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TRUST AGREEMENT
BETWEEN
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL,
MEDICAL AND
ENVIRONMENTAL CONTROL FACILITIES
FINANCING AUTHORITY
AND
BANCO SANTANDER PUERTO RICO,
TRUSTEE
DATED [ ], 1999
SECURING
[$105,200,000]
TOURISM REVENUE BONDS, 1999 SERIES A
(EL CONQUISTADOR RESORT PROJECT)
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TABLE OF CONTENTS
PAGE
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TRUST AGREEMENT.................................................................-1
BEFORE ME.......................................................................-1
APPEAR..........................................................................-1
AS THE PARTY OF THE FIRST PART:............................................-1
AS PARTY OF THE SECOND PART: ..............................................-1
STATE...........................................................................-2
FIRST......................................................................-2
SECOND.....................................................................-2
THIRD......................................................................-2
FOURTH.....................................................................-2
FIFTH......................................................................-2
SIXTH......................................................................-2
SEVENTH....................................................................-2
EIGHTH.....................................................................-3
NINTH......................................................................-3
TENTH......................................................................-3
ELEVENTH...................................................................-4
ARTICLE I......................................................................-4
DEFINITIONS................................................................-4
Section 101. Definitions..............................................-4
Accreted Value....................................................-4
Act ..............................................................-5
Act of Bankruptcy.................................................-5
Additional Interest...............................................-5
Administrative Fee................................................-5
Affiliate.........................................................-5
Amortization Requirement..........................................-5
Aggregate Principal Amount........................................-5
Authority.........................................................-5
Authority Representative..........................................-6
Authorized Borrower Representative................................-6
Authorized Denominations..........................................-6
Beneficial Owner..................................................-6
Board.............................................................-6
Bond Fund.........................................................-6
Bondholder........................................................-6
Bond Register.....................................................-6
Bonds.............................................................-7
Borrower..........................................................-7
Business Day......................................................-7
Capital Appreciation Bonds........................................-7
Code..............................................................-7
Corporate Trust Office............................................-7
Costs.............................................................-7
Costs of Issuance.................................................-8
Date of Issuance..................................................-8
PAGE
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Defaulted Interest................................................ -8
Defeasance Obligations............................................ -8
Defeased Municipal Obligations.................................... -8
DTC .............................................................. -9
DTC Representation Letter......................................... -9
Event of Taxability............................................... -9
Executive Director................................................ -9
Exhibit A......................................................... -9
Exhibit B......................................................... -9
Fair Market Value................................................. -9
Federal...........................................................-10
Government Obligations............................................-10
Grant.............................................................-10
Holder............................................................-10
Interest Payment Date.............................................-10
Interest Rate.....................................................-10
Insurance Consultant..............................................-10
Investment Obligations............................................-10
Loan Agreement....................................................-12
Majority Interest.................................................-12
Maturity Date.....................................................-13
Mortgages.........................................................-13
Mortgage Notes....................................................-13
Outstanding.......................................................-13
Participant.......................................................-13
Payment of the Bonds..............................................-13
Person............................................................-13
Pledge Agreement..................................................-14
Predecessor Bond..................................................-14
Principal.........................................................-14
Principal Payment Date............................................-14
Principal Payment Period..........................................-15
Project...........................................................-15
Project Fund......................................................-15
Puerto Rico.......................................................-15
Rating Agency.....................................................-15
Redemption Price..................................................-15
Regular Record Date...............................................-15
Related Documents.................................................-16
Reserve Fund......................................................-16
Reserve Fund Amount...............................................-16
Renewal and Replacement Fund......................................-16
Renewal and Replacement Fund Amount...............................-16
Secretary.........................................................-17
Securities Act....................................................-17
Securities Depository.............................................-17
Serial Bonds......................................................-17
Serial Bonds Aggregate Principal Amount...........................-17
Special Record Date...............................................-17
Term Bonds........................................................-17
Trust Agreement...................................................-18
Trustee...........................................................-18
Trust Estate......................................................-18
Twenty-Five Percent Interest......................................-18
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PAGE
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Underwriter.......................................................-18
Section 102. Miscellaneous............................................-18
ARTICLE II......................................................................-19
FORM, EXECUTION, AUTHENTICATION,
DELIVERY AND EXCHANGE OF BONDS..............................................19
Section 201. Limitation on Issuance of Bonds..........................-19
Section 202. Form of Bonds............................................-19
Section 203. Details of Bonds.........................................-19
Section 204. Authentication of Bonds..................................-23
Section 205. Exchange of Bonds........................................-23
Section 206. Registration of Transfer of Bonds........................-23
Section 207. Ownership of Bonds; Transfer of Title....................-24
Section 208. Authorization of Bonds...................................-25
Section 209. Temporary Bonds..........................................-28
Section 210. Mutilated, Destroyed or Lost Bonds.......................-29
Section 211. Book-Entry Bonds..........................................-29
ARTICLE III.....................................................................-33
REDEMPTION OF BONDS........................................................-33
Section 301. Redemption of Bonds......................................-33
Section 302. Redemption Notice........................................-35
Section 303. Effect of Calling for Redemption.........................-36
Section 304. Redemption of Portions of the Bonds......................-37
ARTICLE IV......................................................................-37
PROJECT FUND...............................................................-37
Section 401. Project Fund.............................................-37
Section 402. Payments from Project Fund...............................-38
Section 403. [Reserved]...............................................-38
Section 404. Requisites for Payments from Project Fund................-38
Section 405. Reliance on Requisitions.................................-39
Section 406. Balance in Project Fund..................................-39
ARTICLE V.......................................................................-40
BOND FUND, RESERVE FUND, RENEWAL AND
REPLACEMENT FUND, AND INSURANCE FUND.......................................-40
Section 501. Creation of Bond Fund....................................-40
Section 502. Payments into Bond Fund..................................-40
Section 503. Use of Moneys in Bond Fund...............................-41
Section 504. Moneys Withdrawn From Bond Fund..........................-41
Section 505. Creation of Reserve Fund.................................-42
Section 506. Payments into Reserve Fund...............................-42
Section 507. Application of Moneys in Reserve Fund....................-43
Section 508. Reserve Fund Maintenance of Margin,
Overage or Deficiency; Notice to Borrower................-43
Section 509. Creation of Renewal and Replacement Fund................-44
Section 510. Payments into Renewal and Replacement Fund...............-44
Section 511. Application of Moneys in Renewal and
Replacement Fund.........................................-44
Section 512. Renewal and Replacement Fund Maintenance
of Margin, Overage or Deficiency; Notice
to Borrower..............................................-45
Section 513. Creation of Insurance Fund...............................-45
Section 514. Payments into Insurance Fund.............................-45
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PAGE
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Section 515. Application of Moneys in Insurance Fund..................-46
Section 516. Insurance Fund Maintenance of Margin, Overage
or Deficiency; Notice to Borrower........................-46
Section 517. Cancellation of Bonds Upon Payment.......................-47
ARTICLES VI.....................................................................-48
DEPOSITORIES OF MONEYS, SECURITY FOR DEPOSITS
AND INVESTMENTS OF FUNDS...................................................-48
Section 601. Security for Deposits...................................-48
Section 602. Investment of Moneys...................................-49
ARTICLE VII.....................................................................-49
PARTICULAR COVENANTS AND PROVISIONS........................................-49
Section 701. Covenant to Pay Bonds; Bonds Limited
Obligations of Authority................................-49
Section 702. Covenant to Perform Obligations under this
Trust Agreement and the Related Documents...............-50
Section 703. Covenants to Perform Further Acts.......................-51
Section 704. Trustee May Enforce Authority's Rights Under
the Related Documents...................................-51
ARTICLE VIII....................................................................-51
DEFAULT AND REMEDIES.......................................................-51
Section 801. Extension of Interest Payment Dates.....................-51
Section 802. Defaults................................................-52
Section 803. Acceleration............................................-52
Section 804. Enforcement of Remedies.................................-53
Section 805. Trustee May File Claim in Bankruptcy....................-54
Section 806. Pro Rata Application of Funds...........................-55
Section 807. Effect of Discontinuance of Proceedings.................-57
Section 808. Majority Interest May Control Proceedings...............-58
Section 809. Restrictions Upon Actions by Individual
Bondholder..............................................-58
Section 810. Receiver................................................-59
Section 811. Actions by Trustee......................................-59
Section 812. No Remedy Exclusive.....................................-59
Section 813. No Delay or Omission Construed to Be
a Waiver................................................-60
Section 814. Waiver of Past Defaults.................................-60
Section 815. Notice of Default.......................................-60
Section 816. Notice of Acceleration..................................-61
ARTICLE IX......................................................................-61
CONCERNING THE TRUSTEE.....................................................-61
Section 901. Acceptance of Trusts.....................................-61
Section 902. Trustee Entitled to Indemnity............................-61
Section 903. Trustee Not Responsible for Insurance, Taxes
or Execution of this Trust Agreement.....................-62
Section 904. Trustee Not Responsible for Acts of the Authority
or Application of Moneys Applied in
Accordance with this Trust Agreement.....................-62
Section 905. Certain Duties and Responsibilities of the
Trustee..................................................-63
Section 906. Compensation.............................................-66
Section 907. Statement of Funds on Deposit............................-66
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PAGE
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Section 908. Notice of Default.......................................-67
Section 909. Trustee May Be Bondholder...............................-67
Section 910. Trustee Not Responsible for Recitals....................-67
Section 911. Trustee Not Responsible for Recording...................-68
Section 912. Qualification of the Trustee............................-68
Section 913. Resignation and Removal of Trustee......................-68
Section 914. Successor Trustee.......................................-70
Section 915. Money Held in Trust.....................................-71
ARTICLE X.......................................................................-71
EXECUTION OF INSTRUMENTS BY BONDHOLDERS
AND PROOF OF OWNERSHIP OF BONDS............................................-71
Section 1001. Execution of Instruments................................-71
Section 1002. Proof of Execution of Instrument and of
Ownership...............................................-71
Section 1003. Record Date.............................................-72
ARTICLE XI......................................................................-72
SUPPLEMENTS AND AMENDMENTS TO TRUST
AGREEMENT..................................................................-72
Section 1101. Supplements and Amendments Not
Requiring Bondholders' Consent...........................-72
Section 1102. Supplements and Amendments Requiring
Consent of the Majority Interest.........................-73
Section 1103. Supplements and Amendments Deemed Part
of Trust Agreement.......................................-75
Section 1104. Discretion of Trustee in Entering into
Supplements and Amendments...............................-76
Section 1105. Consent of Borrower Required.............................-76
ARTICLE XII.....................................................................-76
SUPPLEMENTS AND AMENDMENTS TO
THE RELATED DOCUMENTS .....................................................-76
Section 1201. Supplements and Amendments to
Related Documents Not Requiring Consent..................-77
Section 1202. Supplements and Amendments to Related
Documents Requiring Consent of the
Majority Interest........................................-77
Section 1203. Consent of Trustee Required..............................-77
ARTICLE XIII....................................................................-78
PAYMENT OF BONDS AND TERMINATION;
DEFEASANCE.................................................................-78
Section 1301. Payment of Bonds and Termination........................-78
Section 1302. Defeasance..............................................-79
ARTICLE XIV.....................................................................-80
MISCELLANEOUS PROVISIONS...................................................-80
Section 1401. Covenants of Authority Bind its Successors..............-81
Section 1402. Notices.................................................-81
Section 1403. Substitute Mailing......................................-83
Section 1404. Rights under Trust Agreement............................-83
Section 1405. Severability............................................-84
Section 1406. Covenants of Authority Not Covenants of
Officials Individually..................................-84
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PAGE
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Section 1407. Puerto Rico Law Governs.................................-85
Section 1408. Payments Due on a Non-Business Day......................-85
Section 1409. Headings Not Part of Trust Agreement....................-85
Section 1410. Trust Agreement Supersedes Prior Agreement..............-85
Section 1411. Conflicts...............................................-85
ACCEPTANCE......................................................................-85
EXHIBIT A
FORM OF THE BONDS
EXHIBIT B
SCHEDULE OF FEATURES OF THE BONDS
EXHIBIT C
DTC REPRESENTATION LETTER
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-------------------------------- NUMBER [ ( )] -----------
---------------------------- TRUST AGREEMENT -----------------------------------
In the City of San Xxxx, Puerto Rico, on this [ ( th)] day of [
], nineteen hundred ninety-nine (1999). ----------------------
------------------------------------ BEFORE ME ---------------------------------
---[ ], Attorney-at-Law and Notary Public in and
for the Commonwealth of Puerto Rico with residence in [ ], Puerto
Rico and offices at 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxx Xxxx, Xxxxxx
Xxxx 00000. --------------------------------------------------------------------
----------------------------------- APPEAR -------------------------------------
-- AS THE PARTY OF THE FIRST PART: PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL CONTROL FACILITIES FINANCING AUTHORITY (the
"Authority"), a public corporation and governmental instrumentality of the
Commonwealth of Puerto Rico ("Puerto Rico"), Employer Identification Number
00-0000000, and represented herein by its Executive Director, Xxxxxx Xxxxx xx
Xxxxx, of legal age, married and a resident of Xxxxxxxx Alto, Puerto Rico, who
has been duly authorized to appear herein on behalf of the Authority.-----------
--- AS PARTY OF THE SECOND PART: BANCO SANTANDER PUERTO RICO (Employer
Identification Number 00-0000000), represented herein by the Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxxx, Senior Vice President and Executive Trust Officer of the
Trustee, of legal age, single, and resident of San Xxxx, Puerto Rico, who has
been duly authorized to appear herein on behalf of the Trustee.-----------------
-- I, the Notary, DO HEREBY CERTIFY that I personally know the appearing parties
herein and by their statements as to their respective ages, civil status,
professions and residences. They assure me that they have, and
in my judgment they do have, the necessary legal capacity and knowledge of the
English language to execute this public instrument. Wherefore, they freely and
voluntarily. -------------------------------------------------------------------
---------------------------------------- STATE ---------------------------------
--- FIRST: The Authority was created by the Act a body corporate and politic
constituting a public corporation and governmental instrumentality of Puerto
Rico. --------------------------------------------------------------------------
--- SECOND: The Authority is authorized under the Act to borrow money and issue
bonds for the purpose of providing funds to pay all or any part of the cost of
refinancing any industrial, tourist, educational, medical, or environmental
control facility, the principal of and the premium, if any, and the interest on
which bonds shall be payable solely from the funds provided by the obligor under
the financing agreement in respect of such project. ----------------------------
--- THIRD: The Authority has entered into the Loan Agreement with the Borrower
which provides that the (i) Authority shall issue the Bonds and lend the
proceeds thereof to the Borrower to pay all or part of the Costs, and (ii)
Borrower shall pay or cause to be paid to the Authority sufficient amounts to
pay the principal of, the premium, if any, and the interest on the Bonds.-------
--- FOURTH: The Authority is entering into this Trust Agreement for the purpose
of authorizing the Bonds and securing the payment thereof by Granting the Trust
Estate to the Trustee. -------------------------------------------
--- FIFTH: The Borrower will pledge the Mortgage Notes under the terms of the
Pledge Agreement, in order to further secure, among other things, the payment of
principal of and interest on the Bonds. ----------------------------------------
--- SIXTH: The Authority has determined that the Bonds and the certificate of
authentication to be endorsed thereon by the Trustee shall be substantially in
the forms set forth in Exhibit A with such substitutions,
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omissions, and insertions as are required or permitted by this Trust Agreement.-
--- SEVENTH: The execution and delivery of this Trust Agreement and the Related
Documents to which the Authority is a party, have been duly authorized by a
resolution of the Authority. ---------------------------------------------------
--- EIGHTH: All acts, conditions and things required by the Constitution and
laws of Puerto Rico and the rules and regulations of the Authority to happen,
exist and be performed precedent to and in the execution and delivery of this
Trust Agreement and the Related Documents to which the Authority is a party have
happened, exist and have been performed as so required in order to make this
Trust Agreement and the Related Documents to which the Authority is a party
legal, valid and binding agreements in accordance with their terms.-------------
--- NINTH: The Trustee has accepted the trusts created by this Trust Agreement
and in evidence thereof has joined in the execution hereof. --------------------
--- TENTH: (A) The Authority Grants the Trust Estate to the Trustee IN TRUST,
subject to the rights of the Borrower under the Loan Agreement and to the
exceptions, reservations and matters therein and herein contained, for the equal
and proportionate benefit of all and singular present and future Bondholders,
without preference, priority or distinction, except as otherwise hereinafter
provided, of any one Bond over any other Bond, for reason of priority in the
issue, sale, negotiation or incurrence thereof or otherwise. -------------------
----- (B) This Trust Agreement and all covenants, agreements and other
obligations of the Authority hereunder (except with respect to such funds,
delivered to the Borrower pursuant to Section 504) shall cease and terminate
after the rights, title and interest of the Trustee in and to the Trust Estate
shall have ceased and terminated in accordance with Article XIII and the
principal of and interest on the Bonds shall have been paid to the
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Bondholders, or to the Borrower pursuant to Section 504(B). Thereupon, the
Trustee shall cancel and discharge this Trust Agreement and execute and deliver
to the Authority and the Borrower such instruments as shall be required to
evidence the discharge hereof. -------------------------------------------------
--- ELEVENTH: The Bonds are to be issued, authenticated and delivered and the
payments under the Loan Agreement and other revenues and funds hereby Granted
are to be dealt with and disposed of under, upon and subject to the provisions
of this Trust Agreement. The Authority agrees and covenants with the Trustee and
with the Holders from time to time as follows: ---------------------------------
----------------------------------- ARTICLE I ----------------------------------
---------------------------------- DEFINITIONS ---------------------------------
--- SECTION 101. DEFINITIONS. In addition to words and terms elsewhere defined
in this Trust Agreement, the following words and terms hereinbefore and
hereinafter used shall have the following meanings, unless some other meaning is
intended:-----------------------------------------------------------------------
----- ACCRETED VALUE: with respect to any Capital Appreciation Bond, (i) as of
any Interest Payment Date, an amount equal to the initial principal amount of
such Bond on the Date of Issuance plus the interest accrued on such Bond from
the Date of Issuance to such Interest Payment Date, compounded on each preceding
Interest Payment Date and on such Interest Payment Date and (ii) as of any date
other than an Interest Payment Date, the sum of (a) the Accreted Value of such
Bond on the preceding Interest Payment Date (or, if there is no preceding
Interest Payment Date, the initial principal amount) and (b) the product of (x)
a fraction, the numerator of which is the number of days having elapsed from the
preceding Interest Payment Date (or from the Date of Issuance if there is no
preceding Interest Payment Date) and the denominator of which is the number of
days from
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such preceding Interest Payment Date (or from the Date of Issuance if there
is no preceding Interest Payment Date) to the next succeeding Interest
Payment Date and (y) the difference between the Accreted Values for such
Interest Payment Dates (or between the initial principal amount and the
Accreted Value on the first Interest Payment Date). The Accreted Value per
Five Thousand Dollars ($5,000) amount due at maturity on each Interest
Payment Date is set forth in the Accretion Table contained in the form of
the Capital Appreciation Bonds. ------------------------------------------------
----- ACT: Act Xx. 000 xx xxx Xxxxxxxxxxx xx Xxxxxx Xxxx, approved June
twenty-seven (27), nineteen hundred seventy-seven (1977), as amended, and all
future acts supplemental thereto or amendatory thereof. ------------------------
----- ACT OF BANKRUPTCY: the filing of a petition commencing a case under the
Federal Bankruptcy Code by or against the Borrower. ----------------------------
----- ADDITIONAL INTEREST: as defined in the Loan Agreement.--------------------
----- ADMINISTRATIVE FEE: the single fee to the Authority in the amount of
one-half of one percent (1/2 of 1%) of the aggregate principal amount of the
Bonds.--------------------------------------------------------------------------
----- AFFILIATE: a Person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with the
Borrower. ----------------------------------------------------------------------
----- AMORTIZATION REQUIREMENT: with respect to the Term Bonds, the principal
amount fixed in item 5 of Exhibit B under "Amortization Requirements".----------
----- AGGREGATE PRINCIPAL AMOUNT: One Hundred Five Million Two Hundred Thousand
Dollars [($105,200,000)].-------------------------------------------------------
----- AUTHORITY: Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority a body corporate and
politic constituting a public corporation and governmental instrumentality
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of Puerto Rico and any successor thereto. --------------------------------------
----- AUTHORITY REPRESENTATIVE: each of the Persons designated at the time to
act on behalf of the Authority by a certificate furnished to the Trustee and the
Borrower, containing specimen signatures of such Persons and signed on behalf of
the Authority by the Executive Director. ---------------------------------------
----- AUTHORIZED BORROWER REPRESENTATIVE: each of the Persons designated at the
time to act on behalf of the Borrower by a certificate furnished to the Trustee
and the Authority, containing the specimen signatures of such Persons and signed
on behalf of the Borrower by the general partner thereof. ----------------------
----- AUTHORIZED DENOMINATIONS: Five Thousand Dollars ($5,000) principal amount
(in the case of the Serial Bonds and the Term Bonds) or maturity amount (in the
case of the Capital Appreciation Bonds) or any integral multiple thereof.-------
----- BENEFICIAL OWNER: whenever used with respect to a Bond, the Person in
whose name such Bond is recorded as the beneficial owner thereof by a
Participant on the records of such Participant or such Person's subrogee.-------
----- BOARD: the board of directors of the Authority as constituted from time to
time and defined by the Act, or if said Board shall be abolished, then the
board, body or officer succeeding to the principal functions thereof or to whom
the powers of the Authority shall be given by law. -----------------------------
----- BOND FUND: the Tourism Revenue Bonds, 1999 Series A (El Conquistador
Resort Project) Bond Fund, a special fund created and designated by the
provisions of Section 501. -----------------------------------------------------
----- BONDHOLDER: the Person registered as owner of any Bond in the Bond
Register.-----------------------------------------------------------------------
----- BOND REGISTER: the register to be maintained by the Trustee, and which
shall provide for the registration, transfer and exchange of Bonds, as provided
under Section 206. -------------------------------------------------------------
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----- BONDS: the bonds designated by and issued pursuant to the provisions of
Section 208.--------------------------------------------------------------------
----- BORROWER: El Conquistador Partnership L.P., S.E., a limited partnership
organized and existing under the laws of the State of Delaware, and its
successors and permitted assigns and any surviving, resulting or transferee
partnership or other entity. ---------------------------------------------------
----- BUSINESS DAY: any day, other than a Saturday or Sunday, or a day on which
commercial banks in Puerto Rico or New York, New York are authorized or required
by law or executive order to close. --------------------------------------------
----- CAPITAL APPRECIATION BONDS: the Capital Appreciation Bonds authorized to
be issued under Section 208 and identified as such on Exhibit B.----------------
----- CODE: the Federal Internal Revenue Code of 1986 and the regulations issued
thereunder, as amended, and all future acts supplemental thereto or amendatory
thereof. -----------------------------------------------------------------------
----- CORPORATE TRUST OFFICE: the principal office of the Trustee at 000 Xxxxx
xx Xxxx Xxxxxx, Xxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000, or any other address at
which its corporate trust business shall be administered at any particular time.
----- COSTS: as applied to the refinancing of the acquisition, development,
construction and equipping of the Project, shall have the meaning set forth in
the Act, including, without limitation: the repayment of advances made by
Citicorp Real Estate, Inc. to the Borrower pursuant to certain Assignment and
Modification Agreement dated as of August three (3) nineteen hundred ninety
eight (1998), as amended, in the principal amount of Ninety Million Dollars
($90,000,000), interest paid by the Borrower on the aforementioned advances from
the date thereof until the Date of Issuance, the Administrative Fee, the Costs
of Issuance and the Reserve Fund Amount.----------------------------------------
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----- COSTS OF ISSUANCE: all items of expense, not to exceed in the aggregate
two percent (2%) of the Aggregate Principal Amount, relating to the
authorization, sale and issuance of the Bonds (excluding the Administrative
Fee and all expenses of recordation of the Mortgages), including the fees,
commissions and expenses of the Trustee properly incurred under this Trust
Agreement prior to the Date of Issuance, the initial or acceptance fee of the
Trustee, legal, accounting and financial advisory fees and expenses,
underwriting fees and expenses, filing and rating agencies' fees and printing
and engraving costs incurred in connection with the authorization, sale and
issuance of the Bonds, the execution of this Trust Agreement, the Related
Documents, and all other documents in connection therewith, and payment
of all fees, costs and expenses for the preparation of this Trust Agreement,
the Bonds, the Related Documents and any other collateral or security taken
by the Trustee to secure the Borrower's obligations hereunder, and any
other fees and expenses necessary or incident to the issuance and sale of the
Bonds, the execution and delivery of the Related Documents and the
documents contemplated by any of the foregoing. --------------------------------
----- DATE OF ISSUANCE: the date appearing in the first page of this Trust
Agreement. ---------------------------------------------------------------------
----- DEFAULTED INTEREST: has the meaning specified in Section 203. -----------
----- DEFEASANCE OBLIGATIONS: (i) noncallable Government Obligations, (ii)
Defeased Municipal Obligations and (iii) evidences of ownership of a
proportionate interest in specified Defeased Municipal Obligations held by a
bank or trust company organized and existing under the Federal laws or the laws
of any state or territory thereof as custodian.---------------------------------
---- DEFEASED MUNICIPAL OBLIGATIONS: obligations of state, territory or local
government issuers which are rated in the highest rating category by the Rating
Agency, provision for the payment of the principal of and
-8-
redemption premium, if any, and interest on which shall have been made by
deposit with a trustee or escrow agent of noncallable Government Obligations,
the maturing principal of and interest on which, when due and payable, shall
provide sufficient money to pay the principal of and redemption premium, if any,
and interest on such obligations of state, territory or local government
issuers. -----------------------------------------------------------------------
----- DTC: The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, and its successors and
assigns. -----------------------------------------------------------------------
----- DTC REPRESENTATION LETTER: the letter or letters from the Authority
and the Trustee to DTC with respect to the Bonds in the form appended
hereto as Exhibit C, which, so long as DTC shall be the Securities
Depository for the Bonds, shall be deemed to be part of this Agreement and
shall be a binding obligation of the Authority and the Trustee.---------------
----- EVENT OF TAXABILITY: as defined in the Loan Agreement. -------------------
----- EXECUTIVE DIRECTOR: the Executive Director, the Assistant Executive
Director or the Acting Executive Director of the Authority, or if there is no
Executive Director, Assistant Executive Director or Acting Executive Director,
then any Person designated by the Board or authorized by the by-laws of the
Authority to perform the functions of the Executive Director. ------------------
----- EXHIBIT A: the "FORM OF BOND" attached to this Trust Agreement and marked
Exhibit A. ---------------------------------------------------------------------
----- EXHIBIT B: the "Schedule of Features of the Bonds" attached to this
Trust Agreement and marked Exhibit B. ------------------------------------------
----- FAIR MARKET VALUE: on any date, (i) with respect to Investment Obligations
the bid and asked price of which are published in the Wall Street Journal, the
bid price thereof so published on or most recently prior to the valuation date;
(ii) with respect to Investment Obligations the bid and
-9-
asked price of which are not published in the Wall Street Journal, the average
bid price therefor on the valuation date reported by any of the recognized
dealers at the time making a market in such Investment Obligations; and (iii)
with respect to any Investment Obligations for which no value can be established
under (i) or (ii) above, the principal amount thereof plus accrued and unpaid
interest thereon.---------------------------------------------------------------
----- FEDERAL: the United States of America and the government thereof. --------
----- GOVERNMENT OBLIGATIONS: (i) direct obligations of, or obligations the
principal of and the interest on which are unconditionally guaranteed by, the
United States of America, and (ii) any certificates or other evidences of an
ownership in obligations or in specified portions thereof (which may consist of
specified portions of the principal thereof or the interest thereon) of the
character described in clause (i).----------------------------------------------
----- GRANT: to convey, assign and transfer legal title.------------------------
----- HOLDER: the Person registered as owner of any Bond in the Bond Register.--
----- INTEREST PAYMENT DATE: the first day of each month, commencing on [ ],
nineteen hundred ninety-nine (1999) --------------------------------------------
----- INTEREST RATE: as of any date, the prevailing rates of interest on the
Bonds of each maturity. --------------------------------------------------------
---- INSURANCE CONSULTANT: a Person recognized as expert in the insurance
industry selected by the Trustee and paid by the Borrower. ---------------------
----- INVESTMENT OBLIGATIONS: Government Obligations and obligations of any
agency or instrumentality whose obligations are backed by the full faith and
credit of the United States of America and, to the extent from time to time
permitted by law, (A) the obligations of (i) Federal National Mortgage
Association, (ii) Federal Home Loan Banks, (iii) Federal Farm Credit System,
(iv) Federal Home Loan Mortgage Corporation, and
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(v) Government National Mortgage Association (to the extent not included in
Government Obligations); (B) repurchase agreements with financial institutions
which are members of the Federal Reserve System or primary dealers in the United
States Treasury market the short-term obligations of which institutions or
dealers are rated at least "A" by the Rating Agency (or any similar rating to
which it may be changed) or whose long-term obligations are rated in one of the
three highest rating categories by the Rating Agency secured by Government
Obligations or by securities described in clause (A); provided, that such
repurchase agreement must provide that the value of the underlying obligations
shall be maintained at a current market value, calculated at least weekly, of
not less than 104% of the repurchase price (or in the case such underlying
obligations are obligations of the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation, of not less than 105% of the repurchase
price), a legal opinion shall be furnished to the Trustee to the effect that the
repurchase agreement meets guidelines under the laws of Puerto Rico for the
legal investment of public funds, the Trustee shall be given a first priority
security interest, no independent third party shall have a lien, such
obligations purchased must be transferred to the Trustee or an independent third
party agent by physical delivery or by an entry made on the records of the
issuer of such obligations, in either case, the entity should receive
confirmation from the independent third party that those securities are being
held in a safe-keeping account in the name of the entity (the trust or safe-
keeping departments of broker-dealers or financial institutions selling
investments or pledging collateral or underlying securities, or their custodial
agents, are not considered independent third parties for the foregoing
purposes), such repurchase agreement shall constitute a "repurchase agreement"
within the meaning of Section 101 of the Federal Bankruptcy
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Code, as amended, and any investment in a repurchase agreement shall mature
within 30 days; (C) debt obligations and commercial paper rated "M-1" or better
by the Rating Agency; (D) U.S. Treasury Strips, REFCORP Strips and FICO Strips;
(E) money market funds registered under the Federal Investment Company Act of
1940, whose shares are registered under the Securities Act, and having a rating
of "P-1" by the Rating Agency; (F) certificates of deposit secured at all times
by Government Obligations or collateral described in (A) which certificates are
issued by commercial banks, savings and loan associations or mutual savings
banks; provided that the collateral must be held by a third party and the
Trustee must have a perfected first priority security interest in the
collateral; (G) certificates of deposit, savings accounts, deposit accounts or
money market deposits which are fully insured by FDIC, including BIF and SAIF;
(H) bonds or notes issued by any state, territory or municipality which are
rated by the Rating Agency in one of the two highest rating categories assigned
by such agencies; (I) federal funds or bankers' acceptances with a maximum term
of one year of any bank which has an unsecured, uninsured and unguaranteed
obligation rating of "A" or better by the Rating Agency; and (J) any Puerto Rico
administered pool investment fund in which the Authority is statutorily
permitted or required to invest. Any investment in Government Obligations or in
obligations described in (A) above may be made in the form of an entry made on
the records of the issuer of the particular obligation. ------------------------
----- LOAN AGREEMENT: the Loan Agreement, dated the Date of Issuance, by and
between the Authority and the Borrower, together with all permitted agreements
amendatory thereof or supplemental thereto. ------------------------------------
----- MAJORITY INTEREST: as of any date of calculation, the Bondholders (not
including the Borrower, any Affiliate or any Person holding Bonds on
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behalf of the Borrower or an Affiliate) of more than 50% of the aggregate
principal amount of Bonds then Outstanding. ------------------------------------
----- MATURITY DATE: with respect to any Bond, the date specified in such Bond
as the maturity date thereof.---------------------------------------------------
----- MORTGAGES: collectively, (i) the first mortgage on the Project and on
parcel #15,228 registered at page 29 of tome 354 of Fajardo and the leasehold
mortgage on Palominos Island, constituted by deeds number [____ (__), ______ ( )
and ___ ( )], respectively, dated the Date of Issuance, executed before Notary
Public [ ] to secure the Mortgage Notes.]-------------------
----- MORTGAGE NOTES: collectively, the notes of the Borrower dated the Date of
Issuance, in the principal amounts of [ONE HUNDRED FIVE MILLION TWO HUNDRED
THOUSAND DOLLARS ($105,200,000)], TWO MILLION DOLLARS ($2,000,000) and ONE
HUNDRED THOUSAND DOLLARS ($100,000) secured by the Mortgages.-------------------
----- OUTSTANDING: When used with reference to the Bonds, means, as of a
particular date, all Bonds theretofore issued and authenticated under this Trust
Agreement except: (i) Bonds paid or delivered to the Trustee for cancellation;
(ii) Bonds deemed to have been paid in accordance with Article XIII; and (iii)
Bonds in exchange for or in lieu of which other Bonds have been authenticated
and delivered pursuant to this Trust Agreement. --------------------------------
----- PARTICIPANT: each broker-dealer, bank or other financial institution for
which DTC or any other Securities Depository holds securities as a Securities
Depository.---------------------------------------------------------------------
----- PAYMENT OF THE BONDS: as defined in the Loan Agreement. ------------------
----- PERSON: any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
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government or any agency or political subdivision thereof. ---------------------
----- PLEDGE AGREEMENT: The Mortgage Notes Pledge and Security Agreement, dated
the Date of Issuance, by and between the Borrower and the Authority, together
with all permitted agreements amendatory thereof or supplemental thereto.-------
----- PREDECESSOR BOND: of any particular Bond means every previous Bond
evidencing all or a portion of the same debt as that evidenced by such
particular Bond; and, for purposes of this definition, any Bond authenticated
and delivered under Section 210 in lieu of a lost, destroyed, mutilated, or
stolen Bond shall be deemed to evidence the same debt as the lost, destroyed,
mutilated or stolen Bond.-------------------------------------------------------
----- PRINCIPAL: when referring to the Bonds (i) in the case of any Serial Bond
or Term Bond, the principal amount of such Bond stated to be payable at maturity
and (ii) in the case of any Capital Appreciation Bond, (A) the Accreted Value
thereof, when used in connection with determining whether the Holders of the
requisite principal amount of Bonds Outstanding have given any notice, consent,
request, direction, waiver or demand pursuant to this Trust Agreement, or for
the purposes of determining the principal amount of such Bond due at maturity,
redemption or other payment date thereof, and for all other purposes other than
for the purpose set forth in clause (B) and (C) below, (B) the initial principal
amount thereof for purposes of the order of payments under Section 806 (the
difference between the Accreted Value and the initial principal amount
constituting interest for purposes of the order of payment in Section 806), and
(C) the "maturity amount" for purposes of Sections 205, 209(B) and 210.---------
----- PRINCIPAL PAYMENT DATE: the Maturity Date and any date on which the
principal of the Bonds, in whole or in part, is due and payable by reason of
redemption, purchase, acceleration or otherwise. -------------------------------
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----- PRINCIPAL PAYMENT PERIOD: each period of 6 months commencing on each
Principal Payment Date and ending on the day preceding the next Principal
Payment Date, except that the first Principal Payment Period shall commence on
the Date of Issuance and the last Principal Payment Period shall end on the
Maturity Date. -----------------------------------------------------------------
----- PROJECT: the Industrial Facilities (as defined in the Act) described in
Exhibit A to the Loan Agreement, including any modifications thereof,
substitution therefor or additions thereto and excluding deletions therefrom
(others than those permitted hereunder), as may be permitted by the Loan
Agreement.----------------------------------------------------------------------
----- PROJECT FUND: the special fund created and designated by the provisions of
Section 401. -------------------------------------------------------------------
----- PUERTO RICO: the Commonwealth of Puerto Rico. ----------------------------
----- RATING AGENCY: Xxxxx'x Investors Service, Inc., a corporation organized
and existing under the laws of the State of Delaware, its successors and
assigns, or Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., its successors and assigns, or if neither is available, any
other nationally recognized statistical rating organization which shall have
been requested by the Borrower to provide a rating for the Bonds and which shall
then have a rating in effect with respect to the Bonds. ------------------------
----- REDEMPTION PRICE: with respect to any Bond to be redeemed in whole or in
part pursuant to this Trust Agreement, an amount equal to 100% of the principal
amount of the Bond to be so redeemed (or, in the case of a Bond to be redeemed
in part, 100% of the portion of the principal amount thereof to be redeemed),
together with interest on such amount at the Interest Rate from the preceding
Interest Payment Date to the date of redemption. -------------------------------
----- REGULAR RECORD DATE: the fifteenth day of the month immediately
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preceding an Interest Payment Date.---------------------------------------------
----- RELATED DOCUMENTS: the (i) Loan Agreement; (ii) Mortgages; (iii) Mortgage
Notes; and (iv) Assignment of Leases and Rents Agreement and Security Agreement,
Assignment of Hotel Management Agreement and Security Agreement, Master Security
Agreement, UCC Financing Statement and the UCC Fixtures Filing dated the Date of
Issuance by and between the Borrower and the Trustee, together with all
permitted agreements amendatory thereof or supplemental thereto, individually or
collectively, as the case may be. ----------------------------------------------
----- RESERVE FUND: the fund created and designated by Section 505.-------------
----- RESERVE FUND AMOUNT: NINE MILLION ONE HUNDRED THOUSAND DOLLARS
($9,100,000). ------------------------------------------------------------------
----- RENEWAL AND REPLACEMENT FUND: from fund created and designated by Section
509.----------------------------------------------------------------------------
----- RENEWAL AND REPLACEMENT FUND AMOUNT: on the Date of Issuance through the
Taxable Year ending December 31, 2004, FOUR MILLION DOLLARS ($4,000,000); from
January 1, 2005 through December 31, 2009, the higher of FOUR MILLION DOLLARS
($4,000,000) and an amount equal to four percent (4%) of the average gross
revenues of the Borrower for the three (3) Taxable Years immediately preceding
January 1, 2005, as shown in the Borrower's audited financial statements; from
January 1, 2010 through December 31, 2014, the higher of FOUR MILLION DOLLARS
($4,000,000) and an amount equal to four percent (4%) of the average gross
revenues of the Borrower for the three (3) Taxable Years immediately preceding
January 1, 2010, as shown in the Borrower's audited financial statements; from
January 1, 2015 through December 31, 2019, the higher of FOUR MILLION DOLLARS
($4,000,000) and an amount equal to four percent (4%) of the average gross
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revenues of the Borrower for the three (3) Taxable Years immediately preceding
January 1, 2015, as shown in the Borrower's audited financial statements; from
January 1, 2020 through December 31, 2025, the higher of FOUR MILLION DOLLARS
($4,000,000) and an amount equal to four percent (4%) of the average gross
revenues of the Borrower for the three (3) Taxable Years immediately preceding
January 1, 2020, as shown in the Borrower's audited financial statements; and
from January 1, 2026 through December 31, 2030, the higher of FOUR MILLION
DOLLARS ($4,000,000) and an amount equal to four percent (4%) of the average
gross revenues of the Borrower for the three (3) Taxable Years immediately
preceding January 1, 2026, as shown in the Borrower's audited financial
statements.---------------------------------------------------------------------
----- SECRETARY: the Secretary or any Assistant Secretary of the Authority, or
if there is no secretary or assistant secretary, then any Person designated by
the Board or authorized by the by-laws of the Authority to perform the functions
of the Secretary. --------------------------------------------------------------
----- SECURITIES ACT: the Federal Securities Act of 1933, as amended. ----------
----- SECURITIES DEPOSITORY: DTC, or any other depository trust company (or any
of its designees to the Trustee) appointed for the Bonds.-----------------------
----- SERIAL BONDS: the Serial Bonds authorized to be issued under Section 208
and identified as such on Exhibit B.--------------------------------------------
----- SERIAL BONDS AGGREGATE PRINCIPAL AMOUNT: the Serial Bonds Aggregate
Principal Amount as stated in item 2 of Exhibit B.------------------------------
----- SPECIAL RECORD DATE: the date fixed by the Trustee for determining the
Holders entitled to the payment of Defaulted Interest, pursuant to Section 203.-
----- TERM BONDS: the Term Bonds authorized to be issued under Section 208 and
identified as such on Exhibit B.------------------------------------------------
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----- TRUST AGREEMENT: this Trust Agreement together with all permitted
agreements amendatory hereof or supplemental hereto. ---------------------------
----- TRUSTEE: Banco Santander Puerto Rico (Employer Identification Number
00-0000000), a bank incorporated and existing under the laws of Puerto Rico and
having its principal corporate trust office in Hato Rey, Puerto Rico, which is
authorized under such laws to exercise corporate trust powers and any other
bank, banking association or trust company becoming successor trustee under this
Trust Agreement.----------------------------------------------------------------
----- TRUST ESTATE: (i) all right, title and interest of the Authority in and to
(a) the Loan Agreement and all amounts receivable thereunder (except its rights
under Sections 4.05, 4.06, 5.06, 5.07, 7.04, 9.14 and 9.15 of the Loan
Agreement, and its rights to receive notices), and (b) the other Related
Documents (except its rights under the sections of the other Related Documents
corresponding to Sections 4.05, 4.06, 5.06, 5.07 and 7.04 of the Loan Agreement,
and its rights to receive notices); (ii) all funds and accounts established
under this Trust Agreement and all moneys and securities from time to time held
by the Trustee hereunder until disbursement therefrom as provided herein; and
(iii) any and all real or personal property of every name and nature from time
to time, by delivery or by writing of any kind, Granted pursuant to the
provisions of this Trust Agreement. --------------------------------------------
----- TWENTY-FIVE PERCENT INTEREST: as of any date of calculation, the Holders
(not including the Borrower, any Affiliate or any Person holding Bonds on behalf
of the Borrower or an Affiliate) of not less than 25% of the aggregate principal
amount of Bonds then Outstanding. ----------------------------------------------
----- UNDERWRITER: Citicorp Financial Services Corporation.---------------------
--- SECTION 102. MISCELLANEOUS. (A) Words of the masculine gender shall be
deemed and construed to include relative words of the feminine and
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neuter genders. ----------------------------------------------------------------
----- (B) Unless the context shall otherwise indicate, "Bond," "Bondholder,"
"Holder," "owner," and "Person" shall include the plural as well as the singular
number. ------------------------------------------------------------------------
----- (C) All references herein to particular articles, sections or exhibits,
are references to articles, sections or exhibits of this Trust Agreement unless
some other reference is established. -------------------------------------------
----- (D) Words importing the redemption or calling for redemption or the Bonds
shall not be deemed to refer to or connote the payment of the Bonds at their
Maturity Date. -----------------------------------------------------------------
----- (E) The captions or headings in this Trust Agreement are for convenience
only and in no way define, limit or describe the scope or intent of any
provisions of articles and sections of this Trust Agreement. -------------------
---------------------------------- ARTICLE II ----------------------------------
---------------------- FORM, EXECUTION, AUTHENTICATION, ------------------------
----------------------- DELIVERY AND EXCHANGE OF BONDS -------------------------
--- SECTION 201. LIMITATION ON ISSUANCE OF BONDS. No Bonds may be issued under
the provisions of this Trust Agreement except in accordance with the provisions
of this Article. ---------------------------------------------------------------
--- SECTION 202. FORM OF BONDS. The definitive Bonds are issuable as fully
registered Bonds without coupons, in Authorized Denominations, and substantially
in the form of Exhibit A. All Bonds may have endorsed thereon such legends or
text as may be necessary or appropriate to conform to any applicable rules and
regulations of any governmental authority or of any securities exchange on which
the Bonds may be listed or traded or any usage or requirement of law with
respect thereto or as may be authorized by the Authority and approved by the
Trustee.------------------------------------------------------------------------
--- SECTION 203. DETAILS OF BONDS. (A) The Bonds shall be dated, shall bear
interest until their payment (in the case of the Serial Bonds and the
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Term Bonds), shall yield (in the case of the Capital Appreciation Bonds) and
shall be stated to mature (subject to the right of prior redemption) as provided
in Exhibit B. ------------------------------------------------------------------
------ (B) Each Bond shall bear interest from the Interest Payment Date next
preceding the date on which it is authenticated, unless authenticated on an
Interest Payment Date, in which case it shall bear interest from such Interest
Payment Date, or, unless authenticated prior to the first Interest Payment Date
in which case it shall bear interest from the Date of Issuance; provided,
however, that if at the time of authentication of any Bond interest thereon is
in default, such Bond shall bear interest from the date to which interest shall
have been paid. ----------------------------------------------------------------
------(C) Interest on the Bonds shall be computed on the basis of a 360-day year
of twelve 30-day months. -------------------------------------------------------
------ (D) The Bonds shall be signed by, or bear the facsimile signatures of,
the Executive Director and the Secretary. A facsimile of the corporate seal of
the Authority shall be imprinted on the Bonds. In case any officer whose
signature shall appear on any Bonds shall cease to be such officer before the
delivery of such Bonds, such signature or such facsimile shall nevertheless be
valid and sufficient for all purposes as if he had remained in office until such
delivery, and also any Bond may bear the facsimile signatures of or may be
signed by such Persons as at the actual time of the execution of such Bond shall
be the proper officers to sign such Bond although at the Date of Issuance of
such Bond such Persons may not have been such officers. ------------------------
------ (E) The principal of and premium, if any, and the interest on the Bonds
shall be payable in any Federal coin or currency which on the respective dates
of payment thereof is legal tender for the payment of public and private debts.
------ (F) Payment of the interest on each Bond which is payable and is
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punctually paid shall be made by the Trustee on each Interest Payment Date to
the Holders at the close of business on the Regular Record Date by check mailed
to such Bondholder or at the request of a Bondholder who initially purchases or
subsequently acquires at least ONE MILLION DOLLARS ($1,000,000) aggregate
principal amount of Bonds, by wire transfer to the bank account of such
Bondholder, provided he files his bank account number with the Trustee for such
purpose at least 15 Business Days prior to the first Interest Payment Date for
which such wire transfer is to be made. The Trustee may impose a reasonable
charge for each such wire transfer payment. The foregoing provisions as to
payment are subject to the provisions of Section 211 regarding book-entry Bonds.
------ (G) Except as provided in Section 209 and 210, payment of the principal
of all Bonds and any premium thereon shall be made at the Corporate Trust Office
upon the presentation and surrender of such Bonds as the same shall become due
and payable, and only to the Bondholder or his legal representative.------------
------ (H) Any interest on any Bond which is payable but is not punctually paid
or duly provided for within 5 days after the same shall become due and payable
on any Interest Payment Date for such Bond (herein called "Defaulted Interest"),
shall forthwith cease to be payable to the Bondholder on the relevant Regular
Record Date by virtue of his having been such Bondholder; and such Defaulted
Interest may be paid by the Authority, in its election in each case, as provided
in clause First or Second below: -----------------------------------------------
-------- First: The Authority may elect to make payment of any Defaulted
Interest to the Holders at the close of business on a Special Record Date, which
shall be fixed in the following manner. The Authority shall notify the Trustee
of the amount of Defaulted Interest proposed to be paid on each such Bond and
the date of the proposed payment, and at the same time the
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Authority shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Authority of such Special Record Date and, in the name and at the expense of the
Authority, shall cause notice of the proposed payment of such Defaulted Interest
and the date therefor to be given to each Bondholder on the Special Record Date
not less than five (5) days prior to the date specified for payment of such
Defaulted Interest. Notice of the proposed payment therefor having been given as
aforesaid, such Defaulted Interest shall be paid on the date fixed for payment
to the Bondholder at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause Second. ------------------
-------- Second: The Authority may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Bonds affected may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the Authority to the
Trustee of the proposed payment pursuant to this clause, such payment shall be
deemed practicable by the Trustee. ---------------------------------------------
----- (J) Subject to the foregoing provisions of this Section, each Bond
delivered under this Trust Agreement upon registration of transfer of or in
exchange for or in lieu of any other Bond shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Bond. ------
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--- SECTION 204. AUTHENTICATION OF BONDS. Only such of the Bonds as shall have
endorsed thereon a certificate of authentication substantially in the form set
forth in Exhibit A, duly executed by the Trustee, shall be entitled to any
benefit or security under this Trust Agreement. No Bond shall be valid or become
obligatory for any purpose unless and until such certificate of authentication
shall have been duly executed by the Trustee, and such certificate of the
Trustee upon any such Bond shall be conclusive evidence that such Bond has been
duly authenticated and delivered under this Trust Agreement. The Trustee's
certificate of authentication on any Bond shall be deemed to have been duly
executed if signed by an authorized officer of the Trustee, but it shall not be
necessary that the same officer sign the certificate of authentication on all of
the Bonds that may be issued hereunder at any one time. ------------------------
--- SECTION 205. EXCHANGE OF BONDS. Bonds, upon surrender thereof at the
Corporate Trust Office, together with an assignment duly executed by the
Bondholder or legal representative in such form as shall be satisfactory to the
Trustee, may, at the option of the Bondholder thereof, be exchanged for an equal
aggregate principal amount of Bonds of same tenor, of any Authorized
Denominations and of the same Maturity Date. -----------------------------------
--- SECTION 206. REGISTRATION OF TRANSFER OF BONDS. (A) The Trustee shall keep
the Bond Register. The transfer of any Bond may be registered only in the Bond
Register upon surrender of such Bond to the Trustee together with an assignment,
duly executed by the Holder or legal representative in such form as shall be
satisfactory to the Trustee. Upon any such registration of transfer the
Authority shall execute and the Trustee shall authenticate and deliver in
exchange for such Bond a new Bond or Bonds registered in the name of the
transferee, for an equal aggregate principal amount, of any Authorized
Denominations and of the same Maturity Date. -----------------------------------
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------ (B) In all cases in which Bonds shall be exchanged or the transfer of
Bonds shall be registered hereunder, the Authority shall execute and the Trustee
shall authenticate and deliver at the earliest practicable time Bonds in
accordance with the provisions of this Trust Agreement. All Bonds surrendered in
any such exchange or registration of transfer shall forthwith be canceled by the
Trustee. The Authority or the Trustee may impose a reasonable fee or service
charge for every such exchange or registration of transfer of Bonds sufficient
to reimburse it for any tax or other governmental charge required to be paid
with respect to such exchange or registration of transfer. Neither the Authority
nor the Trustee shall be required to make any such exchange or registration of
transfer of Bonds during the 15 days immediately preceding the date of giving of
notice of any redemption of Bonds, or after such Bond or any portion thereof has
been selected for redemption. --------------------------------------------------
--- SECTION 207. OWNERSHIP OF BONDS; TRANSFER OF TITLE. (A) As to any Bond, the
Holder shall be deemed and regarded as the absolute owner thereof for all
purposes. Payment of or on account of the principal of and the interest on any
Bond shall be made only to or upon the order of the Holder or his legal
representative, and shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid. -------------
------ (B) The Holders are granted the power to transfer absolute title to their
Bonds, including by assignment thereof to a bona fide purchaser for value
(present or antecedent) without notice of prior defenses or equities or claims
of ownership enforceable against his assignor or any Person in the chain of
title and before the maturity of such Bond. Every prior Holder of any Bond shall
be deemed to have waived and renounced all of his equities or rights therein in
favor of every such bona fide purchaser, and every such bona fide
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purchaser shall acquire absolute title thereto and to all rights represented
thereby. -----------------------------------------------------------------------
--- SECTION 208. AUTHORIZATION OF BONDS. (A) There shall be issued under and
secured by this Trust Agreement Bonds in the aggregate initial principal amount
specified in item 1 of Exhibit B for the purpose of providing funds for paying,
with other available funds, all or a portion of the Costs. The Bonds shall (i)
be designated "Tourism Revenue Bonds, 1999 Series A, (El Conquistador Resort
Project)", (ii) consist of three classes in the amounts and maturities specified
on Exhibit B; and (iii) dated the Date of Issuance and numbered from RA-0001
upwards .-----------------------------------------------------------------------
------ (B) The principal of the Bonds shall be payable on the corresponding
Principal Payment Date. --------------------------------------------------------
------ (C) The Bonds shall (i) be in the principal amounts, (ii) bear interest
(in the case of Serial Bonds and Term Bonds) or yield (in the case of Capital
Appreciation Bonds) at various rates per annum, payable on the Interest Payment
Dates commencing on the Initial Interest Payment Date, (iii) have Maturity
Dates, subject to the right of prior redemption, as set forth in Exhibit B. ----
------ (D) The Bonds shall be executed substantially in the form and manner set
forth in Exhibit A and shall be deposited with the Trustee for authentication,
but before the Trustee shall authenticate and deliver same there shall be filed
with the Trustee the following: ------------------------------------------------
-------- (i) a copy, certified by the Secretary, of the resolution of the Board
awarding the Bonds, specifying the interest rate or rates (in the case of Serial
Bonds and Term Bonds) or yield (in the case of Capital Appreciation Bonds) and
the Amortization Requirements therefor, and directing their authentication and
delivery to or upon the order of the purchasers mentioned therein upon payment
of the purchase price therein set forth; ---------------------------------------
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-------- (ii) an executed counterpart of the Loan Agreement; -------------------
--------(iii) executed counterparts or simple copies (in the case of deeds) of
the other Related Documents; ---------------------------------------------------
-------- (iv) an opinion of counsel to the Borrower that, as to each of the
Related Documents: (a) the Borrower has full power to enter there into, (b) the
execution and delivery thereof has been duly authorized by the Borrower, (c) it
has been duly executed by the Borrower in the form so authorized, and (d)
assuming proper authorization and execution thereof by the other parties
thereto, it is valid, binding and enforceable against the Borrower in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally and subject to general principles of equity (regardless of whether
said enforceability is considered in a proceeding in equity or at law); --------
-------- (v) an opinion of counsel, who may be counsel for the Authority,
addressed to the Trustee, to the effect that (a) the Authority has the legal
right and power to enter into and has duly authorized, validly executed and
delivered, this Trust Agreement and the Related Documents to which it is a
party, and each of such agreements and documents is legally valid and binding
upon the Authority and enforceable against the Authority in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency or other laws affecting creditors' rights generally and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (b) this
Trust Agreement creates a legally valid and effective Grant of the Trust Estate,
subject to the application thereof to the purposes and on the conditions
permitted by this Trust Agreement, and that no filing or recording of any
document is necessary in order to make such Grant
-26-
effective or to continue it in effect (or specifying the place or places, if
any, where such filing or recording is necessary and furnishing any officially
authenticated certificates, or other documents, by which such filing or
recording is evidenced), (c) the issuance of the Bonds will not violate any
provision of law or of the by-laws of the Authority or result in the breach of,
or constitute a default under, any agreement, indenture or other instrument to
which the Authority is a party or by which it may be bound, (d) no
authorization, consent or approval or withholding of objection of any
governmental body or regulatory authority is requisite to the legal issue of
said Bonds (unless such opinion shall show that no such authorization, consent
or approval or withholding of objection is requisite to the legal issue of the
Bonds, it shall specify and furnish any officially authenticated certificates,
or other documents, by which such authorization, consent or approval or
withholding of objection is evidenced), (e) the Bonds are legally valid and
binding direct obligations of the Authority in accordance with their terms and
the terms of this Trust Agreement and have been duly and validly authorized and
issued in accordance with applicable law and this Trust Agreement, and (f) the
conditions precedent to the delivery of the Bonds have been fulfilled, and
covering such other matters as the Trustee may reasonably request; and ---------
-------- (vi) such other opinions and certificates as the Trustee reasonably
requests. ----------------------------------------------------------------------
--- When the documents mentioned above in this Section shall have been filed
with the Trustee and when the Bonds shall have been executed and authenticated
as required by this Trust Agreement, the Trustee shall deliver the Bonds at one
time or from time to time to or upon the order of the purchasers named in the
resolution mentioned in clause (i) of Section 208 (D), but only upon payment to
the Trustee of the purchase price of said
-27-
Bonds. -------------------------------------------------------------------------
------ (E) The Trustee shall apply the proceeds of the Bonds (net of the
Underwriter's discount) as follows: ---(i) the Reserve Fund Amount to the credit
of the Reserve Fund; and (ii) the remainder to the credit of the Project Fund.--
--- SECTION 209. TEMPORARY BONDS. (A) Until definitive Bonds are ready for
delivery, there may be executed, and upon request of the Authority the Trustee
shall authenticate and deliver, in lieu of definitive Bonds and subject to the
same limitations and conditions, one or more temporary printed, typewritten,
engraved or lithographed Bonds, in fully registered form without coupons in such
denomination(s), equal to the Aggregate Principal Amount, with payment record
attached for the notation of payments of interest, without presentation and
surrender of such Bond, as the Authority by resolution may provide,
substantially of the tenor hereinabove set forth and with such appropriate
omissions, insertions and variations as may be required. -----------------------
------ (B) If temporary Bonds shall be issued, the Authority shall cause the
definitive Bonds to be prepared and to be executed and delivered to the Trustee,
and the Trustee, upon presentation to it at the Corporate Trust Office, of any
temporary Bond, shall cancel the same and authenticate and deliver in exchange
therefor at the place designated by the Holder, without charge to the Holder
thereof, a definitive Bond or Bonds of an equal principal amount and Maturity
Date as the temporary Bond surrendered. Until so exchanged the temporary Bonds
shall in all respects be entitled to the same benefit of this Trust Agreement as
the corresponding definitive Bonds to be issued and authenticated hereunder. No
charge of any kind shall be made against the Holder upon an exchange of a
temporary Bond for a definitive Bond. ------------------------------------------
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--- SECTION 210. MUTILATED, DESTROYED OR LOST BONDS. (A) A mutilated Bond may be
surrendered and thereupon the Authority shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Bond of like tenor and
principal amount. --------------------------------------------------------------
----- (B) If there be delivered to the Authority, the Borrower and to the
Trustee: -----------------------------------------------------------------------
------- (i) evidence to their satisfaction of the destruction or loss of any
Bond, and ----------------------------------------------------------------------
------- (ii) such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Authority or the Trustee
that such Bond has been acquired by a bona fide purchaser, the Authority shall
execute and upon its request the Trustee shall authenticate and deliver in lieu
of any such destroyed or lost Bond, a new Bond of like tenor and principal
amount. In case any such mutilated, destroyed or lost Bond has become or is
about to become due and payable, the Authority in its discretion, instead of
issuing a new Bond, may pay such Bond. -----------------------------------------
----- (C) Upon the issuance of any new Bond under this Section, the Authority
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.--
--- SECTION 211. BOOK-ENTRY BONDS. (i) Except as provided in subparagraph (iii)
of this Section 211, the Holder of all Bonds shall be the Securities Depository
and, as long as the Securities Depository shall be DTC, the Holder shall be Cede
& Co., as nominee for DTC. Payment of interest for any Bond registered in the
name of Cede & Co. shall be made to the account of Cede & Co. at the address
indicated for Cede & Co. in the registration books kept by the Trustee. The
"Bonds" referred to in this
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Section 211 shall refer to all Book-Entry Bonds. -------------------------------
-------(ii) The Bonds shall be initially issued in the form of separate, single,
authenticated fully-registered Bonds in the amount of each separately stated
maturity. As long as certificates for the Bonds are not issued pursuant to this
Section 211, the Trustee and the Authority may treat the Securities Depository
(or its nominee) as the sole and exclusive owner of the Bonds registered in its
name for the purposes of payment of the principal or Redemption Price (and
premium, if any) of or interest on the Bonds, selecting the Bonds or portions
thereof to be redeemed, giving any notice permitted or required to be given to
the owners of such Bonds hereunder, registering the transfer of Bonds, obtaining
any consent or other action to be taken by Bondholders and for all other
purposes whatsoever; and neither the Trustee nor the Authority shall have any
responsibility or obligation to any Participant, any Beneficial Owner or any
other Person claiming a beneficial ownership interest in the Bonds under or
through the Securities Depository or any Participant, or any other Person which
is not shown on the registration books of the Trustee as being an owner of
Bonds, with respect to the accuracy of any records maintained by the Securities
Depository or any Participant; the payment to the Securities Depository or any
Participant of any amount in respect of the principal or Redemption Price (and
premium, if any) of or interest on the Bonds; any notice which is permitted or
required to be given to the Bondholders; the selection by the Securities
Depository or any Participant of any Person to receive payment in the event of a
partial redemption of the Bonds; or any consent given or other action taken by
the Securities Depository as owner of Bonds. The Trustee shall pay all principal
and Redemption Price (and premium, if any) of and interest on the Bonds only to
or "upon the order of" the Securities Depository (as that term is used in the
Uniform Commercial Code as
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adopted in the State of New York), and all such payments shall be valid and
effective to fully satisfy and discharge the Authority's obligations with
respect to the principal or Redemption Price (and premium, if any) of and
interest on the Bonds to the extent of the sum or sums so paid. Except as
provided in (iii) below, no Person other than the Securities Depository shall
receive an authenticated Bond for each separate Maturity Date evidencing the
obligation of the Authority to make payments of the applicable principal amount.
Upon delivery by the Securities Depository to the Trustee of notice to the
effect that the Securities Depository has determined to substitute a new nominee
in place of Cede & Co., the Bonds will be transferable to such new nominee in
accordance with subparagraph (vi) below. ---------------------------------------
-------(iii) In the event the Authority determines that it is in the best
interest of the Authority not to continue the book-entry system of transfer for
the Bonds or that the interest of the owners of the Bonds might be adversely
affected if the book-entry system of transfer is continued, the Authority may
notify the Securities Depository and the Trustee, whereupon the Securities
Depository will notify the Participants, of the availability through the
Securities Depository of certificates for the Bonds. In such event, the Trustee
shall issue, transfer and exchange certificates for the Bonds as requested by
the Securities Depository and any Participant or Beneficial Owner in appropriate
amounts in accordance with subparagraph (vi) below. The Securities Depository
may determine to discontinue providing its services with respect to the Bonds at
any time by giving notice to the Authority and the Trustee and discharging its
responsibilities with respect thereto under applicable law, or the Authority may
determine that the Securities Depository is incapable of discharging its
responsibilities and may so advise the Securities Depository. In either such
event, the Authority shall either establish its own book-entry system or use
reasonable efforts to
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locate another Securities Depository. Under such circumstances (if there is no
successor securities depository), the Authority and the Trustee shall be
obligated to deliver certificates for the Bonds with respect to such series of
Bonds as described in subparagraph (vi) below. In the event certificates for the
Bonds are issued, the provisions of this Agreement shall apply to, among other
things, the printing of certificates, the transfer and exchange of such
certificates and the method of payment of principal or Redemption Price (and
premium, if any) of and interest on such certificates. Whenever the Securities
Depository requests the Authority and the Trustee to do so, the Trustee and the
Authority will cooperate with the Securities Depository in taking appropriate
action after reasonable notice (A) to make available one or more separate
certificates evidencing the Bonds to any Participant having Bonds credited to
its account with the Securities Depository, or (B) to arrange for another
Securities Depository to maintain custody of certificates evidencing the Bonds.
-------(iv) Notwithstanding any other provision of this Agreement 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 or Redemption Price
(and premium, if any) of 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
DTC Representation Letter.------------------------------------------------------
-------(v) In connection with any notice or other communication to be provided
to owners of Bonds pursuant to this Agreement by the Authority or the Trustee or
with respect to any consent or other action to be taken by owners of Bonds, the
Authority or the Trustee, as the case may be, shall establish a record date for
such consent or other action and give the Securities Depository notice of such
record date not less than 15 calendar days in advance of such record date to the
extent possible. Such notice to
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the Securities Depository shall be given only when the Securities Depository is
the sole Bondholder. -----------------------------------------------------------
-------(vi) In the event that any transfer or exchange of Bonds is permitted
under subparagraph (ii) or (iii) hereof, such transfer or exchange shall be
accomplished upon receipt by the Trustee from the registered owner thereof of
the Bonds to be transferred or exchanged and appropriate instruments of transfer
to the permitted transferee, all in accordance with the applicable provisions of
this Trust Agreement. Each Bond shall bear a legend substantially to the
following effect: "Except as otherwise provided in Section 211 of the Trust
Agreement, this bond may be transferred, in whole but not in part, only to
another nominee of the Securities Depository (as defined in the Trust Agreement)
or to a successor Securities Depository or to a nominee of a successor
Securities Depository." --------------------------------------------------------
----------------------------------- ARTICLE III --------------------------------
------------------------------ REDEMPTION OF BONDS; ----------------------------
--- SECTION 301. REDEMPTION OF BONDS. (A) The Bonds shall not be subject to
redemption prior to their maturity except as provided in this Article III. -----
----- (B) The Bonds shall be called for redemption in whole at the Redemption
Price, without premium, in the event the Borrower shall have become obligated to
prepay the entire amount payable under Section 4.01 of the Loan Agreement in
accordance with: ---------------------------------------------------------------
-------- (i) Section 8.02(a) of the Loan Agreement due to the cessation of
operation of the Project, on the next Interest Payment Date occurring not less
than 45 days after the Borrower becomes so obligated; or -----------------------
-------- (ii) Section 8.02 (b) of the Loan Agreement, not later than 45 days
after the second occurrence of an Event of Taxability. -------------------------
----- (C) The Bonds shall be called for redemption in whole or in part, at the
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Redemption Price, without premium, in the event the Borrower shall have become
obligated to prepay any amount payable under Section 4.01 of the Loan Agreement
in accordance with Section 8.02(c) of the Loan Agreement due to the occurrence
of a Taking or a Casualty (both as defined in the Loan Agreement), on the next
Interest Payment Date occurring not less than 45 days after receipt by the
Trustee of the notice delivered pursuant to said Section 8.02(c) of the Loan
Agreement. ---------------------------------------------------------------------
----- (D) The Bonds shall be called for redemption in whole or in part, as
directed by the Borrower in the event that the Authority and the Trustee shall
have received notice pursuant to Section 8.01(a) of the Loan Agreement that the
Borrower has elected to prepay all or a portion of the amounts payable under
Section 4.01 of the Loan Agreement pursuant to Section 8.01(a) of the Loan
Agreement and the Borrower shall have complied with the provisions of Section
8.01 of the Loan Agreement, on any Interest Payment Date (which shall not be
less than 45 days from the date such notice is received by the Trustee) selected
by the Borrower, on or after [ ] one (1), two thousand nine (2009) at the
Redemption Price plus a premium of (i) two percent (2%) if redeemed prior to
[ ] one (1) two thousand ten (2010), (ii) one percent (1%) if redeemed on
or after [ ] one (1) two thousand ten (2010) and prior to [ ]
thirty [ (3)] two thousand eleven (2011), and without premium if redeemed on
or after [ ] one (1) two thousand eleven (2011). -----------------------
-----(E) The Term Bonds shall be called for redemption in part on the dates
specified in Exhibit B under "Amortization Requirements"..----------------------
----- (F) Except in the case of a mandatory redemption of Term Bonds pursuant to
(E) above, if fewer than all of the Outstanding Bonds shall be called for
redemption, the Bonds shall be called in inverse order of maturity. If fewer
than all of the Outstanding Bonds of the same Maturity Date shall
-34-
be called for redemption, the Bonds or portions thereof of such Maturity Date to
be redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate; provided, however, that the portion of any Bond to be
redeemed shall be in Authorized Denominations, and that, in selecting Bonds for
redemption, the Trustee shall treat each Bond as representing that number of
Bonds that is obtained by dividing the principal amount of such Bond by Five
Thousand Dollars ($5,000). -----------------------------------------------------
--- SECTION 302. REDEMPTION NOTICE. At least 30 days before the redemption date
of any Bonds the Trustee shall cause a notice, signed by it, of any such
redemption, either in whole or in part, to be given to all Bondholders whose
Bonds are to be redeemed. Each such notice shall set forth (i) the date fixed
for redemption, (ii) the Redemption Price (plus premium, if any) to be paid,
(iii) if less than all of the Outstanding Bonds shall be called for redemption,
the distinctive numbers and letters, if any, of such Bonds to be redeemed and,
in the case of Bonds to be redeemed in part only, the portion of the principal
amount thereof to be redeemed, (iv) that on the date fixed for redemption such
Redemption Price (plus premium, if any) will become due and payable upon each
Bond or portion thereof called for redemption, and that interest thereon shall
cease to accrue on and after said redemption date , (v) the place where such
Bonds are to be surrendered for payment of such Redemption Price (plus premium,
if any); and (vi) whether the redemption is effected by reason of the second
occurrence of an Event of Taxability; and shall otherwise comply with Securities
Exchange Act of 1934 Release No. 34-23856, dated December 3, 1986 (the
"Redemption Release"). In case any Bond is to be redeemed in part only, the
notice of redemption which relates to such Bond shall state also that on or
after the redemption date, upon surrender of such Bond, a new Bond or Bonds in a
principal amount equal to the unredeemed portion of such Bond
-35-
will be issued. Failure to comply with the requirements of the Redemption
Release or any defect thereon shall not affect the validity of the proceedings
for the redemption of the Bonds. Failure to give redemption notice to any Holder
or any defect in any notice so given shall not affect the validity of the
proceedings for the redemption of the Bonds of any other Holders. --------------
--- SECTION 303. EFFECT OF CALLING FOR REDEMPTION. On the date so designated for
redemption, notice having been given in the manner and under the conditions
hereinabove provided, the Bonds or portions of Bonds so called for redemption:
(i) shall become and be due and payable at the Redemption Price (plus premium,
if any) provided for redemption thereof on such date; and (ii) if sufficient
moneys for payment of the Redemption Price (plus premium, if any) are held in
separate accounts by the Trustee in trust for the Holders thereof, as provided
in this Trust Agreement, interest thereon shall cease to accrue, and said Bonds
shall cease to be entitled to any benefits or security under this Trust
Agreement or to be deemed Outstanding, and their Holders shall have no rights in
respect thereof, except to the extent provided in Section 304, to receive Bonds
for any unredeemed portions of the Bonds. Bonds and portions of Bonds for which
irrevocable instruction to pay or to call for redemption on one or more
specified dates have been given to the Trustee in form satisfactory to it shall
not thereafter be deemed to be Outstanding and shall cease to be entitled to the
security of or any rights under this Trust Agreement, other than rights to
receive payment of the Redemption Price thereof and premium, if any, and accrued
interest thereon, to be given notice of redemption in the manner provided in
Section 302, and, to the extent hereinafter provided, to receive Bonds for any
unredeemed portions of Bonds if moneys or Government Obligations, or a
combination of both, sufficient to pay the Redemption Price (plus premium, if
any) of such Bonds or portions thereof, are held in
-36-
separate accounts by the Trustee in trust for the Holders thereof.--------------
--- SECTION 304. REDEMPTION OF PORTIONS OF THE BONDS. In case part but not all
of an Outstanding Bond shall be selected for redemption, the Holder or his legal
representative shall present and surrender such Bond to the Trustee for payment
of the Redemption Price (plus premium, if any) thereof, and the Authority shall
execute and the Trustee shall authenticate and deliver to or upon the order to
such Holder or his legal representative, without charge therefor, for the
unredeemed portion of the principal amount of the Bond so surrendered, a new
Bond or Bonds of the same Maturity, of any Authorized Denomination and in an
amount equal to the unredeemed principal amount of the surrendered Bond. -------
------------------------------------ ARTICLE IV --------------------------------
---------------------------------- PROJECT FUND --------------------------------
--- SECTION 401. PROJECT FUND. (A) A special fund is hereby created and
designated the "Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort
Project) Project Fund", to the credit of which such deposits shall made as are
required by the provisions of Section 208 and Sections 5.23 and 5.24 of the Loan
Agreement. Any moneys received by the Trustee from any other source for the
Project shall also be deposited to the credit of the Project Fund. -------------
------ (B) Subject to the provisions of Sections 404, 406 and 602, the moneys in
the Project Fund shall be held by the Trustee in trust and shall be subject to a
lien and charge in favor of the Holders of the Outstanding Bonds, and for the
further security of such Holders, until paid out or transferred as herein
provided. ----------------------------------------------------------------------
------ (C) The Trustee shall establish a separate account or subaccount within
the Project Fund corresponding to the source of moneys specified in Section 5.23
and 5.24 of the Loan Agreement for each deposit made into the
-37-
Project Fund so that the Trustee may at all times ascertain the source and date
of deposit of the funds in each such account or subaccount. The Project Fund and
its accounts and sub-accounts shall be held separate and apart from each other
and from all funds, accounts and subaccounts created by or pursuant to this
Trust Agreement. Amounts on deposit on said accounts or subaccounts shall not be
commingled with each other or with any other fund, account or subaccount created
by or pursuant to the provisions of this Trust Agreement. ----------------------
--- SECTION 402. PAYMENTS FROM PROJECT FUND. Monies deposited to the credit of
the Project Fund (i) pursuant to Section 208 shall be disbursed for the payment
of the Costs and (ii) pursuant to Sections 5.23 and 5.24 of the Loan Agreement
shall be disbursed as provided thereunder. All payments form the Project Fund
shall be subject to the provisions and restrictions set forth in this Article.
--- SECTION 403. [RESERVED]
--- SECTION 404. REQUISITES FOR PAYMENTS FROM PROJECT FUND. --------------------
(A) Payments from the Project Fund pursuant to Section 402 (ii) shall be made by
the Trustee upon the order of the Borrower in accordance with the provisions of
this Section, but no such payment shall be made unless and until the Trustee
shall receive a requisition (up to a maximum of two (2) per calendar month),
prepared and signed by the Authorized Borrower Representative, stating: --------
-------- (i) the item number of each such payment, -----------------------------
-------- (ii) the name of the Person (including the Borrower) to whom each such
payment is due, ----------------------------------------------------------------
-------- (iii) the respective amounts to be paid, ------------------------------
--------(iv) a certification issued by the Department of the Treasury of Puerto
Rico granting a total waiver of the taxes required to be withheld pursuant
-38-
to the provisions of Section 1143 of the Puerto Rico Internal Revenue Code of
1994, as amended, if applicable, and -------------------------------------------
-------- (v) that obligations in the stated amounts have been incurred and are
presently due and payable, or reimbursable to the Borrower, and that each item
thereof is a proper charge against the Project Fund and has not been paid from
the Project Fund. --------------------------------------------------------------
------ (B) Within three (3) Business Days after receipt of any such order and
accompanying requisition, the Trustee shall pay such obligation from the Project
Fund. If prior to payment of any item in a requisition the Borrower should for
any reason desire not to pay such item, the Borrower shall give notice of such
decision to the Trustee. -------------------------------------------------------
------ (C) In making any disbursement, the Trustee shall pay each such
obligation directly to the Borrower or to any payee designated by the Authorized
Borrower Representative, as set forth in the order of the Borrower directing
such disbursement. -------------------------------------------------------------
--- SECTION 405. RELIANCE ON REQUISITIONS. All requisitions and orders received
by the Trustee, as required in this Article as conditions of payment from the
Project Fund, may be relied upon by the Trustee, subject at all reasonable times
to examination by the Borrower, the Authority, any Bondholder and the agents and
representatives thereof. -------------------------------------------------------
--- SECTION 406. BALANCE IN PROJECT FUND. --------------------------------------
------ (A) In the event that the Borrower exercises the option under Section
8.01 of the Loan Agreement to prepay in full the amounts payable under Section
4.01 of the Loan Agreement, the Trustee shall, upon the direction of the
Borrower, deposit into the Bond Fund, on the date the prepayment is made, any
moneys remaining in the Project Fund. ------------------------------------------
------ (B) If the principal amount of all Outstanding Bonds shall have become
due and payable pursuant to a declaration in accordance with
-39-
Section 803 or the giving of a redemption notice pursuant to Section 301, the
Trustee shall deposit in the Bond Fund any balance remaining in the Project
Fund. --------------------------------------------------------------------------
----- (C) Any balance in the Project Fund derived from monies deposited pursuant
to Sections 5.23 and 5.24 of the Loan Agreement shall be applied as provided
thereunder. --------------------------------------------------------------------
---------------------------------- ARTICLE V -----------------------------------
------------------- BOND FUND, RESERVE FUND, RENEWAL AND -----------------------
--------------------REPLACEMENT FUND, AND INSURANCE FUND -----------------------
--- SECTION 501. CREATION OF BOND FUND. A special fund is hereby created and
designated "Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort
Project) Bond Fund". The moneys in the Bond Fund shall be held by the Trustee in
trust and applied as hereinafter provided and, pending such application, shall
be subject to a lien and charge in favor, and for the further security, of the
Holders, until paid out or transferred as herein provided. ----
--- SECTION 502. PAYMENTS INTO BOND FUND. --------------------------------------
------ (A) There shall be deposited to the credit of the Bond Fund:-------------
(i) accrued interest, if any, on the Bonds paid by the purchasers thereof; -----
(ii) all amount paid pursuant to Section 4.01, 8.01 and 8.02 of the Loan
Agreement; (iii) any amount in the Project Fund to be transferred to the Bond
Fund in accordance with the provisions of Section 406; (iv) all amounts derived
from the Related Documents, which are due and payable to the Trustee thereunder;
and (iv) all other moneys received by the Trustee under and pursuant to any of
the provisions of the Loan Agreement or otherwise which are permitted or
required, or are accompanied by directions from the Borrower or the Authority
that such moneys are to be paid into the Bond Fund. ----------------------------
------ (B) The Trustee shall establish a separate account or subaccount within
the Bond Fund corresponding to the source of moneys specified in
-40-
Section 502 for each deposit made into the Bond Fund so that the Trustee may at
all times ascertain the source and date of deposit of the funds in each such
account or subaccount. The Bond Fund and its accounts and sub- accounts shall be
held separate and apart from each other and from all funds, accounts and
subaccounts created by or pursuant to this Trust Agreement. Amounts on deposit
on said accounts or subaccounts shall not be commingled with each other or with
any other fund, account or subaccount created by or pursuant to the provisions
of this Trust Agreement. -------------------------------------------------------
------ (C) The Trustee is authorized to receive at any time payments from the
Borrower pursuant to the Loan Agreement or otherwise for deposit in the Bond
Fund. --------------------------------------------------------------------------
--- SECTION 503. USE OF MONEYS IN BOND FUND. -----------------------------------
------ (A) Except as otherwise provided in this Trust Agreement, moneys in the
Bond Fund shall be used solely for the payment of the principal (whether at
maturity or upon acceleration or redemption or otherwise) of and premium, if
any, and interest on the Bonds. On each Interest Payment Date and on each
Principal Payment Date, the Trustee shall withdraw from the Bond Fund sufficient
moneys and pay the amounts due and payable to the Bondholders pursuant to this
Trust Agreement. ---------------------------------------------------------------
------ (B) Any provision herein to the contrary notwithstanding, no payment of
the principal of and premium, if any, and interest on Bonds held by or on behalf
of the Borrower or any Affiliate shall be made by the Trustee. -----------------
--- SECTION 504. MONEYS WITHDRAWN FROM BOND FUND. (A) All moneys which the
Trustee shall have withdrawn from the Bond Fund or shall have received from any
other source and set aside for the purpose of paying any of the Bonds, either at
the maturity thereof or upon call for redemption or otherwise shall be held in
the trust for the respective Holder of such Bonds.
-41-
------ (B) Any moneys which shall be withdrawn or set aside under this Section
and which shall remain unclaimed by such Holder for a period of two years after
the date on which such Bond shall have become due and payable or deemed tendered
for purchase may, upon the request of the Borrower, be paid to the Borrower or
to such officer, board or body as may then be entitled by law to receive the
same. Thereafter the Holders of such Bonds shall look only to the Borrower or to
such officer, board or body, as the case may be, for payment and then only to
the extent of the amount so received without any interest thereon, and the
Authority and the Trustee shall have no responsibility with respect to such
moneys. Until paid as aforesaid, any moneys so withdrawn or set aside shall be
invested as the Trustee and the Borrower may agree. ----------------------------
--- SECTION 505. CREATION OF RESERVE FUND. A special fund is hereby created and
designated "Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort
Project) Reserve Fund". The moneys in the Reserve Fund shall be held by the
Trustee in trust for the benefit of the Bondholders, and applied as hereinafter
provided.-----------------------------------------------------------------------
--- SECTION 506. PAYMENTS INTO RESERVE FUND. -----------------------------------
----(A) There shall be deposited to the credit of the Reserve Fund: (i) the
amount required to be deposited pursuant to Section 208; and (ii) all amounts
paid by the Borrower pursuant to Section 4.01(b) (ii) of the Loan Agreement and
Section 508; -------------------------------------------------------------------
----(B) The Trustee shall establish a separate account or subaccount within the
Reserve Fund corresponding to each source of the moneys specified in this
Section 506 for each deposit made into the Reserve Fund so that the Trustee may
at all times ascertain the source and date of deposits of the funds in each
account or subaccount.----------------------------------------------------------
----(C) The Trustee is authorized to receive at any time payments from the
-42-
Borrower pursuant to the Loan Agreement or otherwise for deposit in the Reserve
Fund. --------------------------------------------------------------------------
---- SECTION 507. APPLICATION OF MONEYS IN RESERVE FUND. (A) Except as provided
in Subsection (B) of this Section, moneys held to the credit of the Reserve Fund
shall be held in trust and applied by the Trustee and are charged with, the
payments provided in Section 503 (A) to the extent moneys held to the credit of
the Bond Fund are insufficient for the purposes established therein, provided
that moneys to the credit of the Reserve Fund shall not be applied to the
payment of any redemption premium. ---------------------------------------------
----(B) The Trustee shall, on each Payment Date, withdraw from the Reserve Fund
sufficient moneys and pay the amounts due and payable to the Bondholders, as
provided in this Trust Agreement, to the extent moneys held to the credit of the
Bond Fund are insufficient therefor.--------------------------------------------
----(C) Upon Payment of the Bonds and payment of all of the Borrower's
obligations under this Trust Agreement and the Related Documents, any moneys to
the credit of the Reserve Fund shall be promptly delivered to the Borrower. ----
--- SECTION 508. RESERVE FUND MAINTENANCE OF MARGIN, OVERAGE OR DEFICIENCY;
NOTICE TO BORROWER.-------------------------------------------------------------
----(A) The sum of the Fair Market Value of the Investment Obligations and the
moneys held to the credit of the Reserve Fund will, at all times, be at least
equal to the Reserve Fund Amount.-----------------------------------------------
--(B) Commencing [ ( )], nineteen ninety nine (1999), and on each
[ ( )] thereafter, the Trustee will determine the Fair Market Value
of the Investment Obligations then held to the credit of the Reserve Fund. -----
----(C) The Trustee on the Business Day immediately succeeding each such
[ ( )] shall: (i) if the moneys deposited, and the Fair
-43-
Market Value of the Investment Obligations held to the credit of the Reserve
Fund shall be less than the Reserve Fund Amount, give notice thereof to the
Borrower and the Rating Agency, specifying therein the amount of the deficiency;
or (ii) if the moneys held to the credit of the Reserve Fund is in excess of the
Reserve Fund Amount, give notice thereof to the Borrower and transfer such
excess amount to the Bond Fund.-------------------------------------------------
----(D) The Trustee on the Business Day immediately succeeding each Payment
Date, if the moneys deposited to the credit of the Reserve Fund shall be less
than the Reserve Fund Amount as a result of moneys withdrawn from the Reserve
Fund, shall give notice thereof to the Borrower and the Rating Agency,
specifying therein the amount of deficiency.------------------------------------
--- SECTION 509. CREATION OF RENEWAL AND REPLACEMENT FUND. A special fund is
hereby created and designated "Tourism Revenue Bonds, 1999 Series A (El
Conquistador Resort Project) Renewal and Replacement Fund". The moneys in the
Renewal and Replacement Fund shall be held by the Trustee in trust for the
benefit of the Bondholders, and applied as hereinafter provided. ---------------
--- SECTION 510. PAYMENTS INTO RENEWAL AND REPLACEMENT FUND. -- There shall be
deposited to the credit of the Renewal and Replacement Fund all amounts paid by
the Borrower pursuant to Section 4.01(b) (iii), (iv) and (v) of the Loan
Agreement. ---------------------------------------------------------------------
--- SECTION 511. APPLICATION OF MONEYS IN RENEWAL AND REPLACEMENT FUND. Moneys
held to the credit of the Renewal and Replacement Fund shall be held in trust
and applied by the Trustee and are charged with, the payment of repair, renewal
and replacement of furniture, fixture, equipment and maintenance for the
Project; and moneys to the credit thereof shall be paid by the Trustee to the
Borrower no later than two Business Days after the presentation of a letter
signed by the Authorized Borrower
-44-
Representative certifying the invoices therefor and the amount to be disbursed.
--- SECTION 512. RENEWAL AND REPLACEMENT FUND MAINTENANCE OF MARGIN, OVERAGE OR
DEFICIENCY; NOTICE TO BORROWER. Commencing on the Interest Payment Date
immediately succeeding the Interest Payment Date in which amounts deposited to
the credit of the Renewal and Replacement Fund aggregate the Renewal and
Replacement Fund Amount, and on each Principal Payment Date thereafter, the
Trustee will determine the Fair Market Value of the Investment Obligations then
held to the credit of the Renewal and Replacement Fund. The Trustee on the
Business Day immediately succeeding each such determination date shall: (i) if
the moneys deposited, and the Fair Market Value of the Investment Obligations
held to the credit of the Renewal and Replacement Fund shall be less than the
Renewal and Replacement Fund Amount due to a decrease in such Fair Market Value,
give notice thereof to the Borrower and the Rating Agency, specifying therein
the amount of the deficiency; or (ii) if the moneys held to the credit of the
Renewal and Replacement Fund is in excess of the Renewal and Replacement Fund
Amount, give notice thereof to the Borrower and transfer such excess amount to
the Bond Fund.------------------------------------------------------------------
--- SECTION 513. CREATION OF INSURANCE FUND. A special fund is hereby created
and designated "Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort
Project) Insurance Fund". The moneys in the Insurance Fund shall be held by the
Trustee in trust for the benefit of the Bondholders, and applied as hereinafter
provided.-----------------------------------------------------------------------
---- SECTION 514. PAYMENTS INTO INSURANCE FUND. --------------------------------
--------(A) There shall be deposited to the credit of the Insurance Fund all
amounts paid by the Borrower pursuant to Section 5.21 (i) of the Loan Agreement
and Section 516. ---------------------------------------------------------------
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------ SECTION 515. APPLICATION OF MONEYS IN INSURANCE FUND. (A) Moneys held to
the credit of the Insurance Fund shall be held in trust and applied by the
Trustee and are charged with, the payment of (i) the payments provided in
Section 503 (A) to the extent moneys held to the credit of the Bond Fund and the
Reserve Fund are insufficient for the purposes established therein, provided
that moneys to the credit of the Insurance Fund shall not be applied to the
payment of any redemption premium; (ii) the repair, renewal and replacement of
furniture, fixture, equipment and maintenance for the Project to the extent that
moneys held to the credit of the Renewal and Replacement Fund are insufficient
for such purposes (in which case, moneys to the credit of the Insurance Fund
shall be paid by the Trustee to the Borrower no later than two Business Days
after the presentation of a letter signed by the Authorized Borrower
Representative certifying the invoices therefor and the amount to be disbursed),
and (iii) for the Restoration (as defined in the Loan Agreement) (in which case,
moneys held to the credit of the Insurance Fund shall be disbursed in accordance
with the provisions of 404 (A). ------------------------------------------------
--- (B) Moneys to the credit of the Insurance Fund shall be paid by the Trustee
to the Borrower, no later than two (2) Business Days after the presentation of a
certificate executed by the Insurance Consultant evidencing that the Borrower is
in full compliance with the provisions of Section 5.21 of the Loan
Agreement.----------------------------------------------------------------------
--- SECTION 516. INSURANCE FUND MAINTENANCE OF MARGIN, OVERAGE OR DEFICIENCY;
NOTICE TO BORROWER.-------------------------------------------------------------
----(A) The sum of the Fair Market Value of the Investment Obligations and the
moneys held to the credit of the Insurance Fund will at all times after the
amounts deposited to the credit thereof aggregate the principal amount of the
Bonds then Outstanding, be at least equal to the principal amount of the
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Bonds Outstanding on any date of computation provided for in this Section
516.----------------------------------------------------------------------------
----(B) Commencing on the Interest Payment Date immediately succeeding the date
the amounts deposited to the credit of the Insurance Fund aggregate the
principal amount of the Bonds then Outstanding, and on each Principal Payment
Date thereafter, the Trustee will determine the Fair Market Value of the
Investment Obligations then held to the credit of the Insurance Fund. The
Trustee on the Business Day immediately succeeding each such determination date
shall: (i) if the moneys deposited, and the Fair Market Value of the Investment
Obligations held to the credit of the Renewal and Replacement Fund shall be less
than the aggregate principal amount of the Bonds then Outstanding, give notice
thereof to the Borrower and the Rating Agency, specifying therein the amount of
the deficiency; or (ii) if the moneys held to the credit of the Insurance Fund
is in excess of such aggregate principal amount, give notice thereof to the
Borrower and transfer such excess amount to the Bond Fund. ---------------------
----(C) Commencing on the Interest Payment Date immediately succeeding the date
the amounts deposited to the credit of the Insurance Fund aggregate the
principal amount of the Bonds then Outstanding, and thereafter on each Business
Day immediately succeeding each date moneys to the credit of the Insurance Fund
are disbursed in accordance with Section 515, if the moneys deposited to the
credit of the Insurance Fund shall be less than the aggregate principal amount
of the Bonds then Outstanding as a result of moneys withdrawn from the Insurance
Fund, the Trustee shall give notice thereof to the Borrower and the Rating
Agency, specifying therein the amount of deficiency. ---------------------------
--- SECTION 517. CANCELLATION OF BONDS UPON PAYMENT. All Bonds paid or redeemed,
either at or before maturity shall be delivered to the Trustee
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for cancellation and shall be canceled. All Bonds canceled under any of the
provisions of this Trust Agreement shall be held by the Trustee until such time
as they are destroyed by the Trustee. The Trustee shall execute a certificate in
triplicate describing the Bonds so destroyed, and an executed certificate shall
be filed with each of the Authority and the Borrower and the other executed
certificate shall be retained by the Trustee. ----------------------------------
--------------------------------- ARTICLES VI ----------------------------------
--------------- DEPOSITORIES OF MONEYS, SECURITY FOR DEPOSITS ------------------
-------------------------- AND INVESTMENTS OF FUNDS ----------------------------
--- SECTION 601. SECURITY FOR DEPOSITS. (A) All moneys deposited with the
Trustee under the provisions of this Trust Agreement or the Loan Agreement shall
be held in the trust and applied only in accordance with the provisions of this
Trust Agreement and the Loan Agreement and shall not be subject to the lien or
attachment by any creditor of the Authority or the Borrower. -------------------
------- (B) All moneys deposited with the Trustee under this Trust Agreement and
the Loan Agreement in excess of the amount guaranteed by a Federal agency shall
be continuously secured for the benefit of the Authority and the Bondholders
either (i) by lodging with a bank or trust company approved by the Authority and
the Trustee as custodian, or if then permitted by law, by setting aside under
the control of the trust department of the bank holding such deposit, as
collateral security, Government Obligations or, with the approval of the
Trustee, other marketable securities eligible as security for the deposit of
trust funds under regulations of the Comptroller of the Currency of the United
States of America, or applicable Puerto Rico or state law or regulations, having
a market value (exclusive of accrued interest) not less than the amount of such
deposit, or (ii) if the furnishing of security as provided in clause (i) of this
Section is not permitted by applicable law, in such other manner as may then be
required
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or permitted by applicable Puerto Rico, state or Federal laws and regulations
regarding the security for, or granting a preference in the case of, the deposit
of trust funds. Provided, however, that it shall not be necessary for the
Trustee to give security for any moneys which shall be represented by the
investments purchased under the provisions of this Article as an investment of
such moneys. -------------------------------------------------------------------
--- SECTION 602. INVESTMENT OF MONEYS. (A) Moneys held for the credit of all
funds and accounts established hereunder, except as provided in Article XIII
hereof, at the direction of an Authorized Borrower Representative shall be
invested and reinvested by the Trustee in Investment Obligations the income on
which constitutes income from sources within Puerto Rico under the Code,
selected by the Borrower, that mature or are subject to redemption (at the
option of the holder thereof) not later than the respective dates when moneys
held to the credit of such fund or account will be required for the purposes
intended and, in the case of the Insurance Fund, in short term obligations. ----
------ (B) Obligations purchased as an investment of moneys in any funds,
account or subaccount shall be deemed at all times to be part thereof and any
interest accruing and any profit realized therefrom shall be credited, and any
loss resulting from such investment shall be charged to such fund, account or
subaccount. Neither the Trustee nor the Authority shall be liable or responsible
for any loss resulting from any such investment. -------------------------------
--------------------------------- ARTICLE VII ----------------------------------
-------------------- PARTICULAR COVENANTS AND PROVISIONS -----------------------
--- SECTION 701. COVENANT TO PAY BONDS; BONDS LIMITED
OBLIGATIONS OF AUTHORITY. (A) The Authority covenants that it will cause to be
paid promptly principal of, interest and all other amounts payable on every Bond
on the dates and in the manner provided herein and in said Bond, according
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to the true intent and meaning thereof; provided, however, that any amount in
the Bond Fund available for any payment of principal of or interest and all
other amounts payable on the Bonds shall be credited against any amount required
to be caused by the Authority so to be paid. Except as in this Trust Agreement
otherwise provided, such principal amount, interest and other amounts are
payable solely from the payments required to be made by the Borrower under
Section 4.01 of the Loan Agreement and any other revenues and funds derived
under the Loan Agreement, this Trust Agreement and the other Related Documents
to the extent provided in this Trust Agreement, which payments under the Loan
Agreement, revenues and funds to the extent provided in this Trust Agreement are
hereby charged with the payment thereof in the manner and to the extent
hereinabove particularly specified. --------------------------------------------
----- (B) The Bonds and the interest and other amounts payable thereon, shall
not constitute an indebtedness of either Puerto Rico or any of its political
subdivisions, other than the Authority. The Bonds shall be payable solely from
the revenues and proceeds provided therefor, and the Authority is not obligated
to pay the Bonds or the interest thereon except from such revenues and proceeds
or other amounts and neither Puerto Rico nor any of such political subdivisions,
other than the Authority, shall be liable thereon. -----------------------------
--- SECTION 702. COVENANT TO PERFORM OBLIGATIONS UNDER THIS TRUST AGREEMENT AND
THE RELATED DOCUMENTS. The Authority represents, warrants, and covenants that:
(i) it will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions on its part to be observed or performed contained in
this Trust Agreement, in the Bonds, in all proceedings of the Authority
pertaining thereto and filed with the Trustee and in the Related Documents to
which it is a party; (ii) is it duly authorized under the laws of Puerto Rico,
including particularly and without limitation
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the Act, to issue the Bonds and to enter into this Trust Agreement and the
Related Documents to which it is a party, to assign the payments and other funds
derived from the Related Documents and otherwise in the manner and to the extent
herein set forth; (iii) all action on its part for the issuance of the Bonds,
the execution and delivery of this Trust Agreement and the Related Documents to
which it is a party and the Grant of the payments and other funds as provided
herein has been duly and effectively taken; and (iv) each Bond in the hands of
the owners thereof is and will be a valid and enforceable obligation of the
Authority according to the tenor and import thereof. ---------------------------
--- SECTION 703. COVENANTS TO PERFORM FURTHER ACTS. The Authority covenants that
it will do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered such agreements supplemental hereto and such further
acts, instruments and transfers as the Trustee may reasonably require to Grant
the Trust Estate in trust to the Trustee. --------------------------------------
--- SECTION 704. TRUSTEE MAY ENFORCE AUTHORITY'S RIGHTS UNDER THE RELATED
DOCUMENTS. The Trustee, subject to the provisions of the Loan Agreement and this
Trust Agreement reserving certain rights to the Authority and respecting actions
by the Trustee in its name or in the name of the Authority, may enforce all
rights of the Authority and all obligations of the Borrower under and pursuant
to the Related Documents to which the Authority is a party and on behalf of the
Bondholders whether or not the Authority is in default hereunder. --------------
--------------------------------- ARTICLE VIII ---------------------------------
----------------------------- DEFAULT AND REMEDIES -----------------------------
--- SECTION 801. EXTENSION OF INTEREST PAYMENT DATES. In any case the time for
the payment of the interest on any Bond shall be extended, whether or not such
extension be by or with the consent of the Authority, such
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interest shall not be entitled in case of default hereunder to the benefit of
this Trust Agreement except subject to the prior payment in full of the
aggregate principal amount and interest on all Outstanding Bonds, the time for
the payment of which shall not have been extended. -----------------------------
--- SECTION 802. DEFAULTS. Each of the following events is hereby declared an
"event of default": ------------------------------------------------------------
----- (a) payment of the principal amount or premium, if any, of the Bonds shall
not be made when the same shall become due and payable; or ---------------------
----- (b) payment of any installment of interest on any of the Bonds shall not
be made when the same shall become due and payable; or -------------------------
----- (c) an event of default under the Loan Agreement other than under clause
(a) of Section 7.01 thereof. ---------------------------------------------------
--- SECTION 803. ACCELERATION. (A) The Trustee (i) may, upon the happening and
continuance of any event of default specified in clause (c) of Section 802, and
(ii) shall, at the direction of the Twenty-Five Percent Interest, or upon the
happening of any other event of default specified in Section 802, by notice to
the Authority, declare the principal amount of the Bonds (if not then due and
payable) to be due and payable immediately after the date of receipt of such
notice, and upon such declaration the same shall become and be due and payable
immediately after the date of such notice anything contained in the Bonds or in
this Trust Agreement to the contrary notwithstanding. --------------------------
------ (B) Anything contained in Section 803(A) notwithstanding, other than in
the case of a default specified in clause (a) of Section 802, if at any time
after the principal of the Bonds shall have been so declared to be due and
payable, and before the entry of final judgment or decree in any suit, action or
proceeding instituted on account of such default, or before the completion of
the enforcement of any other remedy under this Trust Agreement,
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sufficient moneys shall have accumulated in the Bond Fund to pay the principal
of all matured Bonds and all arrears of interest, if any, upon all Bonds then
Outstanding (except the principal of any Bonds not then due and payable by their
terms and the interest accrued on such Bonds since the last Interest Payment
Date) and the charges, compensation, expenses, disbursements, advances and
liabilities of the Trustee and all other amounts then payable by the Authority
hereunder shall have been paid or a sum sufficient to pay the same shall have
been deposited with the Trustee, and every other default known to the Trustee in
the observance or performance of any covenant, condition, agreement or provision
contained in the Bonds or in this Trust Agreement (other than a default in the
payment of the principal of such Bonds then due and payable only because of a
declaration under this Section 803) shall have been cured or waived as provided
in Section 814, then and in every such case the Trustee, may, and upon the
written direction of the Majority Interest, shall, by notice to the Authority,
rescind and annul such declaration and its consequences, but no such rescission
or annulment shall extend to or affect any subsequent default or impair any
right consequent thereon. ------------------------------------------------------
--- SECTION 804. ENFORCEMENT OF REMEDIES. (A) Upon the happening and continuance
of any event of default specified in Section 802, then and in every such case
the Trustee, may, and upon the direction of the Twenty-Five Percent Interest
shall proceed, subject to the provisions of Section 902, to protect and enforce
its rights and the rights of the Bondholders under applicable laws, this Trust
Agreement and the Related Documents 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, either for the specific performance of any covenant
or agreement contained herein or in aid or execution of any power herein granted
or for the enforcement of any
-53-
proper legal or equitable remedy, as the Trustee, being advised by counsel,
shall deem most effectual to protect and enforce such rights. ------------------
------ (B) In the enforcement of any remedy under this Trust Agreement, the
Trustee in its own name and as Trustee of an express trust, shall be entitled to
xxx for, enforce payment of and recover judgment for, any and all amounts then
or after any default becoming, and at any time remaining, due from the Authority
and unpaid for principal, premium, if any, and interest or otherwise under any
of the provisions of this Trust Agreement or of the Bonds, with interest on
overdue payments of principal and interest at the Interest Rate together with
any and all costs and expenses of collection and of all proceedings hereunder
and under the Bonds, without prejudice to any other right or remedy of the
Trustee, of the Bondholders, and to recover and enforce any judgment or decree
against the Authority, but solely as provided herein and in the Bonds, for any
portion of such amounts remaining unpaid, and interest, costs and expenses as
above provided, and to collect (but solely from moneys in the Bond Fund and any
other moneys available for such purpose), in any manner provided by law, the
moneys adjudged or decreed to be payable. --------------------------------------
--- SECTION 805. TRUSTEE MAY FILE CLAIM IN BANKRUPTCY. (A) In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Authority or the Borrower or to the property of the
Authority or the Borrower or the creditors of either of them, the Trustee
(irrespective of whether the principal of the Bonds shall then be due and
payable or the Trustee shall have made any demand on the Borrower for the
payments equal to overdue principal), shall be entitled and empowered, by
intervention in such proceeding or otherwise: ----------------------------------
------- (i) to file and prove a claim for the whole amount of principal
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amount and any premium or interest owing and unpaid in respect of the Bonds and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Bondholders allowed in such judicial proceedings; and --
------- (ii) to collect and receive any moneys or other property payable or
delivered on any such claims and to distribute the same. -----------------------
------ (B) Any receiver, custodian, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby authorized
by each Bondholder to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Bondholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 902. ----------
------ (C) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondholder any plan
of reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any Holder, or to authorize the Bonds or the rights of any Holder,
or to authorize the Trustee to vote in respect of the claim of any Bondholder in
any such proceeding. -----------------------------------------------------------
--- SECTION 806. PRO RATA APPLICATION OF FUNDS. (A) Anything in this Trust
Agreement to the contrary notwithstanding, if at any time the moneys in the Bond
Fund shall not be sufficient to pay the principal of or interest on the Bonds as
the same shall become due and payable, such moneys, together with any moneys
then available or thereafter becoming available for such purpose, whether
through the exercise of the remedies provided for in this
-55-
Article or otherwise, shall be applied, following the satisfaction of any
payments due to the Trustee under the provisions of Sections 902 and 906, as
follows: -----------------------------------------------------------------------
------- (i) if the principal of all the Bonds shall not have become due and
payable or shall not have been declared due and payable, all such moneys shall
be applied to the payment of all installments of interest then due and payable
in the order in which such installments become due and payable, and, if the
amount available shall not be sufficient to pay in full any particular
installment, then to the payment of such installments, ratably, according to the
amounts due on such installment, without any discrimination or preference; -----
------- (ii) if the principal of all the Bonds shall have become due and payable
or shall have been declared due and payable, all such moneys shall be applied to
the payment of the principal, interest and premium, if any, then due upon the
Bonds, without preference or priority of principal over interest or premium or
of interest or premium over principal, or of any installment of interest over
any other installment of interest, or of any Bond over any other Bond, ratably,
according to the amounts due respectively for principal, interest and premium,
if any, to the Persons entitled thereto without any discrimination or privilege;
and ----------------------------------------------------------------------------
------- (iii) if the principal of all the Bonds shall have been declared due and
payable and if such declaration shall thereafter have been rescinded and
annulled under the provisions of Section 803, then, subject to the provisions of
(ii) above in the event that the principal of all the Bonds shall later become
due and payable or be declared due and payable, the moneys remaining in and
thereafter accruing to the Bond Fund shall be applied in accordance with the
provisions of (i) above. -------------------------------------------------------
----- (B) Whenever moneys are to be applied by the Trustee pursuant to the
-56-
provisions of this Section, such moneys shall be applied by the Trustee at such
times, and from time to time, as the Trustee in its sole discretion shall
determine, having due regard to the amount of such moneys available for
application and the likelihood of additional moneys becoming available for such
application in the future. The setting aside of such moneys in trust for the
proper purpose shall constitute proper application by the Trustee. The Trustee
shall incur no liability whatsoever to the Authority, to any Bondholder or to
any other Person for any delay in applying any such moneys, so long as the
Trustee acts with reasonable diligence, having due regard to the circumstances,
and ultimately applies the same in accordance with the then applicable
provisions of this Trust Agreement. Whenever the Trustee shall exercise such
discretion in applying such moneys, it shall fix the date (which shall be an
Interest Payment Date unless the Trustee shall deem another date more suitable)
upon which such application is to be made and upon such date interest on the
principal amount to be paid on such date shall cease to accrue. The Trustee
shall give notice as it may deem appropriate of the fixing of any such date, and
shall not be required to make payment to the Holder of any Bond until such Bond
shall be surrendered to the Trustee for appropriate endorsement, or for
cancellation if fully paid. ----------------------------------------------------
----- (C) The provisions of subsection (A) and (B) of this Section are in all
respects subject to the provisions of Section 801. -----------------------------
--- SECTION 807. EFFECT OF DISCONTINUANCE OF PROCEEDINGS. In case any proceeding
taken by the Trustee on account of any default shall have been discontinued or
abandoned for any reason, then, and in every such case, the Authority, the
Trustee, the Borrower, and the Bondholders shall be restored to their former
positions and rights hereunder, respectively, and all rights, remedies, powers
and duties of the Trustee shall continue as though no proceeding had been taken.
-57-
--- SECTION 808. MAJORITY INTEREST MAY CONTROL PROCEEDINGS. Anything in this
Trust Agreement to the contrary notwithstanding, the Majority Interest shall
have the right, subject to the provisions of Sections 902 and 906, by an
instrument or concurrent instruments executed and delivered to the Trustee, to
direct the time, method and place of conducting all remedial proceedings to be
taken by the Trustee hereunder or exercising any trust or power conferred upon
the Trustee, provided that (i) such direction shall not be otherwise than in
accordance with law and the provisions of this Trust Agreement, and (ii) subject
to the provisions of Sections 902 and 906, that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction. ---------------------------------------------------------------------
--- SECTION 809. RESTRICTIONS UPON ACTIONS BY INDIVIDUAL BONDHOLDER. Except as
to indemnity provided in Section 5.10 of the Loan Agreement, no Bondholder shall
have any right to institute any suit, action or proceeding in equity or at law
on any Bond or for the execution of any trust hereunder or for any other remedy
hereunder unless: (i) he previously shall have given to the Trustee notice of
the event of default on account of which such suit, action or proceeding is to
be instituted, (ii) the Twenty-Five Percent Interest shall have requested the
Trustee after the right to exercise such powers or right of action, as the case
may be, shall have accrued, and shall have afforded the Trustee a reasonable
opportunity, either to proceed to exercise the powers hereinabove granted or to
institute such action, suit or proceeding in its or their name, (iii) there
shall have been offered to the Trustee reasonable security and indemnity against
the costs, expenses and liabilities to be incurred therein or thereby, and (iv)
the Trustee shall have refused or neglected to comply with such request within a
reasonable time. Such notification, request and offer of indemnity are declared
in every such case, at the option of the Trustee, to be conditions precedent to
the
-58-
execution of the powers and trusts of this Trust Agreement or to any other
remedy hereunder. Except as otherwise above provided, it is understood and
intended that: (i) no one or more Holders shall have any right in any manner
whatever by his or their action to affect, disturb or prejudice any rights under
this Trust Agreement, or to enforce any right hereunder except in the manner
provided herein, (ii) all suits, actions and proceedings shall be instituted,
had and maintained in the manner herein provided and for the benefit of all
Bondholders, and (iii) any individual right of action or other right given to
one or more Bondholders by law is restricted by this Trust Agreement to the
rights and remedies herein provided. -------------------------------------------
--- SECTION 810. RECEIVER. Upon the occurrence of an event of default and upon
the filing of a suit or other commencement of judicial proceedings to enforce
the rights of the Trustee and of the Bondholders under this Trust Agreement, the
Trustee shall be entitled, as a matter of right, to the appointment of a
receiver or receivers of the payments under the Related Documents pending such
proceedings, with such powers as the court making such appointment shall confer,
whether or not any such amount payable shall be deemed sufficient ultimately to
satisfy the amounts due and payable on the Outstanding Bonds. ------------------
--- SECTION 811. ACTIONS BY TRUSTEE. All rights of action and claims under this
Trust Agreement or under any of the Bonds, enforceable by the Trustee, may be
prosecuted and enforced by the Trustee or the Bondholders without the possession
of any of the Bonds or the production thereof in the trial or other proceeding
relative thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all of the Bondholders
subject to the provisions of this Trust Agreement. -----------------------------
--- SECTION 812. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Trustee or the Bondholders is intended to be exclusive of
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any other remedy or remedies herein provided, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or by law. -----------------------------------------------------------
--- SECTION 813. NO DELAY OR OMISSION CONSTRUED TO BE A WAIVER. No delay or
omission of the Trustee or any Bondholder to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver of any such default or any acquiescence therein. Every
power and remedy given by this Trust Agreement to the Trustee and the
Bondholders, respectively, may be exercised from time to time and as often as
may be deemed expedient. -------------------------------------------------------
--- SECTION 814. WAIVER OF PAST DEFAULTS. The Majority Interest may on behalf of
all the Holders waive any past default hereunder and its consequences except a
default: (i) in the payment of principal of, premium, if any, and interest on
any Bonds; or (ii) in respect of a covenant or provision hereof which under
Article XI hereof cannot be amended or modified without the consent of each
Bondholder affected. Upon such waiver, such default shall cease to exist, and
any event of default arising therefrom shall be deemed to have been cured, for
every purpose of this Trust Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. ------------
--- SECTION 815. NOTICE OF DEFAULT. The Trustee shall give notice to the
Bondholders of the occurrence of any Event of Default set forth in Section 802
within 30 days after the Trustee shall have notice, pursuant to the provisions
of Section 908, that any such event of default shall have occurred, unless such
default shall have been cured or waived. Anything herein to the contrary
notwithstanding, in the case of an event of default specified in Section 802
arising out of a default specified in clause (c) of Section 7.01 of the Loan
Agreement, the Trustee shall be protected in
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withholding such notice if and so long as the board of directors or a designated
committee of the Trustee in good faith determines that the withholding of such
notice is in the best interests of the Bondholders. The Trustee shall not,
however, be subject to any liability to any Bondholder by reason of its failure
to give any such notice. ---------------------------------------
--- SECTION 816. NOTICE OF ACCELERATION. The Trustee, promptly after any
declaration under Section 803(A), shall give notice thereof to all Bondholders.
Failure to give such notice, or any defect in any notice as given, shall not
affect the proceedings for such declaration. -----------------------------------
--------------------------------- ARTICLE IX -----------------------------------
--------------------------- CONCERNING THE TRUSTEE -----------------------------
--- SECTION 901. ACCEPTANCE OF TRUSTS. The Trustee accepts and agrees to execute
the trusts imposed upon it by this Trust Agreement for the benefit of the
Bondholders, but only upon the terms and conditions set forth in this Article
and subject to the provisions of this Trust Agreement. The Trustee also accepts,
and agrees to do and perform, the duties and obligations imposed upon it by and
under the Related Documents, but only upon the terms and conditions set forth
therein and herein. ------------------------------------------------------------
--- SECTION 902. TRUSTEE ENTITLED TO INDEMNITY. With the exception of its
obligations under Section 803 (A) (ii), the Trustee shall be under no obligation
to institute any suit, or to take any remedial proceedings under this Trust
Agreement or the Related Documents, or to enter any appearance in or in any way
defend against any suit, in which it may be made a defendant, or to take any
steps in the execution of the trusts hereby created or in the enforcement of any
rights and powers hereunder or under the Loan Agreement until it shall be
indemnified to its satisfaction against any and all costs and expenses, outlays
and counsel fees and other reasonable disbursements, and against all liability.
The Trustee may, nevertheless,
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begin suit, or appear in and defend suit, or do anything else in its judgment
proper to be done by it as such Trustee, without prior indemnity, and in such
case the Trustee shall be entitled to be reimbursed and indemnified, under
Section 4.06 of the Loan Agreement. If the Borrower shall fail to make such
reimbursement or indemnification, the Trustee may reimburse or indemnify itself
from any moneys in its possession under the provisions of this Trust Agreement,
except from moneys held in trust for the benefit of the Bondholders, and shall
be entitled to a preference over any of the Bonds. -----------------------------
--- SECTION 903. TRUSTEE NOT RESPONSIBLE FOR INSURANCE, TAXES OR EXECUTION OF
THIS TRUST AGREEMENT. The Trustee shall not be under any obligation to effect or
maintain insurance or to renew any policies of insurance or to inquire as to the
sufficiency of any policies of insurance carried by the Borrower, or to report,
or make or file claims or proof of loss for, any loss or damage insured against
or which may occur, or to keep itself informed or advised as to the payment of
any taxes or assessments, or to require any such payment to be made. The Trustee
makes no representation and shall have no responsibility in respect of the
validity, sufficiency, due execution or acknowledgment of this Trust Agreement
or the Loan Agreement by the Authority or, except as to the authentication
thereof, in respect of the validity of the Bonds or the due execution or
issuance thereof. The Trustee shall not be under any obligation to see that any
duties herein imposed upon any party other than itself, or any covenants herein
contained on the part of any party other than itself shall be done or performed,
and the Trustee shall be under no obligation for failure to see that any such
duties or covenants are so done or performed. ----------------------------------
--- SECTION 904. TRUSTEE NOT RESPONSIBLE FOR ACTS OF THE AUTHORITY OR
APPLICATION OF MONEYS APPLIED IN ACCORDANCE WITH THIS TRUST AGREEMENT. The
Trustee shall not be liable or responsible because of the
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failure of the Authority or of any of its employees or agents to make any
collections or deposits or to perform any act herein required of the Authority
or because of the loss of any moneys arising through the insolvency or the act
or default or omission of any other depositary in which such moneys shall have
been deposited under the provisions of this Trust Agreement. The Trustee shall
not be responsible for the application of any of the proceeds of the Bonds or
any other moneys deposited with it and paid out, withdrawn or transferred
hereunder, if such application, payment, withdrawal or transfer shall be made in
accordance with the provisions of this Trust Agreement. The immunities and
exemptions from liability of the Trustee hereunder shall extend to its
directors, officers, employees and agents. -------------------------------------
--- SECTION 905. CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE. (A) Except
during the continuance of an event of default specified in Section 802: (i) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Trust Agreement and the Related Documents, and no
implied covenants or obligations shall be read into this Trust Agreement or the
Loan Agreement against the Trustee; and (ii) in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Trust
Agreement and the Related Documents. -------------------------------------------
----- (B) In case an event of default specified in Section 802 of this Trust
Agreement has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Trust Agreement, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs. ---------------------
----- (C) None of the provisions of this Trust Agreement shall be construed
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to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that: (i) this
subsection shall not be construed to limit the effect of Section 905(A), (ii)
the Trustee shall not be liable for any error of judgment made in good faith by
an officer or officers of the corporate trust department of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts, (iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Majority Interest relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under the provisions of this Trust Agreement;
and (iv) no provision of this Trust Agreement or the Related Documents 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 repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. ----------------------------------
----- (D) Except as otherwise above provided in this Section: (i) the Trustee
may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, waiver, affidavit, requisition or
other paper or document believed by it to be genuine and to have been adopted,
signed or presented by the proper board or Person or to have been prepared and
furnished pursuant to this Trust Agreement or the Related Documents; (ii)
whenever in the administration of this Trust Agreement, prior to the occurrence
of an event of default specified in Section 802, the Trustee shall deem it
desirable that a matter be proved or established prior to taking or
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suffering any action hereunder, such matters (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate of an Authorized Borrower Representative
and such certificate, in the absence of bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken or suffered by it
under the provisions of this Trust Agreement or the Related Documents upon the
faith thereof; (iii) the Trustee may consult with counsel, accountant, engineer
and other experts and the written advice of such expert, believed by the Trustee
to be qualified in relation to the subject matter, shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon; (iv) the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Borrower, personally or by agent or attorney;
provided, however, that the aforesaid right of examination shall be exercised
only upon such reasonable and necessary terms and conditions as the Borrower
shall prescribe, which conditions shall be deemed to include, but not be limited
to, reasonable notice and those conditions necessary to protect the Borrower's
trade secrets and proprietary rights; and (v) the Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any attorney appointed with due care by it
hereunder. ---------------------------------------------------------------------
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------ (E) Whether or not therein expressly so provided, every provision of this
Trust Agreement and the Related Documents relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section. ----------------------------------------------------
--- SECTION 906. COMPENSATION. The Authority shall cause the Borrower to pay to
the Trustee its reasonable fees and expenses in accordance with Section 4.05 of
the Loan Agreement. Upon the occurrence of an event of default under Section
802, if the Borrower shall fail to make any payment required by this Section,
the Trustee may, but shall be under no obligation to, make such payment from any
moneys in its possession under the provisions of this Trust Agreement and from
moneys held in trust for the benefit of the Bondholders, and shall be entitled
to a preference therefor over any Outstanding Bonds. ---------------------------
--- SECTION 907. STATEMENT OF FUNDS ON DEPOSIT. (A) It shall be the duty of the
Trustee, on or before the fifteenth day after each Principal Payment Date, to
file with the Authority and the Borrower a statement setting forth in respect of
the preceding Principal Payment Period: ----------------------------------------
------- (i) the amount withdrawn or transferred by it and the amount deposited
with it on account of each fund and account held by it under the provisions of
this Trust Agreement; ----------------------------------------------------------
------- (ii) a brief description of all the Investment Obligations held by it as
an investment of moneys in each such fund and account; -------------------------
------- (iii) the amount applied to the payment of principal amount of Bonds; --
------- (iv) the amount applied to the payment of interest on the Bonds and the
applicable Interest Rate; and --------------------------------------------------
------- (v) any other information which the Authority or the Borrower may
reasonably request. ------------------------------------------------------------
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------ (B) All records and files pertaining to the Project and the trusts
hereunder in the custody of the Trustee shall be open at all reasonable times to
the inspection of the Authority and the Borrower and their agents and
representatives. ---------------------------------------------------------------
--- SECTION 908. NOTICE OF DEFAULT. The Trustee shall not be obliged to take
notice or be deemed to have notice of any event of default under clause (c) of
Section 802, unless specifically notified of such event of default by the
Twenty-Five Percent Interest. --------------------------------------------------
--- SECTION 909. TRUSTEE MAY BE BONDHOLDER. The Trustee and its directors,
officers, employees or agents, may in good faith buy, sell, own, hold and deal
in the Bonds, and may join in the capacity of Bondholder in any action which any
Bondholder may be entitled to take with like effect as if it were not the
Trustee, may engage, as principal or agent, or be interested in any financial or
other transaction with the Authority or the Borrower, or may maintain any and
all other general banking and business relations with the Authority or the
Borrower, with like effect and in the same manner as if the Trustee were not a
party to this Trust Agreement, and may act as depository, trustee or agent for
any committee or body of Bondholders or other obligations of the Authority with
like effect and in the same manner as if the Trustee were not a party to this
Trust Agreement; and no implied covenant shall be read into this Trust Agreement
against the Trustee in respect of such matters. --------------------------------
--- SECTION 910. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals, statements
and representations contained herein and in the Bonds (excluding the Trustee's
certificates of authentication on 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
shall not be under any responsibility for the correctness of the same. ---------
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--- SECTION 911. TRUSTEE NOT RESPONSIBLE FOR RECORDING. The Trustee shall not be
under any obligation to see to the recording or filing of this Trust Agreement,
the Related Documents or any other instrument or otherwise to the giving to any
Person of notice of the provisions hereof or thereof. --------------------------
--- SECTION 912. QUALIFICATION OF THE TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a corporation organized and doing business
under the Federal laws, or the laws of any state thereof, or of Puerto Rico,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least FIFTY MILLION DOLLARS ($50,000,000), subject to
supervision or examination by Federal, Puerto Rico or state authority, and
having its principal trust office in Puerto Rico or in one of the states of the
United Stated of America. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus and the reported deposits of such corporation shall
be deemed to be its combined capital and surplus and reported deposits,
respectively, as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in Section 913 hereof. ------------------------------------
--- SECTION 913. RESIGNATION AND REMOVAL OF TRUSTEE. (A) No resignation or
removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 914. -------------------------------------------
----- (B) The Trustee may resign at any time by giving notice thereof to the
Authority and the Borrower. If an instrument of acceptance by a successor
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Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the retiring Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee. ----
----- (C) The Trustee may be removed at any time by demand given to the Trustee,
the Authority and the Borrower by the Majority Interest. -----------------------
----- (D) If at any time: (i) the Trustee shall cease to be eligible under
Section 912 hereof and shall fail to resign after request therefor by the
Borrower or by any Bondholder who shall have been a bona fide Bondholder for at
least six months, or (ii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, the Authority or the
Borrower may remove the Trustee, or subject to Section 902, any Bondholder who
has been a bona fide Bondholder for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. -----------------------------------------------------------------------
----- (E) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the
Authority, with the approval of the Borrower, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by an
instrument or concurrent instruments executed by the Majority Interest delivered
to the Authority, the Borrower, and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee appointed by the
Authority and approved
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by the Borrower. If no successor Trustee shall have been so appointed by the
Authority and approved by the Borrower, and accepted its appointment in the
manner hereinafter provided, any Bondholder who shall have been a bona fide
Bondholder for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee. --------------------------------------------
----- (F) The Authority shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Bondholders.
Each notice shall include the name and address of the corporate trust office of
the successor Trustee. ---------------------------------------------------------
--- SECTION 914. SUCCESSOR TRUSTEE. (A) Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor, to the
Authority and the Borrower, an instrument accepting such appointment hereunder,
and thereupon such successor Trustee without any further act, shall become fully
vested with all the rights, immunities, powers and trusts, and subject to all
the duties and obligations, of its predecessors. The predecessor Trustee shall,
nevertheless, on the request of its successor or of the Authority and upon
payment of the expenses, charges and other disbursements of such predecessor
which are payable pursuant to the provisions of Section 906, execute and deliver
an instrument transferring to such successor Trustee all the rights, immunities,
powers and trusts of such predecessor hereunder. Every predecessor Trustee shall
deliver all property and moneys held by it hereunder to its successor, subject,
nevertheless, to its preference, if any, provided for in Sections 902 and 906.
Should any instrument from the Authority be required by any successor Trustee
for more fully and certainly vesting such Trustee the rights, immunities, powers
and trusts hereby vested or intended to be vested the predecessor Trustee, any
such instrument shall and will, on request, be
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executed, acknowledged and delivered by the Authority. -------------------------
----- (B) Notwithstanding any of the foregoing provisions of this Article, any
bank, national association or trust company acting as Trustee may be converted,
merged or consolidated, or to which the corporate trust business assets as a
whole or substantially as a whole of such bank, national association or trust
company may be sold, shall be deemed the successor of the Trustee. -------------
--- SECTION 915. MONEY HELD IN TRUST. Money held by the Trustee in trust under
this Trust Agreement need not be segregated from other funds except to the
extent required by law or by the express provisions hereof. Subject to the
provisions of Section 602, the Trustee shall be under no liability for interest
on any money received by it under this Trust Agreement except as otherwise
agreed with the Authority or the Borrower. -------------------------------------
------------------------------------ ARTICLE X ---------------------------------
------------------- EXECUTION OF INSTRUMENTS BY BONDHOLDERS --------------------
----------------------- AND PROOF OF OWNERSHIP OF BONDS ------------------------
--- SECTION 1001. EXECUTION OF INSTRUMENTS. Any request, direction, consent or
other instrument required or permitted by this Trust Agreement to be signed or
executed by Bondholders may be in any number of concurrent instruments of
similar tenor and may be signed or executed by such Bondholders or their legal
representatives. ---------------------------------------------------------------
--- SECTION 1002. PROOF OF EXECUTION OF INSTRUMENT AND OF OWNERSHIP. Proof of
the execution of any instrument mentioned in Section 1001 and of the ownership
of Bonds shall be sufficient for any purpose of this Trust Agreement and shall
be conclusive in favor of the Trustee with regard to any action taken by it
under such instrument if made in the following manner: (i) the fact and date of
the execution by and the authority of the Person executing any such instrument
may be proved by the verification of any officer in any jurisdiction who, by the
laws thereof, has power to take
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affidavits within such jurisdiction, to the effect that such instrument was
subscribed to before him, or by an affidavit of a witness to such execution; and
(ii) the ownership of Bonds shall be proved by the Bond Register. Nothing
contained in this Section shall be construed as limiting the Trustee to such
proof, it being intended that the Trustee may accept any other evidence of the
matters herein stated which may be sufficient. Any request or consent of any
Bondholder shall bind every future Holder of the same Bond or any Bond issued in
place thereof in respect of anything done by the Trustee in pursuance of such
request or consent. ------------------------------------------------------------
--- SECTION 1003. RECORD DATE. If the Authority shall solicit from the Holders
any request, direction, consent or other instrument required or permitted by
this Trust Agreement to be signed or executed by Bondholders, the Authority may,
at its option, fix in advance a record date for the determination of Holders
entitled to give such request, direction, consent or other instrument, but the
Authority shall have no obligation to do so. If such a record date is fixed,
such request, direction, consent or other instrument may be given before or
after such record date, but only the Holders at the close of business on such
record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion have authorized or agreed or
consented to such request, direction, consent or other instrument, and for that
purpose the Outstanding Bonds shall be computed as of such record date. No such
consent by the Holders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Trust Agreement no
later than six months after the record date. -----------------------------------
----------------------------------- ARTICLE XI ---------------------------------
----------------- SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT ----------------
--- SECTION 1101. SUPPLEMENTS AND AMENDMENTS NOT REQUIRING
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BONDHOLDERS' CONSENT. The Authority and the Trustee may, without the consent or
approval of, or notice to, any of the Bondholders, at any time and from time to
time, enter into such supplements and amendments to this Trust Agreement, in
form reasonably satisfactory to the Trustee, as shall not, in the reasonable
opinion of the Trustee, be detrimental to the interest of the Bondholders (which
supplements and amendments shall thereafter form a part hereof): (i) to cure any
ambiguity or formal defect or omission, to correct or supplement any provision
herein that may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this Trust
Agreement that shall not be inconsistent with the provisions of this Trust
Agreement; or (ii) to grant to or confer upon the Trustee for the benefit of the
Bondholders any additional rights, remedies, powers, authority or security that
may lawfully be granted to or conferred upon the Bondholders or the Trustee; or
(iii) to correct any description of, or to reflect changes in, any properties
comprising the Project; or (iv) to add to the covenants of the Authority for the
benefit of the Bondholders or to surrender any right or power herein conferred
upon the Authority. ------------------------------------------------------------
--- SECTION 1102. SUPPLEMENTS AND AMENDMENTS REQUIRING CONSENT OF THE MAJORITY
INTEREST. (A) With the consent of the Majority Interest, the Authority and the
Trustee may, from time to time and at any time, enter into supplements and
amendments to this Trust Agreement for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Trust
Agreement or of any supplement or amendment to this Trust Agreement or of
modifying in any manner the rights of the Bondholders. Nothing herein contained
shall permit, or be construed as permitting, without the consent of each
Bondholder affected, (i) an extension of the time for the payment of principal
of or interest on any
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Bond; or (ii) a reduction in the principal amount of any Bond or the redemption
premium, if any, or the Interest Rate; or (iii) the creation of any lien or
security interest with respect to the Loan Agreement or the payments thereunder;
or (iv) a preference or priority of any Bond or Bonds over any other Bond or
Bonds; or (v) a reduction in the aggregate principal amount of the Bonds
required for consent to such supplement or amendment or any waiver hereunder.---
----- (B) Nothing herein contained, however, shall be construed as making
necessary the approval by Bondholders of the execution of any supplemental
agreement as authorized in Section 1101. ---------------------------------------
----- (C) It shall not be necessary for the consent of the Bondholders under
this Section to approve the particular form of any proposed supplement or
amendment but it shall be sufficient if such consent shall approve the substance
thereof. -----------------------------------------------------------------------
----- (D) If at any time the Authority shall request the Trustee to enter into
any supplement or amendment to this Trust Agreement for any of the purposes of
this Section, the Trustee shall, at the expense of the Authority, cause notice
of the proposed execution of such supplement or amendment to be given to the
Bondholders. Such notice shall briefly set forth the nature of the proposed
supplement or amendment and shall state that copies thereof are on file at the
Corporate Trust Office for inspection by the Bondholders. The Trustee shall not,
however, be subject to any liability to any Bondholder by reason of its failure
to give the notice required by this Section, and any such failure or any defect
in such notice shall not affect the validity of such supplement or amendment
when consented to as provided in this Section. ---------------------------------
----- (E) Whenever, at any time within one year after the date of the giving of
such notice, the Authority shall deliver to the Trustee an instrument or
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instruments in writing purporting to be executed by the Majority Interest, which
instrument or instruments shall refer to the proposed supplement or amendment
described in such notice and shall specifically consent to and approve the
execution thereof in substantially the form of the copy thereof referred to in
such notice, thereupon, but not otherwise, the Trustee may execute such
supplement or amendment in substantially such form, without liability or
responsibility to any Bondholder whether or not such Bondholder shall have
consented thereto. -------------------------------------------------------------
----- (F) If the Majority Interest at the time of the execution of such
supplement or amendments or any record date established in connection therewith
pursuant to Article X shall have consented to and approved the execution thereof
as herein provided, no Holder shall have any right to object to the execution of
such supplement or amendment, 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 execution thereof, or to enjoin or restrain the Trustee or the
Authority from executing the same or from taking any action pursuant to the
provisions thereof. ------------------------------------------------------------
--- SECTION 1103. SUPPLEMENTS AND AMENDMENTS DEEMED PART OF TRUST AGREEMENT. The
Trustee is authorized to join with the Authority in the execution of any
supplement or amendment herein provided. Any supplement or amendment to this
Trust Agreement executed in accordance with the provisions of this Article shall
thereafter form a part of this Trust Agreement, and all of the terms and
conditions contained in any such supplement or amendment as to any provision
authorized to be contained therein shall be and shall be deemed to be part of
the terms and conditions of this Trust Agreement for any and all purposes. Upon
the execution of any supplement or amendment to this Trust Agreement pursuant to
the provisions of this Article, this Trust Agreement shall be and be deemed to
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be modified and amended in accordance therewith, and the respective rights,
duties and obligations under this Trust Agreement of the Authority, the Trustee
and the Bondholders shall thereafter be determined, exercised and enforced
hereunder, subject in all respects to such modifications and amendments. In case
of the execution and delivery of any supplement or amendment, express reference
may be made thereto in the text of any Bonds issued thereafter, if deemed
necessary or desirable by the Trustee. -----------------------------------------
--- SECTION 1104. DISCRETION OF TRUSTEE IN ENTERING INTO SUPPLEMENTS AND
AMENDMENTS. (A) In each and every case provided for in this Article, the Trustee
shall not be obligated to execute any proposed supplement or amendment, if the
rights, obligations and interests of the Trustee would be thereby affected, and
the Trustee shall not be under any responsibility or liability to the Authority,
the Borrower or to any Bondholder or to anyone whomsoever for its refusal in
good faith to enter into any such supplement or amendment if such supplement or
amendment is deemed by it to be contrary to the provisions of this Article. ----
----- (B) The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an opinion of any counsel, as conclusive evidence that any such
proposed supplement or amendment does or does not comply with the provisions of
this Trust Agreement, and that it is or is not proper for it, under the
provisions of this Article, to join in the execution of such supplement or
amendment. ---------------------------------------------------------------------
--- SECTION 1105. CONSENT OF BORROWER REQUIRED. Anything in this Trust Agreement
to the contrary notwithstanding, any amendment or supplement to this Trust
Agreement shall not become effective unless and until the Borrower shall have
consented thereto. -------------------------------------------------------------
--------------------------------- ARTICLE XII ----------------------------------
----------------------- SUPPLEMENTS AND AMENDMENTS TO --------------------------
---------------------------THE RELATED DOCUMENTS -------------------------------
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--- SECTION 1201. SUPPLEMENTS AND AMENDMENTS TO RELATED DOCUMENTS NOT REQUIRING
CONSENT. The Authority and the Borrower may enter into, and the Trustee may
consent to, from time to time and at any time, such amendments and supplements
to the Related Documents, in form reasonably satisfactory to the Trustee, as
shall not be inconsistent with the terms and provisions thereof and, in the
reasonable opinion of the Trustee, shall not be detrimental to the interests of
the Bondholders (which supplements and amendments shall thereafter form a part
thereof): (i) to make changes in the description of or identify more precisely
the Project; or (ii) to cure any ambiguity or formal defect or omission in the
Related Documents or in any supplement thereto; or (iii) to grant to or confer
upon the Authority or the Trustee for the benefit of the Bondholders any
additional rights, remedies, powers, authority or security that may lawfully be
granted to or conferred upon any of them; or (iv) to add to the covenants of the
Borrower for the benefit of the Bondholders or to surrender any right or power
therein conferred upon the Borrower. -------------------------------------------
--- SECTION 1202. SUPPLEMENTS AND AMENDMENTS TO RELATED DOCUMENTS REQUIRING
CONSENT OF THE MAJORITY INTEREST. Except for supplements or amendments provided
for in Section 1201, the Authority shall not enter into and the Trustee shall
not consent to any supplements or amendments to the Related Documents unless
notice of the proposed execution of such supplement or amendment shall have been
given to, and the Majority Interest shall have consented to and approved the
execution thereof, all as provided for in Section 1102. The Trustee shall be
entitled to exercise its discretion in consenting or not consenting to any such
supplement or amendment in the same manner as provided for in Section 1104 in
the case of supplements and amendments to this Trust Agreement. ----------------
--- SECTION 1203. CONSENT OF TRUSTEE REQUIRED. Anything in this Trust
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Agreement to the contrary notwithstanding, any supplement or amendment to the
Related Documents shall not become effective unless and until the Trustee shall
have consented thereto. --------------------------------------------------------
-------------------------------- ARTICLE XIII ----------------------------------
--------------- PAYMENT OF BONDS AND TERMINATION; DEFEASANCE -------------------
--- SECTION 1301. PAYMENT OF BONDS AND TERMINATION. If there is paid or caused
to be paid from the Bond Fund in accordance with the provisions of Sections 503
and 504 to the Holders of all of the Outstanding Bonds the principal amount of,
premium, if any, and interest which is and shall thereafter become due and
payable thereon, together with all other sums payable hereunder by the
Authority, then and in that case the rights, title and interest of the Trustee
hereunder shall cease and terminate, and such Bonds shall cease to be entitled
to any benefit under this Trust Agreement. In such event, the Trustee shall
transfer and assign to the Borrower all property Granted to the Trustee
hereunder and then held by the Trustee (including, without limitation, the
Mortgages, Mortgage Notes, Assignment of Leases and Rents Agreement and Security
Agreement, Assignment of Hotel Management Agreement and Security Agreement,
Master Security Agreement, UCC Financing Statement and the UCC Fixtures Filing),
and shall execute such documents as may be reasonably required by the Authority
or the Borrower to evidence such transfer and assignment and shall promptly turn
over to the Borrower any surplus in the Bond Fund and any balance remaining in
the Project Fund, Reserve Fund, Renewal and Replacement Fund, and Insurance
Fund. If the Authority shall pay or cause to be paid to the Holders of less than
all of the Outstanding Bonds the principal amount of, premium, if any, and
interest which is and shall thereafter become due and payable upon such Bonds,
such Bonds or portions thereof, shall cease to be entitled to any benefit or
security under
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this Trust Agreement. ----------------------------------------------------------
--- SECTION 1302. DEFEASANCE. (A) Any Outstanding Bond, or any portion thereof,
shall be deemed to have been paid within the meaning and with the effect
expressed in Section 1301 when the whole amount of the principal of, premium, if
any, and interest on such Bond shall have been paid and the conditions set forth
in clauses (iv) and (v) below shall have been satisfied or when (i) if such Bond
or portion thereof shall have been selected for redemption in accordance with
Section 301, the Borrower shall have given to the Trustee irrevocable
instructions to give in accordance with the provisions of Section 302 notice of
redemption thereof; (ii) there shall be on deposit with the Trustee moneys or
Defeasance Obligations, which shall not contain provisions permitting the
redemption thereof other than at the option of the holder, the principal of and
the interest on which when due and without any reinvestment thereof, will
provide moneys which shall be sufficient to pay when due the principal of, and
interest due and to become due on said Bond; (iii) in the event the Maturity
Date of said Bond will not occur or said Bond is not to be redeemed within the
next succeeding 60 days, the Borrower shall have given the Trustee irrevocable
instructions to give notice, as soon as practicable in the same manner as a
notice of redemption is given pursuant to Section 302, to the Holder of said
Bond or portion thereof, stating that the deposit of such Moneys or Defeasance
Obligations required by clause (ii) of this paragraph has been made with the
Trustee and that said Bond is deemed to have been paid in accordance with this
Section and stating such payment or redemption date or dates upon which moneys
are to be available for the payment of the principal of and interest on said
Bond; (iv) the Trustee shall have received an opinion of counsel, which counsel
is experienced in bankruptcy matters, reasonably satisfactory to the Trustee and
the Authority, to the effect that the payment
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to the Bondholder of the moneys described in clause (ii) of this paragraph would
not constitute a transfer which may be avoided under any provision of the
Federal Bankruptcy Code in the event of an Act of Bankruptcy; and (v) the
Trustee shall have received an opinion of counsel experienced in tax matters
under the Code, reasonably satisfactory to the Trustee and the Authority, to the
effect that, assuming, if necessary, that the Borrower will continue to comply
with the covenants contained in Section 5.10 (a) and (b) of the Loan Agreement,
the deposit described in clause (ii) of this paragraph and the payments to be
made to the Bondholders therefrom would not adversely affect the treatment of
the interest received by the Bondholders as income from sources within Puerto
Rico under the Code. -----------------------------------------------------------
----- (B) Neither the moneys nor the Defeasance Obligations deposited with the
Trustee pursuant to this Section nor principal or interest payments on any such
obligations shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of and interest on said Bond. --
----- (C) If payment of less than all of the Bonds is to be provided for in the
manner and with the effect described in this Article, the Trustee shall select
such Bonds, or portions thereof, by such method as the Trustee shall deem fair
and appropriate. ---------------------------------------------------------------
----- (D) If Bonds (or portions thereof) are deemed to have been paid in
accordance with the provisions of this Article by reason of the deposit with the
Trustee of moneys or Defeasance Obligations, no amendment to the provisions of
this Section which would adversely affect the Holders of such Bonds (or portions
thereof) shall be made without the consent of each Holder affected thereby. ----
---------------------------------- ARTICLE XIV ---------------------------------
--------------------------- MISCELLANEOUS PROVISIONS ---------------------------
-80-
--- SECTION 1401. COVENANTS OF AUTHORITY BIND ITS SUCCESSORS. ------------------
In the event of the dissolution of the Authority, all of the covenants,
stipulations, obligations and agreements contained in this Trust Agreement by or
on behalf of or for the benefit of the Authority shall bind or inure to the
benefit of the successor or successors of the Authority from time to time and
any officer, board, commission, authority, agency or instrumentality to whom or
to which any power or duty affecting such covenants, stipulations, obligations
and agreements shall be transferred by or in accordance with law. --------------
--- SECTION 1402. NOTICES. (A) All notices, demands, directions, requests,
consents or other instruments and communications authorized or required by this
Trust Agreement to be requested from, given by or to, or filed with the
Bondholders, the Authority, the Trustee, or the Borrower shall be in writing and
shall be (i) mailed by first-class mail, registered or certified, return receipt
requested, or express mail, postage prepaid, or private courier service, next
day delivery, or sent by telex, telecopy or other similar form of rapid
transmission confirmed by mailing (by first-class mail, registered or certified,
or express mail, postage prepaid, or by private courier, next day delivery)
confirmation at substantially the same time as such rapid transmission; or (ii)
personally delivered to the receiving party or, if not an individual, to an
officer of the receiving party. All such communications shall be mailed, sent or
delivered addressed as follows: ------------------------------------------------
--- If to the Bondholder: To the address appearing in the registration books
kept by the Trustee, -----------------------------------------------------------
--- If to the Authority: Puerto Rico Industrial, Tourist, Educational, ------
------------------------ Medical and Environmental Facilities----------------
------------------------ Financing Authority---------------------------------
------------------------ c/o Government Development Bank for Puerto
-81-
------------------------ Rico, Minillas Government Center,-------------------
------------------------ De Diego Avenue and Baldorioty de-------------------
------------------------ Xxxxxx, Stop 22, Santurce, Puerto Rico, 00911------
------------------------ Attention: Executive Director ----------------------
------------------------ Telephone : (787) 722-1425-----------------------
------------------------ Telefax : (787) 726-1440-----------------------
-- If to the Trustee: Banco Santander Puerto Rico-------------------------
------------------------ Trust Department------------------------------------
------------------------ 221 Xxxxx de Xxxx Avenue----------------------------
------------------------ Lobby-----------------------------------------------
------------------------ Hato Rey, Puerto Rico 00918-------------------------
------------------------ Attention: Executive Trust Officer------------------
------------------------ Telephone : (787) 250-5478-----------------------
------------------------ Telefax : (787) 250-5484-----------------------
-- If to the Borrower: El Conquistador Partnership L.P., S.E.--------------
------------------------ c/o El Conquistador Resort & Country Club ----------
------------------------ 1000 El Conquistador Avenue-------------------------
------------------------ Xxxxxxx, X.X. 00913---------------------------------
------------------------ Attention : President------------------------------
------------------------ Telephone : (787) 863-1000-----------------------
------------------------ Telefax : (787) 863-3200-----------------------
--- With copy to:------- Shack & Xxxxxx, P.C.--------------------------------
------------------------ 530 Fifth Avenue------------------------------------
------------------------ Xxx Xxxx, XX 00000 ---------------------------------
------------------------ Attention: Xxxxxx X. Xxxxxxxx, Esq. ---------------
------------------------ Telephone : (212) 782-0708-----------------------
------------------------ Telefax : (212) 730-1964-----------------------
--- and to: ------------ Patriot American Hospitality, Inc. -----------------
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------------------------ 0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000-------------------
------------------------ Dallas, TX 75207------------------------------------
------------------------ Attention : General Counsel-------------------------
------------------------ Telephone : (214) 863-1000--------------------------
------------------------ Telefax : (214) 863-1986----------------------------
----- (B) All documents received by the Trustee under the provisions of this
Trust Agreement, or photographic copies thereof, shall be retained in its
possession until this Trust Agreement shall be released in accordance with the
provisions of the Trust Agreement, subject at all reasonable times to the
inspection of the Authority, the Borrower and the Bondholders and the agents and
representatives thereof. -------------------------------------------------------
----- (C) A duplicate copy of each notice, certificate, request or other
communication given hereunder to the Authority, the Borrower, or the Trustee
shall also be concurrently given to each of the others. The Authority, the
Trustee, and the Borrower may, by notice given hereunder, designate any further
or different addresses to which subsequent notices, certificates or other
communications shall be sent. --------------------------------------------------
----- (D) All such notices and other communications shall be effective when
received. ----------------------------------------------------------------------
--- SECTION 1403. SUBSTITUTE MAILING. In case, by reason of the suspension of
regular mail service and private courier service as a result of a strike, work
stoppage or similar activity, it shall be impractical to mail notice of any
event to the Bondholders when such notice is required to be given pursuant to
any provision of this Trust Agreement, any manner of giving notice as shall be
satisfactory to the Trustee and the Authority shall be deemed to be a sufficient
giving of such notice. ---------------------------------------------------------
--- SECTION 1404. RIGHTS UNDER TRUST AGREEMENT.---------------------------------
Except as herein otherwise expressly provided, nothing in this Trust
-83-
Agreement expressed or implied is intended or shall be construed to confer upon
any Person, other than the parties hereto, the Borrower, and the Bondholders and
the Beneficial Owners any right, remedy or claim, legal or equitable, under or
by reason of this Trust Agreement or any provision hereof. This Trust Agreement
and all of its provisions is intended to be and is for the sole and exclusive
benefit of the parties hereto, the Borrower and the Bondholders. ---------------
--- SECTION 1405. SEVERABILITY. In case any one or more of the provisions of
this Trust Agreement or of the Bonds shall for any reason be held to be illegal
or invalid, such illegality or invalidity shall not effect any other provision
of this Trust Agreement or of the Bonds, but this Trust Agreement and the Bonds
shall be construed and enforced as if such illegal or invalid provision had not
been contained therein. In case any covenant, stipulation, obligation or
agreement contained in the Bonds or in this Trust Agreement shall for any reason
be held to be in violation of law, then such covenant, stipulation, obligation
or agreement shall be deemed to be the covenant, stipulation, obligation or
agreement of the Authority to the full extent permitted by law. ----------------
--- SECTION 1406. COVENANTS OF AUTHORITY NOT COVENANTS OF OFFICIALS
INDIVIDUALLY. No covenant, stipulation, obligation or agreement contained herein
shall be deemed to be a covenant, stipulation, obligation or agreement of any
present or future member, agent or employee of the Authority in his individual
capacity, and neither the members of the Board nor any other officer of the
Board of the Authority executing the Bonds shall be liable personally on the
Bonds or be subject to any personal liability or accountability by reason of the
issuance thereof. No member, officer, agent or employee of the Authority shall
incur any personal liability in acting or proceeding or in not acting or not
proceeding, in good faith,
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reasonably and in accordance with the terms of this Trust Agreement. -----------
--- SECTION 1407. PUERTO RICO LAW GOVERNS. This Trust Agreement shall be
governed by and construed in accordance with the laws of Puerto Rico. ----------
--- SECTION 1408. PAYMENTS DUE ON A NON-BUSINESS DAY. In any case where a
Principal Payment Date or an Interest Payment Date shall not be a Business Day,
then payment of principal or interest need not be made on such date but may be
made on the next succeeding Business Day with the same force and effect, and no
interest on such payment shall accrue for the period after such date. ----------
--- SECTION 1409. HEADINGS NOT PART OF TRUST AGREEMENT. Any heading preceding
the text of the Articles and Sections, and any table of contents or marginal
notes appended to copies hereof, shall be solely for convenience or reference
and shall not affect its meaning, construction or effect. ----------------------
--- SECTION 1410. TRUST AGREEMENT SUPERSEDES PRIOR AGREEMENT. This Trust
Agreement supersedes any other prior agreement written or oral, between the
parties hereto with respect to the Bonds. --------------------------------------
--- SECTION 1411. CONFLICTS If any provision of (i) the Trust Agreement,
qualifies or conflicts with any provision in any of the Related Documents , the
provision contained in the Trust Agreement shall control and (ii) if any
provision of the Loan Agreement qualifies or conflicts with any provision in any
of the Related Documents (except the Loan Agreement), the provision contained in
the Loan Agreement shall control. This Section will not apply to provisions
relative to the constitution of the documents or the remedies thereunder. ------
---------------------------------- ACCEPTANCE ----------------------------------
--- The appearing parties accept this Deed as drafted and confirm that the same
has been drawn in accordance with their instructions. --------------------------
--- I, the Notary, hereby certify that the appearing parties read this Deed,
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and I advised the appearing parties of their right to have witnesses present at
its execution, which right they waived, and that I advised them of the legal
effect of this Deed; and they acknowledged that they understood the contents of
this Deed and such legal effect, and thereupon they signed this Deed before me,
affixing their initials to each and every page thereof. ------------------------
--- I further certify as to everything stated or contained herein. -------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--- I, the Notary, DO HEREBY ATTEST.--------------------------------------------
-86-
EXHIBIT A
FORM OF SERIAL BOND
1999 SERIES A
FRONT SIDE OF BOND
UNDER EXISTING LAWS OF THE COMMONWEALTH OF PUERTO RICO INTEREST ON THIS
BOND IS EXEMPT FROM INCOME TAX. SUCH INTEREST IS NOT EXEMPT FROM INCOME TAX
UNDER THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE");
HOWEVER, SUCH INTEREST IS NOT SUBJECT TO INCOME TAX UNDER THE CODE IF RECEIVED
BY ANY PERSON WHOSE INCOME FROM PUERTO RICO SOURCES IS NOT SUBJECT TO INCOME TAX
UNDER THE CODE.
No. RA- ______ $_____________________
United States of America
Commonwealth of Puerto Rico
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL AND
ENVIRONMENTAL CONTROL FACILITIES FINANCING AUTHORITY
Tourism Revenue Bond,
1999 Series A
(El Conquistador Resort Project)
Serial Bonds
Interest Rate:__ per annum Maturity Date:
Registered Owner: ______________________________
Principal Amount: ____________________ Dollars
Interest Payment Dates: the 1st day of each month
Initial Interest Payment Date: [ ] 1, 1999
Original Issue Date:[ ] 1, 1999
Cusip No.:
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental
Control Facilities Financing Authority (the "Authority"), a body corporate and
politic constituting a public corporation and governmental instrumentality of
the Commonwealth of Puerto Rico ("Puerto Rico") for value received, promises to
pay, solely from the special fund provided therefor as hereinafter set forth, to
the registered owner mentioned above, or registered assigns (collectively, the
Registered Owner),
the Principal Amount set forth above on the Maturity Date set forth above, and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid principal amount of this bond outstanding from time to
time, from the Interest Payment Date (stated above) next preceding the date of
authentication to which interest shall have been paid, unless such date of
authentication is an Interest Payment Date to which interest shall have been
paid, in which case from said date, or unless such date of authentication is
prior to the Initial Interest Payment Date (stated above), in which case this
bond will bear interest from the Original Issue Date (stated above), until the
principal amount of this bond is paid in full, such interest being payable on
the Interest Payment Dates in each year set forth above, commencing on the
Initial Interest Payment Date, in any coin or currency of the United States of
America which on the date of payment thereof is legal tender for the payment of
public and private debts. Interest on this bond shall be payable to the
Registered Owner on the close of business on the 15th day of the month (whether
or not a Business Day) immediately preceding each Interest Payment Date by check
mailed to such Registered Owner at his address as it appears on the Bond
Register, or by wire transfer in immediately available funds to any Registered
Owner owning ONE MILLION DOLLARS ($1,000,000) or more in principal amount of the
Bonds, if such Registered Owner shall so elect; provided, however, that payments
due and payable on the Maturity Date (set forth above) shall be made upon
presentation and surrender hereof at the corporate trust office of the Trustee
(hereinafter mentioned), in the Municipality of San Xxxx, Puerto Rico. Any
interest not punctually paid shall forthwith cease to be payable to the
Registered Owner on such regular record date, and may be paid to the person in
whose name this bond (or one or more predecessor bonds) is registered at the
close of business on a special record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Bonds may be listed and upon such notice as may be
required by such exchange, all as more fully provided in the Trust Agreement.
The date for the payment of such defaulted interest shall be fixed by the
Trustee, notice whereof being given to the Registered Owners not less than 5
days prior thereto.
This bond shall not be deemed to constitute an indebtedness of either
Puerto Rico or any of its political subdivisions, other than the Authority, and
neither Puerto Rico nor any of its political subdivisions, other than the
Authority, shall be liable thereon. This bond shall be payable as to principal
and interest solely from the special fund provided therefor as hereinafter set
forth.
ADDITIONAL PROVISIONS OF THIS BOND ARE SET FORTH ON THE REVERSE HEREOF AND
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
This bond shall not be valid or become obligatory for any purpose or be
entitled to any benefit under the Trust Agreement until this bond shall have
been authenticated by the execution by the Trustee of the certificate of
authentication endorsed hereon. All acts, conditions and things required by the
Constitution and laws of Puerto Rico, and the resolutions, rules and regulations
of the Authority to happen, exist and be performed precedent to and in the
issuance of this bond have happened, exist and have been performed as so
required.
-2-
IN WITNESS WHEREOF, Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority has caused this bond to
bear the facsimile signatures of the Assistant Executive Director of the
Authority and the Secretary of the Authority, and a facsimile of its corporate
seal to be imprinted hereon, all as of the Original Issue Date.
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL POLLUTION
CONTROL FACILITIES FINANCING AUTHORITY
By: _____________________________________
Assistant Executive Director
By: _____________________________________
Secretary
[Facsimile of corporate seal] -----------
-3-
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds of the series designated herein and issued under
the provisions of the Trust Agreement mentioned herein.
BANCO SANTANDER PUERTO RICO, as Trustee
By: _____________________________________
Authorized Officer
Date of
authentication: _________________________
-4-
EXHIBIT A
FORM OF TERM BOND
1999 SERIES A
FRONT SIDE OF BOND
UNDER EXISTING LAWS OF THE COMMONWEALTH OF PUERTO RICO INTEREST ON THIS
BOND IS EXEMPT FROM INCOME TAX. SUCH INTEREST IS NOT EXEMPT FROM INCOME TAX
UNDER THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE");
HOWEVER, SUCH INTEREST IS NOT SUBJECT TO INCOME TAX UNDER THE CODE IF RECEIVED
BY ANY PERSON WHOSE INCOME FROM PUERTO RICO SOURCES IS NOT SUBJECT TO INCOME TAX
UNDER THE CODE.
No. RA- ______ $_____________________
United States of America
Commonwealth of Puerto Rico
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL AND
ENVIRONMENTAL CONTROL FACILITIES FINANCING AUTHORITY
TOURISM Revenue Bond,
1999 Series A
(El Conquistador Resort Project)
Term Bonds
Interest Rate:__ per annum Maturity Date:
Registered Owner: ______________________________
Principal Amount: ____________________ Dollars
Interest Payment Dates: the 1st day of each month
Initial Interest Payment Date: [ ] 1, 1999
Original Issue Date:[ ] 1, 1999
Cusip No.:
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental
Control Facilities Financing Authority (the "Authority"), a body corporate and
politic constituting a public corporation and governmental instrumentality of
the Commonwealth of Puerto Rico ("Puerto Rico") for value received, promises to
pay, solely from the special fund provided therefor as hereinafter set forth, to
the registered owner mentioned above, or registered assigns (collectively, the
"Registered Owner"), the Principal Amount set forth above on the Maturity Date
set forth above, and to pay interest
-5-
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
principal amount of this bond outstanding from time to time, from the Interest
Payment Date (stated above) next preceding the date of authentication to which
interest shall have been paid, unless such date of authentication is an Interest
Payment Date to which interest shall have been paid, in which case from said
date, or unless such date of authentication is prior to the Initial Interest
Payment Date (stated above), in which case this bond will bear interest from the
Original Issue Date (stated above), until the principal amount of this bond is
paid in full, such interest being payable on the Interest Payment Dates in each
year set forth above, commencing on the Initial Interest Payment Date, in any
coin or currency of the United States of America which on the date of payment
thereof is legal tender for the payment of public and private debts. Interest on
this bond shall be payable to the Registered Owner on the close of business on
the 15th day of the month (whether or not a Business Day) immediately preceding
each Interest Payment Date by check mailed to such Registered Owner at his
address as it appears on the Bond Register, or by wire transfer in immediately
available funds to any Registered Owner owning ONE MILLION DOLLARS ($1,000,000)
or more in principal amount of the Bonds, if such Registered Owner shall so
elect; provided, however, that payments due and payable on the Maturity Date
(set forth above) shall be made upon presentation and surrender hereof at the
corporate trust office of the Trustee (hereinafter mentioned), in the
Municipality of San Xxxx, Puerto Rico. Any interest not punctually paid shall
forthwith cease to be payable to the Registered Owner on such regular record
date, and may be paid to the person in whose name this bond (or one or more
predecessor bonds) is registered at the close of business on a special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Bonds may be
listed and upon such notice as may be required by such exchange, all as more
fully provided in the Trust Agreement. The date for the payment of such
defaulted interest shall be fixed by the Trustee, notice whereof being given to
the Registered Owners not less than 5 days prior thereto.
This bond shall not be deemed to constitute an indebtedness of either
Puerto Rico or any of its political subdivisions, other than the Authority, and
neither Puerto Rico nor any of its political subdivisions, other than the
Authority, shall be liable thereon. This bond shall be payable as to principal
and interest solely from the special fund provided therefor as hereinafter set
forth.
ADDITIONAL PROVISIONS OF THIS BOND ARE SET FORTH ON THE REVERSE HEREOF AND
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
This bond shall not be valid or become obligatory for any purpose or be
entitled to any benefit under the Trust Agreement until this bond shall have
been authenticated by the execution by the Trustee of the certificate of
authentication endorsed hereon. All acts, conditions and things required by the
Constitution and laws of Puerto Rico, and the resolutions, rules and regulations
of the Authority to happen, exist and be performed precedent to and in the
issuance of this bond have happened, exist and have been performed as so
required.
-6-
IN WITNESS WHEREOF, Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority has caused this bond to
bear the facsimile signatures of the Assistant Executive Director of the
Authority and the Secretary of the Authority, and a facsimile of its corporate
seal to be imprinted hereon, all as of the Original Issue Date.
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL POLLUTION
CONTROL FACILITIES FINANCING AUTHORITY
By: _____________________________________
Assistant Executive Director
By: _____________________________________
Secretary
[Facsimile of corporate seal] -----------
-7-
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds of the series designated herein and issued under
the provisions of the Trust Agreement mentioned herein.
BANCO SANTANDER PUERTO RICO, as Trustee
By: _____________________________________
Authorized Officer
Date of
authentication: _________________________
-8-
EXHIBIT A
FORM OF CAPITAL APPRECIATION BOND
1999 SERIES A
FRONT SIDE OF BOND
This is a Capital Appreciation Bond. Interest accrues on this Bond but is
not due and payable until the maturity date set forth below or upon earlier
redemption. The Accreted Value (as defined herein) of this Bond at any time may
be significantly different from the Initial Principal Amount shown on the face
hereof.
UNDER EXISTING LAWS OF THE COMMONWEALTH OF PUERTO RICO INTEREST ON THIS BOND IS
EXEMPT FROM INCOME TAX. SUCH INTEREST IS NOT EXEMPT FROM INCOME TAX UNDER THE
UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"); HOWEVER,
SUCH INTEREST IS NOT SUBJECT TO INCOME TAX UNDER THE CODE IF RECEIVED BY ANY
PERSON WHOSE INCOME FROM PUERTO RICO SOURCES IS NOT SUBJECT TO INCOME TAX UNDER
THE CODE.
No. RA- ______ $_____________________
United States of America
Commonwealth of Puerto Rico
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL AND
ENVIRONMENTAL CONTROL FACILITIES FINANCING AUTHORITY
TOURISM REVENUE BOND,
1999 Series A
(El Conquistador Resort Project)
Capital Appreciation Bonds
Yield: _____
Maturity Date: _____________________
Registered Owner: __________________
Initial Principal Amount Per $5000 Maturity Amount: ________________ Dollars
Maturity Amount:__________________ Dollars
Initial Valuation Date: [ ] 1, 1999
Original Issue Date:[ ] 1, 1999
Cusip No.:
-9-
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental
Control Facilities Financing Authority, a body corporate and public constituting
a public corporation and governmental instrumentality of the Commonwealth of
Puerto Rico (the "Authority"), for value received, hereby promises to pay,
solely from the special fund provided therefor as hereinafter set forth, to the
registered owner mentioned above or registered assigns (collectively, the
"Registered Owner"), the Maturity Amount ("Maturity Amount") set forth above (or
the Accreted Value, as hereinafter defined, on the date of earlier payment if
this Bond is redeemed or paid prior to the Maturity Date), on the Maturity Date
set forth above, which Maturity Amount consists of the Initial Principal Amount
set forth above and interest (computed on the basis of a year of three hundred
sixty (360) days, consisting of twelve (12) thirty-day months) thereon at the
yield set forth above from the Original Issue Date set forth above, compounded
on the first day of each month (each such date, a "Valuation Date" or an
"Interest Payment Date"), commencing on the Initial Valuation Date, during the
period from the Original Issue Date to the Maturity Date. The Initial Principal
Amount of this Bond plus the interest accrued to any given date, based upon the
yield stated above, as so compounded, is its "Accreted Value". The Accreted
Value per $5,000 Maturity Amount on each Valuation Date is set forth in the
Table of Accreted Values herein. The Accreted Value as of any date other than a
Valuation Date is equal to the sum of (a) the Accreted Value on the preceding
Valuation Date and (b) the product of (i) a fraction, the numerator of which is
the number of days having elapsed from the preceding Valuation Date and the
denominator of which is the number of days from such preceding Valuation Date to
the next succeeding Valuation Date and (ii) the difference between the Accreted
Values for such Valuation Dates (or between the Initial Principal Amount and the
Accreted Value on the Initial Valuation Date). The payment of the Accreted Value
of and redemption premium, if any, on this Bond is payable in any coin or
currency of the United States of America which on the date of payment thereof is
legal tender for the payment of public and private debts.
This bond shall not be deemed to constitute an indebtedness of either
Puerto Rico or any of its political subdivisions, other than the Authority, and
neither Puerto Rico nor any of its political subdivisions, other than the
Authority, shall be liable thereon. This bond shall be payable as to principal
and interest solely from the special fund provided therefor as hereinafter set
forth.
ADDITIONAL PROVISIONS OF THIS BOND ARE SET FORTH ON THE REVERSE HEREOF AND
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
This bond shall not be valid or become obligatory for any purpose or be
entitled to any benefit under the Trust Agreement until this bond shall have
been authenticated by the execution by the Trustee of the certificate of
authentication endorsed hereon. All acts, conditions and things required by the
Constitution and laws of Puerto Rico, and the resolutions, rules and regulations
of the Authority to happen, exist and be performed precedent to and in the
issuance of this bond have happened, exist and have been performed as so
required.
-10-
IN WITNESS WHEREOF, Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority has caused this bond to
bear the facsimile signatures of the Executive Director or Assistant Executive
Director of the Authority and the Secretary of the Authority, and a facsimile of
its corporate seal to be imprinted hereon.
Puerto Rico Industrial, Tourist,
Educational, Medical and
Environmental Control Facilities
Financing Authority
By:______________________________
Executive Director
By:______________________________
Secretary
-11-
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds issued under the provisions of the
within-mentioned Trust Agreement.
Banco Popular de Puerto Rico
By:______________________________
Authorized Representative
Date of Authentication
_____________________________
-12-
EXHIBIT A
FORM OF BOND
1999 SERIES A
REVERSE SIDE
This bond is one of a duly authorized series of revenue bonds of the
Authority in the aggregate principal amount of One Hundred Five Million Two
Hundred Thousand Dollars ($105,200,000), known as "Tourism Revenue Bonds, 1999
Series A (El Conquistador Resort Project)" (the "Bonds"). The issue consists of
three classes: Serial Bonds in the aggregate principal amount of [$ ]; four
groups of Term Bonds in the aggregate principal amounts of [$ , $ ,
$ , and $ ,] due on the following dates, respectively, the 1st day of
[ ]of the years 2014, 2019, 2024, and 2029; and Capital Appreciation Bonds
in the aggregate principal amount of [$ ] due on the 1st day of [ , ].
The Bonds are issued for the purpose of providing funds for paying all or a
portion of the refinancing of the acquisition, development, construction and
equipping of certain tourism facilities (the "Project"), to fund certain
reserves, and pay certain costs and expenses of issuing the Bonds.
The Bonds are parity obligations, except for differences in interest rates
(yield in the case of the Capital Appreciation Bonds), and are issued under and
pursuant to a Deed of Trust Agreement (said agreement, together with all
permitted agreements supplemental thereto or amendatory thereof, the "Trust
Agreement"), executed on the Date Of Issuance by and between the Authority and
Banco Santander Puerto Rico, in the Municipality of San Xxxx, Puerto Rico (said
bank and any bank, banking association or trust company becoming successor
trustee under the Trust Agreement, being herein called the "Trustee"). A copy of
the Trust Agreement is on file at the corporate trust office of the Trustee.
Reference is hereby made to the Trust Agreement for the provisions, among
others, with respect to the custody and application of the proceeds of the
Bonds, the collection and disposition of payments under the Loan Agreement
(hereinafter mentioned) and other revenues, a description of the funds charged
with and assigned for the payment of the principal of and interest on the Bonds,
the terms and conditions under which the Bonds are or may be issued, the rights,
duties and obligations of the Authority and of the Trustee and the rights of the
Registered Owners. By the acceptance of this bond, the holder hereof assents to
all of the provisions of the Trust Agreement and the Loan Agreement.
-13-
This bond is issued and the Trust Agreement was made and entered into under
and pursuant to the Constitution and laws of Puerto Rico, including Act Number
121 of the Legislature of Puerto Rico, approved June 27, 1977, as amended (the
"Act"), and under and pursuant to resolutions duly adopted by the Authority. All
capitalized terms used in the front and reverse sides of this bond that are
defined in the Trust Agreement shall have the respective meanings assigned to
them in the Trust Agreement.
The Authority has entered into a Loan Agreement (the "Loan Agreement") with
El Conquistador Partnership L.P., S.E., a limited partnership organized and
existing under the laws of the State of Delaware (the "Borrower"), under the
provisions of which the Authority has agreed to lend to the Borrower the
proceeds of the Bonds for the purposes herein before mentioned. The Loan
Agreement provides that: (i) the Borrower shall pay, or cause to be paid,
amounts sufficient to pay the principal of and interest on all the Bonds as the
same shall become due and payable, and certain fees and expenses of the
Authority and the Trustee; (ii) any payments in respect of the Bonds shall be
made directly to the Trustee for the account of the Authority; and (iii) the
Borrower's obligation to make such payments shall be absolute and unconditional.
Under the Trust Agreement, the Authority, for the benefit of the Registered
Owners, has assigned and conveyed to the Trustee, in trust, the Authority's
interests in the Loan Agreement (subject to the reservation of certain rights of
the Authority under the Loan Agreement, including its rights to payment of
certain expenses and to indemnity) and the payments thereunder and other
revenues derived therefrom. The Trust Agreement provides that any payments under
the Loan Agreement in respect of the Bonds and all such revenues are to be
deposited with the Trustee to the credit of a special fund designated "Tourism
Revenue Bonds, 1999 Series A (El Conquistador Resort Project) Bond Fund", which
special fund is equally and ratably charged with the payment of the principal of
and interest on all the Bonds. In addition, $9,100,000 of the Bonds proceeds
will be initially deposited with the Trustee to the credit of a special fund
designated "Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort
Project) Reserve Fund", which special fund is equally and ratably charged with
the payment of the principal of and interest on all the Bonds whenever moneys
held in the Bond Fund are insufficient for such purposes.
To secure the obligations under the Loan Agreement and the Trust Agreement,
the Borrower has executed the following documents (the "Security Documents"):
(i) the Mortgages creating a first lien on the Project and on the Palominos
island leasehold; (ii) the Pledge Agreement whereby the Mortgage Notes secured
by the Mortgages have been pledged to the Trustee; (iii) the Security Agreements
(as defined in the Loan Agreement) whereby a lien and security interest is
created on all the personal property of the Project owned by the Borrower; and
(iv) the Assignment Agreements (as defined in the Loan Agreement) whereby the
Project's leases and rents and hotel management agreement are assigned to the
Trustee.
The Bonds are issuable only as registered Bonds without coupons, in
denominations (Maturity Amount, in the case of the Capital Appreciation Bonds)
of $5,000, and any integral
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multiples thereof, may be exchanged for an equal aggregate principal amount or
Maturity Amount, as the case may be, of bonds of the same series and authorized
denominations, at the corporate trust office of the Trustee in the Municipality
of San Xxxx, Puerto Rico, in the manner and subject to the limitations and
conditions provided in the Trust Agreement and upon payment of any taxes, fees
or other governmental charges provided in the Trust Agreement.
The Bonds are subject to mandatory redemption at a redemption price equal
to the principal amount thereof, and accrued interest to the redemption date in
the case of the Serial Bonds and the Terms Bonds, and the Accreted Value as of
the date of redemption in the case of the Capital Appreciation Bonds (the
"Redemption Price") (a) in whole: (i) if the operation of the Project ceases,
under the conditions set forth in the Loan Agreement, (ii) upon the second
occurrence of an Event of Taxability (as defined in the Loan Agreement); and (b)
in whole or in part upon the occurrence of an event of condemnation, damage to
or destruction of the Project.
The Bonds are subject to redemption, at the option of the Borrower, in
whole or in part, as directed by the Borrower, on any Interest Payment Date on
or after [ ] 1, 2009, at the Redemption Price, plus a premium of (i) 2%
if redeemed prior to [ ] 1, 2010, (ii) 1% if redeemed on or after [ ],
2010 and prior to [ ] 1, 2011, or without premium if redeemed on or after
[ ] 1, 2011.
The Term Bonds are subject to mandatory redemption as follows:
TERM BONDS DUE [_________] ____ , 2014
YEAR [_________ ] 1 [________ ] 1
2009 $ $
2010
2011
2012
2013
TERM BONDS DUE [_________] ____ , 2019
YEAR [_________ ] 1 [________ ] 1
2014 $ $
2015
2016
2017
2018
TERM BONDS DUE [_________] ____ , 2024
YEAR [_________ ] 1 [________ ] 1
2019 $ $
2020
2021
2022
2023
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TERM BONDS DUE [_________] ____ , 2029
YEAR [_________ ] 1 [________ ] 1
2024 $ $
2025
2026
2027
2028
If fewer than all of the Outstanding Bonds: (i) shall be called for
redemption, the Bonds shall be called in inverse order of maturity; or (ii) of
the same Maturity Date shall be called for redemption, the Bonds or portions
thereof of such Maturity Date to be redeemed shall be selected by the Trustee by
such method as the Trustee shall deem fair and appropriate; all as provided in
the Trust Agreement. If a Bond is delivered for partial redemption, then the
Trustee shall deliver to or upon the order of the Registered Owner, without
charge therefor, in exchange for the unredeemed portion of such Bond, a new Bond
of the same maturity and of any denomination or denominations authorized by the
Trust Agreement.
Any such redemption shall be made upon at least 30 days prior notice to all
Registered Owners, in the manner, and under the terms and conditions provided in
the Trust Agreement. On the date designated for redemption, such notice having
been given, the Bonds shall become and be due and payable at the redemption
price established in the Trust Agreement, and, if sufficient moneys for payment
of the said redemption price are held by the Trustee, as provided in the Trust
Agreement, interest on the Bonds shall cease to accrue, the Bonds shall cease to
be entitled to any benefit under the Trust Agreement and the Registered Owners
shall have no rights in respect of the Bonds except to receive payment of the
redemption price held by the Trustee.
If any Bonds are not presented for payment of principal when due, the
Registered Owners thereof shall look only to the moneys set aside for such
purpose by the Trustee. After two years, such moneys, including any earnings
thereon, will be paid to the Borrower, and the Registered Owners of such Bonds
shall thereafter look only to the Borrower for payment thereof.
The Registered Owner of this bond shall have no right to enforce the
provisions of the Trust Agreement or to institute action to enforce the
covenants therein, or take any action with respect to any event of default under
the Trust Agreement or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Trust Agreement. The
Trustee is not required to enforce the Trust Agreement unless it receives
reasonable security and indemnity.
The Bonds shall be deemed to have been paid if there shall have been
deposited with the Trustee sufficient moneys or certain prescribed investment
obligations to provide, without reinvestment, together with any other available
funds, sufficient moneys, to pay when due the principal of and interest, in the
case of the Serial Bonds and the Term Bonds, and the Accreted
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Value, in the case of the Capital Appreciation Bonds. Thereafter, the Registered
Owners must look only to such moneys or investment obligations for payment.
Modifications or alterations of the Trust Agreement or of any agreement
supplemental thereto may be made by the Authority and the Trustee only to the
extent and in the circumstances permitted by the Trust Agreement.
The Trustee is required to keep at its principal corporate trust office the
books of the Authority for the registration, transfer and exchange of Bonds. The
transfer of this bond may be registered only upon such books and as otherwise
provided in the Trust Agreement upon the surrender hereof to the Trustee
together with an assignment duly executed by the registered owner hereof or his
legal representative in the form set forth on this bond or such other form as
shall be satisfactory to the Trustee. Upon each registration of transfer, the
Trustee shall deliver in exchange for this bond a new bond or bonds of the same
series, registered in the name of the transferee, of authorized denominations,
in an aggregate principal amount equal to the principal amount or the Maturity
Amount, as the case may be, of this bond.
As declared by the Act, this bond, notwithstanding the provisions for the
registration of transfer contained in the Trust Agreement, shall at all times
have, and shall be understood to have, all the qualities and incidents
(including negotiability) of a negotiable instrument under the laws of Puerto
Rico.
This bond is issued with the intent that the laws of Puerto Rico shall
govern its construction.
Pursuant to the Act, the Authority as agent for Puerto Rico, hereby
includes Puerto Rico's pledge to and agreement with the Registered Owners and
with those persons or entities who may enter into contracts with the Authority
pursuant to the Act that Puerto Rico shall not limit or alter the rights vested
in the Authority pursuant to the Act until the Bonds and interest thereon are
fully met and discharged and such contracts are fully performed and fulfilled on
the part of the Authority; provided, however, that nothing contained in this
pledge shall affect or alter such limitation if adequate measures are provided
by the law for the protection of the Registered Owners or those who have entered
into such contracts with the Authority.
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[Form of Assignment]
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
_________________________________________________________________ this bond and
all rights thereunder, and hereby irrevocably constitutes and appoints
______________________________ attorney to register the transfer of this bond on
the books kept for registration thereof with full power of substitution in the
premises.
Date: ____________________
Signature: _______________________________________
NOTICE: The signature of this assignment
must correspond with the name as it appears
on the face of the within note in every
particular, without alteration or enlargement
or any change whatever.
Social Security Number or
Employer Identification Number
of Transferee: _______________
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TABLE OF ACCRETED VALUES
[To come]
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EXHIBIT B
SCHEDULE OF FEATURES OF THE BONDS
1. Aggregate Principal Amount of Bonds: $
2. Serial Bonds:
Maturity Date Principal Amount Interest Rate
------------- ---------------- -------------
Serial Bonds Aggregate Principal Amount: $
3. Term Bonds:
Maturity Date Principal Amount Interest Rate
------------- ---------------- -------------
4. Capital Appreciation Bonds:
Maturity Initial Principal Maturity Yield to
Date Amount Amount Maturity
-------- ----------------- -------- --------
5. Amortization Requirements for Term Bonds:
(a) Term Bonds Due 20__:
Year Amortization Requirements
---- -------------------------
(b) Term Bonds Due 20__:
Year Amortization Requirements
---- -------------------------
(c) Term Bonds Due 20__:
Year Amortization Requirements
---- -------------------------
6. First Call Date:
7. Optional Redemption Premium:
Optional Redemption
Redemption Date Premium
--------------- -------
8. Interest Payment Dates: The first day of each month, commencing ____________.
9. Date of Bonds, from which interest starts accruing: (i) __________ ___,1999,
in the case of the Serial Bonds and the Term Bonds, and (ii) the date of
issuance of the Bonds, in the case of the Capital Appreciation Bonds.
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