Document:

exhibit_4-47.htm

  

  

  

 

CONNECTICUT DEVELOPMENT AUTHORITY

to

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

                                          

 

INDENTURE OF TRUST

                                          

Dated as of December 1, 2011

Connecticut Development Authority

$22,050,000 Water Facilities Revenue Bonds

(The Connecticut Water Company Project - 2011A Series)

 

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TABLE OF CONTENTS

 

 Page

 

Parties and Preambles 1

Form of Bond 4

ARTICLE I DEFINITIONS AND INTERPRETATION                                                                                                                                          

	
  

	
Section 1.1. Definitions.

	
  

	
Section 1.2. Interpretation.

ARTICLE II AUTHORIZATION, TERMS AND ISSUANCE OF BONDS                                                                                                                                          

	
  

	
Section 2.1. Authorization for Indenture.

	
  

	
Section 2.2. Authorization and Obligation of Bonds.

	
  

	
Section 2.3. Issuance and Terms of the Bonds.

	
  

	
Section 2.4. Redemption of Bonds.

	
  

	
Section 2.5. Execution and Authentication of Bonds.

	
  

	
Section 2.6. Delivery of Bonds.

	
  

	
Section 2.7. No Additional Bonds.

ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS                                                                                                                                          

	
  

	
Section 3.1. Date of Bonds.

	
  

	
Section 3.2. Form and Denominations.

	
  

	
Section 3.3. Legends.

	
  

	
Section 3.4. Medium of Payment.

	
  

	
Section 3.5. Bond Details.

	
  

	
Section 3.6. Interchangeability, Transfer and Registry.

	
  

	
Section 3.7. Bonds Mutilated, Destroyed, Stolen or Lost.

	
  

	
Section 3.8. Cancellation and Destruction of Bonds.

	
  

	
Section 3.9. Requirements With Respect To Transfers.

	
  

	
Section 3.10. Registrar.

ARTICLE IV APPLICATION OF BOND PROCEEDS AND OTHER AMOUNTS                                                                                                                                          

	
  

	
Section 4.1. Accrued Interest.

	
  

	
Section 4.2. Bond Proceeds.

ARTICLE V CUSTODY AND INVESTMENT OF FUNDS                                                                                                                                          

	
  

	
Section 5.1. Creation of Funds.

	
  

	
Section 5.2. Project Fund.

	
  

	
Section 5.3. Debt Service Fund.

	
  

	
Section 5.4. Rebate Fund.

	
  

	
Section 5.5. Renewal Fund.

	
  

	
Section 5.6. Investment of Funds and Accounts.

	
  

	
Section 5.7. Non-presentment of Bonds.

ARTICLE VI REDEMPTION OF BONDS                                                                                                                                          

	
  

	
Section 6.1. Privilege of Redemption and Redemption Price.

	
  

	
Section 6.2. Selection of Bonds to be Redeemed.

	
  

	
Section 6.3. Notice of Redemption.

	
  

	
Section 6.4. Payment of Redeemed Bonds.

	
  

	
Section 6.5. [Reserved] .

	
  

	
Section 6.6. Cancellation of Redeemed Bonds.

ARTICLE VII PARTICULAR COVENANTS                                                                                                                                          

	
  

	
Section 7.1. No Pecuniary Liability on Authority or Officers.

	
  

	
Section 7.2. Payment of Principal, Redemption Price, if any, and Interest.

	
  

	
Section 7.3. Performance of Covenants.

	
  

	
Section 7.4. Further Assurances.

	
  

	
Section 7.5. Inspection of Project Books.

	
  

	
Section 7.6. Rights under Financing Documents.

	
  

	
Section 7.7. Creation of Liens, Indebtedness.

	
  

	
Section 7.8. Recording and Filing.

ARTICLE VIII REMEDIES OF BONDHOLDERS                                                                                                                                          

	
  

	
Section 8.1. Events of Default; Acceleration of Due Dates.

	
  

	
Section 8.2. Enforcement of Remedies.

	
  

	
Section 8.3. Application of Revenue and Other Moneys After Default.

	
  

	
Section 8.4. Actions by Trustee.

	
  

	
Section 8.5. Majority Bondholders Control Proceedings.

	
  

	
Section 8.6. Individual Bondholder Action Restricted.

	
  

	
Section 8.7. Effect of Discontinuance of Proceedings.

	
  

	
Section 8.8. Remedies Not Exclusive.

	
  

	
Section 8.9. Delay or Omission Upon Default.

	
  

	
Section 8.10. Notice of Default.

	
  

	
Section 8.11. Waivers of Default.

ARTICLE IX TRUSTEE AND PAYING AGENTS                                                                                                                                          

	
  

	
Section 9.1. Appointment and Acceptance of Duties.

	
  

	
Section 9.2. Indemnity.

	
  

	
Section 9.3. Responsibilities of Trustee.

	
  

	
Section 9.4. Compensation.

	
  

	
Section 9.5. Evidence on Which Trustee May Act.

	
  

	
Section 9.6. Evidence of Signatures of Owners of the Bonds and Ownership of Bonds.

	
  

	
Section 9.7. Trustee and any Paying Agent, May Deal in Bonds and With Borrower.

	
  

	
Section 9.8. Resignation or Removal of Trustee.

	
  

	
Section 9.9. Successor Trustee.

	
  

	
Section 9.10. Appointment and Responsibilities of Paying Agent.

	
  

	
Section 9.11. Resignation or Removal of Paying Agent; Successors.

	
  

	
Section 9.12. Monies Held for Particular Bonds.

	
  

	
Section 9.13. Continuation Statements.

	
  

	
Section 9.14. Obligation to Report Defaults.

	
  

	
Section 9.15. Payments Due on non-Business Day.

	
  

	
Section 9.16. Appointment of Co-Trustee.

	
  

	
Section 9.17. Project Description.

ARTICLE X AMENDMENTS OF INDENTURE                                                                                                                                          

	
  

	
Section 10.1. Limitation on Modifications.

	
  

	
Section 10.2. Supplemental Indentures Without Consent of Owners of the Bonds.

	
  

	
Section 10.3. Supplemental Indentures With Consent of Owners of the Bonds.

	
  

	
Section 10.4. Supplemental Indenture Part of the Indenture.

ARTICLE XI AMENDMENTS OF FINANCING DOCUMENTS                                                                                                                                          

	
  

	
Section 11.1. Rights of Borrower.

	
  

	
Section 11.2. Amendments of Financing Documents Not Requiring Consent of Owners of the Bonds.

	
  

	
Section 11.3. Amendments of Financing Documents Requiring Consent of Owners of the Bonds.

ARTICLE XII DISCHARGE OF INDENTURE                                                                                                                                          

	
  

	
Section 12.1. Defeasance.

ARTICLE XIII GENERAL PROVISIONS                                                                                                                                          

	
  

	
Section 13.1. Notices.

	
  

	
Section 13.2. Covenant Against Discrimination.

	
  

	
Section 13.3. Parties Interested Herein.

	
  

	
Section 13.4. Effective Date; Counterparts.

	
  

	
Section 13.5. Continuing Disclosure.

	
  

	
Section 13.6. Compliance with C.G.S. Sections 4a-60 and 4a-60a.

	
  

	
Section 13.7. Date for Identification Purposes Only.

	
  

	
Section 13.8. Separability of Invalid Provisions.

APPENDICES

 

Appendix A - Form of Requisition

 

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THIS INDENTURE OF TRUST, made and dated as of December 1, 2011, by and between the CONNECTICUT DEVELOPMENT AUTHORITY, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut, and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized, existing and authorized to accept and execute trusts of the character herein set out under and by virtue of the laws of the United States of America, with a corporate trust office located in Hartford, Connecticut, as Trustee,

 

WITNESSETH THAT:

 

WHEREAS, the State Commerce Act, constituting Connecticut General Statutes, Sections 32-1a through 32-23zz, as amended (the “Act”), declares that there is a continuing need in the State (1) for industrial development and activity to provide and maintain employment and tax revenues and to control, abate and prevent pollution to protect the public health and safety, (2) for the development of recreation facilities to promote tourism, provide and maintain employment and tax revenues, and promote the public welfare, (3) for the development of commercial and retail sales and service facilities in urban areas to provide and maintain construction and permanent employment and tax revenues, to improve conditions of deteriorated physical development, slow economic growth and eroded financial health of the public and private sectors in urban areas and to revitalize the economy of urban areas, and (4) for assistance to public service businesses providing transportation and utility services in the State, and that the availability of financial assistance and suitable facilities are important inducements to industrial and commercial enterprises to remain or locate in the State and to provide industrial, recreation, urban and public service projects; and

 

WHEREAS, the Act provides that (1) the term “project” as used therein means any facility, plant, works, system, building, structure, utility, fixture or other real property improvement located in the State, and the land on which it is located or which is reasonably necessary in connection therewith, which is of a nature or which is to be used or occupied by any person for purposes which would constitute it as an economic development project, recreation project, urban project, public service project or health care project, and any real property improvement reasonably related thereto, and (2) a project may also include or consist exclusively of machinery, equipment or fixtures; and

 

WHEREAS, the Act provides that the Authority shall have power to determine the location and character of, and extend credit or make loans to any person for the planning, designing, acquiring, improving and equipping of, a project which may be secured by loan, lease or sale agreements, contracts and other instruments, upon such terms and conditions as the Authority shall determine to be reasonable, to require the inclusion in any contract, loan agreement or other instrument of such provisions for the construction, use, operation, maintenance and financing of the project as the Authority may deem necessary or desirable, to issue its bonds for such purposes, subject to the approval of the Treasurer of the State, and, as security for the payment of the principal or redemption price, if any, of and interest on any such bonds, to pledge or assign such a loan, lease or sale agreement and the revenues and receipts derived by the Authority from such a project; and

 

WHEREAS, by resolution adopted on February 16, 2011, in furtherance of the purposes of the Act, the Authority has accepted the application of The Connecticut Water Company (the “Borrower”) for assistance in the financing of various capital projects located in the State of Connecticut; and

 

WHEREAS, the Borrower currently owns certain existing facilities within certain municipalities in the State and at this time requests assistance in the design, acquisition, installation, improvement and construction of certain facilities consisting of water treatment and storage facilities, transmission and distribution mains, service lines, meters, hydrants and pumping equipment for the purpose of supplying safe potable water to the general public within the Borrower’s  service area; and

 

WHEREAS, the Authority has by a further resolution adopted on October 19, 2011 authorized the issuance of not to exceed $22,050,000 principal amount of its Water Facilities Revenue Bonds (The Connecticut Water Company Project - 2011A Series) for the purpose of providing funds for the Project; and

 

WHEREAS, the Authority has determined that the issuance, sale and delivery of the Bonds, as hereinafter provided, is needed to finance the cost of the Project, and concurrently herewith the Authority and the Borrower have entered into a Loan Agreement, dated as of December 1, 2011, providing for a loan by the Authority to the Borrower for such purpose in an aggregate amount equal to the principal amount of the Bonds; and

 

WHEREAS, the Connecticut Public Utilities Regulatory Authority (“PURA”) has approved the issuance of the Note; and

 

WHEREAS, the Bonds shall be special obligations of the Authority, payable solely out of the revenues and other receipts, funds or monies derived by the Authority under the Agreement or the Indenture and from any amounts otherwise available under this Indenture for the payment of the Bonds; and

 

WHEREAS, the Bonds are to be originally issued as fully registered bonds and such Bonds and the Trustee’s certificate of authentication to be endorsed thereon shall be in substantially the following form, with appropriate variations, omissions and insertions as permitted or required by this Indenture, to wit:

 

  

  

  

FORM OF BOND

 

No. AR- $22,050,000

 

AS PROVIDED IN THE INDENTURE REFERRED TO HEREIN, UNTIL THE TERMINATION OF THE SYSTEM OF BOOK-ENTRY-ONLY TRANSFERS THROUGH THE DEPOSITORY TRUST COMPANY (TOGETHER WITH ANY SUCCESSOR SECURITIES DEPOSITORY APPOINTED PURSUANT TO THE INDENTURE, “DTC”), AND NOTWITHSTANDING ANY OTHER PROVISION OF THE INDENTURE TO THE CONTRARY, A PORTION OF THE PRINCIPAL AMOUNT OF THIS BOND MAY BE PAID OR REDEEMED WITHOUT SURRENDER HEREOF TO THE TRUSTEE.  DTC OR A NOMINEE, TRANSFEREE OR ASSIGNEE OF DTC AS OWNER OF THIS BOND MAY NOT RELY UPON THE PRINCIPAL AMOUNT INDICATED HEREON AS THE PRINCIPAL AMOUNT HEREOF OUTSTANDING AND UNPAID.  THE PRINCIPAL AMOUNT HEREOF OUTSTANDING AND UNPAID SHALL FOR ALL PURPOSES BE THE AMOUNT DETERMINED IN THE MANNER PROVIDED IN THE INDENTURE.

 

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED OFFICER OF DTC (A) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER OR EXCHANGE OR (B) TO THE TRUSTEE FOR PAYMENT OF PRINCIPAL, AND ANY BOND ISSUED IN REPLACEMENT THEREOF OR SUBSTITUTION THEREFOR IS REGISTERED IN THE NAME OF DTC OR ITS NOMINEE CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, DTC OR ITS NOMINEE, CEDE & CO., HAS AN INTEREST HEREIN.

 

NEITHER THE STATE OF CONNECTICUT NOR ANY MUNICIPALITY THEREOF IS OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE STATE OF CONNECTICUT NOR ANY MUNICIPALITY THEREOF IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL, PREMIUM, IF ANY, OF OR INTEREST ON THIS BOND.

 

CONNECTICUT DEVELOPMENT AUTHORITY

WATER FACILITIES REVENUE BOND

(THE CONNECTICUT WATER COMPANY PROJECT - 2011A SERIES)

 

BOND DATE:  December 20, 2011

 

MATURITY DATE:  December 1, 2021

 

INTEREST PAYMENT DATES:  June 1 and December 1

 

INTEREST RATE:  5.00%

 

REGISTERED OWNER:  CEDE & CO.

 

PRINCIPAL AMOUNT:  $22,050,000.00***

 

CUSIP NUMBER:  207900CF6

 

CONNECTICUT DEVELOPMENT AUTHORITY (the “Authority”), a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut (the “State”), for value received, hereby promises to pay to the REGISTERED OWNER or registered assigns, on the MATURITY DATE, solely from the sources and in the manner hereinafter provided, upon presentation and surrender hereof, in lawful money of the United States of America, the PRINCIPAL AMOUNT and in like manner to pay interest on the unpaid principal balance thereof until the Authority’s obligation with respect to the payment of such sum shall be discharged.  Interest shall be payable (computed on the basis of a 360-day year consisting of twelve 30-day months) from the most recent INTEREST PAYMENT DATE, to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND at the INTEREST RATE per annum, payable semi-annually on the INTEREST PAYMENT DATES until the date on which this bond becomes due, whether at maturity or by acceleration or redemption.  From and after that date, any unpaid principal will bear interest at the same rate until paid or duly provided for.

 

Payment of Principal and Interest.  The principal and premium, if any, of this Bond is payable to the REGISTERED OWNER hereof but only upon presentation and surrender of this bond at the corporate trust office of U.S. Bank National Association, as Paying Agent (with its successors, the “Paying Agent”).  Interest is payable by check or draft mailed by the Paying Agent to the REGISTERED OWNER of this bond (or of one or more predecessor or successor Bonds (as defined below)), determined as of the close of business on the applicable record date, at its address as shown on the registration books maintained by the Paying Agent.  If any payment, redemption or maturity date for principal, premium or interest shall not be a Business Day then the payment thereof may be made on the next succeeding Business Day with the same force and effect as if made on the specified payment date and no interest shall accrue for the period after the specified payment date.  Payment shall be in any coin or currency of the United States of America, which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts.

 

The record date for payment of interest is the fifteenth day of the month immediately preceding each INTEREST PAYMENT DATE, provided that, with respect to overdue interest or interest payable on redemption of this bond other than on an INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee (as defined below) may establish a special record date.  The special record date may be not more than thirty (30) days before the date set for payment.  The Paying Agent will mail notice of a special record date to the registered owners of the Bonds (the “Bondholders”) at least ten (10) days before the special record date.  The Paying Agent will promptly certify to the Authority and the Trustee that it has mailed such notice to all Bondholders, and such certificate will be conclusive evidence that such notice was given in the manner required hereby.

 

Authorization and Purpose.  This bond is one of an authorized issue of Bonds of the Authority in the aggregate principal amount of [$22,050,000] designated:  Water Facilities Revenue Bonds (The Connecticut Water Company Project - 2011A Series) (the “Bonds”) which are issued for the purpose of providing The Connecticut Water Company (the “Borrower”), a corporation organized and existing under the laws of the State of Connecticut, with funds for the purpose of financing various capital improvements constituting a portion of the Borrower’s existing water system (the “Project”), and paying necessary expenses incidental thereto.  The Bonds are issued pursuant to the State Commerce Act, constituting Connecticut General Statutes, Sections 32-1a through 32-23zz, as amended, a resolution adopted by the Authority on October 19, 2011 and an Indenture of Trust, dated as of December 1, 2011 (which Indenture as from time to time amended and supplemented is herein referred to as the “Indenture”), duly executed and delivered by the Authority to U.S. Bank National Association, as trustee (with its successors, the “Trustee”), and are equally and ratably secured by and entitled to the protection of the Indenture, which is on file in the office of the Trustee.

 

Pledge and Security.  Pursuant to the Indenture, the Authority has assigned to the Trustee all of its right, title and interest in and to a Loan Agreement, dated as of December 1, 2011, as it may be amended or supplemented from time to time (the “Agreement”),  between the Authority and the Borrower, and the Note evidencing the Borrower’s obligations under the Agreement (except for certain enforcement and indemnification rights which are reserved in the Indenture), including all rights to receive loan payments sufficient to pay the principal and premium if any, of and interest and all other amounts due on the Bonds as the same become due, to be made by the Borrower pursuant to the Agreement.  The Agreement sets forth the terms and conditions under which the Authority will provide for the financing of the Project and under which the Borrower will use and occupy the Project and the Borrower will make loan payments to the Authority in such amounts as are necessary to pay the principal of, premium if any, and interest on the Bonds.  Reference is hereby made to the Indenture for the definition of any capitalized word or term used but not defined herein and for a description of the property pledged, assigned and otherwise available for the payment of the Bonds, the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Authority, the Trustee and the owners of the Bonds, and the terms upon which the Bonds are issued and secured, and the holders of the Bonds are deemed to assent to the provisions of the Indenture by the acceptance of this bond.

 

Event of Default.  In case any Event of Default occurs and is continuing, the principal amount of this bond together with accrued interest may be declared due and payable in the manner and with the effect provided in the Indenture.

 

Extraordinary Optional Redemption.  In addition, at the option of the Authority, which option shall be exercised upon the giving of notice by the Borrower of its election to redeem Bonds following completion of the Project in accordance with the Indenture or its intention to prepay amounts due under the Agreement, the Bonds are subject to redemption prior to maturity at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption (a) in part, on any date, to the extent that excess Bond proceeds are transferred to the Redemption Account from the Project Fund in accordance with Section 5.2(F) of the Indenture, or (b) as a whole, on any date, if any one or more of the events of casualty to or condemnation of the Project or change in law or certain economic events affecting the Project specified in subsection 8.1(B) of the Agreement shall have occurred, as evidenced in each case by the filing of a certificate of an Authorized Representative of the Borrower.

 

Mandatory Taxability Redemption.  In the event of a Determination of Taxability, the Bonds shall be redeemed on any day selected by the Borrower that is not more than 180 days after the occurrence of such Determination of Taxability as provided in the Indenture, at the Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption.  Redemption under this paragraph shall be in whole unless not less than forty-five (45) days prior to the redemption date the Borrower delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to the Trustee to the effect that a redemption of less than all of the Bonds will preserve the tax-exempt status of interest on the remaining Bonds outstanding subsequent to such redemption.

 

Optional Public Purpose Redemption.  If the Borrower fails to perform its obligations under Section 6.4 of the Agreement, the Bonds shall be subject to redemption prior to maturity as a whole on any date at the option of the Authority in accordance with Section 7.3 of the Agreement, at the redemption price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption.

 

Extraordinary Optional Redemption Without Premium to Preserve Tax Exempt Status of the Bonds.  The Bonds shall be subject to extraordinary optional redemption by the Authority, at the direction of the Borrower, in whole or in part on any date at a Redemption Price equal to 100% of the unpaid principal amount thereof, together with accrued interest to the date of redemption, and without premium, if the Borrower shall have delivered to the Trustee and the Authority an opinion of Bond Counsel addressed to the Trustee and the Authority substantially to the effect that (i) a failure so to redeem the Bonds (or the relevant portion thereof) may adversely affect the exclusion of interest on the Bonds from the gross income of the holders pursuant to Section 103 of the Code, and (ii) redemption of Bonds in the amount set forth in such opinion (but in no smaller amount than that set forth in such opinion) would permit the continuance of any exclusion so afforded under Section 103 of the Code.

 

Selection of Bonds to be Redeemed.  If less than all of the Outstanding Bonds are to be called for redemption, the Bonds (or portions thereof) to be redeemed shall be selected as provided in the Indenture.

 

Notice of Redemption.  In the event this bond is selected for redemption, notice (which notice may state that it is subject to the receipt of the redemption moneys by the Trustee on or before the date fixed for redemption and which notice shall be of no effect unless such moneys are so received on or before such date) will be mailed no more than forty-five (45) days nor less than thirty (30) days prior to the redemption date to the REGISTERED OWNER at its address shown on the registration books maintained by the Paying Agent.  Failure to mail notice to the owner of any other Bond or any defect in the notice to such an owner shall not affect the redemption of this bond.

 

If this bond is of a denomination in excess of five thousand dollars ($5,000), portions of the principal amount in the amount of five thousand dollars ($5,000) or any multiple thereof may be redeemed.  If less than all of the principal amount is to be redeemed, upon surrender of this bond to the Paying Agent, there will be issued to the REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the REGISTERED OWNER, for the unredeemed principal amount.

 

Notice of redemption having been duly mailed, and moneys for the redemption having been deposited with the Paying Agent, this bond, or the portion called for redemption, will become due and payable on the redemption date at the applicable redemption price from and after the date fixed for redemption, interest on this bond (or such portion) will no longer accrue.

 

Transfer of Bonds.  This bond is transferable by the REGISTERED OWNER, in person or by its attorney duly authorized in writing, at the office of the Paying Agent, upon surrender of this bond to the Paying Agent for cancellation.  Upon the transfer, a new Bond or Bonds in authorized denominations of the same aggregate principal amount will be issued to the transferee at the same office.  This bond may also be exchanged at the office of the Paying Agent for a new Bond or Bonds in authorized denominations of the same aggregate principal amount without transfer to a new registered owner.  Exchanges and transfers will be without expense to the owner except for applicable taxes, fees or other governmental charges, if any, and a sum sufficient to pay the cost of preparing and delivering each new Bond issued upon such transfer.  The Paying Agent will not be required to make an exchange or transfer of this bond (a) during the fifteen (15) days preceding any date fixed for selection for redemption if this bond (or any portion thereof) is eligible to be selected for redemption or (b) if this bond is selected, called or being called for redemption in whole or in part, except in the case of a bond to be redeemed in part, the portion not to be redeemed.

 

Amendment of Indenture.  The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Authority and the rights of the owners of the Bonds at any time by the Authority with the consent of the owners of not less than 51% in aggregate principal amount of the Bonds at the time outstanding thereunder.  Any such consent shall be conclusive and binding upon each such owner and upon all future owners of each Bond and of any such Bond issued upon the transfer thereof, whether or not notation of such consent is made thereon.  The Indenture also permits the amendment thereof by the Authority but without the consent of the owners of the Bonds for certain specified purposes.

 

Limitation on Bondholder Enforcement Rights.  The owner of this bond shall have no right to enforce the provisions of the Indenture, to institute action to enforce the provisions and covenants thereof or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture.

 

Special Obligations of the Authority.  This bond and the issue of which it forms a part are special obligations of the Authority, payable solely out of the revenues or other receipts, funds or moneys of the Authority pledged under the Indenture and from any amounts otherwise available under the Indenture for the payment of the Bonds.  Neither the State nor any municipality thereof shall be obligated to pay the principal or redemption price, if any, of or interest on this bond and neither the faith and credit nor taxing power of the State or any municipality thereof is pledged to such payment.  The Bonds do not now and shall never constitute a debt or liability of the State or any municipality thereof or bonds issued or guaranteed by either of them within the meaning of any constitutional or statutory limitation.

 

Estoppel Clause.  This bond is issued pursuant to and in full compliance with the Constitution and laws of the State.  It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this bond do exist, have happened and have been performed in due time, form and manner as required by law and that the issuance of this bond and of the issue of which it forms a part, together with all other obligations of the Authority, do not exceed or violate any constitutional or statutory limitation.

 

NEITHER THE AUTHORITY, THE TRUSTEE NOR ANY PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY SUCCESSOR SECURITIES DEPOSITORY, ANY PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (II) THE PAYMENT BY DTC OR ANY SUCCESSOR SECURITIES DEPOSITORY OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS; (III) THE SELECTION BY DTC OR ANY SUCCESSOR SECURITIES DEPOSITORY OR ANY DIRECT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; (IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ANY SUCCESSOR SECURITIES DEPOSITORY AS BONDHOLDER; OR (V) THE DELIVERY TO ANY PARTICIPANT, OR INDIRECT PARTICIPANT, BENEFICIAL OWNER OR OTHER PERSON OTHER THAN DTC OR ANY SUCCESSOR SECURITIES DEPOSITORY OF ANY NOTICE WITH RESPECT TO THE BONDS, INCLUDING BUT NOT LIMITED TO, ANY NOTICE OF REDEMPTION.

 

No Personal Liability.  Neither the officers, directors or employees of the Authority or the Trustee nor any person executing this bond shall be liable personally or be subject to any personal liability or accountability by reason of the issuance hereof.

 

Authentication.  This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been signed by the Trustee or the Paying Agent.

 

Authorized Denomination.  The Bonds are issuable only in fully registered form in denominations of $5,000 or any multiple thereof.

 

Persons Deemed Owners.  The Authority, the Trustee, the Paying Agent and the Borrower may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.

 

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IN WITNESS WHEREOF, the CONNECTICUT DEVELOPMENT AUTHORITY has caused this Bond to be executed in its name by the manual or facsimile signature of its Authorized Representative.

 

CONNECTICUT DEVELOPMENT AUTHORITY

 

By                                                   

Authorized Representative

 

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[FORM OF CERTIFICATE OF AUTHENTICATION]

 

CERTIFICATE OF AUTHENTICATION

 

This bond is one of the Bonds of the issue described in the within mentioned Indenture.

 

Date of Registration:

 

U.S. BANK NATIONAL ASSOCIATION, Trustee

 

By                                                    [,or

Authorized Signature

 

U.S. BANK NATIONAL ASSOCIATION,

 

Paying Agent

 

By                                                   

Authorized Signature]

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[FORM OF ASSIGNMENT]

 

ASSIGNMENT

 

For value received the undersigned sells, assigns and transfers this bond to

 

______________________________________________________________________________

 

(Name and Address of Assignee)

 

______________________________________________________________________________

 

Social Security or Other Identifying Number of Assignee

 

and irrevocably appoints __________________________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.

 

________________________________________________________________________________

 

NOTE:  The signature to this assignment must correspond with the name as written on the face of the bond without alteration or enlargement or other change and must be guaranteed by a Participant in a Recognized Signature Guaranty Medallion Program.

 

Dated:

 

Signature Guaranteed:

 

_____________________________________________________

Participant in a Recognized

Signature Guaranty Medallion Program

 

By: _________________________________________________

     Authorized Signature

 

[END OF FORM OF BOND]

 

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WHEREAS, all things necessary to make the Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the Authority according to the import thereof, and to constitute this Indenture a valid pledge of revenues to the payment of the principal or Redemption Price, if any, of and interest on the Bonds and all other amounts due in connection therewith and a valid assignment of the rights of the Authority (except as stated below) under the Agreement and the Note have been done and performed, and the creation, execution and delivery of this Indenture and the creation, execution and issuance of the Bonds subject to the terms hereof, have in all respects been duly authorized;

 

NOW, THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS:

 

GRANTING CLAUSES

 

That the Authority in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the holders and owners thereof, and of the sum of One Dollar, lawful money of the United States of America, to it duly paid by the Trustee at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of, Redemption Price, if any, and interest on the Bonds according to their tenor and effect and all other amounts due in connection therewith and the performance and observance by the Authority of all the covenants expressed or implied herein and in the Bonds, does hereby grant, bargain, sell, convey, pledge and assign unto, and grant a security interest in and to the Trustee, and unto its respective successors in trust, and to their respective assigns, forever, for the securing of the performance of the obligations of the Authority hereinafter set forth, the following:

 

I.

 

The Agreement and the Note (except to the extent to which any such document provides for the indemnification or the payment of expenses of the Authority, rights of the Authority to inspect the Projects, receive notices and grant approvals), including all extensions and renewals of the term thereof, if any, together with all right, title and interest of the Authority therein, including, but without limiting the generality of the foregoing, the present and continuing right to claim, collect and receive any of the moneys, income, revenues, issues, profits and other amounts payable or receivable thereunder, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the Authority is or may become entitled to do under the Agreement and the Note, but reserving, however, to the Authority rights of the Authority under Sections 6.2, 6.4, 7.2(A)(2) and 7.3 of the Agreement upon the conditions therein set forth;

 

II.

 

All Funds and Accounts (except the Rebate Fund) and moneys therein; and

 

III.

 

All moneys and securities from time to time held by the Trustee or the Paying Agent under the terms of this Indenture (except moneys and securities in the Rebate Fund) and any and all other real or personal property of every name and nature concurrently herewith or from time to time hereafter by delivery or by writing of any nature conveyed, mortgaged, pledged, assigned or transferred as and for additional security hereunder by the Authority or by anyone in its behalf, or with its written consent, to the Trustee or the Paying Agent, 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 the trust estate, whether now owned or hereafter acquired, unto the Trustee and its respective successors and assigns in trust forever to its and their own proper use and behoof but:

 

IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all present and future holders and owners of the Bonds from time to time issued and to be issued under and secured by this Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds;

 

PROVIDED, HOWEVER, that if the Authority, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of, Redemption Price, if any, and interest on, the Bonds due or to become due thereon, and all other amounts due thereunder, at the times and in the manner mentioned in the Bonds according to their tenor, and shall cause the payments to be made on the Bonds as required under Article VII hereof, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions of the Agreement, the Note and this Indenture, then upon the final payment thereof this Indenture and the rights hereby granted shall cease, determine and be void; otherwise this Indenture to be and remain in full force and effect.

 

THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all of the property, rights and interests, including, without limitation the loan payments and other amounts hereby assigned and pledged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Authority has agreed and covenanted, and does hereby agree and covenant with the Trustee and with the respective holders and owners of the Bonds as follows:

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1. Definitions.  »

 

As used in this Indenture:

 

“Account” or “Accounts” shall mean the Account or Accounts established pursuant to Article V herein below.

 

“Act” means the State Commerce Act, constituting Connecticut General Statutes, Sections 32-la through 32-23zz, as amended.

 

“Agreement” means the Loan Agreement of even date herewith between the Authority and the Borrower, and any amendments and supplements thereto.

 

“Authority” means the Connecticut Development Authority, a body corporate and politic constituting a public instrumentality and political subdivision of the State of Connecticut duly organized and existing under the laws of the State, and any body, board, authority, agency or other political subdivision or instrumentality of the State which shall hereafter succeed to the powers, duties and functions thereof.

 

“Authorized Investments” means any of the following:

 

	
  

	
(1)

	
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) or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by the United States of America;

 

	
  

	
(2)

	
United States agency obligations, including obligations of government sponsored enterprises, that are rated in one of the three highest rating categories by a nationally recognized securities rating service;

 

	
  

	
(3)

	
Repurchase agreements or certificates of deposit to which specifically identified obligations described in (1) or (2) are pledged as collateral;

 

	
  

	
(4)

	
certificates of deposit of any of the fifteen largest (measured in terms of assets) domestically chartered banks or trust companies in the United States;

 

	
  

	
(5)

	
commercial paper having the highest rating by a nationally recognized securities rating service;

 

	
  

	
(6)

	
tax-exempt securities which have the highest rating by a nationally recognized securities rating service;

 

	
  

	
(7)

	
savings accounts with banks or savings and loan associations the accounts of which are federally insured;

 

	
  

	
(8)

	
bank acceptances which are eligible collateral for borrowing from Federal Reserve Banks;

 

	
  

	
(9)

	
certificates of deposit of the Trustee (but only to the extent such certificates of deposit do not exceed 10% of the amounts held in all Funds and Accounts hereunder);

 

	
  

	
(10)

	
guaranteed investment contracts and/or investment agreements, acceptable to the Authority, authorized by applicable State law for the investment of proceeds of obligations issued by the State and participation certificates in the short term investment fund created and existing under Section 3-27a, Connecticut General Statutes, as amended, and any State administered pool investment fund in which the Authority is statutorily permitted or required to invest; and

 

	
  

	
(11)

	
Mutual funds and money market funds of or available to the Trustee (including any proprietary money market fund of the Trustee for which the Trustee or an affiliate of the Trustee serves as investment advisor or provides other services and receives reasonable compensation thereof) that are rated at least AAA or AAAm, as applicable, by S&P or Aaa by Moody’s and invest only in other Authorized Investments.

 

“Authorized Representative” means, in the case of the Authority, the Chairman or Vice Chairman, the President, the Executive Vice President, Deputy Director or any Senior Vice President or any Vice President thereof and, in the case of the Borrower, the Chairman, the President and Chief Executive Officer, the Vice President-Finance, Chief Financial Officer and Treasurer, and any Vice President, Assistant Treasurer or Secretary thereof and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document.

 

“Beneficial Owner” shall have the meaning specified in Section 2.3(F) hereof.  If any person claims to the Trustee to be a Beneficial Owner, for purposes of Sections 2.4(C), such person shall prove such claim to the satisfaction of the Trustee with such documentation and signature guaranties as the Trustee may request and such person shall be responsible for and pay any costs associated with such claim.

 

“Bonds” means the $22,050,000 Water Facilities Revenue Bonds (The Connecticut Water Company Project - 2011A Series) authorized and issued pursuant to Section 2.3 hereof.

 

“Bond Counsel” means Harris Beach PLLC or such other nationally recognized bond counsel selected by the Authority and reasonably satisfactory to the Borrower and Trustee.

 

“Bondholder”, “holder” or “owner” or words of similar import when used with reference to Bonds, shall unless otherwise specified, mean any person who shall be the registered owner of any Outstanding Bond.

 

“Borrower” means (i) The Connecticut Water Company, a corporation organized and existing under the laws of the State of Connecticut, and its successors and assigns and (ii) any surviving, resulting or transferee corporation as provided in Section 6.1 of the Agreement.

 

“Business Day” means any day (i) that is not a Saturday or Sunday, (ii) that is a day on which banks located in Hartford, Connecticut and New York, New York are not required or authorized to remain closed, (iii) that is a day on which banking institutions in the cities in which the principal offices of the Trustee and the Paying Agent are located and are not required or authorized to remain closed and (iv) that is a day on which the New York Stock Exchange, Inc. is not closed.

 

“Cede & Co.” means the nominee for The Depository Trust Company (DTC) who shall act as securities depository for the Bonds.

 

“Code” means the Internal Revenue Code of 1986, as amended and regulations promulgated thereunder.

 

“Completion Date” means the date of completion of the Project as specified and established in accordance with Article IV of the Agreement.

 

“Computation Period” means each period from the date of issuance through the date on which a determination of the Rebatable Arbitrage is made or required to be made pursuant to Section 8.3 of the Tax Regulatory Agreement.

 

“Debt Service Fund” means the special trust fund so designated, established pursuant to Section 5.1 hereof.

 

“Default” means any event or condition which will, with the lapse of time, or the giving of notice, or both, become an Event of Default.

 

“DTC” or “The Depository Trust Company” shall mean the limited-purpose trust company organized under the laws of the State of New York which shall act as securities depository for the Bonds, and any successor thereto.

 

“Depository” means DTC or any other depository holding the Bonds for purpose of a book-entry system.

 

“Determination of Taxability” means with respect to the Bonds, (1) a ruling by the Internal Revenue Service, (2) the receipt by the owner of any of the Bonds from the Internal Revenue Service of a notice of assessment and demand for payment (provided the Borrower has been afforded the opportunity to participate at its own expense in all appeals and proceedings to which such owner of any Bonds is a party relating to such assessment and demand for payment) and the expiration of the appeal period provided therein if no appeal is taken or, if an appeal is taken by such owner of any Bonds as provided in Section 6.3 of the Agreement within the applicable appeal period which has the effect of staying the demand for payment, a final unappealable decision by a court of competent jurisdiction, or (3) the admission in writing by the Borrower, in any case to the effect that the interest on the Bonds is includable in the gross income for federal income tax purposes (other than for purposes of alternative minimum tax or foreign branch profits tax) of an owner or former owner thereof, other than for a period during which such owner or former owner is or was a “substantial user” of the Project financed by such Bonds or a “related person” as such terms are defined in the Code.  For purposes of this definition only, the term owner means the Beneficial Owner of the Bonds so long as the Book-Entry Only System is in effect.

 

“Disclosure Agreement” means the agreement by and between the Borrower and U.S. Bank National Association, as dissemination agent, dated the date of the initial delivery of the Bonds and providing for the provision of certain information subsequent to the issuance of the Bonds.

 

“Event of Bankruptcy” means the filing of a petition in bankruptcy or the commencement of a proceeding under the United States Bankruptcy Code or any other applicable law concerning insolvency, reorganization or bankruptcy by or against the Authority, the Borrower, or any guarantor of the Bonds, as debtor.

 

“Event of Default” has the meaning given such term in Section 8.1 hereof.

 

“Federal Securities” means any direct and general obligations of, or any obligations whose full and timely payment is unconditionally guaranteed by, the United States of America.

 

“Financing Documents” means  (1), when used with respect to the Borrower, means the Agreement, the Tax Regulatory Agreement, the Note, the Disclosure Agreement and the general certificate of the Borrower delivered in connection with the issuance of the Bonds, and (2) when used with respect to the Authority, means any of the foregoing documents and agreements to which the Authority is a direct party.  The Financing Documents do not include any documents or agreements to which the Borrower is not a direct party, including the Bonds or the Indenture.

 

“Fitch” means Fitch Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, at the direction of the Borrower, by notice to the Trustee and the Borrower.

 

“Fund” or “Funds” shall mean the Fund or Funds established pursuant to Article V herein below.

 

“Indenture” means this Indenture as from time to time amended or supplemented by Supplemental Indentures in accordance with Article X hereof.

 

“Indirect Participant” shall have the meaning set forth in Section 2.3(F) hereof.

 

“Interest Payment Date” shall mean each date on which interest is payable on the Bonds as provided in the form of the Bonds.

 

“Loan Payments” means the amounts required to be paid by the Borrower in repayment of the loan made to the Borrower by the Authority pursuant to the provisions of the Agreement and the Note, including all amounts realized by the Trustee thereunder in accordance with Article VIII hereof.

 

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

 

“Note” means the promissory note of the Borrower to the Authority, dated the date of initial delivery of the Bonds in the form attached as Appendix A to the Agreement, and any amendments or supplements made in conformity with the Agreement and this Indenture.

 

“Outstanding”, when used with reference to a Bond or Bonds, as of any particular date, means all Bonds which have been authenticated and delivered hereunder, except:

 

	
  

	
(1)

	
Any Bonds cancelled by the Trustee because of payment or redemption prior to maturity or surrendered to the Trustee for cancellation;

 

	
  

	
(2)

	
any Bond (or portion of a Bond) paid or redeemed or for the payment or redemption of which there has been separately set aside and held in the Debt Service Fund either:

 

	
  

	
(a)

	
moneys in an amount sufficient to effect payment of the principal or applicable Redemption Price thereof, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be, specified in irrevocable instructions given to the Trustee to apply such moneys to such payment on the date so specified; or

 

	
  

	
(b)

	
obligations of the kind described in subsection 12.1(B) hereof in such principal amounts, of such maturities, bearing such interest and otherwise having such terms and qualifications as shall be necessary to provide moneys in an amount sufficient to effect payment of the principal or applicable Redemption Price of such Bond, together with accrued interest on such Bond to the payment or redemption date, which payment or redemption date shall be specified in irrevocable instructions given to the Trustee to apply such obligations to such payment on the date so specified; or

 

	
  

	
(c)

	
any combination of (a) and (b) above;

 

	
  

	
(3)

	
Bonds in exchange for or in lieu of which other Bonds shall have been authenticated and delivered under Article III hereof; and

 

	
  

	
(4)

	
any Bond deemed to have been paid as provided in Section 12.1 hereof.

 

“Participant” means one of the entities that deposits securities, directly or indirectly, in the Book-Entry Only System.

 

“Paying Agent” means any paying agent for the Bonds appointed pursuant to Section 9.10 hereof (and may include the Trustee), and its successor or successors and any other corporation which may at any time be substituted in its place in accordance herewith.

 

“Principal and Interest Account” means the special trust account of the Debt Service Fund so designated, established pursuant to Section 5.3 hereof.

 

“Project Costs” mean all costs and expenses of the Project for which the Trustee is permitted to make payment as provided in subsection 5.2(B) hereof.

 

“Project” means realty and other interests in the real property, if any, and all personal property, goods, leasehold improvements, machinery, equipment, furnishings, furniture, fixtures, tools and attachments wherever located and whether now owned or hereafter acquired, financed in whole or in part with the proceeds of the Bonds, and any additions and accessions thereto, substitutions therefor and replacements thereof, including without limitation the project components described in the appendix to the Agreement, as amended from time to time in accordance herewith.

 

“Project Fund” means the special trust fund so designated, established pursuant to Section 5.1 and Section 5.2 hereof.

 

“Redemption Account” means the special trust account of the Debt Service Fund so designated, established pursuant to Section 5.3 hereof.

 

“Redemption Price” means, when used with respect to a Bond or a portion thereof, the principal amount of such Bond or portion thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to this Indenture.

 

 “Renewal Fund” means the special trust fund so designated, established pursuant to Section 5.1 hereof.

 

“Representation Letter” has the meaning given such term in Section 2.3(F) hereof.

 

“Revenues” means (a) the Loan Payments, (b) all amounts paid to the Trustee with respect to the principal of, redemption premium, if any, or interest on, the Bonds (1) by the Borrower as required under the Agreement, and (2) upon deposit in the Debt Service Fund from the proceeds of the Bonds and (c) investment income with respect to any moneys held by the Trustee in the Project Fund, the Debt Service Fund and the Renewal Fund.  The term “Revenues” does not include any moneys or investments or investment income in the Rebate Fund.

 

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns, and, if such corporation or division shall be dissolved, eliminated, reorganized,  or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, at the direction of the Borrower, by notice to the Trustee and the Borrower.

 

“State” means the State of Connecticut.

 

“Supplemental Indenture” means any indenture supplemental hereto or amendatory hereof, adopted by the Authority in accordance with Article X hereof.

 

“Tax Incidence Date” means the date as of which interest on the Bonds becomes or became includable in the gross income of the recipient thereof (other than the Borrower or another substantial user or related person) for federal income tax purposes for any cause, as determined by a Determination of Taxability.

 

“Tax Regulatory Agreement” means the Tax Regulatory Agreement, dated as of the date of initial issuance and delivery of the Bonds, between the Authority and the Borrower, and any amendments and supplements thereto.

 

“Term”, when used with reference to the Agreement, means the term of the Agreement determined as provided in Article III thereof.

 

“Trustee” means U.S. Bank National Association, and its successor or successors hereafter appointed in the manner provided in this Indenture.

 

Section 1.2. Interpretation.  »

 

(A) In this Indenture:

 

(1)           Any capitalized word or term used but not defined herein shall have the meaning ascribed to such word or term in the Agreement or the Tax Regulatory Agreement, as the case may be.

 

(2)           The terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder” and any similar terms, as used in this Indenture, refer to this Indenture, and the term “hereafter” means after, and the term “heretofore” means before, the date of execution of this Indenture.

 

(3)           Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.

 

(4)            Words importing persons include firms, associations, partnerships (including limited partnerships), limited liability companies, trusts, corporations and other legal entities, including public bodies, as well as natural persons.

 

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

 

(6)           All approvals, consents and acceptances required to be given or made by any person or party hereunder shall be at the sole discretion of the party whose approval, consent or acceptance is required.

 

(7)           This Indenture shall be governed by and construed in accordance with the applicable laws of the State.

 

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

 

(C)           If any one or more of the covenants or agreements provided herein on the part of the Authority, the Trustee or any Paying Agent to be performed should be contrary to law, then such covenant or covenants or agreement or agreements, shall be deemed separable from the remaining covenants and agreements hereof, and shall in no way affect the validity of the other provisions of this Indenture or of the Bonds.

 

(D)           All approvals, consents and actions of the Trustee under this Indenture, the Bonds and the Financing Documents may be given or withheld or taken or not taken in accordance with the direction of the owners of not less than 51% of the principal amount of the Outstanding Bonds.

 

(E)           If the Paying Agent shall be removed and the duties and obligations of such Paying Agent discharged pursuant to Section 9.10 hereof, then each and every such duty and obligation to be performed by such Paying Agent set forth herein and in the Financing Documents shall be performed to the same extent and in the same manner by the Trustee, and each and every reference herein and in the Financing Documents to the Paying Agent shall refer to and shall be deemed to refer to the Trustee unless a successor Paying Agent shall have been appointed.

 

(F)           For purposes hereof the Trustee shall not be deemed to have knowledge or actual knowledge of any fact or the occurrence of any event unless and until an officer of the Trustee’s corporate trust administration department has written notice thereof.

 

(G)           In the event of any solicitation of consents from and voting by owners of the Bonds, the Trustee shall establish a record date for such purposes and give DTC notice of such record date not less than fifteen calendar days in advance of such record date to the extent possible.

 

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ARTICLE II

 

AUTHORIZATION, TERMS AND ISSUANCE OF BONDS

 

Section 2.1. Authorization for Indenture.  »

 

This Indenture is made and entered into by virtue of and pursuant to the provisions of the Act.  The Authority has ascertained and hereby determines and declares that the execution and delivery of this Indenture is necessary to carry out the powers and duties expressly provided by the Act, that each and every act, matter, thing or course of conduct as to which provision is made herein is necessary or convenient in order to carry out and effectuate the purposes of the Authority in accordance with the Act and to carry out powers expressly given thereby, and that each and every covenant or agreement herein contained and made is necessary, useful or convenient in order to better secure the Bonds and necessary, useful or convenient to carry out and effectuate its corporate purposes under the Act.

 

Section 2.2. Authorization and Obligation of Bonds.  »

 

(A) Bonds of the Authority issued hereunder, each to be entitled Water Facilities Revenue Bonds (The Connecticut Water Company Project - 2011A Series), shall be subject to the terms, conditions and limitations established herein.  No Bonds may be authenticated and delivered except in accordance with this Article.

 

(B)           All Bonds shall be entitled to the benefit of the continuing pledge and lien created by this Indenture to secure the full and final payment of the principal or Redemption Price, if any, thereof and the interest thereon and all other amounts due under the Financing Documents.  The Bonds shall be special obligations of the Authority, payable solely out of the revenues or other receipts, funds or moneys pledged therefor pursuant to this Indenture and from any amounts otherwise available under this Indenture for the payment of the Bonds.  Neither the State nor any municipality thereof shall be obligated to pay the principal or Redemption Price, if any, of or the interest on the Bonds and neither the faith and credit nor the taxing power of the State or any municipality thereof is pledged to pay such principal, Redemption Price or interest.  The Bonds shall never constitute a debt or liability of the State or any municipality thereof or bonds issued or guaranteed by the State or any municipality thereof within the meaning of any constitutional or statutory limitation.

 

Section 2.3. Issuance and Terms of the Bonds.  »

 

(A) There shall be issued under and secured by this Indenture a series of Bonds to be designated Water Facilities Revenue Bonds (The Connecticut Water Company Project - 2011A Series) in the principal amount of $22,050,000.  The Bonds shall be issuable in fully registered form without coupons and shall be dated as provided in Section 3.1 hereof.

 

(B)           The Bonds shall mature on December 1, 2021 and bear interest at the per annum rate of 5.00% payable on June 1, 2012 and on each December 1 and June 1 thereafter until maturity or prior redemption.

 

(C)           Interest on the Bonds shall be computed on the basis of a 360-day year consisting of twelve (12) 30-day months.

 

(D)           The Bonds shall be numbered from one upward in consecutive numerical order.  Bonds issued in exchange shall be numbered in such manner as the Trustee and the Paying Agent in their discretion shall determine.

 

(E)           The principal or Redemption Price, if any, of the Bonds as they respectively become due shall be payable upon presentation and surrender of the Bonds at the corporate trust office of the Trustee in Hartford, Connecticut, or at the office designated for such payment of any successor Paying Agent.  Payment of each installment of interest on the Bonds shall be made to the registered owners thereof who shall appear on the registration books of the Authority maintained by the Trustee at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date, by check or draft mailed to each such registered owner at his address as it appears on such registration books.  Alternatively, payment shall be made as otherwise agreed in writing by the Bondholder and the Trustee and, at the written request to the Trustee of and at the expense of any holder of at least $1,000,000 in Bonds, such payment may be made by wire transfer or other reasonable method to an account or place designated by such registered owner.

 

(F)           Book-Entry Only System for the Bonds

 

(1)           The Depository Trust Company (“DTC”), New York, New York shall act as securities depository for the Bonds.  One fully registered bond in the aggregate principal amount of the Bonds shall be registered in the name of Cede & Co., as nominee for DTC.  Notwithstanding any provision herein to the contrary, the provisions of this Section 2.3(F) and the Representation Letter (as defined below) shall apply with respect to any Bond registered to Cede & Co. or any other nominee of DTC, New York, New York, while the Book-Entry Only System (meaning the system of registration described in paragraph (2) of this Section 2.3(F)) is in effect.  DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.  DTC holds securities that its participants (“Participants”) deposit with DTC.  DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants’ accounts, thereby eliminating the need for physical movement of securities certificates.  Direct Participants (“Direct Participants”) include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations.  DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.  Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”).  The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission.

 

(2)           The Bonds in or to be in the Book-Entry Only System shall be issued in the form of a separate single authenticated fully registered Bond in substantially the form provided for in this Indenture (a “Global Security”).  Any legend required to be on the Bonds by DTC may be added by the Trustee or Paying Agent.  On the date of original delivery thereof, the Bonds shall be registered in the registry books of the Paying Agent in the name of Cede & Co., as nominee of The Depository Trust Company as agent for the Authority in maintaining the Book-Entry Only System.

 

WITH RESPECT TO BONDS REGISTERED IN THE REGISTRY BOOKS KEPT BY THE PAYING AGENT IN THE NAME OF CEDE & CO., AS NOMINEE OF DTC, THE AUTHORITY, THE PAYING AGENT, THE BORROWER AND THE TRUSTEE SHALL HAVE NO RESPONSIBILITY OR OBLIGATION TO ANY PARTICIPANT (WHICH MEANS SECURITIES BROKERS AND DEALERS, BANKS, TRUST COMPANIES, CLEARING CORPORATIONS AND VARIOUS OTHER ENTITIES, SOME OF WHOM OR THEIR REPRESENTATIVES OWN DTC) OR TO ANY BENEFICIAL OWNER (WHICH MEANS, WHEN USED WITH REFERENCE TO THE BOOK-ENTRY ONLY SYSTEM, THE PERSON WHO IS CONSIDERED THE BENEFICIAL OWNER OF THE BONDS PURSUANT TO THE ARRANGEMENTS FOR BOOK ENTRY DETERMINATION OF OWNERSHIP APPLICABLE TO DTC) WITH RESPECT TO THE FOLLOWING:  (A) THE ACCURACY OF THE RECORDS OF DTC, CEDE & CO. OR ANY PARTICIPANT WITH RESPECT TO ANY OWNERSHIP INTEREST IN THE BONDS, (B) THE DELIVERY TO OR FROM ANY PARTICIPANT, ANY BENEFICIAL OWNER OR ANY OTHER PERSON, OTHER THAN DTC, OF ANY NOTICE WITH RESPECT TO THE OTHER PERSON, OTHER THAN DTC, OF ANY NOTICE WITH RESPECT TO THE BONDS, INCLUDING ANY NOTICE OF REDEMPTION (WHETHER MANDATORY OR OPTIONAL), OR (C) THE PAYMENT TO ANY PARTICIPANT, ANY BENEFICIAL OWNER OR ANY OTHER PERSON, OTHER THAN DTC, OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS.

 

The Paying Agent shall pay all principal of and premium, if any, and interest on the Bonds only to or upon the order of DTC, and all such payments shall be valid and effective fully to satisfy and discharge the Authority’s obligations with respect to the principal of and premium, if any, and interest on Bonds to the extent of the sum or sums so paid.  No person other than DTC shall be entitled to receive an authenticated Bond evidencing the obligation of the Authority to make payments of principal and premium, if any, and interest pursuant to this Indenture.  Upon delivery by DTC to the Paying Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.” in this Indenture shall refer to such new nominee of DTC.

 

The Authority, the Borrower, the Trustee and the Paying Agent shall be entitled to treat the registered owner of a Bond (initially, DTC or its nominee) as the absolute owner thereof for all purposes of this Indenture and any applicable laws, notwithstanding any notice to the contrary received by any of them.  So long as all Bonds are registered in the name of DTC or its nominee or any qualified successor, the Borrower and the Paying Agent shall cooperate with DTC or its nominee or any qualified successor in effecting payment of the principal of, redemption premium, if any, and interest on the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made to DTC when due.

 

(3)           Upon receipt by the Trustee or the Paying Agent of written notice from DTC to the effect that DTC is unable or unwilling to discharge its responsibilities, the Authority shall issue and the Paying Agent shall transfer and exchange Bonds as requested by DTC in appropriate amounts and in authorized denominations, and whenever DTC requests the Authority, the Paying Agent and the Trustee to do so, the Trustee, the Paying Agent and the Authority will, at the expense of the Borrower, cooperate with DTC in taking appropriate action after reasonable notice (A) to arrange for a substitute bond depository willing and able upon reasonable and customary terms to maintain custody of the Bonds or (B) to make available for transfer and exchange Bonds registered in whatever name or names and in whatever authorized denominations as DTC shall designate.

 

(4)           In such event, the Borrower shall so notify DTC, the Paying Agent and the Trustee, whereupon DTC will notify the Participants of the availability through DTC of Bond certificates.  In such event, the Authority shall issue and the Paying Agent shall transfer and exchange Bond certificates as requested by DTC in appropriate amounts and in authorized denominations.  Whenever DTC requests the Paying Agent to do so, the Paying Agent will cooperate with DTC in taking appropriate action after reasonable notice to make available for transfer and exchange Bonds registered in whatever name or names and in whatever authorized denominations as DTC shall designate.

 

(5)           The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository).  In that event, Bond certificates will be printed and delivered.

 

(6)           Notwithstanding any other provisions of this Indenture to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, to DTC as provided in the Blanket Letter of Representation, dated March 29, 1995, from the Authority to DTC (the “Representation Letter”).

 

(7)           Notwithstanding any other provisions of this Indenture to the contrary, so long as any of the Bonds outstanding are held in the Book-Entry Only System, if less than all of such Bonds are to be redeemed upon any redemption of Bonds hereunder, the particular Bonds or portions of Bonds to be converted or redeemed shall be selected by DTC in such manner as DTC may determine.

 

Notwithstanding any provision herein to the contrary, the Trustee and the Paying Agent may comply with the provisions of the Letter of Representation or similar document required by DTC or any successor securities depository in order to maintain the Book-Entry Only System for the Bonds.

 

Section 2.4. Redemption of Bonds.  »

 

(A) [Reserved].

 

(B)           Extraordinary Optional Redemption.  In addition, at the option of the Authority, which option shall be exercised upon the giving of written notice by the Borrower of its election to redeem Bonds following completion of Project pursuant to Section 5.2(F) hereof or its intention to prepay amounts due under the Agreement pursuant to Section 8.1(B) thereof, the Outstanding Bonds shall be subject to redemption prior to maturity at the redemption price of 100% of the principal amount thereof plus accrued interest to the date of redemption (a) in part, on any date, to the extent excess Bond proceeds are transferred to the Redemption Account from the Project Fund in accordance with Section 5.2(F) of the Indenture, or (b) as a whole, on any date, if any one or more of the events of casualty to or condemnation of the Project, change in law, or certain economic events specified in Section 8.1(B) of the Agreement shall have occurred, as evidenced in each case by the filing with the Trustee of a certificate of an Authorized Representative of the Borrower.

 

(C)           Mandatory Taxability Redemption.  In the event of a Determination of Taxability, the Bonds shall be redeemed in the manner and as provided in this Indenture, at the redemption price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption on any day selected by the Borrower, that is not more than 180 days after such Determination of Taxability.  In the case of any redemption pursuant to this subsection, the Authority or the Borrower or any Bondholder shall deliver to the Trustee a certificate of an Authorized Representative specifying the event giving rise to such inclusion in the gross income of the recipient thereof and the dates which are the Tax Incidence Date and the date of the Determination of Taxability.  Such certificate shall be delivered at least ten days before notice of redemption is required to be given.  Redemption under this paragraph shall be in whole unless not less than forty-five (45) days prior to the redemption date the Borrower delivers to the Trustee an opinion of Bond Counsel reasonably satisfactory to the Trustee to the effect that a redemption of less than all of the Bonds will preserve the tax-exempt status of interest on the remaining Bonds outstanding subsequent to such redemption.

 

For purposes of this Subsection C only, the owner of a Bond means the Beneficial Owner of said Bond so long as the Book-Entry Only System shall be in effect.

 

(D)           [Reserved].

 

(E)           [Reserved].

 

(F)           Optional Public Purpose Redemption.  If the Borrower fails to perform its obligations under Section 6.4 of the Agreement, the Bonds shall be subject to redemption prior to maturity as a whole on any date at the option of the Authority in accordance with Section 7.3 of the Agreement, at the redemption price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption.

 

(G)           Extraordinary Optional Redemption Without Premium to Preserve Tax Exempt Status of the Bonds.  The Bonds shall be subject to extraordinary optional redemption by the Authority, at the direction of the Borrower, in whole or in part on any date at a Redemption Price equal to 100% of the unpaid principal amount thereof, together with accrued interest to the date of redemption, and without premium, if the Borrower shall have delivered to the Trustee and the Authority an opinion of Bond Counsel addressed to the Trustee and the Authority substantially to the effect that (i) a failure so to redeem the Bonds (or the relevant portion thereof) may adversely affect the exclusion of interest on the Bonds from the gross income of the holders pursuant to Section 103 of the Code, and (ii) redemption of Bonds in the amount set forth in such opinion (but in no smaller amount than that set forth in such opinion) would permit the continuance of any exclusion so afforded under Section 103 of the Code.

 

(H)           Upon any redemption of Bonds there shall also be due and payable, concurrently with the payment of the Redemption Price, interest accrued on the Bonds and all other amounts then due under the Financing Documents.

 

(I)           Redemption of Bonds permitted or required by this Article II shall be made as follows, and the Trustee shall give the notice of redemption referred to in Section 6.3 hereof in respect of each such redemption:

 

(1)           [Reserved].

 

(2)            Redemption shall be made pursuant to the extraordinary optional redemption provisions of Section 2.4(B) at such date as the Borrower shall request in a written notice to the Authority and Trustee in accordance with Section 5.2(F) hereof or Section 8.2 of the Agreement, as the case may be, to which shall be attached the certificates referred to in Section 5.2(F) hereof and Section 8.1(B) thereof.

 

(3)           Redemption shall be made pursuant to the mandatory taxability redemption provisions of Section 2.4(C) at the earliest possible date following receipt of the certificate prescribed in Section 2.4(C) hereof and of the payments made by the Borrower prescribed in Section 6.3 of the Agreement, without the necessity of any instructions or further act of the Authority or the Borrower.

 

(4)           [Reserved].

 

(5)           [Reserved].

 

(6)           Redemption shall be made pursuant to the provisions of Section 2.4(F) in accordance with Section 7.3 of the Agreement.

 

(7)           Redemption shall be made pursuant to the provisions of Section 2.4(G) at the earliest possible date following the delivery to the Trustee and the Authority of the opinion of Bond Counsel described in Section 2.4(G) hereof, without the necessity of any instructions or further act of the Authority or the Borrower.

 

Section 2.5. Execution and Authentication of Bonds.  »

 

(A) After their authorization as provided in this Article, Bonds may be executed by or on behalf of the Authority and delivered to the Trustee or the Paying Agent for authentication.  Each Bond shall be executed in the name of the Authority by the manual or facsimile signature of any one or more Authorized Representatives of the Authority.

 

(B)           In case any officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated and delivered by the Trustee or the Paying Agent, such Bonds may nevertheless be authenticated and delivered as herein provided as if the person who so signed such Bonds had not ceased to be such officer.  Any Bond may be signed on behalf of the Authority by any person who, on the date of such act, shall hold the proper office, notwithstanding that at the date of such Bond such person may not have held such office.

 

(C)           The Bonds shall each bear thereon a certificate of authentication, in the form set forth in the recitals to this Indenture, executed manually by the Trustee or the Paying Agent.  Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Indenture and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee or the Paying Agent.  Such certificate of the Trustee or the Paying Agent upon any Bond executed on behalf of the Authority shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under this Indenture and that the holder thereof is entitled to the benefits hereof.

 

Section 2.6. Delivery of Bonds.  »

 

The Bonds shall be executed in the form and manner set forth herein and shall be deposited with the Trustee and thereupon shall be authenticated by the Trustee or the Paying Agent.  Upon payment to the Trustee of the proceeds of sale thereof, such Bonds shall be delivered by the Trustee or the Paying Agent to or upon the order of the purchasers thereof, but only upon receipt by the Trustee of:

 

(1)           A certified copy of the Authority’s resolution authorizing the issuance of the Bonds and, the execution and delivery of this Indenture and the Financing Documents;

 

(2)           Original executed counterparts of the Financing Documents other than the Note, and the originally executed Note;

 

(3)           A request and authorization to the Trustee or the Paying Agent on behalf of the Authority to authenticate and deliver the Bonds to the purchasers therein identified upon payment to the Trustee, for the account of the Authority, of a sum specified in such request and authorization, plus any accrued interest on the Bonds to the date of such delivery.  The proceeds of such payment shall be paid over to the Trustee and deposited in the Project Fund and Debt Service Fund pursuant to Article IV hereof; and

 

(4)           A written opinion by Bond Counsel to the effect that the issuance of such Bonds has been duly authorized and that all conditions precedent to the delivery thereof set forth in this Indenture have been fulfilled.

 

Section 2.7. No Additional Bonds.  »

 

No Additional Bonds on a parity with the Bonds may be issued under this Indenture.

 

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ARTICLE III

 

GENERAL TERMS AND PROVISIONS OF BONDS

 

Section 3.1. Date of Bonds.  »

 

The Bonds shall be dated and bear interest from their date of delivery, except in the case of Bonds delivered in any exchange or transfer hereunder on or subsequent to the first Interest Payment Date of the Bond for which it is exchanged or transferred, which shall bear interest from the Interest Payment Date next preceding the date of such delivery, unless, as shown by the records of the Trustee, interest on the Bond surrendered in exchange for such Bond shall be in default, in which case such Bond shall bear interest from the date to which interest has been paid in full on the Bond so surrendered.

 

Section 3.2. Form and Denominations.  »

 

Bonds shall be issued in fully registered form, without coupons, in denominations of $5,000 or any multiple thereof.  Subject to the provisions of Section 3.3 hereof, the Bonds shall be in substantially the form set forth in the recitals to this Indenture, with such variations, omissions and insertions as are permitted or required by this Indenture.

 

Section 3.3. Legends.  »

 

Each Bond shall contain on the face thereof a statement to the effect that neither the State nor any municipality thereof shall be obligated to pay the principal of the Bond or interest thereon and neither the faith and credit nor taxing power of the State or any municipality thereof is pledged to such payment.  The Bonds may, in addition, contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Indenture as may be necessary or desirable to comply with custom or otherwise as may be determined by the Authority prior to the delivery thereof.

 

Section 3.4. Medium of Payment.  »

 

The principal or Redemption Price, if any, of and interest on the Bonds shall be payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts.  Such payment may be made as provided in Section 2.3 hereof.

 

Section 3.5. Bond Details.  »

 

Subject to the provisions hereof, the Bonds shall be dated, shall mature in such years and such amounts, shall bear interest at such rate or rates per annum, shall be subject to redemption on such terms and conditions and shall be payable as to principal or Redemption Price, if any, and interest at such place or places as shall be specified in this Indenture.

 

Section 3.6. Interchangeability, Transfer and Registry.  »

 

(A) Each Bond shall be transferable only upon compliance with the restrictions on transfer set forth on such Bond and only upon the books of the Authority, which shall be kept for the purpose at the principal office of the Paying Agent, by the registered owner thereof in person or by his attorney duly authorized in writing, upon presentation thereof together with a written instrument of transfer satisfactory to the Paying Agent duly executed by the registered owner or his duly authorized attorney.  Upon the transfer of any Bond, the Paying Agent shall prepare and issue in the name of the transferee one or more new Bonds in authorized denominations of the same aggregate principal amount as the surrendered Bond.

 

(B)           Any Bond, upon surrender thereof at the office of the Paying Agent with a written instrument of transfer satisfactory to the Paying Agent, duly executed by the registered owner or his attorney duly authorized in writing, may be exchanged at the office of the Paying Agent for a new Bond or Bonds in authorized denominations of the same aggregate principal amount without transfer to a new registered owner.  No transfer will be effective unless represented by such surrender and reissue.

 

(C)           Except as otherwise specifically provided herein, the Authority, the Borrower, the Trustee, and any Paying Agent may deem and treat the person in whose name any Bond shall be registered as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption Price, if any, of and interest on such Bond and for all other purposes, and all payments made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Authority, the Borrower, the Trustee nor any Paying Agent, nor any agent of the foregoing, shall be affected by any notice to the contrary.

 

(D)           The Paying Agent shall not be required to exchange or transfer (a) any Bond during the fifteen (15) day period preceding any Interest Payment Date or the date fixed for selection of Bonds for redemption, or (b) any Bonds selected, called or being called for redemption in whole or in part except, in the case of any Bond to be redeemed in part, the portion thereof not so to be redeemed.

 

Section 3.7. Bonds Mutilated, Destroyed, Stolen or Lost.  »

 

In case any Bond shall become mutilated or be destroyed, stolen or lost, the Authority shall execute and thereupon the Trustee or the Paying Agent shall authenticate and deliver, a new Bond of the same principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon filing with the Trustee of evidence satisfactory to the Authority, the Trustee and the Paying Agent that such Bond has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Authority, the Trustee and the Paying Agent with indemnity satisfactory to them and complying with such other reasonable requirements as the Authority and the Trustee and the Paying Agent may prescribe and paying such expenses as the Authority, the Trustee and the Paying Agent may incur.  All Bonds so surrendered to the Trustee shall be cancelled by it.  Any such new Bonds issued pursuant to this Section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the Authority, whether or not the Bonds so alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally secured by and entitled to equal and proportionate benefits with all other Bonds issued hereunder in any moneys or securities held by the Authority, the Trustee or the Paying Agent for the benefit of the owners of the Bonds.

 

Section 3.8. Cancellation and Destruction of Bonds.  »

 

All Bonds paid or redeemed in full, either at or before maturity, shall be delivered to the Paying Agent when such payment or redemption is made, and such Bonds together with all Bonds purchased by the Paying Agent, together with all Bonds surrendered in any exchange or transfers, shall thereupon be promptly cancelled.  All Bonds acquired and owned by the Borrower and delivered to the Paying Agent for cancellation shall be deemed paid and shall be promptly cancelled.  Bonds so cancelled shall be cremated or otherwise destroyed by the Paying Agent, who shall execute a certificate of cremation or destruction in duplicate under signature of one of its authorized officers describing the Bonds so cremated or otherwise destroyed, and one executed certificate shall be filed with the Authority and the other executed certificate shall be retained by the Paying Agent.  The Paying Agent shall provide written notice to Moody’s, if the Bonds are then rated by Moody’s and to S&P, if the Bonds are then rated by S&P, of the final payment or redemption of any of the Bonds, either at or before maturity, upon cancellation of any such Bonds.

 

Section 3.9. Requirements With Respect To Transfers.  »

 

In all cases in which the privilege of transferring Bonds is exercised, the Authority shall execute and the Trustee or the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Indenture.  All Bonds surrendered in any such transfer shall forthwith be cancelled by the Trustee or the Paying Agent.  For every such transfer of Bonds, the Authority, the Trustee or the Paying Agent may, as a condition precedent to the privilege of making such transfer, make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such transfer and may charge a sum sufficient to pay the cost of preparing and delivering each new Bond issued upon such transfer, which sum or sums shall be paid by the person requesting such transfer.

 

Section 3.10. Registrar.  »

 

The Trustee shall also be Registrar for the Bonds, and shall maintain a register showing the names of all registered owners of Bonds, Bond numbers and amounts, and other information appropriate to the discharge of its duties hereunder.  The Trustee shall make available to the Borrower for its inspection during normal business hours the registration books for the Bonds, as may be requested by the Borrower in connection with any purchase or tender offer by it with respect to the Bonds.

 

 

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ARTICLE IV

 

APPLICATION OF BOND PROCEEDS AND OTHER AMOUNTS

 

Section 4.1. Accrued Interest.  »

 

Simultaneously with the delivery of any Bonds by the Trustee, the amount received as accrued interest thereon, if any, shall be deposited in the Principal and Interest Account of the Debt Service Fund.

 

Section 4.2. Bond Proceeds.  »

 

The proceeds of sale and delivery of any Bonds, together with any premium received on account of the sale thereof (but excluding any accrued interest on the Bonds), shall, simultaneously with the delivery thereof by the Trustee, be deposited as follows:

 

	
  

	
(A)

	
$23,605,011.00 will be deposited in the Project Account of the Project Fund; and

 

	
  

	
(B)

	
$282,415.50 will be deposited in the Costs of Issuance Account of the Project Fund.

 

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ARTICLE V

 

CUSTODY AND INVESTMENT OF FUNDS

 

Section 5.1. Creation of Funds.  »

 

(A) The Authority hereby establishes and creates the following special trust Funds and Accounts within such Funds:

 

(1)           Project Fund

 

(a)  Project Account

 

(b)  Costs of Issuance Account

 

(2)           Debt Service Fund

 

(a)  Principal and Interest Account

 

(b)  Redemption Account

 

(3)           Rebate Fund

 

(4)           Renewal Fund

 

(B)           The Rebate Fund shall be held by the Trustee free and clear of any lien, charge or pledge created by this Indenture.  All of the Funds and Accounts created hereunder shall be held by the Trustee, including one or more depositories in trust for the Trustee.  All moneys and investments deposited with the Trustee or any Paying Agent shall be held in trust and applied only in accordance with this Indenture and shall be trust funds for the purposes of this Indenture.

 

(C)           The Trustee, in its sole discretion, may establish accounts and subaccounts within the Funds established pursuant to Section 5.1(A) for its internal administrative or accounting purposes in order to facilitate the performance of its duties and obligations hereunder.

 

Section 5.2. Project Fund.  »

 

(A) The Trustee shall establish two separate accounts within the Project Fund to be respectively designated “Project Account” and “Costs of Issuance Account”.  There shall be deposited in the various Accounts of the Project Fund any and all amounts required to be deposited therein pursuant to Section 4.2 hereof or otherwise required to be deposited therein pursuant to the Agreement or this Indenture.

 

(B)           The Trustee shall apply the amounts in the various Accounts of the Project Fund, at the direction of the Borrower, to pay the costs of the Project and the costs of issuance of the Bonds including, but not limited to:

 

(1)           The costs of title insurance, surveys, legal fees and recording and other closing expenses;

 

(2)           Obligations incurred for labor and materials;

 

(3)           All costs of contract bonds and of insurance of all kinds that may be required or necessary during the course of construction of the Project;

 

(4)           All costs of engineering services, including the costs of test borings, surveys, estimates, plans and specifications and preliminary investigation therefor and for supervising construction, as well as for the performance of all other duties required by or consequent upon the proper construction of, and alterations, additions and improvements to, the Project;

 

(5)           All expenses incurred in connection with the issuance, execution and sale of the Bonds, including compensation and expenses of the Trustee, the Authority’s issuance fee, Bond Counsel fees, and expenses, underwriting discount, legal, accounting and consulting expenses and fees, costs of printing and engraving, and recording and filing fees;

 

(6)           All costs which the Borrower shall be required to pay, under the terms of any contract or contracts, for the acquisition, construction, installation or equipping of the Project, including any amounts required to reimburse the Borrower for advances or payments made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the Project;

 

(7)           Interest due and payable on the Bonds from the date of issuance to the Completion Date of the Project;

 

(8)           Any other costs and expenses relating to the Project.

 

(C)           The Trustee is hereby authorized and directed to issue its checks or to effect wire transfers for each disbursement from the various Accounts of the Project Fund (excepting any fees payable to the Trustee as to which no further authority is required) upon a requisition submitted to the Trustee and signed by an Authorized Representative of the Borrower in substantially the form attached hereto as Appendix A.  Such requisition shall state with respect to each payment to be made:  (1) the Account within the Project Fund from which such disbursement is to be made, (2) the requisition number, (3) the name and address of the person, firm or corporation to whom payment is due, or to whom a reimbursable advance, if any, has been made, (4) the amount to be paid, (5) that each obligation mentioned therein has been properly incurred within the provisions of the Agreement, is a proper charge against the Project Fund, is unpaid or unreimbursed, and has not been the basis of any previous withdrawal, (6) that the requisition and the use of proceeds set forth therein are consistent in all material respects with the Tax Regulatory Agreement with respect to the Bonds, and (7) unless the Trustee has received the certificate described in subsection 5.2(F) hereof, 95% or more of the amount requisitioned is to be applied to costs (a) paid or incurred after the date which is sixty (60) days prior to the adoption of the Authority’s inducement resolution for the Project, (b) for the acquisition, construction or reconstruction of land or property of a character subject to the allowance for depreciation provided in Section 167 of the Internal Revenue Code of 1986, as amended, and (c) which are chargeable to the capital account of the Project or would be so chargeable either with an election by the Borrower or but for the election of the Borrower to deduct the amount of the item.

 

(D)           In making any such payment from the various Accounts of the Project Fund, the Trustee may rely on such requisitions and proof delivered to it and the Trustee shall be relieved of all liability with respect to making such payments in accordance with the foregoing.

 

(E)           The Trustee shall hold in the Project Fund an amount equal to 5% of the net proceeds of the Bonds ($1,194,371.00) until the Trustee has received, with respect to the Bonds, a certified statement of Project Costs together with the Borrower’s certificate to the effect that Project Costs in an amount equal to 95% or more of the proceeds of the Bonds (as defined in the Agreement) have been paid or incurred for the acquisition, construction or reconstruction of land or depreciable property under the Internal Revenue Code of 1986, as amended, and have been or could be capitalized by the Borrower for Federal income tax purposes.  Such documents may be delivered upon issuance of the Bonds and may anticipate the use of the final amounts to be requisitioned permitted by subsections 5.2(E) and (F) hereof.  Upon the receipt of such documents, the Trustee shall apply the balance in the Project Fund to or at the direction of the Borrower in accordance with such documents.  The Borrower shall notify the Trustee of any inability to deliver such documents, and in that event the Trustee shall upon the receipt of such notification transfer the balance in the Project Fund to the Redemption Account of the Debt Service Fund.

 

(F)           The completion of the Project shall be evidenced by the filing with the Authority and the Trustee of a certificate of an Authorized Representative of the Borrower in accordance with Article IV of the Agreement, stating the date of such completion and the amount, if any, required in its opinion for the payment of any remaining part of the costs of the Project.  Upon the filing of such certificate, the balance in the Project Fund in excess of the amount, if any, stated in such certificate, shall be applied by the Trustee in accordance with the written order of any Authorized Representative of the Borrower in one or more of the following ways:

 

(1)           Deposited in the Redemption Account of the Debt Service Fund; or

 

(2)           Used in any other manner which preserves the exemption of interest on the Bonds from federal income taxation, provided there is delivered to the Trustee an opinion of Bond Counsel to the effect that the use of such moneys is permitted by law and will not adversely affect the exemption from federal income taxation of interest on the Bonds.  The Trustee may rely on such opinion in any disbursement of funds pursuant to this subsection 5.2(F)(2).

 

Thereafter, upon payment of all the costs and expenses incident to the Project, any balance in the Project Fund shall be deposited in the Redemption Account of the Debt Service Fund.

 

(G)           Promptly following June 30 in each year, until there is no balance remaining in the Project Fund, the Trustee shall deliver a report to the Authority setting forth the amounts remaining in the Project Fund as of such date and a schedule of the securities in which such amounts are invested.

 

(H)           In the event the Borrower shall be required to or shall elect to cause the Bonds to be redeemed in full pursuant to Article VIII of the Agreement, the balance in the Project Fund which is not required to pay incurred Project Costs shall be deposited in the Redemption Account of the Debt Service Fund.

 

Section 5.3. Debt Service Fund.  »

 

(A) The Trustee shall establish two separate accounts within the Debt Service Fund to be respectively designated “Principal and Interest Account” and “Redemption Account”.

 

(B)           The Trustee shall promptly deposit the following receipts in the Debt Service Fund:

 

(1)           Any amount required pursuant to Section 4.1 hereof to be deposited from the proceeds of the Bonds, which shall be credited to the Principal and Interest Account.

 

(2)           All amounts received by the Trustee pursuant to Section 3.1 of the Agreement, which shall be credited to the Principal and Interest Account, in the manner set forth in this Indenture and the Agreement, and applied together with amounts available in the Principal and Interest Account, to pay (i) the interest due on the Outstanding Bonds on the Interest Payment Date next succeeding such payment and (ii) the principal, if any, of the Outstanding Bonds due (otherwise than by call for redemption) on such Interest Payment Date.

 

(3)           Excess or remaining amounts in the Project Fund required to be deposited in the Redemption Account of the Debt Service Fund pursuant to subsections 5.2(E) and 5.2(F) hereof, which shall be credited to the Redemption Account.

 

(4)           Any other amounts required to be paid to the Debt Service Fund for payment of principal and interest due on the Bonds, which shall be credited to the Principal and Interest Account.

 

(5)           Prepayments under the Agreement received by the Trustee pursuant to Article VIII thereof, which shall be credited to the Redemption Account.

 

(6)           All other receipts when and if required by the Financing Documents or any subsequent agreement or by this Indenture to be paid into the Debt Service Fund, which shall be credited to the Principal and Interest Account or the Redemption Account, as appropriate.

 

(7)           Any amounts constituting income or interest earned and gains realized in excess of losses suffered by any Fund and Account hereunder, excluding the Project Fund, which shall be credited to the Principal and Interest Account in accordance with Section 5.6(B) hereof.  Income or interest earned and gains realized in excess of losses suffered by the Project Fund shall be retained in the Project Fund prior to the Completion Date of the Project, and transferred to the Principal and Interest Account of the Debt Service Fund subsequent to the Completion Date.

 

(C)           There shall be paid from the Principal and Interest Account to the respective Paying Agents on each Interest Payment Date for the Bonds the amounts required for the payment of the principal and interest due on the Bonds on such date.  Such amounts shall be applied by the Paying Agents to the payment of principal and interest on the Bonds when due.  All other amounts payable on the Bonds from the Principal and Interest Account shall be paid to the respective Paying Agents upon receipt, and shall immediately be paid by such Paying Agents to the Bondholders.

 

(D)           Amounts in the Redemption Account shall be applied, as promptly as practicable, by the Trustee at the direction of the Borrower to the purchase of Bonds at prices not exceeding the optional Redemption Price thereof applicable on the next redemption date plus accrued interest and all other amounts then due under the Financing Documents in connection with such redemption.  Such redemption date shall be the earliest date upon which Bonds are subject to redemption from such amounts.  Any amount in the Redemption Account not so applied to the purchase of Bonds by forty-five days prior to the next date on which the Bonds are so redeemable shall be applied to the redemption of Bonds on such redemption date; provided that if such amount aggregates less than $10,000, it need not be then applied to such redemption.  Amounts in the Redemption Account to be applied to the redemption of Bonds shall be paid to the respective Paying Agents on or before the redemption date and applied by them on such redemption date to the payment of the Redemption Price of the Bonds being redeemed plus interest on such Bonds accrued to the redemption date and all other amounts then due under the Financing Documents in connection with such redemption.

 

(E)           Any amounts remaining in the Debt Service Fund after payment in full of the Bonds, the fees, charges and expenses of the Trustee and the Paying Agents and all other amounts required to be paid hereunder or under the Financing Documents shall be paid to the Borrower upon the expiration or sooner termination of the Term of the Agreement.

 

Section 5.4. Rebate Fund.  »

 

(A) There shall be credited to the Rebate Fund all amounts required to be credited thereto from interest earnings or net gain on disposition of investments pursuant to this Article V.

 

(B)           On the first Business Day following each Computation Period (as defined in the Tax Regulatory Agreement), upon direction in writing from the Borrower, pursuant to the Tax Regulatory Agreement, the Trustee shall withdraw from the Funds and Accounts and deposit to the Rebate Fund an amount such that the amount held in the Rebate Fund after such deposit is equal to the Rebatable Arbitrage (as defined in the Tax Regulatory Agreement) calculated as of the last day of the Computation Period; provided, however, that the Trustee may transfer monies from any Fund or Account only to the extent such transfer does not result in an Event of Default hereunder.  In the event of any deficiency, the balance required shall be provided by the Borrower pursuant to Section 8.3 of the Tax Regulatory Agreement.  Computations of the amounts on deposit in each Fund and Account and of the Rebatable Arbitrage shall be furnished to the Trustee by the Borrower in accordance with Section 8.3 of the Tax Regulatory Agreement.  Any amounts on deposit in the Rebate Fund in excess of the Rebatable Arbitrage shall be deposited to the Debt Service Fund.

 

(C)           The Trustee, upon receipt of written instructions from an Authorized Representative of the Borrower in accordance with Section 8.3 of the Tax Regulatory Agreement, shall pay to the United States out of amounts in the Rebate Fund (1) not later than 30 days after the end of each five-year period following the date of issuance of the Bonds, an amount such that, together with amounts previously paid, the total amount paid to the United States is equal to 90% of the Rebatable Arbitrage calculated as of the end of the most recent Computation Period, and (2) not later than 30 days after the date on which all of the Bonds have been paid or redeemed, 100% of the Rebatable Arbitrage as of the end of the final Computation Period.

 

(D)           In transferring any funds to the Rebate Fund and making any payments to the United States from the Rebate Fund, the Trustee may rely on the written directions and computations provided it by the Borrower and the Trustee shall be relieved of all liability with respect to the making of such transfers and payments in accordance with the foregoing.

 

Section 5.5. Renewal Fund.  »

 

(A)  There shall be paid into the Renewal Fund all amounts to be deposited therein pursuant to Section 5.3 of the Agreement, and such amounts shall be applied as provided therein.

 

(B)           Any surplus remaining in the Renewal Fund after the completion of any payments for the replacement, repair, reconstruction, alteration, relocation or restoration, of the Project with respect to any event of damage, destruction or condemnation shall be transferred to the Redemption Account of the Debt Service Fund, but the excess, if any, of such amount as will be sufficient to discharge and satisfy this Indenture and pay all Bonds as provided in Section 12.1 hereof shall be paid over to the Borrower free and clear of any pledge or lien hereunder.

 

Section 5.6. Investment of Funds and Accounts.  »

 

(A) Except as otherwise provided in this Indenture, amounts in the Funds and Accounts held hereunder shall, if and to the extent then permitted by law, be invested in Authorized Investments.  Investments authorized under this Section shall be made by the Trustee at the written request of an Authorized Representative of the Borrower, and may be made by the Trustee through its own bond department.  Any investment hereunder shall be made in accordance with the Tax Regulatory Agreement, including particularly the terms and conditions of Article VII thereof relating to arbitrage.  Such investments shall mature in such amounts and at such times as may be necessary to provide funds when needed to make payments from such Funds and Accounts, and any such investments shall, subject to the provisions hereof, at all times be deemed to be a part of the Fund and Account, from which the investment was made.

 

(B)           Except as provided in the following sentence, the income or interest earned and gains realized in excess of losses suffered by any Fund and Account held hereunder from the date of delivery of the Bonds shall be credited to the Principal and Interest Account of the Debt Service Fund (except income or interest earned and gains realized in excess of losses suffered by the Rebate Fund, which shall be credited to the Rebate Fund).  Income or interest earned and gains realized in excess of losses suffered by the Project Fund shall be retained therein prior to the Completion Date of the Project and transferred to the Principal and Interest Account of the Debt Service Fund subsequent to the Completion Date.

 

(C)           Prior to each Interest Payment Date on the Bonds, the Trustee shall notify the Borrower of the amount of any net investment income or gain received and collected subsequent to the preceding interest payment date and the amount then available in the Debt Service Fund.

 

Section 5.7. Non-presentment of Bonds.  »

 

In the event any Bond shall not be presented for payment when the remaining principal thereof becomes due, either at final maturity, or at the date fixed for redemption thereof, or otherwise, and funds sufficient to pay any such Bond shall have been made available to the Trustee for the benefit of the holder or holders thereof, all liability of the Authority to the holder thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such funds, without liability for interest thereon, for the benefit of the holder of such Bond, who shall thereafter be restricted exclusively to such funds, for any claim of whatever nature on his part under this Indenture or on, or with respect to, such Bond.  Funds remaining with the Trustee as above unclaimed for six years shall be paid to the Borrower.

 

ARTICLE VI

 

REDEMPTION OF BONDS

 

Section 6.1. Privilege of Redemption and Redemption Price.  »

 

Bonds or portions thereof subject to redemption prior to maturity shall be redeemable, upon mailed notice as provided in this Article, at the times, at the Redemption Prices and upon such terms, in addition to and consistent with the terms contained in this Article, as shall be specified in Section 2.4 hereof and in such Bonds.

 

Section 6.2. Selection of Bonds to be Redeemed.  »

 

So long as the Bonds are in book-entry form, when Bonds are called, allocation shall be made by DTC or any successor securities depository and not by the Authority or the Trustee.  In the event of redemption of less than all the Outstanding Bonds of like maturity, the Trustee shall select by lot, using such method of selection as it shall deem proper in its discretion, the principal amount of such Bonds to be redeemed.  For purposes of this Section, Bonds or portions of Bonds which have theretofore been selected by lot for redemption shall not be deemed Outstanding.  In the event that the book-entry system is discontinued, if less than all of the Bonds are to be redeemed at the option of the Borrower, the Bonds or portion thereof to be redeemed shall be selected by the Borrower.

 

Section 6.3. Notice of Redemption.  »

 

When redemption is required or permitted by this Indenture, upon written notification of the Trustee by the Borrower of such redemption not less than seven (7) days prior to the date on which the Trustee must give notice to Holders as provided in this Section or the Letter of Representation among the Authority, the Trustee and DTC (if the book entry system is still in effect), the Trustee shall give notice of such redemption in the name of the Authority, specifying the subsection of Section 2.4 hereof under which the redemption is to be made, the numbers and amounts of the Bonds or portions thereof to be redeemed, the redemption date and the place or places where amounts due upon such redemption will be payable.  Such notice shall further state that on such date there shall become due and payable upon each Bond or portion thereof to be redeemed the Redemption Price thereof together with interest accrued to the redemption date and all other amounts then due under the Financing Documents, and that from and after such date interest thereon shall cease to accrue and be payable.  Alternatively, at the option of the Authority, such notice may state that it is subject to the receipt of the redemption moneys by the Trustee on or before the date fixed for redemption and which notice shall be of no effect unless such moneys are so received on or before such date.  Notice of redemption shall be given by the Trustee in the name and on behalf of the Authority by mailing a copy of each such notice to the registered owner of each Bond by first-class mail postage prepaid, addressed to him at his last known address as it appears upon the bond register, no more than forty-five (45) nor less than thirty (30) days prior to the date fixed for redemption.  Such notice shall be effective when mailed and any failure to receive such notice shall not affect the validity of the proceedings for redemption.  In the event of a postal strike, the Trustee shall give notice by other appropriate means selected by the Trustee in its discretion.

 

Section 6.4. Payment of Redeemed Bonds.  »

 

(A) Notice having been given in the manner provided in Section 6.3 hereof, the Bonds or portions thereof so called for redemption shall become due and payable on the redemption dates so designated at the Redemption Price, plus interest accrued to the redemption date and all other amounts then due under the Financing Documents.  If, on the redemption date, monies for the redemption of all the Bonds or portions thereof to be redeemed, together with interest to the redemption date, and all other amounts then due under the Financing Documents, shall be held by the Paying Agent so as to be available therefor on such date and if notice of redemption shall have been given as aforesaid, then, from and after the redemption date, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and become payable.  If such monies shall not be so available on the redemption date, such Bonds or portions thereof shall continue to bear interest until paid at the same rate as they would have borne had they not been called for redemption.

 

(B)           Payment of the Redemption Price together with interest and all other amounts then due to the Bondholders under the Financing Documents shall be made to or upon the order of the registered owner, only upon presentation of the Bond for cancellation or notation as provided in Section 6.6 hereof.

 

Section 6.5. [Reserved] .

 

Section 6.6. Cancellation of Redeemed Bonds.  »

 

(A) All Bonds redeemed in full under the provisions of this Article shall forthwith be cancelled and destroyed by the Trustee and a certificate of destruction furnished to the Authority, and no Bonds shall be executed, authenticated, issued or delivered in exchange or substitution therefor or for or in respect of any paid portion of a fully registered Bond.  In the event that a portion only of a Bond shall be so called for redemption, then, at the option of the registered owner thereof if such owner is a securities depository, such Bond may be either submitted to the Trustee for notation thereon of the payment of the portion of the principal thereof called for redemption or surrendered for redemption.  If so surrendered, one or more new Bonds shall be issued for the unredeemed portion hereof.

 

(B)           If there shall be called for redemption less than all of a Bond, the Authority shall execute and the Trustee shall authenticate and deliver, upon the surrender of such Bond, without charge to the owner thereof, for the unredeemed balance of the principal amount of the Bond so surrendered, Bonds in any of the authorized denominations.

 

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ARTICLE VII

 

PARTICULAR COVENANTS

 

Section 7.1. No Pecuniary Liability on Authority or Officers.  »

 

(A) No covenant or agreement contained in this Indenture or in the Bonds or any obligations herein or therein imposed upon the Authority or the breach thereof, shall constitute or give rise to a charge upon its general credit, or impose upon the Authority a pecuniary liability except as set forth herein.  In making the agreements, provisions and covenants set forth in this Indenture, the Authority has not obligated itself except with respect to the application of the Revenues as hereinabove provided.

 

(B)           All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be covenants, stipulations, promises, agreements and obligations of the Authority and not of any member, officer, agent or employee thereof in his individual capacity.  No recourse shall be had for the payment of the principal or Redemption Price, if any, of or interest on the Bonds, for the performance of any obligation hereunder, or for any claim based thereon or hereunder against any such member, officer, agent or employee or against any natural person executing the Bonds.  No such member, officer, agent, employee or natural person is or shall become personally liable for any such payment, performance or other claim, and in no event shall any monetary or deficiency judgment be sought or secured against any such member, officer, agent, employee or other natural person.

 

Section 7.2. Payment of Principal, Redemption Price, if any, and Interest. »

 

 The Authority covenants that it will promptly pay, solely from the Revenues or other monies derived in connection with the Project or otherwise available hereunder, the principal or Redemption Price, if any, of and interest on every Bond issued under this Indenture, together with all other amounts due under the Financing Documents, at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent and meaning thereof.

 

Section 7.3. Performance of Covenants.  »

 

The Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in any and every Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining thereto.  The Authority covenants that it is duly authorized under the Constitution and laws of the State, including particularly and without limitation the Act, to issue the Bonds authorized hereby and to execute this Indenture, to create, accept and assign the liens in the property described herein and created hereby, to grant the security interest herein provided, to assign the Financing Documents and to pledge the revenues and other amounts hereby pledged in the manner and to the extent herein set forth; that all action on its part for the issuance of the Bonds and the execution and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the hands of the holders and owners thereof are and will be valid and enforceable obligations according to their terms and the terms of this Indenture, except to the extent that such enforceability may be limited by bankruptcy or insolvency or other laws affecting creditors’ rights generally or by general principles of equity.

 

Section 7.4. Further Assurances.  »

 

The Authority and the Trustee each covenants that it will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such indentures supplemental hereto and such further acts, instruments and transfers as the other may reasonably require for the better assuring, transferring, conveying pledging, assigning and confirming unto the Trustee all and singular the property and rights assigned hereby and the amounts pledged hereby to the payment of the principal or Redemption Price, if any, of and interest on the Bonds and all other amounts due under the Financing Documents.

 

Section 7.5. Inspection of Project Books.  »

 

The Authority covenants and agrees that all books and documents in its possession relating to the Project and the revenues derived from the Project shall at all times be open to inspection by such accountants or other agencies as the Trustee may from time to time designate.

 

Section 7.6. Rights under Financing Documents.  »

 

The Financing Documents, originals or duly executed counterparts of which have been filed with the Trustee, set forth the covenants and obligations of the Authority and the Borrower, including provisions that subsequent to the issuance of Bonds and prior to their payment in full or provision for payment thereof in accordance with the provisions hereof, the Financing Documents may not be effectively amended, changed, modified, altered or terminated without the written consents provided for therein, and reference is hereby made to the same for a detailed statement of the covenants and obligations of the Borrower thereunder.  Subject to the provisions of Article IX hereof and to the extent explicitly set forth herein and in the Loan Agreement, the Trustee agrees to enforce all covenants and obligations of the Borrower under the Financing Documents and it is agreed that the Trustee may and is hereby granted the right to enforce all rights of the Authority and all obligations of the Borrower under and pursuant to the Financing Documents.  Nothing in this Section shall permit any reduction in the payments required to be made by the Borrower under or pursuant to the Financing Documents or any alteration in the terms of payment thereof.  All covenants and agreements on the part of the Authority shall, except as otherwise specifically provided herein, be for the benefit of the holders from time to time of the Bonds and may be enforced in the manner provided by Article VIII hereof on behalf of such holders by the Trustee.

 

Section 7.7. Creation of Liens, Indebtedness.  »

 

The Authority shall not create or suffer to be created any lien or charge upon or pledge of the Revenues, except the lien, charge and pledge created by this Indenture and the Bonds.  The Authority shall not incur any indebtedness or issue any evidence of indebtedness, other than the Bonds herein authorized, secured by a lien on or pledge of such Revenues.

 

Section 7.8. Recording and Filing.  »

 

The Authority covenants that it will cause the Financing Documents, this Indenture and all supplements thereto and hereto, as well as such other security agreements, financing statements, 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 be required by law in order to fully preserve and protect the security of the holders and owners of the Bonds and the rights of the Trustee hereunder.

 

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ARTICLE VIII

 

REMEDIES OF BONDHOLDERS

 

Section 8.1. Events of Default; Acceleration of Due Dates.  »

 

(A) Each of the following events is hereby defined as and shall constitute an “Event of Default”:

 

(1)           Failure to duly and punctually pay (a) the interest or (b) any installment of the principal or Redemption Price of any Bond, whether at the stated maturity thereof or upon proceedings for redemption thereof (excluding redemptions for which a conditional notice has been given in accordance with Section 6.3 of this Indenture in which case the failure to pay the Redemption Price of any Bonds shall not constitute an Event of Default under this Section 8.1(1) unless monies are on deposit with the Trustee and available to pay the Redemption Price on the redemption date).

 

(2)           Failure to duly and punctually pay any amount, other than the amounts specified in (1) above, due under the Financing Documents and the continuance of such failure for more than thirty (30) days.

 

(3)           Failure to perform or observe any other of the covenants, agreements or conditions on the part of the Authority in this Indenture or in the Bonds contained and not otherwise a default hereunder and the continuance thereof for a period of sixty (60) days after written notice given by the Trustee or by the owners of not less than 51% of the principal amount of Bonds then Outstanding.

 

(4)           The occurrence of an “Event of Default” under any of the Financing Documents (other than the Disclosure Agreement).

 

(B)           Subject to Section 6.4(B) of the Loan Agreement, upon the happening and continuance of any Event of Default specified in subsection 8.1(A) hereof (unless the principal of all the Bonds shall have already become due and payable), the Trustee may, and upon request in writing from the owners of not less than 51% in principal amount of the Bonds then Outstanding, shall, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon such declaration the same shall become and be immediately due and payable, anything in this Indenture or in any of the Bonds contained to the contrary notwithstanding.

 

(C)           The right of the Trustee or of the owners of not less than 51% in principal amount of the Outstanding Bonds to make any declaration authorized under subsection 8.1(B) hereof with respect to any failure under subsection 8.1(A)(1) hereof, however, is subject to the condition that if, at any time before such declaration, all overdue installments of interest upon the Bonds and the principal of all Bonds which shall have matured by their terms, together with the reasonable and proper charges, expenses and liabilities of the Trustee, shall either be paid by or for account of the Authority or provision satisfactory to the Trustee shall be made for such payment, and all other events of default cured and waived as provided in Section 8.11 then in every such case any such default and its consequences shall ipso facto be deemed to be annulled, but no such annulment shall extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon.

 

Section 8.2. Enforcement of Remedies.  »

 

(A) Upon the happening and continuance of any Event of Default, then and in every case, but subject to the provisions of Section 9.2 hereof and Section 6.4(B) of the Loan Agreement, the Trustee may proceed, and upon the written request of the owners of not less than 51% in the principal amount of the Bonds Outstanding shall proceed, to protect and enforce its rights and the rights of the Bondholders under the Act, the Bonds, the Financing Documents and this Indenture, and under any agreement executed in connection with the foregoing, forthwith by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board or officer having jurisdiction, whether for the specific performance of any covenant or agreement contained in this Indenture or the Financing Documents or in aid of the execution of any power granted therein or in the Act or for the enforcement of any legal or equitable rights or remedies as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights or to perform any of its duties under this Indenture.

 

(B)           [Reserved]

 

(C)           In the enforcement of any right or remedy under this Indenture or under the Act, the Trustee shall be entitled to sue for, enforce payment on and receive any or all amounts then or during any default becoming, and any time remaining, due from the Authority for principal, Redemption Price, interest or otherwise under any of the provisions of the Financing Documents, this Indenture or of the Bonds, and unpaid, and, to the extent permitted by law, with interest on overdue payments at the applicable rate or rates of interest specified in the Bonds, together with any and all costs and expenses of collection and of all proceedings under the Financing Documents, this Indenture and under the Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce judgment or decree against the Authority, but solely as provided in the Financing Documents, this Indenture and in the Bonds, for any portion of such amounts remaining unpaid, with interest, to the extent permitted by law, costs and expenses, and to collect in any manner provided by law, the moneys adjudged or decreed to be payable.

 

(D)           Regardless of the happening of an Event of Default, the Trustee, if requested in writing by the owners of not less than 51% in principal amount of the Bonds then Outstanding, and furnished with security and indemnity to its satisfaction, shall institute and maintain such suits and proceedings as it may be advised shall be necessary or expedient to prevent any impairment of the security under this Indenture by any acts which may be unlawful or in violation of this Indenture or of any resolution authorizing Bonds, and such suits and proceedings as the Trustee may be advised shall be necessary or expedient to preserve or protect its interests and the interests of the Bondholders; but no such request shall be otherwise than in accordance with the provisions of law and of the Indenture or be unduly prejudicial to the interests of the holders of Bonds not making such request.

 

Section 8.3. Application of Revenue and Other Moneys After Default.  »

 

(A)  All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article, after payment of the cost and expenses of the proceedings resulting in the collection of such moneys and of the fees, expenses, liabilities and advances incurred or made by the Trustee and any Paying Agent, shall be deposited in the applicable account of the Debt Service Fund and all moneys so deposited in such Fund and available for payment of the Bonds shall be applied as follows:

 

(1)           Unless the principal of all of the Bonds shall have become or have been declared due and payable:

 

FIRST To the payment of all amounts due under the Financing Documents, exclusive of unpaid principal and interest on the Note;

 

SECOND To the payment to the persons entitled thereto of all installments of interest then due on the Bonds, 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 the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference; and

 

THIRD To the payment to the persons entitled thereto of the unpaid principal or Redemption Price, if any, of any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in order of maturity, from the respective dates upon which they become due and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, then to the payment ratably, according to the amount of principal or Redemption Price due on such date, to the persons entitled thereto without any discrimination or preference.

 

(2)           If the principal of all the Bonds shall have become or have been declared due and payable, to the payment of all amounts due under the Financing Documents, then to the payment of the principal and interest (at the rate or rates expressed thereon) then due and unpaid upon the Bonds without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference.

 

(B)           Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future.  Whenever the Trustee shall apply such funds, it shall fix the date upon which such application shall be made.  The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and shall not be required to make payment to the owner of any Bonds until such Bonds shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

 

(C)           Whenever all Bonds and interest thereon and all other amounts due under the Financing Documents have been paid under the provisions of this Section and all fees, expenses and charges of the Trustee and Paying Agents have been paid, any balance remaining in the Debt Service Fund shall be paid to or upon the order of the Borrower.

 

Section 8.4. Actions by Trustee.  »

 

All rights of action 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 and any such suit or proceedings instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any owners of the Bonds, and any recovery of judgment, subject to the provisions of Section 8.3 hereof, shall be for the benefit of the holders of the Outstanding Bonds.

 

Section 8.5. Majority Bondholders Control Proceedings.  »

 

The holders of at least 51% in aggregate principal amount of Bonds then Outstanding shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of the Indenture, or for any other proceedings hereunder; but such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture.

 

Section 8.6. Individual Bondholder Action Restricted.  »

 

(A) No owner of the Bonds shall have any right to institute any suit, action or proceeding at law or in equity for the enforcement of any provision of this Indenture or the execution of any trust under this Indenture or for any remedy under this Indenture, unless such owners shall have previously given to the Trustee written notice of the happening of an “Event of Default”, as provided in this Article, and the owners of at least 51% in principal amount of the Bonds then Outstanding shall have filed a written request with the Trustee, and shall have offered it reasonable opportunity, either to exercise the powers granted in this Indenture or by the Act or by the laws of the State or to institute such action, suit or proceeding in its own name, and unless such owners shall have offered to the Trustee adequate security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused to comply with such request for a period of sixty days after receipt by it of such notice, request and offer of indemnity, it being understood and intended that no owner of any Bond shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the pledge created by this Indenture, or to enforce any right under this Indenture, except in the manner herein provided; and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner provided in this Indenture and for the equal benefit of all owners of the Outstanding Bonds.

 

(B)           Nothing herein or in the Bonds contained shall affect or impair the right of any owner of the Bonds to payment of the principal or Redemption Price, if any, of and interest on any Bond or other amounts due under the Financing Documents at and after the maturity thereof, or the obligation of the Authority to pay the principal or Redemption Price, if applicable, of and interest on each of the Bonds or other amounts due under the Financing Documents to the respective owners thereof at the time, place, from the source and in the manner herein and in such Bonds expressed.

 

Section 8.7. Effect of Discontinuance of Proceedings.  »

 

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

 

Section 8.8. Remedies Not Exclusive.  »

 

No remedy by the terms of this Indenture conferred upon or reserved to the Trustee or to the owners of the Bonds is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

 

Section 8.9. Delay or Omission Upon Default.  »

 

No delay or omission of the Trustee or of the owners of any Bond to exercise any right or power arising upon any Event of Default shall impair any right or power or shall be construed to be a waiver of any such default or any acquiescence therein; and every power and remedy given by this Article to the Trustee and the owner of any Bond, respectively, may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the owner of the Bonds.

 

Section 8.10. Notice of Default.  »

 

The Trustee shall immediately mail (upon the Trustee’s actual knowledge thereof), to each owner of the Bonds, written notice of an Event of Default under Section 8.1(A)(1) hereof of which it has actual knowledge.  The Trustee shall promptly mail (within thirty (30) days of the Trustee’s actual knowledge thereof), to each owner of the Bonds, written notice of the occurrence of any Event of Default under Sections 8.1(A)(2), 8.1(A)(3) and 8.1(A)(4) hereof of which it has actual knowledge.  Actual knowledge means the actual knowledge of an officer in the Trustee’s corporate trust administration department.  The Trustee shall not, however, be subject to any liability to any owner of the Bonds by reason of its failure to mail any notice required by this Section.  The Trustee shall not be required to monitor the compliance by the Authority with the terms of this Indenture, or the Borrower with the terms of the Agreement, except as aforesaid.

 

Section 8.11. Waivers of Default.  »

 

The Trustee shall waive any Event of Default hereunder and its consequences upon the written request of the owners of 51% in aggregate principal amount of the Bonds then Outstanding; except that there shall not be waived without the consent of the owners of all the Bonds Outstanding (a) any default in the payment of the principal of and Redemption Price on any Outstanding Bonds at the date of maturity specified therein or (b) any default in the payment when due of the interest on any such Bonds unless, prior to such waiver, all arrears of interest, at the rate borne by the Bonds on overdue installments of interest, to the extent permitted by law, in respect of which such default shall have occurred or all arrears of payments of principal due on the Bonds when due, as the case may be, and all expenses of the Trustee and any Paying Agent in connection with such default shall have been paid or provided for, and in case of any such waiver, or in case any proceeding taken by the Trustee on account of any such default shall have been dismissed, discontinued or abandoned or determined adversely, then and in every such case the Authority, the Trustee and the owners of the Bonds shall be restored to their former positions and rights hereunder respectively, but no such waiver, dismissal, discontinuance, abandonment or determination shall extend to any subsequent or other default, or impair any right consequent thereon.

 

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ARTICLE IX

 

TRUSTEE AND PAYING AGENTS

 

Section 9.1. Appointment and Acceptance of Duties.  »

 

(A) U.S. Bank National Association is hereby appointed as Trustee.  The Trustee shall signify its acceptance of the duties and obligations of the Trustee by executing this Indenture.  All provisions of this Article shall be construed as extending to and including all the rights, duties and obligations imposed upon the Trustee under the Agreement and the other Financing Documents as fully for all intents and purposes as if this Article were contained in the Agreement and the other Financing Documents.

 

(B)           The Trustee is hereby appointed as Paying Agent for the Bonds.  The Authority may also from time to time appoint one or more other Paying Agents in the manner and subject to the conditions set forth in Section 9.10 hereof for the appointment of a successor Paying Agent.  Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Indenture by executing and delivering to the Authority and to the Trustee a written acceptance thereof.  The principal offices of the Paying Agents are designated as the respective offices or agencies of the Authority for the payment of the interest on and principal or Redemption Price of the Bonds, except that interest on all registered Bonds and the principal and Redemption Price of all registered Bonds shall be payable at the corporate trust office of the Trustee located in Hartford, Connecticut.

 

Section 9.2. Indemnity.  »

 

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 in or in any way defend 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 and provided with adequate security to its satisfaction against any and all reasonable costs and expenses, outlays, and counsel fees and other disbursements, and against all liability not due to its willful misconduct, gross negligence or bad faith.

 

The Trustee shall be indemnified for and held harmless against any loss, liability or expense incurred without gross 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.  No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that payment of such funds or adequate indemnity against such risk or liability is not assured to it.

 

Section 9.3. Responsibilities of Trustee.  »

 

(A) The Trustee shall have no responsibility in respect of the validity or sufficiency of this Indenture or the security provided hereunder or the due execution hereof by the Authority, or in respect of the title or the value of the Project, or in respect of the validity of any Bonds authenticated and delivered by the Trustee in accordance with this Indenture or to see to the recording or filing of the Indenture or any financing statement (except the filing of continuation statements as provided in Section 9.13 hereof) or any other document or instrument whatsoever.  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 does not assume any responsibility for the correctness of the same; except that the Trustee shall be responsible for its representation contained in its certificate on the Bonds.  The obligation hereunder to pay or reimburse the Trustee for expenses, advances, reimbursements and to indemnify and hold harmless the Trustee pursuant to Section 9.2 hereof shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of all obligations under this Indenture.

 

(B)           The Trustee shall not be liable or responsible because of the failure of the Authority to perform any act required of it by this Indenture or the Financing Documents or because of the loss of any monies arising through the insolvency or the act or default or omission of any depositary other than itself in which such monies shall have been deposited.  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, invested, withdrawn or transferred in accordance herewith or for any loss resulting from any such investment.  The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own willful misconduct, gross negligence or bad faith.  The immunities and exemptions from liability of the Trustee shall extend to its directors, officers, employees and agents.

 

(C)           The Trustee, prior to the occurrence of an Event of Default and subsequent to an Event of Default that has been cured, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  In case an Event of Default has occurred of which the Trustee has actual knowledge (as defined in Section 8.10 hereinabove) and which has not been cured the Trustee, subject to Section 9.2 hereof, shall exercise such of the rights and powers vested in it hereby and use the same degree of care and skill in their exercise, as a prudent person would exercise under the circumstances in the conduct of his own affairs; provided, that if in the opinion of the Trustee such action might involve expense or liability, it shall not be obligated to take such action (other than the payment of any Bonds when due from funds held under this Indenture for the payment thereof or the acceleration of any Bonds pursuant to Section 8.1(B) hereof), unless it is furnished with indemnity and security to its satisfaction therefor.

 

(D)           The Trustee shall in all instances act in good faith in incurring costs, expenses and legal fees in connection with the transactions contemplated by this Indenture and the Agreement.

 

(E)           The Trustee shall not be liable or responsible for the failure of the Borrower to effect or maintain insurance on the Project as provided in the Financing Documents nor shall it be responsible for any loss by reason of want or insufficiency in insurance or by reason of the failure of any insurer in which the insurance is carried to pay the full amount of any loss against which it may have insured the Authority, the Borrower, the Trustee or any other person.

 

Section 9.4. Compensation.  »

 

The Trustee and Paying Agents shall be entitled to receive and collect from the Borrower as provided in the Financing Documents payment for reasonable fees for services rendered hereunder and all advances, counsel fees and expenses and other expenses reasonably and necessarily made or incurred by the Trustee or Paying Agents in connection therewith.

 

Section 9.5. Evidence on Which Trustee May Act.  »

 

(A) In case at any time it shall be necessary or desirable for the Trustee to make any investigation concerning any fact preparatory to taking or not taking any action, or doing or not doing anything, as such Trustee, and in any case in which this Indenture or the Financing Documents provide for permitting or taking any action, it may rely upon any certificate required or permitted to be filed with it under the provisions hereof or of the Financing Documents, and any such certificate shall be evidence of such fact or protect it in any action that it may or may not take, or in respect of anything it may or may not do, in good faith, by reason of the supposed existence of such fact.

 

(B)           The Trustee shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Indenture or the Financing Documents, upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or document which it shall in good faith reasonably 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 the Financing Documents, or upon the written opinion of any attorney (who may be an attorney for the Authority or the Borrower), engineer, appraiser, or accountant reasonably believed by the Trustee to be qualified in relation to the subject matter.  The Trustee is not required to investigate the qualifications of any such expert.

 

Section 9.6. Evidence of Signatures of Owners of the Bonds and Ownership of Bonds.  »

 

(A) Any request, consent, revocation of consent or other instrument which this Indenture may require or permit to be signed and executed by the owners of the Bonds may be in one or more instruments of similar tenor, and shall be signed or executed by such owners of the Bonds in person or by their attorneys appointed in writing.  Proof of (i) the execution of any such instrument, or of any instrument appointing any such attorney, or (ii) the holding by any person of the Bonds shall be sufficient for any purpose of this Indenture (except as otherwise herein expressly provided) if made in the following manner, or in any other manner satisfactory to the Trustee, which may nevertheless in its discretion require further or other proof in cases where it deems the same desirable:

 

(1)           The fact and date of the execution by any owner of the Bonds or his attorney of such instruments may be proved by a guarantee of the signature thereon by an officer of a bank or trust company or by the certificate of any notary public or other officer authorized to take acknowledgments of deeds, that the person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.  Where such execution is by an officer of a corporation or a member of an association, a limited liability company or a partnership, on behalf of such corporation, association, limited liability company  or partnership, such signature guarantee, certificate or affidavit shall be accompanied by sufficient proof of his authority.

 

(2)           The ownership of registered Bonds and the amount, numbers and other identification, and date of owning the same shall be proved by the registry books.

 

(B)           Except as otherwise provided in Section 10.3 hereof with respect to revocation of a consent, any request or consent by the owner of any Bond shall bind all future owners of such Bond in respect of anything done or suffered to be done by the Authority or the Trustee or any Paying Agent in accordance therewith.

 

Section 9.7. Trustee and any Paying Agent, May Deal in Bonds and With Borrower.  »

 

Any national banking association, bank or trust company acting as a Trustee, or Paying Agent, and its directors, officers, employees or agents, may in good faith buy, sell, own, hold and deal in any of the Bonds and may join in any action which any owner of the Bonds may be entitled to take and may otherwise deal with the Borrower with like effect as if such association, bank or trust company were not such Trustee or Paying Agent.

 

Section 9.8. Resignation or Removal of Trustee.  »

 

(A) The Trustee may resign and thereby become discharged from the trusts created under this Indenture by notice in writing to be given to the Authority and the Borrower and by notice mailed, postage prepaid to the owners of the Bonds not less than sixty (60) days before such resignation is to take effect, but such resignation shall not take effect until the appointment of a successor Trustee pursuant to Section 9.9 hereof and such successor Trustee shall accept such trust.

 

(B)           The Trustee may be removed at any time thirty (30) days after an instrument or concurrent instruments in writing, is filed with the Trustee and signed by the owners of not less than a majority in principal amount of the Bonds then Outstanding or their attorneys-in-fact duly authorized, but such removal shall not take effect until the appointment of a successor Trustee pursuant to Section 9.9 hereof and such successor Trustee shall accept such trust.  The Trustee shall promptly give notice of such filing to the Authority.

 

Section 9.9. Successor Trustee.  »

 

(A) If at any time the Trustee shall resign, or shall be removed, be dissolved or otherwise become incapable of acting or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator thereof, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee or of its property or affairs, the position of Trustee shall thereupon become vacant.  If the position of Trustee shall become vacant for any of the foregoing reasons or for any other reason, the Authority shall appoint a successor Trustee to fill such vacancy.  If the Authority fails to act prior to the date of resignation of any Trustee or within fifteen days after the position of Trustee becomes vacant, the Trustee may appoint a temporary successor Trustee.  The Authority may thereafter appoint a successor Trustee to succeed such temporary Trustee.  Within forty-five (45) days after such appointment, the successor Trustee shall cause notice of such appointment to be mailed, postage prepaid, to the Borrower and all owners of the Bonds.

 

(B)           At any time within one year after such vacancy shall have occurred, the owners of a majority in principal amount of the Bonds then Outstanding, by an instrument or concurrent instruments in writing, signed by such owners of the Bonds or their attorneys-in-fact thereunto duly authorized and filed with the Authority, may appoint a successor Trustee, which shall, immediately and without further act, supersede any Trustee theretofore appointed.  If no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section, the owner of any Bond then Outstanding or any retiring Trustee may apply to any court of competent jurisdiction to appoint a successor Trustee.  Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee.  In either event, within thirty (30) days after such appointment, the successor Trustee shall cause notice of such appointment to be marked, postage prepaid, to the Borrower.

 

(C)           Any Trustee appointed under this Section shall be a national banking association or a bank or trust company duly organized under the laws of the State or under the laws of any state of the United States authorized to exercise corporate trust powers.  At the time of its appointment, any successor Trustee shall have a capital stock and surplus aggregating not less than $100,000,000.

 

(D)           Every successor Trustee shall execute, acknowledge and deliver to its predecessor, and also to the Authority, an instrument in writing accepting such appointment, and thereupon such successor Trustee, without any further act, deed, or conveyance, shall become fully vested with all monies, estates, properties, rights, immunities, powers and trusts, and subject to all the duties and obligations of its predecessor, with like effect as if originally named as such Trustee; but such predecessor shall, nevertheless, on the written request of its successor or of the Authority, and upon payment of the compensation, expenses, charges and other disbursements of such predecessor which are due and payable pursuant to Section 9.4 hereof, execute and deliver an instrument transferring to such successor Trustee all the estate, properties, rights, immunities, powers and trusts of such predecessor, except any indemnification rights.  Every predecessor Trustee shall also deliver all property and monies held by it under the Indenture to its successor.  Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such Trustee, the estate, properties, rights, immunities, powers and trusts vested or intended to be vested in the predecessor Trustee any such instrument in writing shall, on request, be executed, acknowledged and delivered by the Authority.  Any successor Trustee shall promptly notify the Paying Agents of its appointment as Trustee.

 

(E)           Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be a national banking association or a bank or trust company duly organized under the laws of any state of the United States, shall have a capital stock and surplus aggregating not less than $100,000,000, and shall be authorized by law to perform all the duties imposed upon it by the Indenture, shall be the successor to such Trustee, both in its capacity as Trustee and in its capacity as Paying Agent if the Trustee is serving as Paying Agent, without the execution or filing of any paper or the performance of any further act.

 

(F)           Any Trustee which becomes incapable of acting as Trustee shall pay over, assign and deliver to its successor any monies, funds or investments held by it in the manner provided in Section 9.9(D) and shall render an accounting to the Authority.

 

Section 9.10. Appointment and Responsibilities of Paying Agent.  »

 

The initial Paying Agent shall be U.S. Bank National Association.  The Paying Agent shall be entitled to the advice of counsel (who may be counsel for any party) and shall not be liable for any action taken in good faith in reliance on such advice.  The Paying Agent may rely conclusively on any telephone or written notice, certificate or other document furnished to it under this Indenture and reasonably believed by it to be genuine.  The Paying Agent shall not be liable for any action taken or omitted to be taken by it in good faith and reasonably believed by it to be within the discretion or power conferred upon it, or taken by it pursuant to any direction or instruction by which it is governed under this Indenture or omitted to be taken by it by reason of the lack of direction or instruction required for such action, or be responsible for the consequences of any error of judgment reasonably made by it.  When any payment or other action by the Paying Agent is called for by this Indenture, it may defer such action pending receipt of such evidence, if any, as it may reasonably require in support thereof.  A permissive right or power to act shall not be construed as a requirement to act.  The Paying Agent shall not in any event be liable for the application or misapplication of funds, or for other acts or defaults, by any person, firm or corporation except by the Paying Agent’s respective directors, officers, agents and employees.  For the purposes of this Indenture matters shall not be considered to be known to the Paying Agent unless they are known to an officer in its corporate trust administration division.  The Paying Agent shall not require indemnification prior to making any payment when due of principal, premium or interest on any Bond to be made by the Paying Agent to any Bondholder, except and unless such drawing or payment is prohibited by or violates applicable law or any outstanding or pending court or governmental order or decree.

 

Section 9.11. Resignation or Removal of Paying Agent; Successors.  »

 

(A) Any Paying Agent may at any time resign and be discharged of the duties and obligations created by the Indenture by giving at least sixty days’ written notice to the Authority, the Trustee and the Borrower.  Any successor Paying Agent shall be appointed by the Authority, at the direction of the Borrower, with the approval of the Trustee, and shall be a bank or trust company duly organized under the laws of any state of the United States or a national banking association, having a capital stock and surplus aggregating at least $100,000,000, and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Indenture.  The Paying Agent may be removed at any time by the Authority at the direction of the Borrower by a written instrument filed with the Trustee and the Paying Agent.  The Paying Agent may, but need not be, the same person as the Trustee.

 

(B)            If the position of Paying Agent shall become vacant for any reason, or if any bankruptcy, insolvency or similar proceeding shall be commenced by or against the Paying Agent, the Authority shall appoint a successor Paying Agent designated by the Borrower to fill the vacancy.  A written acceptance of office shall be filed by the successor Paying Agent.  The Trustee shall give notice of the appointment of a successor Paying Agent in writing to each Bondholder.  The Trustee will promptly certify to the Borrower that it has mailed such notice to all Bondholders, and such certificate will be conclusive evidence that such notice was given in the manner required hereby.

 

(C)           Any corporation, association, limited liability company partnership or firm which succeeds to the business of the Paying Agent as a whole or substantially as a whole, whether by sale, merger, consolidation or otherwise, shall thereby become vested with all the property, rights and powers of the Paying Agent under this Indenture and shall be subject to all the duties and obligations of the Paying Agent under this Indenture.

 

The Paying Agent shall send or cause to be sent notice to Bondholders of a change of address for the delivery of Bonds or notice or the payment of principal of Bonds.

 

Section 9.12. Monies Held for Particular Bonds.  »

 

The amounts held by the Trustee or Paying Agents for the payment of the interest, principal or Redemption Price due on any date with respect to particular Bonds, on and after such date and pending such payment, shall be set aside on its books and held in trust by it for the owners of the Bonds entitled thereto.  Such funds shall be invested in Federal Securities at the direction of the Borrower for the account of the Borrower or shall otherwise remain uninvested.

 

Section 9.13. Continuation Statements.  »

 

The Trustee shall cause all continuation statements necessary to preserve and protect the security interest of the Trustee in the collateral pledged by the Authority in the granting clauses hereof to be filed in the applicable State offices so as to continue the perfected status thereof pursuant to the Uniform Commercial Code of the State.

 

Section 9.14. Obligation to Report Defaults.  »

 

In accordance with the provisions of Section 8.10 hereof, upon an officer in the Trustee’s corporate trust administration department becoming aware of any condition or event which constitutes, or with the giving of notice or the passage of time would constitute, an Event of Default under the Financing Documents or this Indenture, the Trustee shall deliver to the Authority a written notice stating the existence thereof and the action it proposes to take with respect thereto.  Becoming aware means the actual knowledge of an officer in the Trustee’s corporate trust department.

 

Section 9.15. Payments Due on non-Business Day. »

 

 In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall, in the city of payment, be a day other than a Business Day, then payment of such amount shall be made as provided in the forms of the Bonds.

 

Section 9.16. Appointment of Co-Trustee.  »

 

(A) It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as trustee in such jurisdiction.  It is recognized that in case of litigation under this Indenture or the Agreement, and in particular in case of the enforcement of either on default, or in case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate trustee or co-Trustee.  The following provisions of this Section are adapted to these ends.

 

(B)           In the event that the Trustee appoints an additional individual or institution as a separate trustee or co-Trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate trustee or co-Trustee but only to the extent necessary to enable such separate trustee or co-Trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate trustee or co-Trustee shall run to and be enforceable by either of them.

 

(C)           Should any instrument in writing from the Authority be required by the separate trustee or co-Trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority.  In case any separate trustee or co-Trustee, or a successor to either, shall die, become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co-Trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co-Trustee.

 

Section 9.17. Project Description.  »

 

The Trustee shall maintain in current form as an Appendix to the Agreement a list of the property constituting the Project and, on the basis of the descriptions furnished by the Borrower pursuant to the Agreement, shall amend the list in writing to reflect changes in the Project.

 

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ARTICLE X

 

AMENDMENTS OF INDENTURE

 

Section 10.1. Limitation on Modifications.  »

 

This Indenture shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article.

 

Section 10.2. Supplemental Indentures Without Consent of Owners of the Bonds.  »

 

(A) Subject to paragraph (C) of this Section 10.2, the Authority may, from time to time and at any time, adopt Supplemental Indentures without notice to or consent of the owners of the Bonds for any of the following purposes:

 

(1)           To cure any formal defect, omission or ambiguity in this Indenture or in any description of property subject to the lien hereof, if such action is not adverse to the interests of the owners of the Bonds.

 

(2)           To grant to or confer upon the Trustee for the benefit of the owners of the Bonds any additional rights, remedies, powers, authority or security which may lawfully be granted or conferred and which are not contrary to or inconsistent with this Indenture as theretofore in effect.

 

(3)           To add to the covenants and agreements of the Authority in this Indenture other covenants and agreements to be observed by the Authority which are not contrary to or inconsistent with this Indenture as theretofore in effect.

 

(4)           To add to the limitations and restrictions in this Indenture other limitations and restrictions to be observed by the Authority which are not contrary to or inconsistent with this Indenture as theretofore in effect.

 

(5)           To confirm, as further assurance, any pledge under, and the subjection to any lien or pledge created or to be created by, this Indenture, of Revenues or other income from or in connection with the Project or of any other monies, securities or funds, or to subject to the lien or pledge of this Indenture additional revenues, properties or collateral.

 

(6)           To make any other changes which do not materially adversely affect the interest of owners of the Bonds, as evidenced to the Trustee by an opinion of Bond Counsel.

 

(7)           To enable the Authority and the Borrower to receive or maintain a rating on the Bonds from S&P and/or Moody’s; provided, however, that nothing in this Section 10.2(7) shall limit or restrict the rights of Bondholders to consent to modifications, alterations or amendments to this Indenture as provided in Section 10.3 hereof.

 

(B)           Before the Authority shall adopt any Supplemental Indenture pursuant to this Section, there shall have been filed with the Trustee an opinion of Bond Counsel satisfactory to the Trustee stating that such Supplemental Indenture is authorized or permitted by this Indenture and the Act, complies with the terms of this Indenture, and that upon enactment it will be valid and binding upon the Authority in accordance with its terms.

 

Section 10.3. Supplemental Indentures With Consent of Owners of the Bonds.  »

 

(A) Subject to the terms and provisions contained in this Article, the owners of not less than 51% in aggregate principal amount of the Bonds then Outstanding (or in the event that the proposed change does not affect all owners of Bonds, the owners of not less than 51% of the Bonds so affected), shall have the right from time to time, to consent to and approve the adoption by the Authority of any Supplemental Indenture as shall be deemed necessary or desirable by the Authority for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained herein.  Nothing herein contained shall permit, or be construed as permitting, without the consent of all of the owners of the Bonds affected thereby (i) a change in the terms of redemption or maturity of the principal of or the interest on any Outstanding Bond, or a reduction in the principal amount or redemption price of any Outstanding Bond or the rate of interest thereon, without the consent of the owner of such Bond, (ii) the creation of a lien upon or pledge of Revenues other than the lien or pledge created by this Indenture, (iii) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (iv) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture.

 

(B)           If at any time the Authority shall determine to adopt any Supplemental Indenture for any of the purposes of this Section, it shall cause notice of the proposed Supplemental Indenture to be mailed, postage prepaid, to all owners of the Bonds.  Such notice shall briefly set forth the nature of the proposed Supplemental Indenture, and shall state that a copy thereof is on file at the offices of the Trustee for inspection by all owners of the Bonds.

 

(C)           Within one year after the date of such notice, the Authority may adopt such Supplemental Indenture in substantially the form described in such notice only if there shall have first been filed with the Authority (i) the written consent of the owners of not less than 51% in aggregate principal amount of the Bonds then Outstanding so affected, and (ii) an opinion of counsel satisfactory to the Trustee stating that such Supplemental Indenture is authorized or permitted by this Indenture and complies with its terms, and that upon adoption it will be valid and binding upon the Authority in accordance with its terms.  Each valid consent of a Bondholder shall be effective only if accompanied by proof of the owning, at the date of such consent, of the Bonds with respect to which such consent is given.  A certificate or certificates by the Trustee that it has examined such proof and that such proof is sufficient in accordance with this Indenture shall be conclusive that the consents have been given by the owners of the Bonds described in such certificate or certificates.  Any such consent shall be binding upon the owner of the Bonds giving such consent and upon any subsequent owner of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent owner thereof has notice thereof), unless such consent is revoked in writing by the owner of such Bonds giving such consent or a subsequent owner thereof by filing such revocation with the Trustee prior to the adoption of such Supplemental Indenture.

 

(D)           If the owners of not less than the percentage of Bonds required by this Section shall have consented to and approved the execution thereof as herein provided, no owner of any Bond shall have any right to object to the enactment of such Supplemental Indenture, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Authority from adopting the same or from taking any action pursuant to the provisions thereof.

 

(E)           Upon the adoption of any Supplemental Indenture pursuant to the provisions of this Section, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee, the Paying Agent and all owners of Bonds then Outstanding shall thereafter be determined, exercised and enforced under this Indenture, subject in all respects to such modifications and amendments.

 

Section 10.4. Supplemental Indenture Part of the Indenture.  »

 

Any Supplemental Indenture adopted in accordance with the provisions of this Article shall thereafter form a part of this Indenture and all the terms and conditions contained in any such Supplemental Indenture as to any provisions authorized to be contained therein shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.  The Trustee shall execute any Supplemental Indenture adopted in accordance with the provisions of Sections 10.2 or 10.3 hereof; provided, however, that the Trustee may, but shall not be obligated to, enter into any such instrument which adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

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ARTICLE XI

 

AMENDMENTS OF FINANCING DOCUMENTS

 

Section 11.1. Rights of Borrower.  »

 

Anything herein to the contrary notwithstanding, any Supplemental Indenture under Article X hereof which affects in any manner any rights, powers, authority, duties or obligations of the Borrower under the Financing Documents or of any subsequent user of the Project or requires a revision of the Financing Documents or subsequent agreement with respect to the Project shall not become effective unless and until the Borrower or such subsequent user, as the case may be, shall have given its written consent signed by its duly Authorized Representative to such Supplemental Indenture.

 

Section 11.2. Amendments of Financing Documents Not Requiring Consent of Owners of the Bonds.  »

 

The Authority and the Trustee may, without the consent of or notice to the owners of the Bonds, consent to any amendment, change or modification of the Financing Documents for the purpose of (i) curing any ambiguity or formal defect therein or which, in the judgment of the Trustee will not materially prejudice the Trustee or the owners of the Bonds or (ii) to make any other changes which do not materially adversely affect the interests of the owners of the Bonds, as evidenced to the Trustee by an opinion of counsel.  The Trustee shall have no liability to any owner of the Bonds or any other person for any action taken by it in good faith pursuant to this Section.

 

Section 11.3. Amendments of Financing Documents Requiring Consent of Owners of the Bonds.  »

 

Except as provided in Section 11.2 hereof, the Authority and the Trustee shall not consent to any amendment, change or modification of the Financing Documents, including the substitution of an assignee for the Borrower and the release of the Borrower from the obligations of the Financing Documents, without mailing of notice and the written approval or consent of the owners of not less than 51% in aggregate principal amount of the Bonds at the time Outstanding and so affected given and procured as in Section 10.3 hereof provided.  If at any time the Borrower or a subsequent user of the Project shall request the consent of the Trustee to any such proposed amendment, change or modification, the Trustee shall cause notice of such proposed amendment, change or modification to be mailed in the same manner as is provided in Article X hereof with respect to Supplemental Indentures.  Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the principal office of the Trustee for inspection by the owners of the Bonds.

 

 

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ARTICLE XII

 

DISCHARGE OF INDENTURE

 

Section 12.1. Defeasance.  »

 

(A) If the Authority shall pay or cause to be paid, or there shall otherwise be paid, to the owners of all Bonds the principal or Redemption Price, if applicable, interest and all other amounts due or to become due thereon or in respect thereof, and all other amounts due or to become due under the Financing Documents, at the times and in the manner stipulated therein and in this Indenture, and if all the fees, expenses and advances of the Trustee and all Paying Agents have been paid, then the pledge of any revenues or receipts from or in connection with the Financing Documents or the Project under this Indenture and the estate and rights hereby granted, and all covenants, agreements and other obligations of the Authority to the owners of the Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied and such Bonds shall thereupon cease to be entitled to any lien, benefit or security hereunder, except as to moneys or securities held by the Trustee or the Paying Agents as provided below in this subsection.  At the time of such cessation, termination discharge and satisfaction, (1) the Trustee shall cancel and discharge the lien of this Indenture and execute and deliver to the Borrower all such instruments as may be appropriate to satisfy such lien and to evidence such discharge and satisfaction, and (2) the Trustee, the Authority and the Paying Agents shall pay over or deliver to the Borrower or on its order all moneys or securities held by them pursuant to the Indenture which are not required (a) for the payment of principal or Redemption Price, if applicable, or interest on Bonds not theretofore surrendered for such payment or redemption, or (b) for the payment of all such other amounts due or to become due under the Financing Documents.

 

(B)           Bonds or interest installments for the payment or redemption of which moneys (or Federal Securities, the principal of and interest on which when due, together with the moneys, if any, set aside at the same time, will provide funds sufficient for such payment or redemption) shall then be set aside and held in trust by the Trustee or Paying Agents, whether at or prior to the maturity or the redemption date of such Bonds, shall be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section, if (a) in case any such Bonds are to be redeemed prior to maturity, all action necessary to redeem such Bonds shall have been taken and notice of such redemption shall have been duly given or provision satisfactory to the Trustee shall have been made for the giving of such notice, and (b) if the maturity or redemption date of any such Bond shall not then have arrived, (i) provision shall have been made by deposit with the Trustee or other methods satisfactory to the Trustee for the payment to the owners of any such Bonds upon surrender thereof, whether or not prior to the maturity or redemption date thereof, of the full amount to which they would be entitled by way of principal or Redemption Price and interest and all other amounts then due under the Financing Documents to the date of such maturity or redemption, and (ii) provision satisfactory to the Trustee shall have been made for the mailing of a notice to the owners of such Bonds that such moneys are so available for such payment.

 

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ARTICLE XIII

 

GENERAL PROVISIONS

 

Section 13.1. Notices.  »

 

(A) Any notice, request, demand, communication, direction or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or sent by telegram, addressed as follows: if to the Authority, at 999 West Street, Rocky Hill, Connecticut 06067, Attention: Program Manager - Loan Administration; if to the Borrower, 93 Main Street, Clinton, Connecticut  06413, Attention:  Vice President-Finance, and if to the Trustee, Goodwin Square, 225 Asylum Street, Hartford, Connecticut 06103, Attention: Corporate Trust Administration.  A duplicate copy of each notice required to be given hereunder by the Trustee to either the Authority or the Borrower, shall also be given to the other.  Any notice party may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

 

(B)           Notice hereunder may be waived prospectively or retrospectively by the person entitled to such notice, but no waiver shall affect any notice requirement as to other persons.

(C)           Notwithstanding anything to the contrary contained herein, all notices, requests, demands, communications or directions to the Trustee shall be given in writing.

Section 13.2. Covenant Against Discrimination.  »

 

The Trustee agrees and warrants that in the performance of this Indenture it will not discriminate against any person or group of persons on the grounds of race, color, religion, national origin, age, sex, sexual orientation, marital status, physical or learning disability, political beliefs, mental retardation, or history of mental disorder in any manner prohibited by the laws of the United States or of the State.

 

Section 13.3. Parties Interested Herein.  »

 

Except as otherwise specifically provided herein, nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the Authority, the Trustee, the Borrower, the Paying Agent and the registered owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Authority, the Trustee, the Borrower, the Paying Agent and the registered owners of the Bonds.

 

Section 13.4. Effective Date; Counterparts.  »

 

This Indenture shall become effective on delivery.  It may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

 

Section 13.5. Continuing Disclosure.  »

 

The Borrower has undertaken all responsibility for compliance with applicable continuing disclosure requirements, if any, and the Authority and the Trustee shall have no liability to the Bondholders or any other person with respect to S.E.C. Rule 15c2-12.

 

Section 13.6. Compliance with C.G.S. Sections 4a-60 and 4a-60a.  »

 

(A)  CGS Section 4a-60.  In accordance with Connecticut General Statutes Section 4a-60(a)(1), as amended by Connecticut Public Act 07-142, and to the extent required by Connecticut law, the Trustee agrees and warrants as follows: (1) in the performance of this Indenture it will not discriminate or permit discrimination against any person or group of persons on the grounds of race, color, religious creed, age, marital or civil union status, national origin, ancestry, sex, gender identity or expression, mental retardation or physical disability, including, but not limited to, blindness, unless it is shown by the Trustee that such disability prevents performance of the work involved, in any manner prohibited by the laws of the United States or of the State of Connecticut and further to take affirmative action to insure that applicants with job-related qualifications are employed and that employees are treated when employed without regard to their race, color, religious creed, age, marital or civil union status, national origin, ancestry, sex, gender identity or expression, mental retardation, or physical disability, including, but not limited to, blindness, unless it is shown by the Trustee that such disability prevents performance of the work involved; (2) in all solicitations or advertisements for employees placed by or on behalf of the Trustee, to state that it is an “affirmative action-equal opportunity employer” in accordance with regulations adopted by the Commission on Human Rights and Opportunities (the “CHRO”); (3) to provide each labor union or representative of workers with which the Trustee  has a collective bargaining agreement or other contract or understanding and each vendor with which the Trustee has a contract or understanding, a notice to be provided by the CHRO advising the labor union or workers’ representative of the Trustee’s commitments under Connecticut General Statutes Section 4a-60, and to post copies of the notice in conspicuous places available to employees and applicants for employment; (4) to comply with each provision of Connecticut General Statutes Sections 4a-60, 46a-68e and 46a-68f and with each regulation or relevant order issued by the CHRO pursuant to Connecticut General Statutes Sections 46a-56, 46a-68e and 46a-68f; (5) to provide the CHRO with such information requested by the CHRO, and permit access to pertinent books, records and accounts, concerning the employment practices and procedures of the Trustee as relate to the provisions of Connecticut General Statutes Sections 4a-60a and 46a-56.

 

(B)           CGS Section 4a-60a.  In accordance with Connecticut General Statutes Section 4a-60a(a)(1), as amended by Connecticut Public Act 07-142, and to the extent required by Connecticut law, the Trustee agrees and warrants as follows: (1) that in the performance of this Indenture, the Trustee will not discriminate or permit discrimination against any person or group of persons on the grounds of sexual orientation, in any manner prohibited by the laws of the United States or of the State of Connecticut, and that employees are treated when employed without regard to their sexual orientation; (2) to provide each labor union or representative of workers with which the Trustee has a collective bargaining agreement or other contract or understanding and each vendor with which the Trustee has a contract or understanding, a notice to be provided by the CHRO advising the labor union or workers’ representative of the Trustee’s commitments under Connecticut General Statutes Section 4a-60a, and to post copies of the notice in conspicuous places available to employees and applicants for employment; (3) to comply with each provision of Connecticut General Statutes Section 4a-60a and with each regulation or relevant order issued by the CHRO pursuant to Connecticut General Statutes Section 46a-56; (4) to provide the CHRO with such information requested by the CHRO, and permit access to pertinent books, records and accounts, concerning the employment practices and procedures of the Trustee which relate to the provisions of Connecticut General Statutes Sections 4a-60a and 46a-56; and (5) to include provisions (1) through (4) this section in every subcontract or purchase order entered into by the Trustee  in order to fulfill any obligation of this Indenture, and such provisions shall be binding on a subcontractor, vendor or manufacturer unless exempted by regulations or orders of the CHRO and take such action with respect to any such subcontract or purchase order as the CHRO may direct as a means of enforcing such provisions in accordance with Connecticut General Statutes Section 4a-60a.

 

Section 13.7. Date for Identification Purposes Only.  »

 

The date of this Indenture shall be for identification purposes only and shall not be construed to imply that this Indenture was executed on such date.

 

Section 13.8. Separability of Invalid Provisions.  »

 

In case any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, but this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.

 

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IN WITNESS WHEREOF, the Connecticut Development Authority has caused these presents to be signed in its name and behalf by an Authorized Representative, and to evidence its acceptance of the trusts hereby created, U.S. Bank National Association, has caused these presents to be signed in its name and behalf by its duly authorized officer, as of the date first above written.

 

CONNECTICUT DEVELOPMENT AUTHORITY

 

By  /s/  Karin A. Lawrence                                                        

Name:  Karin A. Lawrence

	
  

	
Title:  Senior Vice President –

 

	
  

	
Public and Investment Finance

 

 

U.S. BANK NATIONAL ASSOCIATION

 

By  /s/  Cauna M. Silva                                                                  

Name:  Cauna M. Silva

Title:  Vice President

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APPENDIX A TO INDENTURE

 

REQUISITION

 

The Connecticut Water Company (the “Borrower”) hereby requests U.S. Bank National Association, as trustee (the “Trustee”) under the Indenture of Trust, dated December 1, 2011, between U.S. Bank National Association and the Connecticut Development Authority (the “Indenture”), to withdraw $___________ from the ___________ Account of the Project Fund established under the Indenture for purposes permitted by Section 5.2 thereof.  In connection with this withdrawal, the Borrower states as follows:

 

1.           The number of this requisition is ____________________.

 

2.           Payments aggregating _____________ are due to the following persons in the following amounts for expenditures incurred in connection with the Project:

 

	
Person

	
Address

	
Amount

	
Item

	  	  	  	  

3.           Payment is due to the Borrower in the total amount of $____________ in reimbursement for amounts paid by the Borrower in connection with the Project:

 

	
Amount

	
Item

	  	  

Attached hereto are receipts or other evidences of payment showing payment of each such amount and the person to whom payment was made.

 

4.           Each amount set forth in paragraphs 2 and 3 hereof has been properly paid or incurred within the provisions of the Agreement and the Indenture, is a proper charge against the Project Fund, is unpaid or unreimbursed, and has not been the basis for any previous withdrawal.

 

5.           This requisition and the use of proceeds set forth herein are consistent in all material respects with the Tax Regulatory Agreement.

 

6.           Ninety-five percent or more of the amount requisitioned is to be applied to costs (a) paid or incurred not more than sixty (60) days prior to the adoption of the Authority’s inducement resolution for the Project on February 16, 2011, (b) for the acquisition, construction or reconstruction of land or property of a character subject to the allowance for depreciation provided in Section 167 of the Internal Revenue Code of 1986, as amended, and (c) which are chargeable to the capital account of the Project or would be so chargeable either with an election by the Borrower or but for the election of the Borrower to deduct the amount of the item.

 

Capitalized terms used in this requisition are used as defined in the Indenture.

 

A-

  

  

  

I am an Authorized Representative of the Borrower under the Agreement.

 

	
  

	
THE CONNECTICUT WATER COMPANY

 

By  /s/  David C. Benoit

Name:  David C. Benoit

Title:  Vice President - Finance and

Chief Financial Officer

A-exhibit_10-20b.htm

AMENDED AND RESTATED

DEFERRED COMPENSATION AGREEMENT

THIS AGREEMENT (the “Deferred Compensation Agreement”) is made this ______ day of __________________, 2011 and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the "Employer") and

_____________________ (hereinafter referred to as the "Employee").

WITNESSETH:

WHEREAS, the Employee is among a select group of management or highly compensated employees of the Employer; and

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement dated January 24, 2008; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to enter into this Amended and Restated Deferred Compensation Agreement (the "Agreement") on the terms herein set forth, effective as of January 1, 2011;

NOW, THEREFORE, in consideration of the premises and the mutual and dependent promises herein, the parties hereto agree as follows:

1. DEFERRED COMPENSATION.  The Employee may file a written election with the Employer in the form attached to this Agreement or such other form as may be approved by the Employer to defer up to 12 percent (12%) of the Employee's salary.  Such amount shall be credited to a Deferred Compensation Account as provided in Section 2 hereof.  This election to defer the receipt of salary must be made before the beginning of the calendar year for which the salary is earned and shall remain in effect, unless terminated or changed, or until the date the Employee ceases to be an employee of the Employer.  Any election termination or change of a deferral election must be made on a form provided by the Employer for such purpose and may only be made with respect to salary which will be earned on and after the January 1 following the Employer's receipt of such form provided that such form is received at least seven (7) days prior to the applicable January 1.

2. DEFERRED COMPENSATION ACCOUNT.  The Employer shall maintain on its books and records a Deferred Compensation Account to record its liability for future payments of deferred compensation and interest thereon required to be paid to the Employee or his beneficiary pursuant to this Agreement.  However, the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee or his beneficiary.  The amount reflected in said Deferred Compensation Account shall be available for the Employer's general corporate purposes and shall be available to the Employer's general creditors.  The amount reflected in said Deferred Compensation Account shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee or his beneficiary, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void.  Neither the Employee nor his beneficiary may assert any right or claim against any specific assets of the Employer.  The Employee or his beneficiary shall have only a contractual right against the Employer for the amount reflected in said Deferred Compensation Account and shall have the status of general unsecured creditors.  Notwithstanding the foregoing, in order to pay amounts which may become due under this Agreement, the Employer may establish a grantor trust (hereinafter the "Trust") within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended.  The assets in such Trust shall at all times be subject to the claims of the general creditors of the Employer in the event of the Employer's bankruptcy or insolvency, and neither the Employee nor any beneficiary shall have any preferred claim or right, or any beneficial ownership interest in, any such assets of the Trust prior to the time such assets are paid to an Employee or beneficiary pursuant to this Agreement.

The Employer shall credit to said Deferred Compensation Account the amount of any salary to which the Employee becomes entitled and which is deferred pursuant to Section 1 hereof, such amount to be credited as of the first business day of each month.  The Employer shall also credit to said Deferred Compensation Account an Interest Equivalent in the amount and manner set forth in Section 3 hereof.

3.           PAYMENT OF DEFERRED COMPENSATION

(a)           Separation from Service On or After Attainment of Age 55.  If the Employee should separate from service on or after his attainment of age fifty-five (55) for any reason other than death or an account of “Cause” as defined in subsection (c) below, he shall be entitled to receive payment of the entire amount of his Deferred Compensation Account including an Interest Equivalent, as described below, in the form of an actuarially equivalent life annuity providing for equal annual payments for the life of the Employee.  Such actuarially equivalent life annuity shall be computed on the basis of a mortality table that assumes a life expectancy of age eighty (80) and uses the Interest Factor described below (payment shall continue for the life of the Employee, even if the Employee continues to live past eighty (80)).  If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, the first annual annuity payment under this subsection shall be paid on the first day of the seventh month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date.  If the Employee is not a “specified employee” at the time of separation from service, the first annual payment under this subsection shall be paid on the first day of the month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date.

There shall be credited to the Employee's Deferred Compensation Account as of each January 1 and July 1, commencing with July 1, 1996 until payment of such account begins, as additional deferred compensation, an Interest Equivalent equal to fifty percent (50%) of the product of (i) the AAA Corporate Bond Yield Averages published by Moody's Bond Survey for the Friday ending on or immediately preceding the applicable January 1 and July 1 plus 3 percentage points (the "Interest Factor"), multiplied by (ii) the balance of the Employee's Deferred Compensation Account, including the amount of Interest Equivalent previously credited to such Employee's account, as of the preceding day (i.e., December 31 or June 30).  The Interest Factor used to compute the annuity payable upon the Employee's separation from service on or after his attainment of age fifty-five (55) shall be calculated based upon the Interest Factor as of the January 1 or July 1 immediately preceding the date of the Employee's separation from service, whichever shall fall nearer to the date of the Employee's separation from service.

(b) Separation from Service Prior to Attainment of Age 55.  If the Employee should separate from service prior to his attainment of age fifty-five (55) for any reason other than death or on account of "Cause" as defined in subsection (c) below, the Employee shall be entitled to receive payment in a lump sum of the entire amount of his Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above.  If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence.  If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3rd) day following separation from service.

(c) Separation from Service for Cause.

(i)           If the employment of the Employee is terminated by the Employer for Cause, the Employee shall be entitled only to a return of amounts deferred pursuant to Section 1 hereof.

(ii)           If the Employee is so terminated on or after age 55, payment shall be made in accordance with the terms of Section 3(a) above.  However, the Employee shall not be entitled to the Interest Equivalent for any years prior to such termination, and such Interest Equivalent shall not be included in determining Employee’s benefit hereunder.  An Interest Factor shall be utilized in calculating the amount of the annuity payable in accordance with the last sentence of subsection (a) above.

(iii)           If the Employee is so terminated prior to attainment of age 55, payment of the return of amounts deferred (excluding any Interest Equivalent) shall be made in a lump sum.  If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence.  If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3rd) day following separation from service.

(iv)           As used in this Agreement, the term "Cause" shall mean:

	
  

	
(A)

	
the Employee's rendering, while employed by the Employer, of any services, assistance or advice, either directly or indirectly, to any person, firm or organization competing with, or in opposition to, the Employer;

	
  

	
(B)

	
the Employee's allowing, while employed by the Employer, any use of his name by any person, firm or organization competing with, or in opposition to, the Employer; or

	
  

	
(C)

	
willful misconduct by the Employee, including, but not limited to, the commission by the Employee of a felony or the perpetration by the Employee of a common law fraud upon the Employer.

(d) Death While Employed.  Notwithstanding anything to the contrary contained in the foregoing, if the Employee should die while employed by the Employer, his beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the greater of (i) the Hypothetical Death Benefit, as defined in subsection (f) hereof, and (ii) the entire amount of his Deferred Compensation Account at the date of his death, assuming that an Interest Equivalent were credited to such account as of each January 1 and July 1, occurring after the first deferral hereunder until the date of death at the rate set forth in subsection (a) hereof.  Such beneficiary shall receive such death benefit on the thirtieth (30th) day following the death of the Employee.

(e) Death After Separation from Service.

(i)           If the Employee should die after his separation from service, whether prior to or on or after attainment of age 55, and prior to the date on which payment of his Deferred Compensation Account has commenced in the form of an annuity in accordance with subsection (a) or has been paid in the form of a lump sum as provided in subsection (b), his beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the entire amount of the Employee's Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above, at the date of his death, provided that the Employee's employment shall not have terminated on account of "Cause" as defined in subsection (c) hereof.  In the event that the Employee should die after the termination of his employment for “Cause,” whether prior to or on or after attainment of age 55, and in either case prior to the date upon which payment of his Deferred Compensation Account has been made or has commenced, his beneficiary, designated pursuant to Section 4 hereof, shall receive a return of the amounts deferred (excluding any Interest Equivalent).  No Interest Equivalent shall be credited to the Employee's Deferred Compensation Account in the event of the Employee's death after his termination on account of "Cause" as provided in subsection (c) hereof.  In either case, the Employee's beneficiary shall receive such death benefit on the thirtieth (30th) day following the death of the Employee.

(ii)           If the Employee should die after his separation from service with the Employer on or after attainment of age 55 (not on account of “Cause”) and after the date on which payment of his Deferred Compensation Account and the Interest Equivalent set forth in subsection (a) hereof has commenced in the form of an annuity as provided in subsection (a), no additional benefits shall be payable under this Agreement after the Employee's death except to the extent that the Employee did not receive prior to his death benefits in an amount equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto, as of the date of the Employee’s death.  If the Employee dies prior to receiving benefits equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto as of the date of the Employee’s death, his beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the Employee’s Deferred Compensation account, plus any Interest Equivalent credited thereto, as of the date of the Employee’s death.

(iii)           If the Employee should die after his separation from service with the Employer on or after attainment of age 55 on account of “Cause” and after the date payments have commenced to him in the form of an annuity as provided in subsection (c), no additional benefits shall be payable under this Agreement after the Employee’s death except to the extent the Employee did not receive prior to his death benefits in an amount equal to or greater than the amounts deferred (excluding any Interest Equivalent earned while employed).  In such event, his beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the amounts deferred (excluding any Interest Equivalent earned while employed).

(iv)           If the Employee should die after his separation from service with the Employer and after the date on which payment has been paid to him in the form of a lump sum pursuant to subsection (b) or (c), no additional benefits shall be payable upon the Employee's death.

(f) Hypothetical Death Benefit.  For purposes of this Agreement, the term "Hypothetical Death Benefit” shall mean a lump sum benefit equal to the proceeds of any policy of key-man life insurance on the life of the Employee, of which the Employer is owner and beneficiary, and which policy is designated by the Employer as subject to the provisions hereof, reduced by (i) the amount of any tax imposed on the Employer with respect to such proceeds and (ii) the cost to the Employer of any tax deductions postponed as a result of salary deferrals pursuant to Section 1 hereof and increased by (iii) the tax deduction to the Employer which would result from payment of the Hypothetical Death Benefit to a beneficiary of the Employee.  For purposes of (ii) above, an opportunity cost factor of six (6) percent pre-tax interest will be applied during the period of postponed deductions under (ii).  The calculation of the Hypothetical Death Benefit shall be done by the Employer, whose calculation shall be final and binding on the Employee and his beneficiary.  Anything herein to the contrary notwithstanding, the Employer shall not be required to purchase a policy of key-man life insurance on the life of any Employee, and any such policy purchased by the Employer, and all proceeds thereof, shall remain at all times available to the Employer's general creditors.

(g) Termination of Employment.  In order for the Employee to be considered to have terminated employment with the Employer, the Employee must have incurred a separation from service from the Employer (and all related companies) within the meaning of Section 409A, and the term termination of employment shall be construed and interpreted in a manner consistent with the term separation from service.

4.           BENEFICIARY.  The Employee has notified or will in the future notify the Employer of the person or persons entitled to receive payments on the death of the Employee.  For the purposes of this Agreement, such person or persons are herein referred to collectively as the "beneficiary."  The person whom an Employee designates as his beneficiary for this purpose must be one of the following: the Employee's spouse; father, mother, sister, brother, son or daughter.  The beneficiary may also be a legal ward living with and dependent on the Employee at the time of his death.  If the Employee dies and has not designated a beneficiary, his beneficiary shall be his spouse, if living; otherwise, his beneficiary shall be deemed to be his estate.  An Employee's beneficiary designation may be changed at any time by the Employee giving written notice to the Employer of such change.  The rights of any beneficiary presently or hereafter designated are subject to any changes made in this Agreement by the Employee and the Employer.

5. WITHHOLDING.  The Employer shall be permitted to withhold from any payment to the Employee or his beneficiary hereunder all federal, state or other taxes which may be required with respect to such payment.

6. ARBITRATION.  In the event that a dispute shall arise with respect to any of the provisions of this Agreement, either the Employer or the Employee or his beneficiary, as the case may be, may give written notice to the other stating the claims that said party desires to arbitrate, and naming an arbitrator.  Within ten (10) days after the receipt of such notice, the party receiving same shall appoint a second arbitrator by written notice to be sent to the party who requested arbitration.  Within ten (10) days after receipt of such notice of appointment of the second arbitrator, the two (2) arbitrators so appointed shall meet to select a third arbitrator and shall give written notice of such selection to the Employer and the Employee or his beneficiary.  The decision of a majority of the arbitrators shall be conclusive and binding upon the Employer and the Employee or his beneficiary.  All notices hereunder shall be by registered mail addressed to the last known address of the party entitled to receive notice.  The Employer and the Employee shall each pay their own costs incurred in the arbitration proceeding.

7.           MISCELLANEOUS.

(a) This Agreement shall be binding upon the parties hereto, their heirs, executors, administrators, successors and assigns.  The Employer agrees that it will not be a party to any merger, consolidation or reorganization unless and until its obligations hereunder shall be expressly assumed by its successor or successors.

(b) This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, or any beneficiary designated by him, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided.

(c) Deferrals under this Agreement may be suspended by the Employer effective as of any January 1, following the time that tax or other laws are enacted or interpreted which result or will result in costs to the Employer significantly in excess of those contemplated at the time of the execution hereof.  In the event of such suspension, the Employer's sole obligation shall be to pay to the Employee in accordance with Section 3 above.  In no event may deferrals be ceased during a calendar year by action of either the Employer or the Employee, or both.

(d) This Agreement shall not supersede any contract of employment, whether oral or written, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder.  Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

(e) If Moody's Bond Survey shall cease to publish the Corporate Bond Yield Averages referred to in Section 3 hereof, a similar average selected by the Board of Directors of the Employer, in its sole discretion, shall be used.

(f) This Agreement shall be executed in duplicate, and each executed copy of this Agreement shall be deemed an original.

(g) This Agreement shall be construed in all respects under the laws of the State of Connecticut, subject to applicable federal law.

(h) This Agreement has been prepared with reference to Section 409A and should be interpreted and administered in a manner consistent with Section 409A.

(i) This Amendment and Restatement is effective as of January 1, 2011.

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

THE CONNECTICUT WATER COMPANY

By                                                                           

Date

     Its

Date

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