sealed with the seal of the Authority, or in lieu thereof shall
bear a lithographed, engraved or otherwise reproduced facsimile of such seal
attested by the manual or facsimile signature of its Vice President, Treasurer,
Secretary or an Assistant Secretary.


 


Bonds
bearing the manual signature of the officer of the Authority authorized to
execute such Bonds in office on the date of such manual signing thereof and
Bonds bearing the facsimile signature of the officer of the Authority
authorized to execute such Bonds in office on the date of the reproducing of
such facsimile signature on such Bonds, shall be valid and binding obligations
in accordance with their terms, notwithstanding that before the delivery
thereof and payment therefor the person whose signature appears thereon shall
have ceased to be such officer.


 


Only
Bonds having endorsed thereon a certificate of authentication substantially in
the form set forth in Article XVI, duly executed by the Trustee shall be
entitled to any right or benefit under this Indenture.  No Bonds shall be valid or 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 a Bond
shall be conclusive evidence that such Bond has been duly authenticated and
delivered under this Indenture and that the Holder thereof is entitled to the
benefits of this Indenture.  The
Trustee’s certificate of authentication on any Bond shall be deemed to have
been duly executed if signed by an authorized officer of the Trustee.


 


SECTION 7.02.                                 Books of Registry.  The
Registrar and Paying Agent shall keep or cause to be kept at its principal
office books (herein referred to as the “books of registry” or “registration
books”) for the registration and transfer of the Bonds.  Upon presentation at its principal office
for such purpose the Registrar and Paying Agent, under such reasonable
regulations as it may prescribe, shall register or transfer, or cause to be
registered or transferred, on said books of registry, the Bonds as hereinafter
set forth.  The books of registry shall
at all times during business hours be open for inspection by the Authority, the
Company and the Trustee or their duly authorized agents or representatives.


 


SECTION 7.03.                                 Transfer, Registration and Exchange of Bonds.  The
transfer of the Bonds may be registered only upon the books of registry
required to be kept pursuant to Section 7.02 upon surrender thereof to the
Registrar and Paying Agent, together with an assignment duly executed by the
Holder thereof or his or her duly authorized agent and accompanied by a
guarantee of signature, each in such form as shall be satisfactory to the
Registrar and Paying Agent.  Upon any
such registration of transfer the Authority shall execute and the Trustee shall
authenticate and deliver in exchange for such Bonds a new Bond or Bonds registered
in the name of the transferee or transferees for a like aggregate principal
amount, of


 


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any
denomination or denominations authorized by this Indenture.  No transfer of any Bond shall be effective
until entered on the books of registry.


 


Any
Bond surrendered in any such registration of transfer shall forthwith be
cancelled by the Trustee.  Any Bonds
registered and transferred to a new Holder pursuant to this Section shall
be delivered to the Holder at the principal office of the Registrar and Paying
Agent or sent by first-class mail to the Holder at his or her request, risk and
expense.


 


Bonds,
upon surrender thereof at the principal corporate trust office of the Registrar
and Paying Agent, together with an assignment duly executed by the Holder or
his or her authorized agent and accompanied by a guarantee of signature, each
in such form as shall be satisfactory to the Registrar and Paying Agent, may,
at the option of the Holder thereof, be exchanged for an equal aggregate
principal amount of Bonds of any denomination or denominations authorized by
this Indenture and in the same form as the Bonds surrendered for exchange.  All Bonds so surrendered pursuant to this Section shall
be cancelled by the Trustee.


 


Any
Bonds to be delivered to the Holder upon any such exchange shall be delivered
to the Holder at the principal office of the Registrar and Paying Agent or sent
by first-class mail to the Holder thereof at his or her request, risk and
expense.


 


Any
taxes or other governmental charges required to be paid with respect to the
registration of transfer or exchange of the Bonds shall be paid by the Holder
requesting registration of such transfer or exchange, as a condition precedent
to the exercise of such privilege. The Authority or the Registrar and Paying
Agent, or both, may charge the Company for every registration of transfer or
exchange sufficient to reimburse it for any and all costs required to be paid
in respect thereof.


 


SECTION 7.04.                                 Mutilated, Lost, Stolen, or Destroyed Bonds.  In
the event any Bond shall be lost, stolen, destroyed, wholly or in part, or so
defaced as to impair its value to the Holder, the Trustee shall, upon
compliance with the terms provided by law, authenticate and deliver a new Bond
of like date and tenor in exchange or replacement therefor against delivery for
cancellation of such mutilated Bond, or in lieu of and in replacement of a
destroyed, stolen or lost Bond, and upon payment by the Holder of the
reasonable expenses of the Registrar and Paying Agent and the Authority and the
reasonable charges of the Trustee and Registrar and Paying Agent in connection
therewith and, in the event that the Bond is destroyed, stolen or lost, the
Holder’s filing with the Registrar and Paying Agent of evidence satisfactory to
it that the Bond was destroyed, stolen or lost, of the Holder’s ownership
thereof, and furnishing the Registrar and Paying Agent such security and
indemnity as is satisfactory to it which shall name the Authority as an additional
indemnified party. Any replacement Bond issued under the provisions of this
Section in exchange or substitution for the defaced, mutilated or partly
destroyed Bond or in substitution for the allegedly lost, stolen or wholly
destroyed Bond shall be entitled to the identical benefits under this Indenture
as was the original Bond in lieu of which such replacement Bond is issued. Each
such replacement Bond shall be prepared in substantially the same manner as the
original.


 


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Notwithstanding
the foregoing provisions of this Section, if the lost, stolen, destroyed,
defaced or mutilated Bond has matured or been called for redemption and the
date fixed for redemption thereof has arrived, at the option of the Authority,
payment of the amount due thereon may be made without the issuance of any
replacement Bond upon receipt of like evidence, indemnity, security and payment
of expenses and the surrender for cancellation of the defaced or mutilated or
partly destroyed Bond and upon such other conditions as the Trustee may
prescribe.


 


Except
as provided in this sentence and as permitted in the following paragraph, any
replacement Bond shall be in the form of the Bond being replaced, and be dated
the date of its issuance and bear such number as shall be assigned thereto by
the Registrar and Paying Agent, with such subseries designation, if any, as may
be deemed appropriate by the Registrar and Paying Agent.  The Registrar and Paying Agent shall make an
appropriate notation in the books of registry that a replacement Bond has been
issued in exchange or substitution for the defaced, mutilated, lost, stolen, or
wholly or partly destroyed Bond.


 


There
may be imprinted or affixed on the face and the panel portion of any duplicate
Bond a mark to identify such Bond as a replacement Bond.


 


Prior
to arranging for the preparation or printing of a replacement Bond, the Trustee
and the Registrar and Paying Agent may require a deposit by the Holder to
secure the Trustee, the Registrar and Paying Agent and the Authority for costs
and expenses incurred by them in the preparation, printing, execution and
issuance of such replacement Bond.


 


Any
amount of such deposit received by the Registrar and Paying Agent in excess of
the amount required to reimburse the Registrar and Paying Agent, the Trustee or
the Authority for costs and expenses shall be returned to the party which made
the deposit.


 


Any
defaced, mutilated or partly destroyed Bond surrendered to the Registrar and
Paying Agent in substitution for a new Bond pursuant to this Section shall
be cancelled by the Trustee.


 


SECTION 7.05.                                 Temporary Bonds. 
Pending the preparation of definitive Bonds, interim receipts or
certificates (herein referred to as “temporary Bonds”) may initially be issued,
exchangeable for definitive Bonds when the latter are ready for delivery. Such
temporary Bonds may be printed, lithographed or typewritten, shall be of such
denomination or denominations as may be determined by the Authority and may
contain such references to any of the provisions of this Indenture as may be
appropriate. If temporary Bonds are issued, the Authority will cause to be
furnished duly executed definitive Bonds without delay, and thereupon the
temporary Bonds may be surrendered for cancellation at the principal office of
the Trustee in exchange for definitive Bonds and without charge for such
exchange, and the Registrar and Paying Agent shall deliver in exchange for such
temporary Bonds so surrendered an equal aggregate principal amount of
definitive duly executed Bonds, of authorized denominations. Until so
exchanged, the temporary Bonds shall be entitled to the same benefits under
this Indenture as definitive Bonds.


 


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Nothing
in this Indenture shall prevent the Authority from delivering, and the
Authority is hereby expressly permitted to deliver, Auction Rate Bonds in
typewritten form to the Securities Depository as registered owner thereof.


 


SECTION 7.06.                                 Disposition of Bonds.  Any
Bond surrendered to the Registrar and Paying Agent for payment shall be
cancelled upon such payment by the Trustee. The Trustee shall dispose of any
cancelled Bond which has been paid and which bears any date two (2) years prior
to the date of disposition in accordance with the Trustee’s procedures in
effect for the disposition of cancelled securities as of the date of such
disposition. When the Trustee shall dispose of any Bond, it shall deliver a
certificate of such disposition to the Authority and the Company.


 


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ARTICLE VIII


 


ESTABLISHMENT
OF THE PROJECT FUND


 


SECTION 8.01.                                 Project Fund.


 


1.                               There is hereby created and established a
special trust fund to be designated “Consolidated Edison Company of New York,
Inc. Series 2004B Project Fund” (hereinafter referred to as the “Project Fund”)
to be held by the Trustee.  All income
or gain on monies deposited in the Project Fund shall be retained therein.


 


2.                               There shall be deposited into the Project
Fund the proceeds of the Bonds issued hereunder.


 


3.                               The monies on deposit from time to time in
the Project Fund shall be held under and subject to this Indenture, but shall
not be subject to the liens, pledges, charges, assignments and trusts created
hereby for the security and benefit of the Holders of the Bonds and shall not
be available for the payment of Bonds within the meaning of the Indenture, and
shall be used and applied solely for the purpose of refunding the Prior Bonds
in accordance with the remaining provisions of this Section.


 


4.                               The Trustee is authorized and directed to
make payments from the Project Fund to pay the redemption price of the Prior
Bonds or costs incurred in connection therewith, upon receipt of a letter or
letters signed by an Authorized Company Representative so directing.


 


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ARTICLE IX


 


CREATION OF
SPECIAL FUNDS AND ACCOUNTS;

APPLICATION AND INVESTMENT OF REVENUES


 


SECTION 9.01.                                 Creation of Funds and Accounts. 
(a)  The following fund and the
following accounts therein, which shall be a special fund and accounts to be
held by the Trustee, are hereby created and designated as set forth below:


 


Bond
Fund


 


(a)                                  Interest Account


(b)                                 Principal Account


(c)                                  Redemption Account


(d)                                 Acceleration Account


 


The
designation of each fund and account set forth above shall include the term
“Consolidated Edison Company of New York, Inc. Series 2004B,” which term shall
precede the designation as set forth above. 
Such fund and each such account is, however, sometimes referred to
herein as set forth above.


 


(b)                                 The Bond Fund and the accounts therein shall
be held in the custody of the Trustee. 
All monies required to be deposited with or paid to the Trustee under
any provision of this Indenture shall be held by the Trustee in trust and
applied only in accordance with the provisions of this Indenture and shall be
trust funds for the purposes specified in this Indenture.


 


SECTION 9.02.                                 Deposit of Note Payments.  The
Trustee shall deposit the Note Payments or other money set forth below in the
Bond Fund and credit the Accounts set forth below in the order set forth below:


 


The
Company shall pursuant to Sections 4.02, 4.03 and 4.04 of the Participation
Agreement deposit, or cause to be deposited, the following in immediately
available funds with the Trustee as the Note Payments become due or are
declared to be immediately due and payable under the Participation Agreement
and the Note unless sufficient amounts are then available in such Accounts to
make the required payments therefrom:


 


(a)                                  No later than 12:00 noon (New York City time)
on the Business Day next preceding each Interest Payment Date, into the Bond
Fund for credit to the Interest Account an aggregate amount of funds available
on the next Business Day in The City of New York equal to the aggregate amount
required for the payment of the interest payable on the Bonds, on such Interest
Payment Date.


 


In
the event a Direct-Pay Credit Facility is in place, amounts required to be
deposited in the Bond Fund for credit to the Interest Account shall be derived
solely from the


 


85

















 


following
sources of funds in the priority indicated and shall be so deposited and
credited to the Interest Account on the date indicated:


 


(I)                                    First, on each Interest Payment Date, the
proceeds of a draw, borrowing or payment under the Direct-Pay Credit Facility
in respect of interest payable on such Interest Payment Date; and


 


(II)                                Second, on each Interest Payment Date, any
other monies provided by the Company pursuant to the preceding paragraph for
such purpose.


 


The
Trustee shall deposit the proceeds of a draw, borrowing or payment under a
Direct-Pay Credit Facility in a segregated sub-account of the Interest Account
in the Bond Fund and such proceeds shall not be commingled with moneys in any
other Account or sub-account or derived from any other source.


 


(b)(i)                      During an Auction Rate Period, no later than
12:00 noon (New York City time) on the second Business Day next preceding each
Auction Date, into the Bond Fund for credit to the Redemption Account an
aggregate amount of funds available on the next Business Day in The City of New
York equal to the aggregate amount required to pay the principal of and
premium, if any, and accrued interest on any Auction Rate Bonds, called for
redemption; provided, however if the scheduled date of such deposit to the
Redemption Account by the Company is not a Business Day then the date for such
deposit to the Redemption Account by the Company shall be the first Business
Day immediately preceding the scheduled date of such deposit to the Redemption
Account by the Company.


 


(ii)                                  Other than during an Auction Rate Period, on
the last Business Day prior to the day on which any redemption is to occur or
on the last Business Day prior to the Stated Maturity, into the Bond Fund for
credit to the Redemption Account or the Principal Account, as appropriate, the
amount required to pay principal of and premium, if any, and accrued interest
on any Bonds called for redemption or at the Stated Maturity, the amount
required to pay the principal of the Bonds.


 


In
the event a Direct-Pay Credit Facility is in place, amounts required to be
deposited in the Bond Fund for credit to the Redemption Account or the
Principal Account, as appropriate, shall be derived solely from the following
sources of funds in the priority indicated and shall be so deposited and
credited in the Redemption Account or the Principal Account, as appropriate, on
the date indicated:


 


(I)                                    First, on the date any redemption is
scheduled to occur and on the Stated Maturity, the proceeds of a draw,
borrowing or payment under the Direct-Pay Credit Facility in respect of the
amounts described in the preceding paragraph; and


 


(II)                                Second, on the date any redemption is scheduled
to occur and on the Stated Maturity, any other monies provided by the Company
pursuant to the preceding paragraph for such purpose.


 


86

















 


The
Trustee shall deposit the proceeds of a draw, borrowing or payment under a
Direct-Pay Credit Facility in a segregated sub-account of the Redemption
Account or Principal Account, as the case may be, in the Bond Fund and such
proceeds shall not be commingled with moneys in any other Account or
sub-account or derived from any other source.


 


If
other monies are received by the Trustee as advance payments of Note Payments
to be applied to the redemption of all or a portion of the Bonds, such monies
shall be deposited in the Bond Fund for credit to the Redemption Account
therein.


 


(c)                          Immediately following the declaration of
principal of and accrued interest on the Bonds then Outstanding to be
immediately due and payable pursuant to Section 12.03, into the Bond Fund
for credit to the Acceleration Account, the amount required to pay principal of
and accrued interest on such Bonds.


 


In
the event a Direct-Pay Credit Facility is in place, amounts required to be
deposited in the Bond Fund for credit to the Acceleration Account shall be
derived solely from the following sources of funds in the priority indicated
and shall immediately be so deposited and credited in the Acceleration Account:


 


(I)                                 First, the proceeds of a draw, borrowing or
payment under the Direct-Pay Credit Facility in respect of principal of and
accrued interest on the Bonds; and


 


(II)                             Second, any other monies provided by the Company pursuant to the
preceding paragraph for such purpose.


 


The
Trustee shall deposit the proceeds of a draw, borrowing or payment under a
Direct-Pay Credit Facility in a segregated sub-account of the Acceleration
Account in the Bond Fund and such proceeds shall not be commingled with moneys
in any other Account or sub-account or derived from any other source.


 


SECTION 9.03.                                 Application of Monies in the Bond Fund and
the Bond Purchase Fund.


 


1.                               The Bond Fund shall be used for the purpose
of making scheduled payments of principal of and interest on the Bonds, of
making payments of principal of and premium, if any, and accrued interest on
Bonds then subject to redemption in the manner herein provided and of making
payments of principal of and accrued interest on the Bonds then Outstanding
that have been declared to be immediately due and payable pursuant to
Section 12.03.  The monies in the
Bond Fund shall be applied as follows:


 


(a)                                  Interest Account. 
Subject to the succeeding sentence, on each Interest Payment Date, the
Trustee shall apply the amount of monies then credited to the Interest Account
equal to the interest then payable on the Bonds to the payment of such interest
on such Interest Payment Date.  In the
event a Direct-Pay Credit Facility is in place and payments are required to be
made in the order specified in Section 9.02 (a)(ii), the


 


87

















 


Trustee
shall request a draw, borrowing or payment under the Direct-Pay Credit Facility
in accordance with the terms thereof in an amount equal to the amount required
to pay the interest payable on the Outstanding Bonds on such Interest Payment
Date and shall notify the Company of the amount and date of such request.  If sufficient funds are not available under
Section 9.02(a)(ii)(I) to pay such interest, the Trustee shall apply
funds, if any, available pursuant to Section 9.02(a)(ii)(II), to the extent
necessary, to such payment of interest. If the interest on the Bonds has been
paid in full when due and all payments required under the Direct-Pay Credit
Facility have been made, the Trustee shall apply remaining funds, if any,
available pursuant to Section 9.02(a)(ii)(II) in an amount not to exceed the
amount of the draw or borrowing under the Direct-Pay Credit Facility to
reimburse the Credit Facility Issuer for such draw or borrowing after such draw
or borrowing has been honored by the Credit Facility Issuer.


 


(b)                                 Principal Account. 
Subject to the succeeding sentence, on the Stated Maturity, the Trustee
shall apply the amount of monies then credited to the Principal Account equal
to the principal amount of Bonds then payable to the payment of such principal
on such date.  In the event a Direct-Pay
Credit Facility is in place, the Trustee shall request a draw, borrowing or
payment under the Direct-Pay Credit Facility in accordance with the terms
thereof in the amount required, to pay such principal amount and shall notify
the Company of the amount and date of such request.  If sufficient funds are not available under
Section 9.02(b)(ii)(I) to pay such principal, the Trustee shall apply
funds, if any, available pursuant to Section 9.02(b)(ii)(II), to the
extent necessary, to such payment. If the principal of the Bonds has been paid
in full when due and all payments required under the Direct-Pay Credit Facility
have been made, the Trustee shall apply remaining funds, if any, available
pursuant to Section 9.02(b)(ii)(II) in an amount not to exceed the amount
of the draw or borrowing under the Direct-Pay Credit Facility to reimburse the
Credit Facility Issuer for such draw or borrowing after such draw or borrowing
has been honored by the Credit Facility Issuer.


 


(c)                                  Redemption Account.  The
Trustee shall redeem on the date set for the redemption thereof, as provided in
Article V of this Indenture, a principal amount of Bonds then subject to
redemption.  Subject to the following
sentence, the Trustee shall apply an amount credited to the Redemption Account
equal to the principal amount and premium, if any, of Bonds then subject to
redemption, together with accrued interest thereon to the redemption date, to
the payment of such Bonds on the redemption date from funds described in
Section 9.02(b).


 


In
the event a Direct-Pay Credit Facility is in place, the Trustee shall request a
draw under the Direct-Pay Credit Facility in accordance with the terms thereof,
in an amount equal to the amount required to pay the principal amount and
premium, if any, of Bonds then to be redeemed, together with accrued interest
thereon to the date set for redemption and shall notify the Company of the date
and amount of such request.  If
sufficient amounts to make such payment are not available under
Section 9.02(b)(ii)(I), the Trustee shall apply amounts, if any, available
pursuant to Section 9.02 (b)(ii)(II), to the extent necessary, to such
payment.  Such redemption shall be made
pursuant to the provisions of Article V. If the redemption price of the
Bonds equal to the principal amount of Bonds then to be redeemed, together with
premium, if


 


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any,
and accrued interest thereon has been paid in full on the redemption date and
all payments required under the Direct-Pay Credit Facility have been made, the
Trustee shall apply remaining funds, if any, available pursuant to
Section 9.02(b)(ii)(II) in an amount not to exceed the amount of the draw
or borrowing under the Direct-Pay Credit Facility to reimburse the Credit
Facility Issuer for such draw or borrowing after such draw or borrowing has
been honored by the Credit Facility Issuer.


 


Upon
the retirement of any portion of the Bonds by redemption pursuant to the
provisions of this Section 9.03, the Trustee shall file with the Authority
and the Company a statement stating the amounts of the Bonds so redeemed and
setting forth the date of their redemption and the amount paid as principal,
premium and interest thereon.  The
expenses in connection with the redemption of the Bonds shall be paid by the
Company as Additional Payments.


 


All
monies in the Redemption Account on the last Business Day prior to the Stated
Maturity shall be transferred to the Principal Account.


 


(d)                                 Acceleration Account.  The
Trustee shall immediately apply an amount credited to the Acceleration Account
equal to the principal amount of and accrued interest on the Bonds then
Outstanding that have been declared to be immediately due and payable pursuant
to Section 12.03 from funds described in Section 9.02(c).


 


In
the event a Direct-Pay Credit Facility is in place, the Trustee shall request a
draw under the Direct-Pay Credit Facility in accordance with the terms thereof,
in an amount equal to the amount required to pay the principal amount of and
accrued interest of the Bonds then Outstanding that have been declared to be
immediately due and payable pursuant to Section 12.03 and shall notify the
Company of the date and amount of such request.  If sufficient amounts to make such payment are not available
under Section 9.02(c)(I), the Trustee shall apply amounts, if any,
available pursuant to Section 9.02(c)(II), to the extent necessary, to
such payment. If the principal of and interest on the Bonds has been paid in
full after such Bonds have been declared to be immediately due and payable and
all payments required under the Direct-Pay Credit Facility have been made, the
Trustee shall apply remaining funds, if any, available pursuant to
Section 9.02(c)(II) in an amount not to exceed the amount of the draw or
borrowing under the Direct-Pay Credit Facility to reimburse the Credit Facility
Issuer for such draw or borrowing after such draw or borrowing has been honored
by the Credit Facility Issuer.


 


2.                               Bond Purchase Fund. 
Pursuant to Section 4.02(d) of the Participation Agreement, the
Company has agreed that the Company shall provide funds to the Registrar and
Paying Agent for deposit in the Bond Purchase Fund and credit to the Company
Account therein established under the Bond Purchase Trust Agreement to be
applied to the payment of the Purchase Price of any Bond pursuant to the Bond
Purchase Trust Agreement to the extent not otherwise provided from the sources
described in the Bond Purchase Trust Agreement.


 


In
the event sufficient funds are not available under Section 2.03(a)(i) of the
Bond Purchase Trust Agreement to pay such Purchase Price on the date of
purchase of any Bonds pursuant to Section 5.03, 5.04, 5.08 or 5.09 hereof,
the Registrar and Paying Agent on or prior to


 


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the
time specified in the Bond Purchase Trust Agreement shall direct the Trustee to
request a draw or payment under the Liquidity Facility in accordance with the
terms thereof in the amount required, together with amounts, if any, available
under Section 2.03(a)(i) of the Bond Purchase Trust Agreement, to pay the
Purchase Price of such Bonds on such date of purchase.  The Trustee shall on or prior to the time
specified in the Bond Purchase Trust Agreement request such draw or payment
under the Liquidity Facility in accordance with the terms thereof and shall on
or prior to the time specified in the Bond Purchase Trust Agreement transfer
the proceeds of such draw or payment to the Registrar and Paying Agent, who
shall cause the proceeds of such draw or payment to be deposited in the Bond
Purchase Fund under the Bond Purchase Trust Agreement and credited to the
Liquidity Facility Proceeds Account therein. 
The Registrar and Paying Agent shall notify the Company of the amount and
date of such request.  The Registrar and
Paying Agent shall promptly notify the Company in the event that it has not
received any amounts requested under a Support Facility prior to the time
specified in the Bond Purchase Trust Agreement on any date a Purchase Price is
due.


 


The
Remarketing Agent for a subseries of Bonds shall notify the Registrar and
Paying Agent and the Trustee, at or prior to 11:15 a.m. (New York City time) on
a specified purchase date, of the amount of the proceeds of the related
remarketing, and shall specify whether remarketing proceeds (excluding any such
proceeds from the Company, the Authority or an affiliate of either) equal to
the full amount of the Purchase Price payable on such purchase date are held by
such Remarketing Agent and will be available on such purchase date for the
payment of such Purchase Price, and, if the amount of such remarketing proceeds
that will be available on such purchase date for the payment of such Purchase
Price shall not be equal to the full amount of the Purchase Price payable on
such purchase date, such notice shall specify the amount of the
deficiency.  By 11:45 a.m. (New York
City time) on such purchase date, the Remarketing Agent shall pay to the
Registrar and Paying Agent, for deposit in the Bond Purchase Fund and credit to
the Remarketing Proceeds Account, an aggregate amount of such remarketing
proceeds equal to the amount stated in such notice to be available on such
purchase date for the payment of such Purchase Price.


 


SECTION 9.04.                                 Investment of Funds. 
Monies in the Bond Fund and the accounts in such fund shall only be
invested and reinvested by the Trustee in Investment Securities selected by the
Company, so long as the Company is not in default hereunder or under the
Participation Agreement, and maturing in the amounts and at the times as
determined by the Company so that the payments required to be made from such
funds and accounts may be made when due and subsequent to the occurrence of an
Event of Default hereunder or under the Participation Agreement, the Trustee
shall hold monies in the Bond Fund uninvested. Investment earnings shall be
considered on deposit in any Fund or Account as of the date they are actually
received by the Trustee. 
Notwithstanding the foregoing, so long as a Direct-Pay Credit Facility
is in effect, monies in the Bond Fund, except for proceeds of refunding bonds,
shall be held uninvested.


 


Monies
on deposit in the Project Fund shall be invested and reinvested by the Trustee
at the express direction of the Company, promptly confirmed in writing (which
may be provided by telecopy), so long as the Company is not in default under
the Participation Agreement, to the extent reasonable and practicable, in
Investment Securities maturing in such


 


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amounts
and at such times as it is anticipated by the Company that such monies will be
required to pay the redemption price of the Prior Bonds.


 


The
Trustee, with the consent of the Company, shall be authorized to sell any
investment when necessary to make the payments to be made from the funds and
accounts therein.  All earnings on and
income from monies in said funds and accounts (other than the Project Fund)
created hereby shall be considered to be Revenues and shall be held in the
respective account in the Bond Fund for use and application as are all other
monies deposited in such accounts.  The
Trustee shall, in the statement required by Section 11.07, set forth the
Investment Securities held separately in, and the earnings realized on
investment for, each fund and account hereunder.  The Trustee shall not be liable for any depreciation in the value
of the Investment Securities acquired hereunder or any loss suffered in
connection with any investment of funds made by it in accordance herewith,
including, without limitation, any loss suffered in connection with the sale of
any investment pursuant hereto.


 


The
Trustee may make any such investments through its own investment department
upon written direction of the Company.


 


All
Investment Securities shall constitute a part of the respective fund and
accounts therein from which the investment in Investment Securities was made.


 


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ARTICLE X


 


PARTICULAR
COVENANTS OF THE AUTHORITY


 


SECTION 10.01.                           Payment of Principal of and Interest and
Redemption Premium on Bonds.  The Authority will promptly pay solely from
the Note Payments and other monies held by the Trustee and available therefor,
the principal of, and the interest on, every Bond issued under and secured by
the Indenture and any premium required to be paid for the retirement of said
Bonds by redemption, at the places, on the dates and in the manner specified in
this Indenture and in said Bonds according to the true intent and meaning
thereof, subject, however, to the provisions of Section 2.02.3.


 


SECTION 10.02.                           Performance of Covenants.  The
Authority will faithfully perform at all times all covenants, undertakings,
stipulations and provisions contained in the Indenture, in any and every Bond
and in all proceedings of the Authority pertaining thereto.


 


SECTION 10.03.                           Further Instruments.  The
Authority will from time to time execute and deliver such further instruments
and take such further action as may be reasonable and as may be required to
carry out the purpose of the Indenture; provided, however, that no such
instruments or actions shall pledge the credit of the Authority or the State of
New York or the taxing power of the State of New York or otherwise be
inconsistent with the provisions of Section 2.02.3.


 


SECTION 10.04.                           Inspection of Project Books.  All
books and documents in the possession of the Authority relating to the Project
or the Participation Agreement shall at all times be open to inspection by such
accountants or other agents as the Trustee or the Bond Insurer may from time to
time designate.


 


SECTION 10.05.                           No Extension of Time of Payment of Interest.  In
order to prevent any accumulation of claims for interest after maturity, the
Authority will not directly or indirectly extend or assent to the extension of
the time of payment of any claims for interest on, any of the Bonds and will
not directly or indirectly be a party to or approve any such arrangement by
purchasing such claims for interest or in any other manner.  In case any such claim for interest shall be
extended in violation hereof, such claim for interest shall not be entitled, in
case of any default hereunder, to the benefit or security of the Indenture
except subject to the prior payment in full of the principal of, and premium,
if any, on, all Bonds issued and outstanding hereunder, and of all claims for
interest which shall not have been so extended or funded.


 


SECTION 10.06.                           Trustee’s, Auction Agent’s, Remarketing
Agent’s, Broker-Dealers’, Registrar and Paying Agent’s and Indexing Agent’s
Fees, Charges and Expenses.  Pursuant to the provisions of
Section 4.02 of the Participation Agreement, the Company has agreed to pay
the fees and the expenses (including, in the case of the Trustee, the Registrar
and Paying Agent and the Remarketing Agents, the reasonable fees and expenses
of counsel and accountants) of the Trustee, the Registrar and Paying Agent,
Indexing Agent, Remarketing Agents and in the case of Auction Rate Bonds, the
Auction Agent and Broker-Dealers, in the


 


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amounts set forth more fully
therein, and the Authority shall have no liability for the payment of any fees
or expenses of the Trustee, the Registrar and Paying Agent, Indexing Agent,
Remarketing Agents and in the case of Auction Rate Bonds, the Auction Agent and
Broker-Dealers.


 


SECTION 10.07.                           Agreement of the State of New York.  In
accordance with the provisions of subdivision 11 of Section 1860 of the
Act, the Authority, on behalf of the State of New York, does hereby pledge to
and agree with the Bondholders that the State of New York will not limit or
alter the rights and powers vested by the Act in the Authority to fulfill the
terms of any contract made with Bondholders, or in any way impair the rights
and remedies of such Bondholders, until the Bonds, together with the premium
and interest thereon, with (to the extent permitted by law) interest on any
unpaid installments of interest, and all costs and expenses in connection with
any action or proceeding by or on behalf of such Bondholders, are fully met and
discharged.


 


SECTION 10.08.                           Recording and Filing. 
Pursuant to the Participation Agreement, the Company covenants that it
will cause all financing statements related to this Indenture and all
supplements thereto and the Participation Agreement and all supplements
thereto, as well as such other security agreements, financing statements and
all supplements thereto and other instruments as may be required from time to
time to be kept, to be recorded and filed in such manner and in such places as
may from time to time be required by law in order to preserve and protect fully
the security of Holders and the rights of the Trustee hereunder, and to take or
cause to be taken any and all other action necessary to perfect the security interest
created by this Indenture.  The Company
is obligated under Section 5.08 of the Participation Agreement to file all
such financing statements and other security agreements.  The Trustee is hereby authorized to file all
financing statements in the event that the Company does not file them.


 


SECTION 10.09.                           Rights Under the Participation Agreement and
the Note.  The Participation Agreement, a duly executed
counterpart of which has been filed with the Trustee, sets forth the covenants
and obligations of the Authority and the Company and reference is hereby made
to the same for a detailed statement of said covenants and obligations of the
Company thereunder.  Subsequent to the
issuance of Bonds and prior to their payment in full or provision for payment thereof
in accordance with the provisions hereof, neither the Participation Agreement
nor the Note may be effectively amended, changed, modified, altered or
terminated except in accordance with the provisions of Article XIV hereof.  The Authority agrees that the Trustee, in
its name or in the name of the Authority, may enforce all rights of the
Authority and all obligations of the Company under and pursuant to the
Participation Agreement and the Note for and on behalf of the Holders, whether
or not the Authority is in default hereunder. 
The Note heretofore delivered to the Trustee evidences the obligations
of the Company to make certain specified payments under the Participation
Agreement.  Nothing herein contained
shall be construed to prevent the Authority from enforcing directly any or all
of its rights to administrative compensation or indemnification under the
Participation Agreement.


 


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ARTICLE XI


 


CONCERNING
THE TRUSTEE; APPOINTMENT OF

REGISTRAR AND PAYING AGENT, REMARKETING AGENTS,

AUCTION AGENT AND INDEXING AGENT


 


SECTION 11.01.                           Appointment of Trustee.  The
Bank of New York is hereby appointed the Trustee hereunder and by the execution
of this Indenture accepts such appointment and without further act, deed or
conveyance, shall be fully vested with all the estate, properties, rights,
powers, trusts, duties and obligations of the Trustee hereunder.


 


The
Trustee shall set up suitable accounts for the deposit of the Note Payments and
for the payment of the Bonds and the interest thereon and for all other
payments provided or required by this Indenture, including, without limiting
the generality of any of the foregoing, setting up of the Funds created by
Articles VIII and IX.


 


SECTION 11.02.                           Indemnification of Trustee as Condition for
Remedial Action.  The Trustee shall be under no obligation to
institute any suit, or to take any remedial proceeding under this Indenture, or
to enter any appearance or in any way defend in any suit in which it may be
made defendant, or to take any steps in the execution of the trusts hereby
created or in the enforcement of any rights and powers hereunder, until it
shall be indemnified to its satisfaction against any and all costs and
expenses, outlays and counsel fees and other reasonable disbursements, and
against all liability; the Trustee may, nevertheless, begin suit, or appear in
and defend suit, or do anything else in its judgment proper to be done by it as
such Trustee, without indemnity, and in such case the Trustee shall be
reimbursed from the Additional Payments required to be made pursuant to the
Participation Agreement for all costs and expenses, outlays and counsel fees
and other reasonable disbursements incurred in connection therewith.  If the Company shall fail to make such
reimbursement, the Trustee may reimburse itself from any monies in its
possession under the provisions of this Indenture and shall be entitled to a
preference over the Bonds; provided, however, that the proceeds of a Support
Facility or of remarketing of Bonds shall be applied solely as set forth
elsewhere herein and in such Support Facility and shall not be applied to the
reimbursement set forth in this Section 11.02.  Notwithstanding the foregoing, the Trustee shall make all
payments of principal of and premium, if any, and interest on the Bonds then
Outstanding when due, when called for redemption or when declared to be
immediately due and payable pursuant to this Indenture and of the Purchase
Price of the Bonds in accordance with this Indenture.


 


SECTION 11.03.                           Trustee Not Liable for Failure of the
Authority or Company to Act.  The Trustee shall not be liable or
responsible because of the failure of the Authority or the Company or any of
their employees or agents to make any collections or deposits or to perform any
act herein required of the Authority or the Company.  The Trustee shall not be responsible for the application of any
of the proceeds of the Bonds or any other monies deposited with it and paid
out, withdrawn or transferred hereunder if such application, payment,
withdrawal or transfer shall be made in accordance with the provisions of this
Indenture.  The immunities and
exemptions from liability of the Trustee hereunder shall extend to its directors,
officers, employees and agents.


 


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SECTION 11.04.                           Certain Duties and
Responsibilities of the Trustee. 
(a) Except during the continuance of an Event of Default specified in
Section 12.01 of which the Trustee
has been notified or is deemed to have notice as provided in
Section 11.08,


 


(1)                                  the Trustee shall undertake to perform such
duties and only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and


 


(2)                                  in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).


 


(b)                                 In case an Event of Default specified in
Section 12.01 has occurred and is continuing of which the Trustee has been
notified or is deemed to have notice as provided in Section 11.08, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in such exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.


 


(c)                                  None of the provisions of this Indenture
shall be construed to relieve the Trustee from liability for negligent action,
negligent failure to act, or willful misconduct, except that


 


(1)                                  this Subsection (c) shall not be
construed to limit the effect of Subsection (a) of this Section;


 


(2)                                  the Trustee shall not be liable for any error
of judgment made in good faith by any one of its officers, unless it shall be
proved that the Trustee was negligent;


 


(3)                                  in the absence of bad faith on its part, the
Trustee shall be protected and shall incur no liability in acting or proceeding
or in not acting or not proceeding upon any resolution, order, notice,
telegram, request, consent, waiver, certificate, statement, affidavit, voucher
requisition, bond or other paper or document which the Trustee shall believe to
be genuine and to have been adopted or signed by the proper board or person or
to have been prepared and furnished pursuant to any of the provisions of this
Indenture, or upon the written opinion of any attorney, engineer, accountant or
other expert believed by the Trustee to be qualified in relation to the subject
matter, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such
instrument but may accept and rely upon the same as conclusive evidence of the
truth and accuracy of such statements;


 


95

















 


(4)                                  the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Bonds relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under the provisions
of this Indenture; and


 


(5)                                  no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.


 


(d)                                 Notwithstanding anything contained elsewhere
in this Indenture, the Trustee shall have the right to reasonably require, in
respect of the payment or withdrawal of any monies or the taking of any action
whatsoever within the purview of this Indenture, any showings, certificates,
opinions, appraisals or other information, or corporate action or evidence
thereof, in addition to that required by the terms hereof as a condition of
such action by the Trustee.


 


(e)                                  The Trustee may execute any of the trusts or
powers hereof and perform any of its duties by or through attorneys, agents or
receivers, and shall not be responsible for any negligence or misconduct on the
part of any such attorney, agent or receiver appointed by it if the Trustee
shall have exercised due care and diligence in appointing or selecting such
person, and shall be entitled to advice of counsel concerning all matters of
the trusts hereof and the duties hereunder, and may in all cases pay such
reasonable compensation to all such attorneys, agents and receivers as may
reasonably be employed in connection with the trusts hereof. The Trustee may
act upon the opinion or advice of any attorney or attorneys (who may be the
attorney or attorneys for the Authority or the Company), approved by the
Trustee in the exercise of reasonable care, and the Trustee shall not be
responsible for any loss or damage resulting from any action or nonaction in good
faith in reliance upon such opinion or advice.


 


(f)                                    Whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon a certificate of an
Authorized Company Representative or an Authorized Officer.


 


(g)                                 The Trustee shall not be accountable for the
use by the Company of any proceeds of the Bonds authenticated or delivered
hereunder.


 


(h)                                 The Trustee shall not be required to give any
bonds or surety in respect of the execution of its trusts and powers hereunder.


 


(i)                                     The Trustee may treat and deem the Holder of
any Bonds as set forth in the books of the registry hereunder as the absolute
owner thereof.


 


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(j)                                     Notwithstanding any other provision of this
Indenture, in determining whether the rights of the Holders will be adversely
affected by any action taken pursuant to the terms and provisions of this
Indenture, the Trustee shall consider the effect on the Holders as if there
were no Policies.


 


(k)                                  The Trustee shall furnish to the Bond
Insurer, upon request, such information concerning the subseries of the Bonds
to which such Policy applies as it may reasonably request.


 


(l)                                     The Trustee shall provide to the Bond Insurer
(attention:  Surveillance Department), a
copy of any notice to be given to the registered owners of the related
subseries of Bonds, including, without limitation, notice of any redemption of
or defeasance of the Bonds, and any certificate rendered pursuant to this
Indenture relating to the security for the Bonds.


 


(m)                               The Trustee shall notify the Bond Insurer of
any failure of the Company to provide relevant notices, certificates or other
information pursuant to the terms hereof or of the Participation Agreement.


 


(n)                                 Notwithstanding any other provision of this
Indenture, the Trustee shall immediately notify the Bond Insurer if at any time
there are insufficient moneys to make any payments of principal and/or interest
as required and immediately upon the occurrence of any Event of Default
hereunder


 


SECTION 11.05.                           Limitations on Obligations and Responsibilities
of Trustee.  The Trustee shall be under no obligation to
effect or maintain insurance or to renew any policies of insurance or to
inquire as to the sufficiency of any policies of insurance carried by the
Company, or to report, or make or file claims or proof of loss for, any loss or
damage insured against or which may occur, or to keep itself informed or
advised as to the payment of any taxes or assessments, or to require any such
payment to be made.  The Trustee, except
as to the acceptance of the trusts by its execution of this Indenture and the
performance of its responsibilities hereunder, shall have no responsibility in
respect of the validity, sufficiency, due execution or acknowledgment of this
Indenture, or in respect of the validity of the Bonds or the due execution or
issuance thereof.  The Trustee shall be
under no obligation to see that any duties herein or in the Participation
Agreement, the Remarketing Agreement, the Auction Agency Agreement, the
Broker-Dealer Agreement or any Support Facility imposed upon the Authority, the
Company, the issuer of any Support Facility, or any party other than itself in
its capacity as Trustee, or any covenants herein contained on the part of any
party other than itself in its capacity as Trustee to be performed, shall be
done or performed, and the Trustee shall be under no obligation for failure to
see that any such duties or covenants are so done or performed.


 


SECTION 11.06.                           Compensation and Indemnification of Trustee.  The
Company has agreed in the Participation Agreement (1) to pay to the Trustee
from time to time such compensation for all services rendered by it hereunder
or shall from time to time be agreed


 


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in writing (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); (2) except as otherwise
expressly provided herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.


 


SECTION 11.07.                           Statements from Trustee.  It
shall be the duty of the Trustee, on or about the fifteenth (15th) day of each
month, and at such other reasonable time or times as may be determined by the
Authority or the Company, to file with the Authority, upon the written request
thereof, and the Company a statement setting forth in respect of the preceding
calendar month:


 


(a)                                  the amount withdrawn or transferred by it and
the amount received by it and held on account of each Fund under the provisions
of this Indenture;


 


(b)                                 the amount on deposit with it at the end of such
calendar month to the credit of each such Fund or Account;


 


(c)                                  a monthly account of reconciliation and
income which includes a brief description of all obligations held by it as an
investment of monies in each such Fund or Account;


 


(d)                                 the amount applied to the redemption of the
Bonds under the provisions of Article V and Section 9.03 and the
amount of the Bonds remaining Outstanding; and


 


(e)                                  any other information which the Authority or
the Company may reasonably request.


 


All
records and files pertaining to the Bonds and the Company in the custody of the
Trustee shall be open at all reasonable times upon prior notice to the
inspection of the Authority, the Company and their agents and representatives.


 


SECTION 11.08.                           Notice of Default. 
Except upon the happening of any Event of Default specified in clauses
(a) through (d), inclusive, of Section 12.01, the Trustee shall not be
obliged to take notice or be deemed to have notice of any Event of Default
hereunder, unless a Responsible Officer of the Trustee shall have actual
knowledge thereof or be specifically notified in writing of such Event of
Default by the issuer of any Support Facility, any Remarketing Agent, the
Auction Agent or the Holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Bonds Outstanding and such written notice
shall state that it is a “notice of default.”


 


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SECTION 11.09.                           Trustee May Deal in Bonds.  The
bank or trust company acting as Trustee under this Indenture, and its
directors, officers, employees or agents, may in good faith buy, sell, own,
hold and deal in the Bonds issued under and secured by this Indenture, and may
join in the capacity of a Holder of a Bond in any action which any Holder of a
Bond may be entitled to take with like effect as if such bank or trust company
were not the Trustee under this Indenture.


 


SECTION 11.10.                           Trustee Not Responsible For Recitals.  The
recitals, statements and representations contained herein and in the Bonds
shall be taken and construed as made by and on the part of the Authority, and
not by the Trustee, and the Trustee assumes, and shall be under, no
responsibility for the correctness of the same or for the recording or
re-recording or filing or refiling of the Indenture or any supplements thereto
or any instruments of further assurance (including financing statements) except
as otherwise provided herein.  The
Trustee makes no representations as to the value of any property pledged
hereunder to the payment of Bonds or as to the title of the Authority or the
Company thereto or as to the validity, sufficiency or adequacy of the security
afforded thereby or hereby or as to the validity of this Indenture, the Note,
the Participation Agreement, any Support Facility or of the Bonds.


 


SECTION 11.11.                           Qualification of the Trustee. 
There shall at all times be a Trustee hereunder which shall be a trust
company or bank in good standing located in or incorporated under the laws of
the State of New York, duly authorized to exercise trust powers and subject to
examination by Federal or State authority, and having reported capital and
surplus of not less than $75,000,000. 
The Trustee hereunder shall not be required to maintain, and any
successor Trustee shall not be required to have, an office in the city in which
the principal corporate trust office of the initial Trustee hereunder is
located.


 


If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.11, it shall resign immediately in the
manner and with the effect specified in Section 11.12.


 


SECTION 11.12.                           Resignation and Removal of Trustee.


 


(a)                                  No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee
under Section 11.13.


 


(b)                                 The Trustee may resign at any time by giving
written notice thereof to the Authority, the Bond Insurer and the Company. If
an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within thirty (30) days after the giving of such
notice of resignation, the retiring Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.


 


(c)                                  The Trustee may be removed at any time by
demand of the Holders of a majority in principal amount of the Bonds then
Outstanding, signed in person by such Holders or by their attorneys, legal
representatives or agents and delivered to such


 


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Trustee,
the Authority and the Company (such demand to be effective only when received
by the Trustee, the Authority and the Company).


 


(d)                                 If at any time:


 


(1)                               the Trustee shall cease to be eligible under Section 11.11 and
shall fail to resign after written request by the Authority or by a Holder who
shall have been a bona fide Holder for at least six months,


 


(2)                               the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, or


 


(3)                               the Trustee shall breach any trust or obligation hereunder,


 


then,
in any such case, (i) the Authority may remove, and the Company or the Bond
Insurer may direct the Authority to remove, the Trustee, or (ii) any Holder who
has been a bona fide Holder for at least six months may, on behalf of herself
and all other similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor.


 


(e)                                  If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of the
Trustee for any cause, the Authority shall promptly appoint a successor; the
Company or the issuer of any Support Facility or both of them, having the right
to request the appointment of a particular qualified institution as such
successor.  Within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee may be appointed by an instrument or concurrent instruments
in writing executed by the Holders of a majority in principal amount of the Bonds
then Outstanding delivered to the Authority and the retiring Trustee, and, upon
such delivery, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Authority.


 


(f)                                    The Authority shall give notice to the
Trustee, the Bond Insurer, the Company, the applicable Remarketing Agents, the
Registrar and Paying Agent, the Auction Agent and the Bondholders of each
resignation and each removal of a Trustee and each appointment of a successor
Trustee in the manner set forth in Section 17.03 with respect to
Bondholders and Section 17.09 with respect to the Company, the Bond
Insurer, the Auction Agent and the applicable Remarketing Agents. Each notice
shall include the name and address of the Principal Corporate Trust Office of
the successor Trustee.


 


(g)                                 The Trustee at any time other than during the
continuance of an Event of Default and for any reason may be removed by an
instrument in writing, executed by an Authorized Officer, appointing a
successor, filed with the Trustee so removed.


 


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SECTION 11.13.                           Successor Trustee. 
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to its predecessor, and also to the Authority and the Company, an
instrument in writing accepting such appointment hereunder, and thereupon such
successor Trustee, without any further act, shall become fully vested with all
the rights, immunities, powers and trusts and subject to all the duties and
obligations, of its predecessor; but such predecessor shall, nevertheless, on
written request of its successor or of the Authority and upon payment of
expenses, charges and other disbursements of such predecessor which are payable
pursuant to the provisions of Sections 11.02 and 11.06, execute and deliver an
instrument transferring to such successor Trustee all the rights, immunities,
powers and trusts of such predecessor hereunder; and every predecessor Trustee
shall deliver all property and monies held by it hereunder to its successor,
subject, nevertheless, to its first lien and preference provided for in
Sections 11.02 and 11.06.  Should any
instrument in writing from the Authority be required by any successor Trustee
for more fully vesting in such Trustee the rights, immunities, powers and
trusts hereby vested or intended to be vested in the predecessor Trustee, any
such instrument in writing shall and will, on request, be executed,
acknowledged and delivered by the Authority.


 


Every
successor Trustee appointed pursuant to this Section shall be a trust
company or bank in good standing located in or incorporated under the laws of
the State of New York, duly authorized to exercise trust powers and subject to
examination by Federal or State authority, having a reported capital and
surplus of not less than $75,000,000.


 


Notwithstanding
any of the foregoing provisions of this Article, any bank or trust company
having power to perform the duties and execute the trusts of this Indenture and
otherwise qualified to act as Trustee hereunder with or into which the bank or
trust company acting as Trustee may be converted, merged or consolidated, or to
which the corporate trust business assets as a whole or substantially as a
whole of such bank or trust company may be sold, shall be deemed the successor
of the Trustee.


 


SECTION 11.14.                           Appointment of Remarketing Agents. 
Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Banc
One Capital Markets, Inc. and Citigroup Global Markets Inc. are hereby
appointed by the Authority as the initial Remarketing Agents to serve as such
under the terms and provisions hereof and of the Market Agent Agreements for
the Series 2004B-1-1 Bonds, the Series 2004 B-1-2 Bonds, the Series 2004 B-1-3
Bonds, and the Series 2004 B-1-4 Bonds and Series 2004B-2 Bonds, respectively,
and of any successor Remarketing Agreement. 
The Remarketing Agent for any subseries, including any successor
appointed pursuant hereto, shall be a member of the National Association of
Securities Dealers, Inc. having capitalization of at least $25,000,000, and be
authorized by law to perform all the duties imposed upon it by this Indenture,
the Bond Purchase Trust Agreement and the Remarketing Agreement.  The Remarketing Agent for any subseries of
Bonds may be removed at any time by the Authority, upon thirty (30) days’
notice, acting at the written direction of the Company by an instrument signed
by the Authority and filed with the Trustee, the Registrar and Paying Agent,
the Remarketing Agent and the Company. 
If there shall not be at least one Remarketing Agent serving as such for
any subseries of Bonds following the effective date of a proposed removal of a
Remarketing Agent for such subseries, no such removal shall take effect until
the appointment of a successor Remarketing Agent for such subseries of
Bonds.  The


 


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Remarketing
Agent for any subseries of Bonds may resign upon 30 days’ written notice
delivered to the Company, the Authority, the Trustee, the Registrar and Paying
Agent and the Bond Insurer or any other issuer of any Support Facility.  The Company shall use its best efforts to
cause the Authority to appoint a successor Remarketing Agent that is a qualified
institution, effective as of the effectiveness of any such resignation or
removal.  Each successor Remarketing
Agent shall be a qualified institution selected and appointed by the Authority,
upon the written request and with the approval of the Company and the Bond
Insurer.  If there shall be more than
one Remarketing Agent serving as such for a subseries of Bonds, the Authority,
at the request of the Company, shall designate one such Remarketing Agent as “Remarketing
Representative” to act on behalf of all Remarketing Agents for such subseries,
and each other Remarketing Agent shall agree in writing to accept the
determinations of such Remarketing Representative.


 


SECTION 11.15.                           Appointment of Registrar and Paying Agent.  The
Bank of New York in New York, New York is hereby appointed by the Authority to
serve as the Registrar and Paying Agent hereunder.  The Company shall have the right to request the appointment of an
institution meeting the requirements of Section 11.19 to serve as
successor thereto in the event of the removal or resignation of such Registrar
and Paying Agent.


 


The
Trustee hereby appoints any Registrar and Paying Agent appointed hereunder as
authenticating agent.


 


SECTION 11.16.                           General Provisions Regarding Registrar and
Paying Agent.


 


(a)                                  The Registrar and Paying Agent shall:


 


(i)                                     hold all Bonds delivered to it for purchase
hereunder in trust for the benefit of the respective Bondholders which shall
have so delivered such Bonds until monies representing the purchase price of
such Bonds shall have been delivered to or for the account of or to the order
of such Holders and deliver said Bonds in accordance with the provisions of
this Indenture;


 


(ii)                                  hold all monies delivered to it for the
purchase of Bonds, in trust for the benefit of the person or entity who has
delivered such monies until the Bonds purchased with such monies have been
delivered to or for the account of such person or entity as provided in this
Indenture;


 


(iii)                               maintain the books of registry and keep such books and records as shall
be consistent with prudent industry practice and make such books and records
available for inspection by the Trustee, the Remarketing Agent, the Authority
and the Company at all reasonable times;


 


(iv)                              perform the duties and undertake the obligations assigned to them in
Sections 7.02 through 7.06;


 


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(b)                                 The Registrar and Paying Agent may deem and
treat the Holder of any Bonds as set forth in the books of registry hereunder
as the absolute owner thereof;


 


(c)                                  The Registrar and Paying Agent may in good
faith hold any other form of indebtedness issued by the Authority or any
security issued by the Company, or any affiliate of the Company; own, accept or
negotiate any drafts, bills of exchange, acceptances or obligations thereof;
and make disbursements therefor and enter into any commercial or business
arrangement therewith; all without any liability on the part of such Registrar
and Paying Agent for any real or apparent conflict of interest by reason of any
such actions; and


 


(d)                                 The Registrar and Paying Agent agrees to
cooperate with the Trustee and the Company in preparing and conveying
information necessary for drawings under any Support Facility.  To the extent that any other certificate to be
submitted by the Trustee to an issuer of a Support Facility in connection with
a drawing under the Support Facility requires the Trustee to state that the
Registrar and Paying Agent has certified certain information to the Trustee,
the Registrar and Paying Agent agrees to provide such certification to the
Trustee to the extent such information is known to it.


 


SECTION 11.17.                           Payment of Registrar and Paying Agent;
Indemnification.  The Authority will cause the Company to
agree in the Participation Agreement to pay all reasonable fees, charges and
expenses of the Registrar and Paying Agent for acting under and pursuant to
this Indenture.  In addition, the
Authority will cause the Company to agree in the Participation Agreement to
indemnify the Registrar and Paying Agent and its directors, officers and
employees against and save them harmless from any and all losses, costs,
charges, expenses, judgments and liabilities incurred while carrying out the
transactions contemplated by this Indenture, except that said indemnity does
not apply to the extent that they are caused by the negligent action, negligent
failure to act or willful misconduct of the Registrar and Paying Agent or its
directors, officers, employees or agents.


 


SECTION 11.18.                           Registrar and Paying Agent’s Performance;
Duty of Care.  The duties and obligations of the Registrar
and Paying Agent shall be determined solely by the provisions of this
Indenture.  None of the provisions of
this Indenture shall be construed to relieve the Registrar and Paying Agent
from liability for negligent action, negligent failure to act or willful
misconduct, except that (a) the Registrar and Paying Agent shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and, in the absence of bad faith on the part of
the Registrar and Paying Agent, the Registrar and Paying Agent may conclusively
rely, as to the truth of the statements expressed therein, upon any document
furnished to the Registrar and Paying Agent and conforming to the requirements
of this Indenture and the Registrar and Paying Agent may conclusively rely and
shall be protected in acting upon any document believed by it to be genuine and
to have been signed or presented by the proper party or parties, provided that,
in the case of any such document which by any provision of this Indenture is
specifically required to be furnished to the Registrar and Paying Agent, the
Registrar and Paying Agent shall be under a duty to examine the same to
determine whether or not it conforms to the requirements of this Indenture, and
(b) no provisions of this Indenture shall require the Registrar and Paying
Agent to expend


 


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or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. 
The Registrar and Paying Agent may act upon the opinion or advice of any
attorney or attorneys (who may be the attorney or attorneys for the Authority
or the Company), approved by the Trustee in the exercise of reasonable care,
and the Registrar and Paying Agent shall not be responsible for any loss or
damage resulting from any action or nonaction in good faith in reliance upon
such opinion or advice.


 


SECTION 11.19.                           Qualifications of Registrar and Paying Agent.  The
Registrar and Paying Agent, including any successor appointed pursuant to this
Indenture, shall be a bank duly organized under the laws of the United States
of America or any State or territory thereof, having a combined capital and
unimpaired surplus of at least $50,000,000 and authorized by law to exercise
trust powers and perform all the duties imposed upon it by this Indenture.  Unless the Bonds bear an Auction Rate, or a
Fixed Rate, the Registrar and Paying Agent shall have an office or agency in
New York, New York capable of performing its obligations hereunder.


 


SECTION 11.20.                           Resignation or Removal of Registrar and
Paying Agent and Successor to Registrar and Paying Agent; Termination of
Registrar and Paying Agent’s Obligations.  The Registrar and Paying
Agent may at any time resign and be discharged of the duties and obligations
created hereunder and under the Bond Purchase Trust Agreement by giving at
least sixty days’ notice to the Authority, the Company, the Trustee, the Bond
Insurer and the Remarketing Agent.  The
Registrar and Paying Agent may be removed at any time upon and pursuant to the
request of the Company by an instrument, signed by the Authority and filed with
the Trustee, the Bond Insurer and the Registrar and Paying Agent and the
Company, provided that such removal shall not take effect until the appointment
of a successor Registrar and Paying Agent. 
The Authority at the request of the Company shall appoint a successor
Registrar and Paying Agent effective as of the effectiveness of any such
resignation or removal.  Each successor
Registrar and Paying Agent shall be a qualified institution selected by the
Company and, so long as a Support Facility is in effect, reasonably acceptable
to the issuer of a Support Facility, and approved and appointed by the
Authority.


 


In
the event of the resignation or removal of the Registrar and Paying Agent, the
Registrar and Paying Agent shall pay over and deliver any monies and Bonds held
by it in such capacity to its successor or, if there is no successor, to the
Trustee.  In the event that there is no
successor to the Registrar and Paying Agent on the effective date of its
resignation, the entity acting as Trustee shall perform the functions of the
Registrar and Paying Agent; provided that monies held by the Trustee pursuant
to this paragraph shall not be deemed to be held by the Trustee in its capacity
as Trustee.


 


SECTION 11.21.                           Appointment of Auction Agent; Qualifications
of Auction Agent, Resignation; Removal.  The Authority hereby appoints
The Bank of New York to serve as the Auction Agent for the Bonds.  The Auction Agent may at any time resign and
be discharged of the duties and obligations created by this Indenture by giving
at least 90 days’ notice, or, if it has not been paid, 30 days’ notice, to the
Trustee, the Company, the Authority, and to the Remarketing Agent.  During the Auction Rate Period, the Auction
Agent may be removed at any time by the Authority acting at the request of the
Company by an instrument 


 


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signed
by the Authority and filed with the Company, the Auction Agent, the Bond
Insurer, the Remarketing Agent and the Registrar and Paying Agent upon at least
90 days’ notice.  No resignation or removal
of the Auction Agent shall take effect until the appointment of a successor
Auction Agent.  During any Auction Rate
Period, an Authorized Officer of the Authority shall appoint a successor
Auction Agent with the consent of the Company and the Bond Insurer.  The Company shall evidence its consent to
such appointment by entering into an Auction Agency Agreement with the Auction
Agent.  The Auction Agent shall be (a) a
bank or trust company duly organized under the laws of the United States of
America or any State or territory thereof having its principal place of
business in the Borough of Manhattan, in The City of New York and having a
combined capital stock, surplus and undivided profits of at least $25,000,000
or (b) a member of the National Association of Securities Dealers, Inc., having
a capitalization of at least $25,000,000 and, in either case, authorized by law
to perform all the duties imposed upon it under the Auction Agency Agreement.


 


If
the Auction Agent shall fail to determine, or for any reason fail to timely
provide, a rate of interest pursuant to the Auction Procedures for three
consecutive Auction Periods, the Authority shall use its best efforts to remove
the then-existing Auction Agent and appoint a successor Auction Agent in
accordance with this Indenture and the then-existing Auction Agency Agreement.


 


SECTION 11.22.                           Appointment of Broker-Dealers.  On
the Closing Date, the Company appointed, subject to the consent of the
Authority, Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc.,
Banc One Capital Markets, Inc. and Citigroup Global Markets Inc. as the initial
lead Broker-Dealers for the Series 2004B-1-1 Bonds, the Series 2004 B-1-2
Bonds, the Series 2004 B-1-3 Bonds, and the Series 2004 B-1-4 Bonds and Series
2004B-2 Bonds, respectively.  The
Authority hereby consents to such appointment of Citigroup Global Markets Inc.,
Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc. and Banc One
Capital Markets, Inc.  On or prior to a
subsequent Change in the Interest Rate Mode to an Auction Rate Period with
respect to a subseries, the Company with the consent of the Authority shall
appoint an initial Broker-Dealer for such subseries. After the Closing Date or
a Change in the Interest Rate Mode to an Auction Rate Period, as the case may
be, the Company may select, with the consent of the Auction Agent, the
Authority and the initial lead Broker-Dealer or any successor, from time to
time, one or more additional persons to serve as Broker-Dealers under
Broker-Dealer Agreements. 
Notwithstanding anything in this Indenture or the Auction Agency
Agreement to the contrary, the Authority may substitute any Broker-Dealer for a
subseries with a new Broker-Dealer in a written direction, provided at the
request of the Company, to the Auction Agent and to the Broker-Dealer to be
substituted at any time not less than 30 days in advance of the date of
substitution.


 


SECTION 11.23.                           Appointment of Additional Paying Agents; Each
Paying Agent to Hold Money in Trust.  The Authority may at the request
of the Company appoint an additional Paying Agent or Paying Agents for the
Bonds.  Each such Paying Agent shall
hold in trust subject to the provisions of the Indenture for the benefit of the
Holders all sums held by such Paying Agent for the payment of the principal of,
premium, if any, and interest on the Bonds. 
Any such Paying Agent may be any person or corporation authorized to
perform such functions, including to the extent permitted by law, the Company.


 


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SECTION 11.24.                           Appointment and Duties of Indexing Agents.  The
Authority hereby appoints Kenny Information Systems, Inc. as Indexing Agent for
the Bonds for the purpose of calculating each rate index defined in
Section 1.01. The Authority may, with the approval of the Company, appoint
additional or successor Indexing Agents, subject to the conditions set forth in
this Section.  There may be separate
Indexing Agents for the purpose of calculating each rate index defined in
Section 1.01.  The Indexing Agent
shall designate to the Trustee its principal office and signify its acceptance
of the duties and obligations imposed upon it hereunder by a written instrument
of acceptance delivered to the Authority, the Trustee, the Company and the
Remarketing Agent under which the Indexing Agent will agree, particularly:


 


(a)                                  to compute the Daily Rate Index, the
Commercial Paper Rate Index, the Weekly Rate Index, the Monthly Rate Index, the
Semi-annual Rate Index, the Term Rate Index or the Fixed Rate Index, as the
case may be, pursuant to and in accordance with Section 3.01, and to give
notice to the Trustee, the Registrar and Paying Agent, the Remarketing Agent
and the Company of such rate index on the date of the computation thereof in
accordance with Section 3.01; and


 


(b)                                 to keep such books and records as shall be
consistent with prudent industry practice and to make such books and records
available for inspection by the Authority, the Trustee, the Registrar and
Paying Agent, the Remarketing Agent and the Company at all reasonable times.


 


The
Indexing Agent will perform the duties provided for in Section 3.01.  Whenever the Indexing Agent makes a
computation under that Section, it will promptly notify the Trustee, the
Registrar and Paying Agent, the Authority, the Remarketing Agent (and during
any Auction Rate Period, the Auction Agent), and the Company of the results and
date of computation.  The Indexing Agent
will keep adequate records pertaining to the performance of its duties and
allow the Trustee, the Bond Insurer, Registrar and Paying Agent, the
Authority,  the Remarketing Agent and
the Company (and, if appropriate, the Auction Agent) to inspect the records at
reasonable times.


 


SECTION 11.25.                           Qualifications of Indexing Agents. 
Each Indexing Agent shall be a commercial bank, a member of the National
Association of Securities Dealers, Inc. or a nationally recognized municipal
securities evaluation service authorized by law to perform all the duties
imposed upon it by the Indenture.  Any
Indexing Agent may at any time resign and be discharged of the duties and
obligations created by the Indenture by giving at least sixty (60) days’ notice
to the Authority, the Company, the Remarketing Agent and the Trustee.  The Indexing Agent may be removed at any
time, at the written direction of the Company, by an instrument, signed by the
Authority, filed with the Company, the Indexing Agent, the Remarketing Agent,
the Trustee, the Bond Insurer, the Registrar and Paying Agent and the issuer of
a Support Facility, if any.


 


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ARTICLE XII


 


EVENTS OF
DEFAULT; REMEDIES UPON

OCCURRENCE THEREOF


 


SECTION 12.01.                           Events of Default. 
Each of the following is hereby defined as and declared to be and shall
constitute an “Event of Default”:


 


(a)                                  Payment of the principal of and premium, if
any, on any Bond (whether by maturity, proceedings for redemption, purchase in
accordance with Article V hereof or the Remarketing Agreement, or
otherwise) shall not be made when the same shall become due and payable; or


 


(b)                                 Payment of any installment of interest on any
Bond shall not be made when the same shall become due and payable and such
nonpayment shall continue for one (1) Business Day; or


 


(c)                                  Receipt by the Trustee of written notice from
the Bond Insurer of the occurrence and continuance of an event of default under
the agreement entered into with the Company in connection with the issuance of
a Policy directing the Trustee to declare an Event of Default; or


 


(d)                                 The Authority shall fail in the due and
punctual performance of any of the covenants, conditions, agreements,
provisions or obligations, other than as set forth in (a) and (b) above,
contained in the Bonds or in this Indenture or in any Supplemental Indenture on
the part of the Authority to be performed, and such failure shall continue for
ninety (90) days after written notice specifying such failure and requiring the
same to be remedied shall have been given to the Authority, the Company, the
Governor, the Comptroller and the Attorney General of the State of New York, by
the Trustee or to the Trustee, the Authority and the Company by the Bond
Insurer or by the Holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Bonds then Outstanding as provided for in
Section 12.08; provided that if any such failure shall be such that it
cannot be cured or corrected within such ninety (90) day period, it shall not
constitute an Event of Default hereunder if curative or corrective action is
instituted within such period and diligently pursued until the failure of
performance is cured or corrected; or


 


(e)                                  The occurrence of an event of default as
defined in Section 7.01 of the Participation Agreement.


 


SECTION 12.02.                           Notice to Holders and Others Upon Occurrence
of an Event of Default or a Payment Default.  1.  The Trustee shall give notice to the Bondholders of all Events of
Default within sixty (60) days after the Trustee has been notified thereof or
is deemed to have notice thereof as provided in Section 11.08, unless the
Event of Default shall have been cured before the giving of such notice or
unless the Trustee shall deem it in the best interest of the Holders to defer
or withhold notice under this Section; provided, however, that if a notice of


 


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an
Event of Default is given to any Bondholder, the Trustee shall concurrently
therewith cause a copy to be provided to all beneficial owners.


 


2.                               So long as ownership of the Auction Rate
Bonds is maintained in book-entry form by the Securities Depository, upon the
occurrence of an Event of Default, the Trustee shall immediately send a notice
thereof in substantially the form required by the Auction Agency Agreement to
the Auction Agent and to the registered Holders of each series of Bonds by
telecopy or similar means.


 


3.                               So long as the ownership of the Auction Rate
Bonds is maintained in book-entry form by the Securities Depository, the
Trustee shall immediately send a notice in substantially the form required by
the Auction Agency Agreement to the Auction Agent and to the registered Holders
of each series of Bonds by telecopy or similar means if an Event of Default has
been cured or waived in accordance with this Article XII.


 


4.                               Upon the occurrence of a Payment Default, or
in the event such Payment Default is cured, the Trustee shall give the Auction
Agent the notices referred to in paragraph 7 of Section 6.04 hereof.


 


SECTION 12.03.                           Declaration of Principal and Interest As Due. 
Upon the occurrence and continuation of any Event of Default, of which
the Trustee has been notified or is deemed to have notice as provided in
Section 11.08, then and in every case the Trustee, by a notice in writing
to the Authority, the Company and (to addresses then specified by the Authority)
the Governor, the Comptroller and the Attorney General of the State of New
York, may with the written consent of the Bond Insurer (such consent, however,
not being required if a Bond Insurer Default has occurred and is continuing),
and shall, unless a Bond Insurer Default has occurred and is continuing, upon
the written request or direction of the Bond Insurer, or, if a Bond Insurer
Default has occurred and is continuing, upon the written request or direction
of the Holders of not less then twenty-five percent (25%) in principal amount
of the Bonds then Outstanding (determined in accordance with the provisions of
Section 13.03) shall, declare the principal of and accrued interest on all
the Bonds then Outstanding (if not then due and payable) to be due and payable
immediately, and upon such declaration the same shall become due and be
immediately due and payable, anything contained in the Bonds or in this
Indenture to the contrary notwithstanding. 
If, however, at any time after the principal of the Bonds shall have
been so declared to be due and payable, and before the entry of final judgment
or decree in any suit, action or proceeding instituted on account of such Event
of Default, or before the completion of the enforcement of any other remedy
under this Indenture, monies shall have accumulated in the Bond Fund sufficient
to pay the principal of and any premium (or redemption price) on all Bonds (or
portions of the principal amount thereof) then or theretofore required to be
redeemed pursuant to any provisions of this Indenture (excluding principal not
then due except by reason of the aforesaid declaration) and all arrears of
interest and interest then due, if any, upon Bonds then Outstanding and if the
fees, compensation, expenses, disbursements, advances and liabilities of the
Trustee and all other amounts then payable by the Company under the
Participation Agreement and the Note shall have been paid or a sum sufficient
to pay the same shall have been deposited with the Trustee, and every other
Event of Default known to the Trustee in the observance or performance of any
covenant, condition or


 


108

















 


agreement
contained in the Bonds or in this Indenture (other than default in the payment
of the principal of such Bonds then due only because of a declaration under
this Section) shall have been remedied to the satisfaction of the Trustee or,
the Company shall be taking, or shall be causing to be taken, appropriate
action in good faith to effect its cure, then and in every such case the
Trustee may with the written consent of the Bond Insurer, unless a Bond Insurer
Default has occurred and is continuing, and shall upon the written request of
the Bond Insurer, unless a Bond Insurer Default has occurred and is continuing,
or, if a Bond Insurer Default has occurred and is continuing, upon the written
request or direction of the Holders of not less than a majority in principal
amount of the Bonds (determined in accordance with the provisions of
Section 13.03) then Outstanding shall, by written notice to the Authority,
rescind and annul such declaration and its consequences; provided, however,
that notwithstanding any such rescission and annulment during an Auction Rate
Period, the Bonds shall continue to bear interest at the Overdue Rate for the
applicable period of time determined pursuant to Article III.  No such rescission or annulment pursuant to
the next preceding sentence shall extend to or affect any subsequent default or
impair any right consequent thereto.


 


SECTION 12.04.                           Action by Trustee Upon Occurrence of Event of
Default.  Subject to Section 6.05, upon the
occurrence and continuation of an Event of Default the Trustee (i) for and on
behalf of the Holders of the Bonds, shall have the same rights hereunder which
are possessed by any Holders of the Bonds; (ii) shall be authorized to proceed,
in its own name and as trustee of an express trust; (iii) may pursue any
available remedy by action at law or suit in equity to enforce the payment of
the principal of and interest and premium, if any, on the Bonds; (iv) may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of such Trustee and of the Bondholders
allowed in any judicial proceedings relative to the Company, its creditors, its
property or the Bonds; and (v) may, and upon the written request or direction
of the Bond Insurer, unless a Bond Insurer Default has occurred and is
continuing, or Holders of not less than twenty-five percent (25%) in principal
amount of the Bonds then Outstanding (determined in accordance with the
provisions of Section 13.03), with, so long as no Bond Insurer Default has
occurred and is continuing, the prior written consent of the Bond Insurer,
shall proceed to protect and enforce all rights of the Holders and the Trustee
under and as permitted by this Indenture and the laws of the State of New York,
by such means or appropriate judicial proceedings as shall be suitable or
deemed by it most effective in the premises, including the appointment of
temporary trustees and any actions, suits or special proceedings at law or in
equity or in bankruptcy or by proceedings in the office of any board or officer
having jurisdiction, or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture, or in aid of execution of any power
granted in this Indenture or to enforce any other legal or equitable right or
remedy vested in the Holders of the Bonds or the Trustee by this Indenture or
by such laws, or for the appointment of a receiver.  All rights of action (including the right to file proofs of
claim) under this Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the production thereof in
any trial or other proceedings relating thereto. Any such suit or proceeding
instituted by the Trustee shall be brought in its name and as trustee of an
express trust without the necessity of joining as plaintiffs or defendants any
Holders of the Bonds, and any recovery or judgment shall be for the equal
benefit of the Holders of the Outstanding Bonds.


 


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In
the enforcement of any remedy under this Indenture the Trustee shall be
entitled to sue for, enforce payment of and receive any and all amounts, then
or during any Event of Default becoming, and at any time remaining, due from
the Company and unpaid under the Participation Agreement and the Note for
principal, premium, interest or otherwise under any of the provisions of this
Indenture or of the Bonds, with interest on overdue payments if such interest
then is permitted by the laws of the State of New York, together with any and
all costs and expenses of collection and of all proceedings hereunder and under
such Bonds, without prejudice to any other right or remedy of the Trustee or of
the Holders, and to recover and enforce judgment or decree against the Company
which is in default of its respective obligations under the Participation
Agreement and the Note, but solely as provided herein and in such Bonds, for
any portion of such amounts remaining unpaid, with interest, costs and
expenses, and to collect in any manner provided by law, the monies adjudged or
decreed to be payable. Any such judgment shall be recovered by the Trustee, in
its own name and as trustee of an express trust.


 


SECTION 12.05.                           Powers of Trustee With Respect to
Participation Agreement and Other Agreements.  If the payments required to
be paid to the Trustee under the Participation Agreement and the Note or other
agreement pledged and assigned hereunder, as the case may be, are not paid when
due or upon the happening and continuance of an Event of Default set forth in
clause (a) or (b) of Section 12.01, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of all payments
due and unpaid under the Participation Agreement and the Note or other
agreement, as the case may be, and required to be paid to the Trustee and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Company or the obligor
under any other agreement, as the case may be, and collect in the manner
provided by law out of the property of the Company or such obligor wherever
situated, the monies adjudged or decreed to be payable.


 


In
case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company under the Participation Agreement or an obligor
under any other agreement pledged and assigned hereunder, as the case may be,
under the Federal Bankruptcy Act or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company
under the Participation Agreement and the Note or an obligor under any other
agreement pledged and assigned hereunder, as the case may be, the Trustee,
regardless of whether the principal of the Bonds shall then be due and payable
as therein expressed or by declaration or otherwise and regardless of whether
the Trustee shall have made any demand pursuant to the power vested in it by
this Indenture, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid under the Participation Agreement and the Note by the
Company or under such other agreement by such obligor, as the case may be, and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith) and of the
Holders allowed in any such judicial proceedings relative to the Company or
other obligor, as the case may be, or to the creditors or


 


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property
of the Company or other obligor, as the case may be, and to collect and receive
any monies or other property payable or deliverable on such claims, and to
distribute in accordance with the provisions hereof all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf, and
any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized to make such payments to the Trustee.


 


Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holders any plan of
reorganization, arrangement, adjustment or composition of the Authority or the
Company affecting the Bonds or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holders in any
such proceeding.  In the event of any
such reorganization, arrangement, adjustment, composition or liquidation, the
Bond Insurer shall have the right to vote on behalf of all Holders who hold
Bonds covered by the Policy applicable to such Bonds unless a Bond Insurer
Default has occurred and is continuing.


 


The
provisions of this Section shall not be construed as in any way limiting
the powers of the Trustee, with respect to defaults by the Authority or by the
Company under the Participation Agreement and the Note, or an obligor under any
other agreement pledged and assigned hereunder, as the case may be, whether
such powers be expressly or implicitly granted to the Trustee elsewhere in this
Indenture or in the Participation Agreement or the Note or other agreement, as
the case may be, or as a denial that the Trustee has any such other powers, but
the powers granted to the Trustee by this Section shall be supplemental,
additional and cumulative to all other powers possessed by the Trustee with
respect to defaults under this Indenture or under the Participation Agreement,
the Note or other agreement pledged and assigned hereunder, as the case may be.


 


SECTION 12.06.                           Disposition of Monies in Event of Insufficiencies
in Funds and Accounts.  All monies (other than proceeds of any
Support Facility) received by the Trustee pursuant to any right given or action
taken under the provisions of this Article, after payment of the costs and
expenses of the proceedings resulting in the collection of such monies and of
the expenses, fees and advances incurred or made by the Trustee hereunder,
shall be deposited in the Bond Fund. If at any time the monies in the Bond Fund
shall not be sufficient to pay the interest or principal or premium, if any (or
the redemption price), of the Bonds as the same become due and payable (whether
at maturity or upon proceedings for the redemption thereof or by acceleration
or otherwise), the monies in such fund, together with any other monies then
available or thereafter becoming available for such purpose, whether through
the exercise of the remedies provided for in this Article XII or
otherwise, shall be applied as follows:


 


(a)                                  Unless the principal of all the Bonds shall
have become due and payable or shall have been declared due and payable
pursuant to the provisions of Section 12.03, all such monies shall be
applied:


 


First: to the payment to the persons entitled
thereto of all installments of interest then due, in the order of the maturity
of the installments of such interest, and if the amount available shall not be
sufficient to pay in full any particular installment, then to


 


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the
payment ratably, according to the amounts due on such installment, to the
persons entitled thereto, without any discrimination or preference; and


 


Second: to the payment of the premium, if any, on and the principal of
the Bonds, to the purchase and retirement of Bonds and to the redemption of
Bonds, all in accordance with the provisions of this Indenture.


 


(b)                                 If the principal of all the Bonds shall have
become due and payable or shall have been declared due and payable pursuant to
the provisions of Section 12.03, all such monies shall be applied to the
payment of the principal and interest then due and unpaid, with interest on
such principal as aforesaid, without preference or priority of principal over
interest or of interest over principal, or of any installment of interest over
any other installment of interest, or of any Bond over any other Bond,
according to the amounts due respectively for principal and interest, to the
persons entitled thereto without any discrimination or preference except as to
any difference in the respective rates of interest specified in the Bonds.


 


(c)                                  If the principal of all the Bonds shall have
been declared due and payable pursuant to the provisions of Section 12.03,
and if such declaration shall thereafter have been rescinded and annulled
pursuant to the provisions of such Section 12.03, then, subject to the
provisions of subparagraph (b) above of this paragraph in the event that the
principal of all the Bonds shall later become due and payable or be declared
due and payable pursuant to the provisions of Section 12.03, the monies
then held in the Bond Fund shall be applied to the payment of the principal of
and premium (or redemption price) on all matured Bonds and all Bonds (or
portions of the principal amount thereof) then or theretofore required to be
redeemed pursuant to any provisions of this Indenture (excluding principal not
then due except by reason of such declaration) and all arrears of interest and
interest then due, if any, upon all Bonds then Outstanding, and any monies
thereafter deposited in the Bond Fund shall be applied in accordance with the
provisions of Article IX.


 


Whenever
monies are to be applied by the Trustee pursuant to the provisions of
subparagraphs (a) and (b) of this Section, (i) such monies shall be applied by
the Trustee at such times, and from time to time, as the Trustee in its sole
discretion shall determine, having due regard to the amount of such monies
available for application and the likelihood of additional monies becoming
available for such application in the future; (ii) the deposit of such monies,
in trust for the proper purpose, shall constitute proper application by the
Trustee; and (iii) the Trustee shall incur no liability whatsoever to the
Authority, to any Holder or to any other person for any delay in applying any
such monies, so long as the Trustee acts with reasonable diligence, having due
regard to the circumstances, and ultimately applies the same in accordance with
such provisions of this Indenture as may be applicable at the time of
application by the Trustee. Whenever the Trustee shall exercise such discretion
in applying such monies, it shall fix the date (which shall be an Interest
Payment Date unless the Trustee shall deem another date more suitable) upon
which such application is to be made and upon such date interest on the amounts
of principal to be paid on such date shall cease to accrue. The Trustee shall
give such notice as it may deem appropriate of the fixing of any such date, and
shall not be required to make payment


 


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to
the Holder of any unpaid Bond until such Bond shall be surrendered to the
Trustee for appropriate endorsement, or for cancellation if fully paid.


 


SECTION 12.07.                           Effect of Delay or Omission; Waiver of
Default; Direction of Remedial Proceedings by the Holders.  No
delay or omission of the Trustee or of any Holder of the Bonds to exercise any
right or power accruing upon any default or Event of Default shall impair any
such right or power or shall be construed to be a waiver of any such default or
acquiescence therein.


 


Anything
in this Indenture to the contrary notwithstanding, but subject to
Section 6.05, the Holders of not less than a majority in principal amount
of the Bonds at the time Outstanding (determined in accordance with the
provisions of Section 13.03) with, so long as the no Bond Insurer Default
has occurred and is continuing, the prior written consent of the Bond Insurer
shall be authorized and empowered and have the right, by an instrument or
concurrent instruments in writing delivered to the Trustee on behalf of the
Holders of the Bonds then Outstanding to consent to the waiver of any Event of
Default or its consequences, and the Trustee shall waive any Event of Default
and its consequences upon the written request of the Holders of such majority
with the prior written consent of the Bond Insurer, so long as no Bond Insurer
Default has occurred and is continuing; provided, however, that there shall not
be waived (i) any default in payment of principal or premium when due or (ii)
any default in payment when due of interest unless, in either case, prior to
such waiver all arrears in principal, premium, if any, and interest, with
additional interest, to the extent permitted by law, at the rate then borne by
the Bonds (which, in the case of a Payment Default with respect to Auction Rate
Bonds shall be the Overdue Rate), and all fees and expenses of the Trustee
shall have been paid or provided for; provided, however, that notwithstanding
any such waiver, any Auction Rate Bonds shall continue to bear interest at the
Overdue Rate until such Payment Default is cured.  No such waiver shall extend to or affect any other existing or
subsequent default or Event of Default or impair any rights or remedies
consequent thereon.


 


Anything
in this Indenture to the contrary notwithstanding, but subject to
Section 6.05, the Holders of not less than twenty-five percent (25%) in
principal amount of the Bonds at the time Outstanding (determined in accordance
with the provisions of Section 13.03) with, so long as no Bond Insurer
Default has occurred and is continuing, the prior written consent of the Bond
Insurer shall be authorized and empowered and have the right, by an instrument
or concurrent instruments in writing delivered to the Trustee to direct the
time and method of conducting any proceeding for any remedy to enforce the
payment of the Bonds to be taken by the Trustee or available to the Trustee or
available to the Holders of the Bonds, or exercising any trust or power
conferred upon the Trustee hereunder provided: (1) such direction shall not be
in conflict with any rule of law or with this Indenture or expose the Trustee
to personal liability, or be unduly prejudicial to Holders not joining therein,
and (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.


 


SECTION 12.08.                           Suits or Actions by Holders; Any Holder May
Enforce Overdue Payment of His or Her Bond or Interest Thereon.  No
Holder of any of the Bonds shall have any right to institute any suit, action
or proceeding in equity or at law for the execution of any trust hereunder or
for any other remedy hereunder unless there shall have occurred an Event


 


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of
Default of which the Trustee has been notified or is deemed to have notice as
provided in Section 11.08, and such Holder previously shall have given to
the Trustee written notice of the Event of Default on account of which such
suit, action or proceeding is to be instituted, and unless also the Holders of
not less than twenty-five percent (25%) in principal amount of the Bonds then
Outstanding, with the consent of the Bond Insurer, so long as no Bond Insurer
Default has occurred and is continuing, shall have made written request of the
Trustee after the right to exercise such powers or right of action, as the case
may be, shall have accrued, and shall have afforded the Trustee a period of 60
days either to proceed to exercise the powers hereinabove granted or to
institute such action, suit or proceeding in its or their name, the Trustee
shall have been indemnified by Holders against the costs, expenses and
liabilities to be incurred in compliance with such request, and shall not have
received an inconsistent direction from the Bond Insurer, so long as no Bond
Insurer Default has occurred and is continuing, or from the Holders of not less
than twenty-five percent (25%) in principal amount of the Bonds and the Trustee
shall have refused or neglected to comply with such request within a reasonable
time.  It is understood and intended
that no one or more Holders of the Bonds hereby secured shall have any right in
any manner whatever by the action of such Holder or Holders to affect, disturb
or prejudice the security of this Indenture, or to enforce any right hereunder
except in the manner herein provided; that all proceedings at law or in equity
shall be instituted, had and maintained in the manner herein provided and for
the benefit of all Holders of such Outstanding Bonds; and that any individual
rights of action or other right given to one or more of such Holders by law are
restricted by this Indenture to the rights and remedies herein provided.
Notwithstanding the foregoing and subject to Section 11.02, the Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.  The rights of any Holder under this
Section 12.08 are subject to the rights of the Bond Insurer under Section 6.05.


 


Notwithstanding
any other provision of this Indenture, the right of any Holder of a Bond to
receive payment of the principal of, premium, if any, and interest on such
Bond, on or after the respective due dates expressed in such Bond, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder, except that no Holder of any such Bond shall have the right to
institute any such suit, if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver, or loss of the lien of this
Indenture.


 


SECTION 12.09.                           Remedies Not Exclusive.  No
remedy by the terms of this Indenture conferred upon or reserved to the
Trustee, the Bond Insurer or the Holders of the Bonds is intended to be
exclusive of any other remedy so conferred or reserved or to be exclusive of
other remedies now or hereafter existing at law or in equity or by statute, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given hereunder to the Trustee, the Bond Insurer or to the Holders
of the Bonds or now or hereafter existing at law or in equity or by statute.
Every such right, power and remedy given hereunder or by law or in equity or by
statute may be exercised from time to time and as often as may be deemed
expedient.


 


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SECTION 12.10.                           Effect of Abandonment of Proceedings on
Default.  In case any proceeding taken by the Trustee
or the Holders of the Bonds on account of any Event of Default shall have been
discontinued or abandoned for any reason, then and in every such case the
Authority, the Trustee and the Holders shall be restored to their former
positions and rights hereunder, respectively, and all rights, remedies, powers
and duties of the Trustee shall continue as though no such proceeding had been
taken.


 


SECTION 12.11.                           Interest on Overdue Amounts.  To
the extent permitted by law all amounts which are due and payable but which
have not been so paid under this Indenture shall bear interest at the then
current rate of interest on the Bonds until paid; provided, however, that upon
the occurrence of a Payment Default during any Auction Rate Period all amounts
which are due and owing but unpaid hereunder shall bear interest at the Overdue
Rate until paid.


 


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ARTICLE XIII


 


EXECUTION
OF INSTRUMENTS BY BONDHOLDERS AND

OWNERSHIP OF BONDS; EXCLUSION OF BONDS

OWNED BY THE AUTHORITY OR THE COMPANY


 


SECTION 13.01.                           Execution of Requests, Directions and
Consents and Other Instruments and Proof of Same; Ownership of Bonds and Proof
of Same.  Any request, direction, consent or other
instrument required by this Indenture to be signed or executed by Holders of
Bonds may be signed or executed by such Holders in person or by agent or agents
duly appointed in writing, and may be in any number of concurrent writings of
substantially similar tenor. Proof of the execution of any such request,
direction, consent or other instrument or of a writing appointing any such
agent, and of the holding or ownership of Bonds, shall be sufficient for any
purpose of this Indenture and shall be conclusive in favor of the Trustee hereunder
with regard to any action taken by it under such request, direction, consent or
other instrument or of a writing appointing any such agent, if made in the
following manner:


 


(a)                                  the fact and date of the execution by any
person of any such request, direction, consent or other instrument in writing
may be proved in any reasonable manner which the Trustee deems sufficient;


 


(b)                                 the ownership of Bonds shall be proved by the
books of registry kept under the provisions of this Indenture.


 


Any
request, direction, consent or vote of the Holder of any Bond shall bind and be
conclusive upon the Holder of such Bond giving such request, direction or
consent or casting such vote and upon every future Holder of the same Bond in
respect of anything done or suffered to be done by the Trustee or otherwise, or
by the Holders of other Bonds, in pursuance of such request, direction, consent
or vote, and whether or not such future Holder has knowledge of or information
as to such request, direction, consent or vote; provided that any request,
direction, consent or vote of the Holder of a Bond required by any of the
provisions hereof may be revoked by the Holder giving such request, direction,
consent or vote or by a subsequent Holder if such revocation in writing is
filed with the Trustee, prior to the time when the request, direction, consent
or vote of the percentage of the Holders of the Bonds required by such
provision shall have been given and action taken by the Trustee or otherwise,
or by the Holders of other Bonds, under authority of such request, direction,
consent or vote.


 


The
payment of or on account of principal to or upon the order of the person in
whose name the Bonds shall at the time be registered on said books of registry
and the payment of interest to or upon the order of any person in whose name
the Bonds shall at the time be registered on said books of registry, shall be
valid and effectual fully to satisfy and discharge all liability hereunder or
upon the Bonds to the extent of the sum or sums so paid.


 


The
Authority at the request of the Company may establish a record date for the
taking of any action by the Holders.


 


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SECTION 13.02.                           Meetings of Holders.  The
Trustee or the Holders of not less than twenty percent (20%) in principal
amount of the Bonds then Outstanding may at any time call a meeting of the
Holders of the Bonds for the purpose of the consenting to, the approving, the
requesting, or the directing by the Holders of the Bonds of any action required
to be consented to or approved by them hereunder or which they may request or
direct hereunder to be taken, or for the making by the Holders of any
appointments they may make hereunder, or for the purpose of taking any other
action which the Holders may take hereunder, or for any other purpose
concerning the payment and security of the Bonds hereunder. Every such meeting
shall be held at such place in The City of New York, State of New York, as may
be specified in the notice calling such meeting. Written notice of such
meeting, stating the place and time of the meeting and in general terms the
business to be submitted, shall be mailed to the Holders whose names and
addresses then appear upon the books of registry by the Registrar and Paying
Agent or the Holders calling such meeting, not less than 20 days nor more than
60 days before such meeting. Any meeting of Holders shall, however, be valid
without notice if the Holders of all Bonds then Outstanding are present in
person or by proxy or if notice is waived before or within 30 days after the
meeting by those not so present.


 


Attendance
and voting by Holders at meetings thereof may be in person or by proxy. Holders
of Bonds may, by an instrument in writing under their hands, appoint any person
or persons, with full power of substitution, as their proxy to attend and vote
at any meeting for them.


 


Persons
named by the Trustee, or elected by the Holders of a majority in principal
amount of the Bonds represented at the meeting in person or by proxy in the event
the Trustee is not represented at such meeting, shall act as temporary chairman
and temporary secretary of any meeting of Holders. A permanent chairman and a
permanent secretary of such meeting shall be elected by the Holders of a
majority in principal amount of the Bonds represented at such meeting in person
or by proxy. The permanent chairman of the meeting shall appoint two (2)
inspectors of votes who shall count all votes cast at such meeting, except
votes on the election of chairman and secretary as aforesaid, and who shall
make and file with the secretary of the meeting and the Trustee their verified
report of all such votes cast at the meeting.


 


The
Holders of not less than the principal amount of the Bonds required by the
provisions hereof to consent to, approve, request or direct any action to be
taken at a meeting of Holders, or required by the provisions hereof to make any
appointments to be made at such meeting, or required by the provisions hereof
to take any other action to be taken at such meeting, must be present at such
meeting in person or by proxy in order to constitute a quorum for the
transaction of such business.  Less than
a quorum, however, shall have power to adjourn the meeting from time to time
without notice of such adjournment other than the announcement thereof at the
meeting; provided, however, that if such meeting is adjourned by less than a
quorum for more than ten (10) days, notice of such adjournment shall be given
by the Trustee at least five (5) days prior to the adjourned date of the
meeting.


 


Any
Holder of a Bond shall be entitled in person or by proxy to attend and vote at
such meeting as Holder of the Bond or Bonds registered in his or her name
without producing


 


117

















 


such
Bond or Bonds. Such persons and their proxies shall, if required, produce such
proof of personal identity as shall be satisfactory to the Secretary of the
meeting.


 


All
proxies presented at such meeting shall be delivered to the Inspector of Votes
and filed with the Secretary of the meeting. The right of a proxy for a Holder
to attend the meeting and act and vote thereat may be proved (subject to the
Trustee’s right to require additional proof) by a written proxy executed by
such Holder as aforesaid.


 


The
officers or nominees of the Trustee may be present or represented at such
meeting and take part therein, but shall not be entitled to vote thereat,
except for such officers or nominees who are Holders or proxies for Holders
(including the Trustee).


 


The
vote at any such meeting of the Holder of any Bond, or his or her proxy,
entitled to vote thereat shall be binding upon such Holder and upon every
subsequent Holder of such Bond (whether or not such subsequent Holder has
notice thereof).


 


SECTION 13.03.                           Exclusion of Bonds Held by or for the
Authority, the Company and of Bonds No Longer Deemed Outstanding Hereunder.  In
determining whether the Holders of the requisite aggregate principal amount of
Bonds have concurred in any demand, request, direction, consent, vote or waiver
under this Indenture, any Bonds which are owned by or on behalf of or for the
account of the Authority, the Company and, except for the purposes of
Section 15.01, any Bonds which are deemed no longer Outstanding hereunder
shall be disregarded and not included for the purpose of any such
determination, and such Bonds shall not be entitled to vote upon, consent to or
concur in any action provided in this Indenture, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
demand, request, direction, consent, vote or waiver only Bonds which a
Responsible Officer of the Trustee knows are owned as aforesaid shall be
disregarded. The Trustee may require each Holder of a Bond or Bonds, before such
Holder’s demand, request, direction, consent, vote or waiver shall be deemed
effective, to reveal if the Bonds as to which such demand, request, direction,
consent, vote or waiver is made, granted, cast or given are disqualified as
provided in this Section.


 


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ARTICLE XIV


 


AMENDING
AND SUPPLEMENTING THE INDENTURE,

THE PARTICIPATION AGREEMENT, THE REMARKETING AGREEMENT,

AUCTION AGENCY AGREEMENT, BROKER-DEALER AGREEMENTS,

BOND PURCHASE TRUST AGREEMENT


 


SECTION 14.01.                           Amending and Supplementing Indenture Without
Consent of Holders.  The Authority and the Trustee, from time to
time and at any time and without the consent or concurrence of any Holder, may
enter into a Supplemental Indenture, (i) to make any changes, modifications,
amendments or deletions to this Indenture that may be required to permit the
Indenture to be qualified under the Trust Indenture Act of 1939 of the United
States of America or (ii) for any one or more of the following purposes:


 


(a)                                  (x)                                   to make any changes or corrections in this
Indenture or any Supplemental Indenture as to which the Authority shall have
been advised by counsel that the same are required for the purpose of curing or
correcting any ambiguity or defective or inconsistent provision or omission or
mistake or manifest error contained in this Indenture or Supplemental
Indenture, or (y) to insert in this Indenture such provisions clarifying
matters or questions arising under this Indenture as are necessary or desirable
if such provisions shall not materially and adversely affect the rights of the
Holders;


 


(b)                                 to add additional covenants and agreements of
the Authority for the purpose of further securing the payment of the Bonds;


 


(c)                                  to surrender any right, power or privilege reserved
to or conferred upon the Authority by the terms of this Indenture;


 


(d)                                 to confirm as further assurance any lien,
pledge or charge, or the subjection to any lien, pledge or charge, created or
to be created by the provisions of this Indenture or any Supplemental
Indenture;


 


(e)                                  to grant to or confer upon the Holders any
additional rights, remedies, powers, authority or security that lawfully may be
granted to or conferred upon them, or to grant to or to confer upon the Trustee
for the benefit of the Holders any additional rights, duties, remedies, power
or authority;


 


(f)                                    to provide for the issuance of Bonds in book
entry or coupon form, if at the time permitted by applicable law;


 


(g)                                 to provide for the substitution of rating
agencies;


 


(h)                                 to provide for any new administrative or
procedural provisions made necessary or desirable by the issuance of a Support
Facility or an Alternate Support Facility, other credit, liquidity or support
facility, including, but not limited to, any amendment necessary to obtain a
rating on the Bonds based upon such facility; and


 


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(i)                                     to modify, amend or supplement the Indenture
in such manner as to permit the qualification of the Bonds for deposit with a
Securities Depository, and, in connection therewith, if they so determine, to
add to the Indenture, such other terms, conditions and provisions as may be
required to permit such qualification.


 


No
Supplemental Indenture shall be entered into unless in the Opinion of Bond
Counsel which shall be delivered to the Trustee (which opinion may be combined
with the opinion required by Section 14.04) the execution of such
Supplemental Indenture is permitted by the foregoing provisions of this
Section and the provisions of such Supplemental Indenture do not
materially and adversely affect the rights of the Holders of the Bonds and the
Trustee may rely on any such opinion.


 


SECTION 14.02.                           Amending and Supplementing Indenture with
Consent of Holders.  With the consent of the Holders of a
majority in principal amount of the Bonds then Outstanding and, so long as no
Bond Insurer Default has occurred and is continuing, the Bond Insurer, the
Authority and the Trustee from time to time and at any time may enter into a
Supplemental Indenture for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture, or
modifying or amending the rights and obligations of the Authority hereunder, or
modifying or amending in any manner the rights of the Holders; provided that,
without the specific consent of the Holders of all Bonds Outstanding which
would be affected thereby and the Bond Insurer, so long as no Bond Insurer
Default has occurred and is continuing, no Supplemental Indenture amending or
supplementing the provisions hereof shall: (a) change the fixed maturity date
for the payment of the principal of any Bond, or the dates for the payment of
interest thereon or the terms of the purchase or redemption thereof, or reduce
the principal amount of any Bond or the rate of interest thereon or the method
of calculating the same except as otherwise provided in this Indenture; or (b)
reduce the aforesaid percentage of Bonds, the Holders of which are required to
consent to any Supplemental Indenture amending or supplementing the provisions
of this Indenture; or (c) give to any Bond any preference over any other Bond
secured hereby; or (d) authorize the creation of any pledge of payments under
the Participation Agreement or Note Payments prior or superior to the pledge of
a lien and charge thereon assigned herein for the payment of the Bonds; or (e)
effect any change in the purchase or redemption provisions relating to the
Bonds; or (f) deprive any Holders in any material respect of the security afforded
by this Indenture. A modification or amendment of the provisions of
Article IX hereof with respect to the Bond Fund or any other Funds or
Accounts established thereby shall not be deemed a change in the terms of
payment; provided that no such modification or amendment shall, except upon the
consent of the Bond Insurer and the Holders of all Bonds Outstanding affected
thereby, reduce the amount or amounts required to be deposited in the Bond
Fund. Nothing in this paragraph contained, however, shall be construed as
making necessary the approval of the Holders of the execution of any
Supplemental Indenture authorized by the provisions of Section 14.01.


 


The
proof of the giving of any consent by any Holder required by this
Section and of the holding of the Bonds for the purpose of giving consents
shall be made in accordance with the provisions of Article XIII. It shall
not be necessary that the consent of the Holders approve the particular form of
wording of the proposed supplemental amendment or supplement, but it shall be
sufficient if such consent approves the substance of the proposed amendment or


 


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supplement.
After the Holders of the required percentage of Bonds shall have filed their
consents to the amending or supplementing hereof pursuant to this Section, the
Authority shall mail a copy of a notice of such consent, postage prepaid, to
each Holder at his or her address as it appears upon the books of registry and
to the Trustee. Nothing in this paragraph contained, however, shall be
construed as requiring the giving of notice of any amending or supplementing of
this Indenture authorized by this Section. A record of the consents shall be
filed with the Trustee, and shall be proof of the matters therein stated until
the contrary is proved. No action or proceeding to set aside or invalidate such
Supplemental Indenture or any of the proceedings for its adoption shall be
instituted or maintained unless such action or proceeding is commenced within
sixty (60) days after the mailing of the notice required by this paragraph.


 


Notwithstanding
anything in this Indenture to the contrary, the consent of the Holders of the
required amount of Bonds shall be deemed given with respect to a Supplemental
Indenture if:


 


(a)                                  (i) the Supplemental Indenture takes effect
on a date on which all of the Bonds that are affected by such Supplemental
Indenture are subject to mandatory tender for purchase in accordance with this
Indenture, (ii) any modification or amendment effected thereby is consented to
in writing by the Remarketing Agent, if any, for such Bonds on or prior to such
effective date and (iii) the Bonds so tendered are purchased;


 


(b)                                 (i) not less than 30 days before the
effective date of the Supplemental Indenture, the Trustee sends a notice of the
proposed modification or amendment to the Holders of the Bonds that are
affected by such Supplemental Indenture and the Holders of such Bonds have the
right to tender their Bonds for purchase pursuant to Section 5.03 hereof
before such effective date, (ii) the Remarketing Agent, if any, for such Bonds
consents in writing to the proposed modification or amendment on or prior to
such effective date and (iii) the Bonds so tendered are purchased; or


 


(c)                                  (i) not less than 30 days before the Auction
Date for the Auction Period during which any modification or amendment to this
Indenture shall become effective, the Trustee sends a notice of the proposed
modification or amendment to the Holders of the Auction Rate Bonds that are affected
by such modification or amendment, (ii) the Auction Rate determined for such
Auction Rate Bonds at the Auction immediately preceding the effective date of
the modification or amendment is a Winning Bid Rate, and (iii) any modification
or amendment effected thereby is consented to in writing by the
Broker-Dealer(s) for such Bonds on or prior to such effective date and is
disclosed in the official statement or other disclosure document delivered by
the Broker-Dealer(s) to Potential Holders prior to the Auction immediately
preceding such effective date; provided, however, that, notwithstanding
anything to the contrary in this Indenture, any Auction Rate Bonds that are not
the subject of a specific Hold Order or Bid shall be deemed to be subject to a
Sell Order at the Auction immediately preceding such effective date.


 


SECTION 14.03.                           Notation upon Bonds; New Bonds Issued upon
Amendments.  The Bonds delivered after the effective date
of any action taken as provided in


 


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this
Article, if any, may and shall if required by the Trustee bear a notation as to
such action, by endorsement or otherwise and in form approved by the Authority.
In that case, upon demand of any Holder at such effective date and upon presentation
of Bonds at the Principal Corporate Trust Office of the Trustee or other
transfer agent or registrar hereunder for such Bonds, and at such additional
offices, if any, as the Authority may select and designate for that purpose, a
suitable notation shall be made on the Bonds.


 


SECTION 14.04.                           Effectiveness of Supplemental Indentures. 
Upon the execution pursuant to this Article by the Authority and
the Trustee of any Supplemental Indenture amending or supplementing the
provisions of this Indenture and the delivery to the Trustee of an Opinion of
Bond Counsel that such Supplemental Indenture is permitted by the provisions of
this Article XIV and has been duly executed in accordance with the
provisions hereof and applicable law and that the provisions thereof are valid
(upon which opinion the Trustee, subject to the provisions of
Section 11.04, shall be fully protected in relying), or upon such later
date as may be specified in such Supplemental Indenture, (i) this Indenture and
the Bonds shall be modified and amended in accordance with such Supplemental
Indenture; (ii) the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Authority, the Trustee, and
the Holders shall thereafter be determined, exercised and enforced under this
Indenture subject in all respects to such modifications and amendments; and
(iii) all of the terms and conditions of any such Supplemental Indenture shall
be a part of the terms and conditions of the Bonds and of this Indenture for
any and all purposes.


 


SECTION 14.05.                           Supplemental Indenture Affecting Support
Facility Provider.  No Supplemental Indenture affecting the
rights or obligations of the Support Facility Issuer which takes effect while
any Support Facility is in effect may, so long as the Support Facility Issuer
is not in default under the Support Facility and no event of the type described
in (b) through (g) of the definition of Bond Insurer Default contained herein
shall have occurred and be continuing in respect to the Support Facility
Issuer, be entered into by the Authority and the Trustee or be consented to by
the Holders without written consent of each Support Facility Issuer.


 


SECTION 14.06.                           Supplemental Participation Agreements Not
Requiring the Consent of the Holders.  The Authority and the Company
may, with the written consent of the Trustee but without notice to or consent
of any Holder, from time to time and at any time, agree to such supplemental
agreements supplementing the Participation Agreement or amendments to the
Participation Agreement as shall not be inconsistent with the terms and
provisions of the Participation Agreement or this Indenture and, in the opinion
of the Authority, shall not be detrimental to the interests of the Holders
(which Supplemental Participation Agreements shall thereafter form a part of
the Participation Agreement):


 


(a)                                  to cure any ambiguity or formal defect or
omission in the Participation Agreement or in any supplemental agreement;


 


(b)                                 to grant to or confer upon the Trustee for the
benefit of the Holders any additional rights, remedies, powers, authority or
security that may lawfully be granted to or conferred upon the Holders or the
Trustee;


 


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(c)                                  to provide for any new administrative,
security or procedural provisions necessitated by the issuance of an Alternate
Support Facility; or


 


(d)                                 to provide for or add any further changes or
corrections that are necessary or desirable to comply with any Supplemental
Indenture entered into pursuant to Section 14.01;


 


provided
that no such Supplemental Participation Agreement which takes effect while a
Support Facility is in effect shall, so long as the Support Facility Issuer is
not in default under the Support Facility, be effective prior to the receipt by
such parties of the written consent of each Support Facility Issuer.


 


SECTION 14.07.                           Notice and Consent for Supplemental
Participation Agreements Requiring the Consent of the Holders. 
Except for Supplemental Participation Agreements or amendments provided
for in Section 14.06, neither the Authority nor the Trustee shall agree or
consent, as the case may be, to any Supplemental Participation Agreement or
amendment to the Participation Agreement unless notice of the proposed execution
of such Supplemental Participation Agreement or amendment shall have been given
and the Holders, and, so long as no Bond Insurer Default has occurred and is
continuing, the Bond Insurer shall have consented to and approved the execution
thereof in the same manner and form as provided for in Section 14.02 in
the case of Supplemental Indentures; provided that no such Supplemental
Participation Agreement which materially and adversely affects any issuer of a
Support Facility (so long as such Support Facility is in effect) shall be
effective prior to the receipt by such parties of the written consent of the
issuer of such Support Facility, so long as the Support Facility Issuer is not
in default under the Support Facility and no event of the type described in (b)
through (g) of the definition of Bond Insurer Default contained herein shall
have occurred and be continuing in respect of the Support Facility Issuer.


 


Notwithstanding
anything in this Indenture to the contrary, the consent of the Holders of the
required amount of Bonds shall be deemed given with respect to any Supplemental
Participation Agreement or amendment to the Participation Agreement if:


 


(a)                                  (i) the Supplemental Participation Agreement
or amendment to the Participation Agreement takes effect on a date on which all
of the Bonds that are affected by such Supplemental Participation Agreement or
amendment to the Participation Agreement are subject to mandatory tender for
purchase in accordance with this Indenture, (ii) any modification or amendment
effected thereby is consented to in writing by the Remarketing Agent, if any,
for such Bonds on or prior to such effective date  and (iii) the Bonds so tendered are purchased;


 


(b)                                 (i) not less than 30 days before the
effective date of the Supplemental Participation Agreement or amendment to the
Participation Agreement, the Trustee sends a notice of the proposed
modification or amendment to the Holders of the Bonds that are affected by such
modification or amendment and the Holders of such Bonds have the right to
tender their Bonds for purchase pursuant to Section 5.03 hereof before
such effective date, (ii) the Remarketing Agent, if any, for such Bonds
consents in writing to


 


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the
proposed modification or amendment on or prior to such effective date and (iii)
the Bonds so tendered are purchased; or


 


(c)                                  (i) not less than 30 days before the Auction
Date for the Auction Period during which any modification or amendment to the
Participation Agreement shall become effective, the Trustee sends a notice of
the proposed modification or amendment to the Holders of the Auction Rate Bonds
that are affected by such modification or amendment, (ii) the Auction Rate
determined for such Auction Rate Bonds at the Auction immediately preceding the
effective date of the modification or amendment is a Winning Bid Rate, and
(iii) any modification or amendment effected thereby is consented to in writing
by the Broker-Dealer(s) for such Bonds on or prior to such effective date and
is disclosed in the official statement or other disclosure document delivered
by the Broker-Dealer(s) to Potential Holders prior to the Auction immediately
preceding such effective date; provided, however, that, notwithstanding
anything to the contrary in this Indenture, any Auction Rate Bonds that are not
the subject of a specific Hold Order or Bid shall be deemed to be subject to a
Sell Order at the Auction immediately preceding such effective date.


 


SECTION 14.08.                           Effectiveness of Supplemental Participation Agreement. 
Upon the execution pursuant to this Article and of applicable law
by the Authority and the Company of any Supplemental Participation Agreement
amending or supplementing the provisions of the Participation Agreement and the
delivery to the Trustee of an Opinion of Bond Counsel that such Supplemental
Participation Agreement is in due form, has been duly executed in accordance
with the provisions hereof and applicable law and that the provisions thereof
are valid (upon which opinion the Trustee, subject to the provisions of
Section 11.04, shall be fully protected in relying), or upon such later
date as may be specified in such Supplemental Participation Agreement, (i) the
Participation Agreement shall be modified and amended in accordance with such Supplemental
Participation Agreement; (ii) the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Authority and the Company
shall thereafter be determined, exercised and enforced thereunder subject in
all respects to such modifications and amendments; and (iii) all of the terms
and conditions of any such Supplemental Participation Agreement shall be a part
of the terms and conditions thereof for any and all purposes.


 


SECTION 14.09.                           Amending and Supplementing the Remarketing
Agreement, Auction Agency Agreement, Broker-Dealer Agreements or Bond Purchase
Trust Agreement.  Amendments of or supplements to the
Remarketing Agreement, the Auction Agency Agreement, any Broker-Dealer
Agreement or the Bond Purchase Trust Agreement shall be made only in accordance
with the terms thereof.


 


SECTION 14.10.                           Supplemental Participation Agreement
Affecting Support Facility Provider.  No Supplemental Participation
Agreement or amendments to the Participation Agreement affecting the rights or
obligations of the Support Facility Issuer which take effect while any Support
Facility is in effect may, so long as the Support Facility Issuer is not in
default under the Support Facility and no event of the type described in (b)
through (g) of the definition of Bond Insurer Default contained herein shall
have occurred in respect to the


 


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Support
Facility Issuer, be entered into by the Authority or be consented to by the
Holders without written consent of each Support Facility Issuer.


 


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ARTICLE XV


 


DEFEASANCE;
MONEYS HELD FOR PAYMENT OF

DEFEASED BONDS


 


SECTION 15.01.                           Discharge of Liens and Pledges; Bonds No
Longer Deemed to be Outstanding Hereunder.  Bonds purchased pursuant to
Section 5.03, 5.04, 5.08 or 5.09 shall continue to be Outstanding
hereunder until such Bonds shall be cancelled in accordance with
Section 5.15 or paid at maturity or redeemed pursuant to Article V or
otherwise defeased. The obligations of the Authority under this Indenture and
the liens, pledges, charges, trusts, covenants and agreements of the Authority,
herein made or provided for, shall be, subject to the terms of
Section 15.02, fully discharged and satisfied as to the Bonds or portion
thereof and the Bonds shall no longer be deemed to be Outstanding hereunder:


 


(a)                                  when the Bonds shall have been cancelled, or
shall have been surrendered for cancellation and are subject to cancellation,
or shall have been redeemed by the Trustee from monies held by it under this
Indenture; or


 


(b)                                 if the Bonds have not been cancelled or so
surrendered for cancellation or subject to cancellation, or so redeemed, when
(1) payment of the principal of and premium, if any, on the Bonds, plus interest
on such principal to the due date thereof (whether such due date be by reason
of maturity or upon redemption or prepayment, or otherwise) and of any Purchase
Price which is or may become due on such Bonds either (i) shall have been made
or caused to be made in accordance with the terms thereof, or (ii) shall have
been provided for by irrevocably depositing with the Trustee in trust, and
irrevocably appropriating and setting aside exclusively for such payments (A)
monies sufficient to make such payment, or (B) Governmental Obligations
maturing as to principal and interest in such amounts and at such times as will
insure the availability of sufficient and timely monies to make such payments
when due, or (C) a combination of both such monies and Governmental
Obligations, whichever the Authority deems to be in its best interest, (2)
there shall have been delivered to the Trustee (x) a letter addressed to the
Trustee from a nationally recognized firm of independent public accountants
verifying the mathematical accuracy of the sufficiency of the deposit made
pursuant to (1)(ii) above, (y) an Opinion of Bond Counsel to the effect that
upon the provision of payment on the Bonds as described in (1)(ii) above, the
Bonds are no longer deemed to be Outstanding under the Indenture and (z) in the
case of Bonds bearing interest at a Daily Rate, a Weekly Rate, an Auction Rate,
a Monthly Rate and a Semi-annual Rate, written confirmation  from S&P, if the Bonds are then rated by
S&P, to the effect that the deposit made pursuant to (1)(ii) above will
not, by itself, result in a reduction or withdrawal of its short-term or
long-term rating of the Bonds below the rating category of S&P then in
effect with respect to the Bonds, and (3) all necessary and proper fees, compensation
and expenses of the Trustee pertaining to the Bonds or portion thereof with
respect to which such deposit is made, shall have been paid or the payment
thereof provided to the satisfaction of the Trustee.


 


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At
such time as the Bonds shall be deemed to be no longer Outstanding hereunder,
as aforesaid, such Bonds shall cease to accrue interest from the due date
thereof (whether such due date occurs by reason of maturity, or upon redemption
or prepayment or otherwise) and, except for the purposes of any such payment
from such monies or Governmental Obligations and except, in the case of Auction
Rate Bonds, to the extent provided in the definition of Outstanding in
Article I shall no longer be secured by or entitled to the benefits of
this Indenture.


 


Any
such monies so deposited with the Trustee as provided in this Section may
at the written direction of the Company also be invested and reinvested in
Governmental Obligations, maturing in the amounts and times as hereinbefore set
forth, and all income from all Governmental Obligations in the hands of the
Trustee pursuant to this Section which is not required for the payment of
the Bonds and interest thereon with respect to which such monies shall have
been so deposited shall be paid to the Company or if any Bonds are then
Outstanding, be deposited in the Bond Fund and credited to the Principal
Account as and when realized and collected, for use and application as are
other monies credited to such Account.


 


Anything
in Article XV to the contrary notwithstanding, if monies or Governmental
Obligations have been deposited or set aside with the Trustee pursuant to this
Section for the payment of the Bonds, the Bonds shall be deemed to have
been paid in full.  No amendment to the
provisions of this Article shall be made without the consent of the Bond
Insurer, so long as no Bond Insurer Default has occurred and is continuing, and
the Holders of the Bonds affected thereby.


 


The
Trustee shall promptly surrender any Support Facility (if appropriate for the
type of instrument or instruments then serving as Support Facility) to the
issuer of such Support Facility for cancellation or shall otherwise take
appropriate action to terminate the Support Facility following any such
defeasance.


 


Notwithstanding
anything herein to the contrary, in the event that the principal and/or
interest due on the Bonds shall be paid by the Bond Insurer pursuant to a
Policy, the Bonds to which such Policy relates shall remain Outstanding for all
purposes, not be defeased or otherwise satisfied and not be considered paid by
the Authority or Company, and the assignment and pledge of the Trust Estate and
all covenants, agreements and other obligations of the Authority and Company to
the Holders shall continue to exist and shall run to the benefit of the Bond
Insurer, and the Bond Insurer shall be subrogated to the rights of such
Holders.


 


SECTION 15.02.                           Release of Indenture, Termination of Right,
Title and Interest of Trustee.  When the Bonds shall be deemed to be paid in
accordance with the provisions of Section 15.01, then and in the case all
right, title and interest of the Trustee under this Indenture shall thereupon
cease, determine and become void, and the Trustee in such case shall release
this Indenture, shall execute such documents to evidence such release as may be
reasonably required by the Authority and furnish the Authority with the same,
and shall turn over to the Company any surplus monies and balances remaining in
any of the Funds and Accounts created in or held under this Indenture, other
than monies and Governmental Obligations held by it pursuant to
Section 15.01 or the provisions of Section 15.03 for the


 


127

















 


redemption,
payment or prepayment of the Bonds; otherwise, this Indenture shall be,
continue and remain in full force and effect.


 


Notwithstanding
the satisfaction and discharge of this Indenture, the rights of the Trustee and
the Registrar and Paying Agent under Sections 11.02, 11.06 and 11.17 shall
survive defeasance of the Bonds hereunder.


 


SECTION 15.03.                           Bonds Not Presented for Payment When Due;
Monies Held for the Bonds after Due Date of Bonds. 
Subject to the provisions of the next sentence of this paragraph, if the
Bonds shall not be presented for payment when the principal thereof shall
become due, whether at maturity or at the date fixed for the redemption
thereof, or otherwise, and if monies or Governmental Obligations shall at such
due date be held by the Trustee in trust for that purpose sufficient and
available to pay the principal of and premium, if any, on the Bonds, together
with all interest due on such principal to the due date thereof or to the date
fixed for redemption thereof, all liability of the Authority and the Company
for such payment shall forthwith cease, determine and be completely discharged,
and thereupon it shall be the duty of the Trustee to hold said monies or
Governmental Obligations without liability to the Holders for interest thereon,
in trust for the benefit of the Holders, which thereafter shall be restricted
exclusively to said monies or Governmental Obligations for any claim of
whatever nature on its part on or with respect to the Bonds, including for any
claim for the payment thereof.  Notwithstanding
anything to the contrary in Section 9.04, any monies or Governmental
Obligations held by the Trustee for the Holders after the principal of and
premium, if any, and interest on the Bonds or any portion thereof with respect
to which such monies or Governmental Obligations have been so set aside has
become due and payable (whether at maturity or upon redemption or prepayment or
otherwise) shall be either held uninvested as cash or at the written direction
of the Company invested and reinvested in Governmental Obligations which mature
on the next Business Day. Any such monies or Governmental Obligations held by
the Trustee for the Holders after the principal of and premium, if any, and
interest on the Bonds or any portion thereof with respect to which such monies
or Governmental Obligations have been so set aside has become due and payable
(whether at maturity or upon redemption or prepayment or otherwise) shall be
deemed abandoned property when such monies or Governmental Obligations shall
have remained unpaid or undelivered to the Holder or Holders entitled thereto
for three years from the date the principal of and premium, if any, and
interest on the Bonds or any portion thereof has become due and payable and
shall be subject to the laws of the State of New York relating to disposition
of unclaimed property.


 


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ARTICLE XVI


 


FORM OF
BONDS

AND ENDORSEMENT AND ASSIGNMENT PROVISIONS


 


SECTION 16.01.                           Form of Bonds and Endorsement and Assignment
Provisions.  The form of Bond, the form of the certificate
of authentication thereof, the form of endorsement to appear thereon and the
form of assignment thereof shall be substantially in the form set forth in
Appendix A hereto.


 


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ARTICLE XVII


 


MISCELLANEOUS


 


SECTION 17.01.                           Benefits of Indenture Limited to Authority,
Company, Trustee, Registrar and Paying Agent, Support Facility Issuer, and
Auction Agent and Holders of the Bonds.  With the exception of rights
or benefits herein expressly conferred, nothing expressed or mentioned in or to
be implied from this Indenture or the Bonds is intended or should be construed
to confer upon or give to any person other than the Authority, the Company, the
Trustee, the Registrar and Paying Agent, the Bond Insurer and any other Support
Facility Issuer, the Auction Agent and the Holders of the Bonds any legal or
equitable right, remedy or claim under or by reason of or in respect to this
Indenture or any covenant, condition, stipulation, promise, agreement or
provision herein contained.  Unless
otherwise expressly set forth herein, this Indenture and all of the covenants,
conditions, stipulations, promises, agreements and provisions hereof are
intended to be and shall be for and inure to the sole and exclusive benefit of
the Authority, the Company, the Trustee, the Registrar and Paying Agent, the
Bond Insurer or any other Support Facility Issuer, the Auction Agent and the
Holders of the Bonds as herein and therein provided.


 


SECTION 17.02.                           Indenture a Contract; Indenture Binding Upon
Successors or Assigns of the Authority.  In consideration of the
acceptance of the Bonds by any person who shall hold the same from time to
time, each of the obligations, duties, limitations and restraints imposed by
this Indenture upon the Authority or any employee thereof shall be deemed to be
a covenant between the Authority and every Holder and this Indenture and every
provision and covenant hereof shall be a contract by the Authority with the
Holders of the Bonds issued hereunder to secure the full and final payment of
the principal of, premium, if any, of and the interest on the Bonds executed
and delivered hereunder. The provisions of the Act shall be a contract by the
Authority with the Holders and the duties of the Authority and any employee
thereof under the Act shall be enforceable by the Holders. This Indenture shall
be enforceable by the Holders, by mandamus or other appropriate suit, action or
proceeding in any court of competent jurisdiction. The covenants and agreements
herein set forth to be performed by the Authority and any employee thereof,
shall be for the benefit, security and protection of the Holders.  All the terms, provisions, conditions, covenants,
warranties and agreements contained in this Indenture shall be binding upon the
assigns of the Authority, and shall inure to the benefit of the Trustee, its
successors or substitutes in trust and assigns, and the Holders.


 


SECTION 17.03.                           Notice to Holders of Bonds. 
Except as is otherwise provided in this Indenture, any provision for the
mailing of a notice or other paper to the Holders shall be fully complied with
if it is mailed postage prepaid, to the Holder of the Bonds at such Holder’s
address appearing upon the books of registry kept pursuant to
Article VII.  The Trustee shall
furnish a copy of any notice to a Holder upon a request by the Holder that a
copy of such notices be provided directly to the Holder; provided, however,
that any failure to provide such a notice to a Holder shall not effect the
validity of the provision of the notice in the preceding sentence.


 


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SECTION 17.04.                           Waiver of Notice. 
Whenever in this Indenture the giving of notice by mail, publication, or
otherwise is required, the giving of such notice may be waived by the person
entitled to receive such notice, and in any case the giving or receipt of such
notice shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.


 


SECTION 17.05.                           Effect of Saturdays, Sundays and Non-Business
Days.  Except as otherwise specifically provided
herein, whenever this Indenture requires any action to be taken on a Saturday,
Sunday or other day which is not a Business Day, such action shall be taken on
the first Business Day occurring thereafter. Except as otherwise specifically
provided herein, whenever in this Indenture the time within which any action is
required to be taken or within which any right will lapse or expire shall
terminate on a Saturday, Sunday or other day which is not a Business Day, such
time shall continue to run until midnight on the next succeeding Business Day.


 


SECTION 17.06.                           Partial Invalidity.  If
any one or more of the covenants or agreements or portions thereof provided in
this Indenture on the part of the Authority or the Trustee to be performed
should be determined by a court of competent jurisdiction to be contrary to
law, then such covenant or covenants, or such agreement or agreements, or such
portions thereof, shall be deemed severable from the remaining covenants and
agreements or portions thereof provided in this Indenture and the invalidity
thereof shall in no way affect the validity of the other provisions of this
Indenture or of the Bonds, but the Holders shall retain all the rights and
benefits accorded to them hereunder and under any applicable provisions of law.


 


If
any provisions of this Indenture shall be held or deemed to be or shall, in
fact, be inoperative or unenforceable or invalid in any particular case in any
jurisdiction or jurisdictions or in all jurisdictions, or in all cases because
it conflicts with any constitution or statute or rule of public policy, or for
any other reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable or invalid in any other case
or circumstance, or of rendering any other provision or provisions herein
contained inoperative or unenforceable or invalid to any extent whatsoever.


 


SECTION 17.07.                           Law and Place of Enforcement of Indenture. 
This Indenture shall be construed and interpreted in accordance with the
laws of the State of New York and all suits and actions arising out of this
Indenture shall be instituted in a court of competent jurisdiction in the State
of New York.


 


SECTION 17.08.                           Requests, Approvals and Directions of
Authority.  Whenever in this Indenture a request,
approval, direction or other action is required of the Authority, such request,
approval, direction or other action shall be in the form of and evidenced by a
certificate of an Authorized Officer of the Authority unless otherwise provided
herein.


 


SECTION 17.09.                           Notices, Demands; Requests. 
Except as otherwise set forth herein, all notices, demands, directions
and requests to be given to or made hereunder by the Company, the Authority,
the Trustee, the Remarketing Agent, the Auction Agent and the


 


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Registrar
and Paying Agent shall be given or made in writing and shall be deemed to be
properly given or made if sent by first class United States mail, postage
prepaid, addressed as follows:


 


	
  (a)

  	
   

  	
  As to the Company

  	
   

  	
  4 Irving Place

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10003

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  As to the Authority

  	
   

  	
  17 Columbia Circle

  
	
   

  	
   

  	
   

  	
   

  	
  Albany, New York
  12203-6399

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  As to the Trustee

  	
   

  	
  101 Barclay Street - 21W

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10286

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Corporate Trust Trustee

  
	
   

  	
   

  	
   

  	
   

  	
  Administration

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  As to the Auction Agent

  	
   

  	
  at the address specified
  in the Auction Agency Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  As to the Remarketing
  Agents

  	
   

  	
  at the address specified
  in the applicable Remarketing Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  As to the Registrar and
  Paying Agent

  	
   

  	
  101 Barclay Street - 21W

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10286

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Corporate Trust
  Trustee Administration

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  As to the Bond Insurer

  	
   

  	
  1221 Avenue of the
  Americas

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10020

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Surveillance
  Department and General Counsel

  



 


Any
such notice, demand, direction or request may also be transmitted to the
appropriate above-mentioned party by telegram, telecopy, telex or similar means
and shall be deemed to be properly given or made at the time of such
transmission if, and only if, such transmission of notice shall be in writing
and sent as specified above.


 


Any
notice, demand, direction or request given or transmitted to the Trustee or the
Authority shall be effective only upon receipt.


 


Any
of such addresses may be changed at any time upon written notice of such change
sent by first-class United States mail, postage prepaid, to the other parties
by the party affecting the change.


 


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If
the Bonds shall be rated by Moody’s, the Trustee shall furnish to Moody’s at 99
Church Street, New York, New York, Attention: Corporate Department Structured
Finance Group or such other office as Moody’s may designate to the
Trustee,  if the Bonds shall be rated by
S&P, the Trustee shall furnish to S&P at 55 Water Street, New York, New
York 10041, Attention: Letter of Credit Surveillance Group, and if the Bonds
shall be rated by Fitch, the Trustee shall furnish to Fitch, Inc. at One State
Street Plaza, New York, New York 10004, Attention: Municipal Structured Finance
Group (i) a copy of each amendment to the Indenture, Participation Agreement,
Bond Purchase Trust Agreement, and each Support Facility of which it has
knowledge, (ii) notice of the termination, extension or expiration of any
Support Facility, (iii) notice of the payment of all the Bonds (iv) notice of a
Change in the Interest Rate Mode, and (v) notice of any successor Trustee,
Registrar and Paying Agent or Remarketing Agent; provided, however, that
failure by the Trustee to so notify Moody’s, S&P or Fitch shall not result
in any liability on the part of the Trustee or affect the validity of such
documents or actions.


 


SECTION 17.10.                           Effect of Article and
Section Headings and Table of Contents.  The heading or titles of the
several Articles and Sections hereof, and any table of contents appended hereto
or to copies hereof, shall be solely for convenience of reference and shall not
affect the meaning, construction, interpretation or effect of this Indenture.


 


SECTION 17.11.                           Indenture May be Executed in Counterparts;
Effectiveness of Indenture.  This Indenture may be simultaneously
executed in counterparts. Each such counterpart so executed shall be deemed to
be an original, and all together shall constitute but one and the same
instrument. This Indenture shall take effect immediately upon the execution and
delivery hereof. Notwithstanding the actual date hereof, for convenience and
purposes of reference this Indenture shall be dated as of January 1, 2004
and may be cited and referred to as the “Indenture dated as of January 1, 2004”.


 


SECTION 17.12.                           Liability of Authority Limited to Revenues. 
Notwithstanding anything in this Indenture or in the Bonds contained,
the Authority shall not be required to advance any monies derived from any
source other than the Revenues and other assets pledged under this Indenture
for any of the purposes in this Indenture mentioned, whether for the payment of
the principal or redemption price of or interest on the Bonds or for any other
purpose of this Indenture.  Pursuant to
Section 5.09 of the Participation Agreement, the Company has agreed to
indemnify and hold harmless the Authority and the Trustee from all liability
arising hereunder.


 


SECTION 17.13.                           Waiver of Personal Liability.  No
member, officer, agent or employee of the Authority shall be individually or
personally liable for the payment of the principal of or premium, if any, or
interest on the Bonds or be subject to any personal liability or accountability
by reason of the issuance thereof; but nothing herein contained shall relieve
any such member, officer, agent or employee from the performance of any
official duty provided by law or by this Indenture.


 


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[Signature Page of this Indenture Follows]


 


134

















 


IN
WITNESS WHEREOF, the Authority has caused this Indenture to be executed by its
Acting President, Vice President or Treasurer and its corporate seal to be
hereunto affixed and attested by its Assistant Secretary, and the Trustee has
caused this Indenture to be executed by its authorized officer, all as of the
date first above written.


 


	
   

  	
  NEW YORK STATE ENERGY RESEARCH

  AND DEVELOPMENT AUTHORITY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Acting President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (SEAL)

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Assistant Secretary

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NEW YORK

  as Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
								



 


 


[Signature Page of Indenture]


 


135