HomeMy WebLinkAboutGeorgia Special Facility Airport Revenvie Bond
Augusta Richmond GA
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RESOLUTION
A RESOLUTION OF THE AUGUSTA-RICHMOND COUNTY COMMISSION TO
PROVIDE FOR THE ISSUANCE AND SALE OF AUGUSTA, GEORGIA SPECIAL
FACILITY AIRPORT REVENUE BONDS (GARRETT AVIATION SERVICES PROJECT),
SERIES 2000, IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED
$3,500,000 (THE "BONDS"), FOR THE PURPOSE OF PROVIDING FUNDS TO PAY, OR
TO BE APPLIED OR CONTRIBUTED TOWARD, THE COST OF ACQUIRING,
CONSTRUCTING, EXPANDING AND EQUIPPING A HANGER EXPANSION AND A
TEST FACILITY AT THE AUGUSTA, GEORGIA REGIONAL AIRPORT AT BUSH FIELD,
TO BE LEASED TO GE ENGINE SERVICES - CORPORATE AVIATION SERVICES, INC.
D/B/A GARRETT AVIATION SERVICES; FOR THE PURPOSE OF PAYING EXPENSES
INCIDENT TO ACCOMPLISHING THE FOREGOING; FOR THE PURPOSE OF
AUTHORIZING AN INDENTURE OF TRUST, A LEASE AGREEMENT AND A
PURCHASE CONTRACT AND APPROVING A GUARANTY AGREEMENT AND A
PRELIMINARY OFFICIAL STATEMENT; FOR THE PURPOSE OF DESIGNATING
HUNTON & WILLIAMS AS BOND COUNSEL, SALOMON SMITH BARNEY INC. AS
UNDERWRITER AND THE BANK OF NEW YORK AS TRUSTEE; FOR THE PURPOSE
OF AUTHORIZING AN AUTHORIZED OFFICER TO "DEEM FINAL" THE
PRELIMINARY OFFICIAL STATEMENT PURSUANT TO RULE 15C2-12
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION; AND FOR
CERTAIN OTHER PURPOSES, ALL IN CONNECTION WITH THE ISSUANCE AND SALE
OF THE FOREGOING DESCRIBED BONDS.
WHEREAS, the City of Augusta, Georgia (the "Issuer") is a political subdivision of the
State of Georgia and a "governmental body" as defined in the Revenue Bond Law of the State of
Georgia (O.c.G.A. Sections 36-82-60 et seq., as amended, the "Revenue Bond Law"); and
WHEREAS, the Issuer is authorized pursuant to the Constitution of the State of Georgia
and the various statutes of the State of Georgia, including specifically the Revenue Bond Law, to
issue its revenue obligations in order to finance certain undertakings, including airports,
terminals and other facilities; and
WHEREAS, GE Engine Services - Corporate Aviation Services, Inc. d/b/a Garrett
A viation Services (the "Company"), a Delaware corporation, qualified to do business in the State of
Georgia and in good standing under the laws of the State of Georgia, currently leases certain airport
facilities located at the Augusta Regional Airport at Bush Field from the Issuer, and has requested
that the Issuer expand such facilities to include an approximately 8,250 square foot addition to an
existing hanger facility (the "Hanger Expansion"), an approximately 21,000 square foot facility to
be used an airplane maintenance facility (the "Test Facility") and certain other functionally related
facilities (together with the Hanger Expansion and the Test Facility, collectively, the "Project") for
lease to the Company; and
WHEREAS, the most feasible method of financing the costs of the acqUIsItIOn,
construction, expansion and equipping the Project is by the issuance of Augusta, Georgia Special
Facility Airport Revenue Bonds (Garrett Aviation Services Project), Series 2000 (the "Bonds"), in
the aggregate principal amount of not to exceed $3,500,000; and
WHEREAS, the Bonds shall be authorized and issued pursuant to the terms of an
Indenture of Trust (the "Indenture") between the Issuer and The Bank of New York, as trustee (the
"Trustee"); and
WHEREAS, the Issuer shall receive payments of basic rent from the Company pursuant to
an Amendments to Lease Agreements dated July 15, 1976, and October 1, 1996, and Lease
Agreement (the "Lease Agreement") between the Issuer and the Company, pursuant to which the
Company is obligated to make payments of basic rent to the Issuer in amounts sufficient to pay the
debt service on the Bonds and which payments of basic rent will be assigned and pledged as
security for the payment of the principal of, redemption premium, if any, and interest on the Bonds
under the terms ofthe Indenture; and
WHEREAS, as further security for the Bonds, General Electric Company, a New York
corporation (the "Guarantor"), proposes to execute and deliver to the Trustee a Guaranty
Agreement (the "Guaranty Agreement"), pursuant to which the Guarantor will guarantee, inter alia,
the full and timely payments of all principal of, redemption premium, if any, and interest due on the
Bonds; and
WHEREAS, it is proposed that in order to accomplish the sale of the Bonds, the Issuer
should enter into a Purchase Contract (the "Purchase Contract") with Salomon Smith Barney Inc.
(the "Underwriter) and the other parties thereto, the terms of which will provide for the purchase of
the Bonds; and
WHEREAS, it is proposed that in order to facilitate the purchase of the Bonds, the Issuer
should provide for the use and distribution by the Underwriter of a Preliminary Official Statement
(the "Preliminary Official Statement") and a final Official Statement (the "Official Statement"); and
WHEREAS, it is also proposed that the lssuer should authorize the Mayor to "deem final"
the Preliminary Official Statement within the meaning of Rule 15c2-12 promulgated under the
Securities & Exchange Act of 1934; and'
NOW, THEREFORE, BE IT RESOLVED, as follows:
Section 1. Authority for Resolution, This Resolution is adopted pursuant to the
provisions of the Constitution and the laws of the State of Georgia.
Section 2. Findings, It is hereby ascertained, determined and declared that:
(a) the financing of the costs of the Project is a lawful and valid lmdertaking
pursuant to the Revenue Bond Law of the State of Georgia;
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(b) the payments of basic rent to be received by the Issuer under the Lease
Agreement and the payments under the Guaranty Agreement will be fully sufficient to pay
the principal of, redemption premium, if any, and interest on the Bonds as the same become
due; and
(c) the Bonds shall constitute only limited obligations of the Issuer and shall be
payable solely from the revenues to be assigned and pledged to the payment thereof and
shall not constitute a debt or a general obligation or a pledge of the faith and credit of the
State of Georgia or any political subdivision thereof, including Augusta, Georgia, and shall
not directly or indirectly obligate such State or any municipality or political subdivision
thereof, including Augusta, Georgia, to levy or to pledge any form of taxation whatever for
the payment thereof.
Section 3, Authorization of the Financing of the Proiect. The financing of all or a
portion of the cost of the Project by using the proceeds of the sale of the Bonds is hereby
authorized.
Section 4, Authorization of Bonds, For the purpose of financing the Project, the
issuance of not to exceed $3,500,000 in aggregate principal amount of revenue bonds of the Issuer
known as "Augusta, Georgia Special Facility Airport Revenue Bonds (Garrett Aviation Services
Project), Series 2000," is hereby authorized. The Bonds shall be dated, bear interest, be subject to
redemption prior to maturity and be payable as set forth in Articles II and VII of the Indenture,
provided that the Bonds shall mature on December I, 20 I 0, interest rate on the Bonds shall not
exceed 6.00% per annum and the maximum principal and interest due in any year shall not exceed
$_. The Issuer shall adopt a supplemental resolution prior to the issuance of the Bonds
approving the final principal amount, interest rate or rates and debt service schedule. The Bonds
shall be issued as registered bonds without coupons in denominations of $5,000 or whole multiples
thereof, with such rights of exchangeability and transfer of registration and shall be in the form and
executed and authenticated in the manner provided in the Indenture. The term "Bonds" as used
herein shall be deemed to mean and include the Bonds as initially issued and delivered and Bonds
issued in exchange therefor or in exchange for Bonds previously issued.
Any Bonds hereafter issued in exchange or for transfer of registration for the Bonds initially
issued and delivered pursuant to the Indenture shall be executed in accordance with the provisions
of the Indenture and such execution by the Mayor and Clerk, whether present or future, is hereby
authorized. A certificate of validation shall be endorsed upon each of such Bonds hereafter issued,
and the Clerk of the Superior Court of Richmond, Georgia, is instructed to execute such certificate
of validation upon the written request of the Trustee or the Issuer, specifying that such Bonds are
being issued in exchange or for transfer of registration for one of the Bonds issued and delivered to
the initial purchaser or purchasers thereof or one of the Bonds previously issued in exchange
therefor.
Section 5, Authorization of Indenture. In order to secure the payment of the
principal of, redemption premium, if any, and interest on the Bonds herein authorized, and in
order to secure the performance and observance of all the agreements and conditions in the
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Bonds, the execution, delivery and performance of the Indenture relating to the Bonds by and
between the Issuer and the Trustee are hereby authorized. The Indenture shall be in substantially
the form attached hereto as Exhibit "l," subject to such minor changes, insertions or omissions as
may be approved by the Mayor, and the execution of the Indenture by the Mayor and Clerk as
hereby authorized shall be conclusive evidence of any such approval. Anything herein or in the
Indenture to the contrary notwithstanding, the Mayor Pro- Tem is hereby authorized to execute
the Indenture in the event of the absence or incapacity of the Mayor, and any Assistant Clerk is
hereby authorized to attest the Indenture in the absence or incapacity of the Clerk.
Section 6, Authorization of Lease Aereement, The execution, delivery and
perfoffilance of the Lease Agreement by and between the Issuer and the Company are hereby
authorized. The Lease Agreement shall be in substantially the form attached hereto as Exhibit "2,"
subject to such minor changes, insertions or omissions as may be approved by the Mayor, and the
execution of the Lease Agreement by the Mayor and Clerk as hereby authorized shall be conclusive
evidence of any such approval. Anything herein or in the Lease Agreement to the contrary
notwithstanding, the Mayor Pro- Tem is hereby authorized to execute the Lease Agreement in the
event of the absence or incapacity of the Mayor, and any Assistant Clerk is hereby authorized to
attest the Lease Agreement in the absence or incapacity of the Clerk.
Section 7, Authorization of Purchase Contract. The execution, delivery and
performance of the Purchase Contract providing for the purchase of the Bonds, by and among the
Issuer, the Underwriter and the other parties thereto are hereby authorized. The Purchase
Contract shall be in substantially the form attached hereto as Exhibit "3," subject to minor
changes, insertions or omissions as may be approved by the Mayor and the execution of the
Purchase Contract by the Mayor and Clerk as hereby authorized shall be conclusive evidence of
any such approval. Anything herein or in the Purchase Contract to the contrary notwithstanding,
the Mayor Pro- Tem is hereby authorized to execute the Purchase Contract in the event of the
absence or incapacity of the Mayor, and any Assistant Clerk is hereby authorized to attest the
Purchase Contract in the absence or incapacity of the Clerk.
Section 8, Authorization of Official Statement: Authorization to "Deem Final"
Preliminary Official Statement, The use and distribution of the Preliminary Official Statement
and a final Official Statement with respect to the Bonds are hereby authorized and approved, and
said Preliminary Official Statement shall be in substantially the form attached hereto as Exhibit
"4." The Mayor is hereby authorized to "deem final" the Preliminary Official Statement in
accordance with Rule 15c2- 1 2 promulgated under the Securities & Exchange Act of 1934.
Anything herein to the contrary notwithstanding, the Mayor Pro- Tem is hereby authorized to
"deem final" the Preliminary Official Statement in the event of the absence or incapacity of the
Mayor.
Section 9, Approval of Guarantv Aereement. The form of the Guaranty
Agreement to be executed by the Guarantor is hereby approved and said Guaranty Agreement
shall be in substantially the same form attached hereto as "Exhibit 5," subject to such minor
changes, insertions or omissions as may be approved by the City Attorney.
-4-
Section 10, Designation of Trustee. Paving Al!ent. and Rel!istrar, The Bank of
New York, a banking corporation organized and existing under and by virtue of the laws of the
State of New York, is hereby designated Trustee, Paying Agent and Registrar for the Bonds.
Section 11. Desil!nation of Bond Counsel. Hunton & Williams is hereby designated
as Bond Counsel in connection with the Bonds.
Section 12, Designation of Undenvriter, Salomon Smith Barney Inc. IS hereby
designated as Underwriter in connection with the Bonds.
Section 13, Execution of Bonds, The Bonds shall be executed in the manner
provided in the Indenture and the same shall be delivered to the Trustee for proper authentication
and delivery to the Underwriter with instructions to that effect as provided in the Indenture.
Anything herein or in the Indenture to the contrary notwithstanding, the Mayor Pro- Tem is
hereby authorized to execute the Bonds in the event of the absence or incapacity of the Mayor,
and any Assistant Clerk is hereby authorized to attest the Bonds in the absence or incapacity of
the Clerk.
Section 14. Validation of Bonds, The Mayor or, in his absence or incapacity, the
Mayor Pro- Tem, is hereby authorized and directed to immediately notify the District Attorney of
the Augusta Judicial Circuit of the action taken by the Issuer, to request the District Attorney to
institute a proceeding to confirm and validate the Bonds and to pass upon the security therefor,
and the Mayor and Clerk are further authorized to acknowledge service and make answer in such
proceeding.
Section 15, Non-Arbitral!e Certification, Any officer of the Issuer is hereby
authorized to execute one or more non-arbitrage certifications with respect to the Bonds or any
series thereof in order to comply with Section 148 of the Code, and the applicable Treasury
Regulations thereunder.
Section 16, No Personal Liabilitv, No stipulation, obligation or agreement herein
contained or contained in the Lease Agreement, the Indenture, or the Purchase Contract shall be
deemed to be a stipulation, obligation or agreement of any officer, director, agent or employee of
the Issuer in his individual capacity, and no such officer, director, agent or employee shall be
personally liable on the Bonds or be subject to personal liability or accountability by reason of
the issuance thereof.
Section 17, General Authority, From and after the execution and delivery of the
documents hereinabove authorized, the proper officers, directors, agents and employees of the
Issuer are hereby authorized, empowered and directed to do all such acts and things and to
execute all such documents as may be necessary to carry out and comply with the provisions of
the documents as authorized herein and are further authorized to take any and all further actions
and execute and deliver any and all other documents and certificates as may be necessary or
desirable in connection with the issuance of the Bonds and in conformity with the purposes and
intents of this Resolution.
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The Mayor and Clerk, or in their absence or incapacity, the Mayor Pro-Tern and Assistant
Clerk, respectively, are hereby authorized and directed to prepare and furnish to the purchasers of
the Bonds, when the Bonds are issued, certified copies of all the proceedings and records of the
Issuer relating to the Bonds, and such other affidavits and certificates as may be required to show
the facts relating to the legality and marketability of the Bonds as such facts appear from the books
and records in the officers' custody and control or as otherwise known to them; and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall constitute
representations of the Issuer as to the truth of all statements contained therein.
Section 18, Actions Approved and Confirmed, All acts and doings of the officers of
the Issuer which are in conformity with the purposes and intents of this Resolution and in
furtherance of the issuance of the Bonds and the execution, delivery and perfom1ance of the
Indenture, the Lease Agreement and the Purchase Contract and the approval of the Guaranty
Agreement and Official Statement, shall be, and the same hereby are, in all respects approved
and confirmed.
Section 19, Severability of Invalid Provision, If anyone or more of the agreements
or provisions herein contained shall for any reason whatsoever be held invalid, then such
covenants, agreements or provisions shall be null and void and shall be deemed separable from
the remaining agreements and provisions and shall in no way affect the validity of any of the
other agreements and provisions hereof or of the Bonds authorized hereunder.
Section 20, Repealing Clause, All resolutions or parts thereof of the Issuer in conflict
with the provisions herein contained are, to the extent of such conflict, hereby superseded and
repealed.
Section 21. Effective Date, This Resolution shall take effect immediately upon its
adoption.
ADOPTED this 21st day of November , 2000.
(SEAL)
Attest:
~
'4f~~
C erk
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SECRETARY'S CERTIFICATE
The undersigned Secretary of the Augusta - Richmond County Commission (the
"Issuer"), DOES HEREBY CERTIFY that the foregoing pages of typewritten matter pertaining up
to not to exceed $3,500,000 in aggregate principal amount of Augusta, Georgia Special Facility
Airport Revenue Bonds (Garrett Aviation Services Project), Series 2000, constitute a true and
correct copy of the Resolution adopted on November 21,2000, by a majority of the commissioners
of the Issuer in a meeting duly called and assembled, which was open to the public and at which a
quorum was present and acting throughout, and that the original of the Resolution appears of record
in the Minute Book of the Issuer which is in the undersigned's custody and control.
WITNESS my hand and the official seal of the Augusta - Richmond County
Commission, this - day of November, 2000. A /J1 ~
~TA - RICHMOND
COUNTY COMMISSION
(SEAL)
Path: DOCSOPEN\RICHMOND\03 704\55769\000003\CZ$CO I !.DOC
Doc #: 605892; V. I
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INDENTURE OF TRUST
dated as of
December 1, 2000
between
AUGUST A, GEORGIA,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
secunng
$
SPECIAL FACILITY AIRPORT REVENUE BONDS
(GARRETT AVIATION SERVICES PROJECT), SERIES 2000
EXHIBIT
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 2
Section 1.1. Definitions..................,...............................................,......................,..........2
ARTICLE II THE BONDS 9
Section 2.1. Issuance of Bonds; Disposition of Proceeds. ...............................................9
Section 2.2. Form and Denominations of Bonds; Bonds as Limited Obligations
of Issuer....,............................................................................................. 9
Execution. ..................................................................................................1 0
Authentication. ...........................................................................................1 0
Transfer and Exchange.......... .......,......... ...... ....,.......,........, ..................,.....10
Mutilated, Destroyed, Lost or Stolen Bonds...........,.........................,........12
Payments of Principal, Redemption Price and Interest; Persons
Entitled Thereto. ....... ....... ............... ........................,........,.................. .13
Temporary Bonds............. ..... ................. ............................ ..........,............ .14
Cancellation of Surrendered Bonds. ....................,................................,.., .14
Acts of Registered Owners; Evidence of Ownership................................. 14
Book Entry System. ... ....... ..... .................................. ...... ........................,. ..14
Delivery of the Bonds. .............................................................................. .16
CUSIP Numbers.... .......... ........ ..... ....... ............. ............ ............................ ..17
Section 2.3.
Section 2.4.
Section 2.5.
Section 2.6.
Section 2.7.
Section 2.8.
Section 2.9.
Section 2.1 O.
Section 2.l1.
Section 2.12.
Section 2.13.
ARTICLE III ADDITIONAL BONDS ] 7
Section 3.1. Issuance of Additional Bonds. ...................................................................17
Section 3.2. Execution and Delivery of Additional Bonds. ...........................................17
Section 3.3 . Use of Proceeds of Additional Bonds....................................................... .19
ARTICLE IV DEPOSIT OF BOND PROCEEDS 19
Section 4.1. Deposit of Proceeds of Bonds. ...................................................................19
ARTICLE V BOND FUND AND CONSTRUCTION FUND 20
Section 5.1. Establishment of Bond Fund and Construction Fund. ...............................20
Section 5.2. Payments into Bond Fund........ ......... ........................... ...................... ........20
Section 5.3. Use of Moneys in Bond Fund. ...................................................................20
Section 5.4. Payments into Construction Fund; Disbursements. ...................................21
Section 5.5. Completion of Project. ...,....,....,...,...... ..................,.,........,...,.................... .21
Section 5.6. Transfer of Construction Fund. ,......,.....................,...............,....,...............21
Section 5.7. Non-presentment of Bonds. ......,.... ......,........................,........................... .22
Section 5.8. Moneys to Be Held in Trust.......................................................................22
Section 5.9. Repayment to the Company. ......................................................................22
(i)
ARTICLE VI INVESTMENTS 23
Section 6.l. Investment of Funds...................... ..... ................. .................................... ...23
Section 6.2. Non-Arbitrage Covenant.....,..................................................................... .23
Section 6.3. Rebate Account. ...,........ .......,..............,..........,.,.....................,.................. .24
ARTICLE VII REDEMPTION OF BONDS 24
Section 7.1. Bonds Subject to Redemption....... ....... ................... .............. .............. .......24
Section 7.2. Selection of Bonds for Redemption. ..........................................................26
Section 7.3. Notice of Redemption. ........ ..... .............. ........................................... ........ .26
Section 704. Effect of Redemption. .................. ......... ....................,..... ......................... ..28
Section 7.5. Purchase in Lieu of Redemption. ...............................................................28
ARTICLE VIII PAYMENT; FURTHER ASSURANCES
Section 8.1. Payment of Principal or Redemption Price of, and Interest on,
Bonds. . ....,.,.. .....,.. .....,.... ... ..... ..... ............ ....., ....., ........... ....,................ .28
Performance of Covenants; the Issuer. ..........................................,......... ..28
Right to Payments under Lease Agreement. ..............................................29
Further Assurances; Recordings and Filings. ............................................29
Inspection of Project Books. ......................................,.............................. .29
Rights Under Lease Agreement and Guaranty Agreement. .......................29
28
Section 8.2.
Section 8.3.
Section 8.4.
Section 8.5.
Section 8,6.
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES 30
Section 9.1. Events of Default Defined.... ...... ..... ........... ...................... ........................ ..30
Section 9.2. Acceleration and Annulment Thereof. .......................................................30
Section 9.3. Legal Proceedings by Trustee. ,.. ..... ........ ........................ ........................ ...31
Section 9 A. Discontinuance of Proceedings by Trustee. ..........,.... ............................... ,31
Section 9.5. Registered Owners May Direct Proceedings. ............................................31
Section 9.6. Limitations on Actions by Registered Owners. .........................................31
Section 9.7. Trustee May Enforce Rights Without Possession of Bonds. .....................32
Section 9.8. Remedies Not Exclusive. ...........................................................................32
Section 9.9. Delays and Omissions Not to Impair Rights..............................................32
Section 9.10. Application of Moneys. ............... ................................................. ........... ..32
Section 9.11. Trustee and Registered Owners Entitled to All Remedies.........................34
Section 9 .12. Waiver of Events of Default. ................................................................... ..34
Section 9.13. Notice of Event of Default under Section 9.1 (d); Opportunity of
Company to Cure Defaults. ......... ..........................................,..............35
ARTICLE X THE TRUSTEE 35
Section 10.1. Certain Duties and Responsibilities of Trustee.......... ............ .................. ..35
Section lO.2. Notice If Default Occurs. ...........................................................................36
Section 10.3. Certain Rights of Trustee and Paying Agent. ............................................36
Section lOA. Not Responsible for Recitals or Issuance of Bonds. ..................................38
Section 10.5. Trustee May Deal in Bonds. ............... ........................ ......... ..................... .39
Section 10.6. Corporate Trustee Required; Eligibility.....................................................3 9
Section 10.7. Resignation and Removal of Trustee; Appointment of Successor. ...........39
(ii)
Section 10.8. Acceptance of Appointment by Successor Trustee....................................40
Section 10.9. Appointment of Co-Trustee. ......................................................................41
Section 10.10. Merger, Conversion, Consolidation or Succession to Business. ...............42
Section 10.11. Fees, Charges, Expenses and Indemnification of Trustee. ........................42
Section 10.12. Trustee's Application for Instructions from the Company. .......................42
ARTICLE XI THE PAYING AGENT 42
Section 11.1. The Paying Agent. .....................................................................................42
Section 11.2. Paying Agent May Act Through Agents; Answerable Only for
Willful Misconduct or Negligence.......................................................4 3
Section 11.3. Compensation............................................................................................44
Section 11.4. Paying Agent May Deal in Bonds. ............................................................44
Section 11.5. Removal or Resignation of Paying Agent. ................................................44
Section 11.6. Successor Paying Agents. ....... ......................................................... ..........45
ARTICLE XII AMENDMENTS AND SUPPLEMENTS
Section 12.1. Amendments and Supplements to Indenture Without Registered
Owners' Consent................. ..... ...........,.............................. ................. .45
Amendments to Indenture with Registered Owners' Consent...................46
Consents to Supplemental Indentures. ........ ................ .......... ............. ........48
Amendments to Lease Agreement and Guaranty Agreement. ...................48
Right to PaYlnent. ..............,...................................................................... .49
Execution of Consents. ............................................................................. .49
Amendment to Tax Regulatory Agreement. ..............................................49
45
Section 12.2.
Section 12.3.
Section 12.4.
Section 12.5.
Section 12.6.
Section 12.7.
ARTICLE XIII DEFEASANCE 49
Section 13.1. Defeasance...........,.......... ..... ........ .........,............,...............................,.... ...49
Section l3.2. Deposit of Funds for Payment of Bonds........................................,.......... .50
ARTICLE XIV MISCELLANEOUS PROVISIONS 51
Section 14.1. Limitations on Recourse. .... ........ ....... ....... ................................. .............. ..51
Section l4.2. No Rights Conferred on Others. ................................................................51
Section 14.3. Severability... ............................ ....... ........................................................ ..52
Section 14.4. Notices.... ...........,.... ....... ................ ............. ......,.....................,....,.,......... ..52
Section 14.5. Notice to Rating Agencies. ........................................................................53
Section 14.6. Holidays........................ ...................................................... ...........,......... ..53
Section 14.7. Governing Law. ....., ....... ....... ........... ..............,...........,...., ......................... .53
Section 14.8. Successors and Assigns..... ............................... .................. .............. ..........54
Section 14.9. Headings and Subheadings for Convenience Only....................................54
Section 14.10. Entire Agreement. ....... .............. ......... ................................. ..................... ..54
Section 14.11. Counterparts........., ................ ........... .................., ..................................... ..54
EXHIBIT A FORM OF FACE OF BOND
EXHIBIT B CONSTRUCTION FUND CERTIFICATE AND REQUISITION
EXHIBIT C CERTIFICATE OF COMPLETION
(iii)
INDENTURE OF TRUST
THIS INDENTURE OF TRUST dated as of December I, 2000 (the "Indenture"),
between AUGUSTA, GEORGIA, a political subdivision of the State of Georgia (the "Issuer"),
and THE BANK OF NEW YORK, a New York Banking Corporation, as Trustee (the "Trustee").
PRELIMINARY STATEMENT
The Issuer is authorized and empowered under the Constitution and the laws of the State
of Georgia, including particularly Article 3 of Chapter 82 of Title 36 of the Official Code of
Georgia Annotated, known as the "Revenue Bond Law," as amended (the "Act"), and the Charter
of Augusta, Georgia, as amended, to issue its $ Special Facility Airport Revenue
Bonds (Garrett Aviation Services Project), Series 2000 (the "Bonds"), which Bonds are payable
from certain rental payments to be made under a Lease Agreement dated , 2000 (the
"Lease Agreement"), between the Issuer and GE Engine Services - Corporate Aviation Services,
Inc. d/b/a Garrett Aviation Services (the "Company"). As additional security for the Bonds,
General Electric Company (the "Guarantor") has entered into a Corporate Guaranty Agreement
dated as of December I, 2000 (the Guaranty Agreement"), pursuant to which the Guarantor
guarantees the Company's obligations to pay rent under the Lease Agreement and the payment of
principal of premium, if any, and interest on the Bonds. Pursuant to the Act, the Augusta -
Richmond County Commission duly adopted a resolution authorizing the issuance of the Bonds
and the execution of this Indenture and the Lease Agreement (the "Bond Resolution"). All
Bonds issued under this Indenture will be secured, inter alia, by a pledge of a portion of the
rental payments to be made by the Company under the Lease Agreement. The Trustee has
agreed to accept the trusts herein created upon the terms herein set forth.
AGREEMENT
IT IS THEREFORE AGREED AS FOLLOWS:
That the Issuer in consideration of the acceptance by the Trustee of the trusts hereby
created, the mutual covenants herein contained and the purchase and acceptance of the Bonds by
the purchasers thereof, and for other valuable consideration, the receipt of which is hereby
acknowledged, and in order to secure the payment of the principal of, premium, if any, and
interest on, all Bonds outstanding hereunder from time to time according to their tenor and effect,
and to secure the performance and observance by the Issuer of all the covenants and conditions
expressed or implied herein and in the Bonds, does hereby pledge and assign unto the Trustee
and unto its successors and assigns forever, the following described property and proceeds
thereof (collectively, the "Trust Estate"):
GRANTING CLAUSE FIRST
All payments to be received by the Issuer of Basic Rent (as hereinafter defined), together
with all other Revenues, and all moneys and earnings thereon held by the Trustee in the
Construction Fund and the Bond Fund under the terms of the Indenture; and
GRANTING CLAUSE SECOND
Any and all other property of each kind and nature from time to time hereafter, by
delivery or by writing of any kind, pledged or assigned as and for additional security hereunder,
by the Issuer or by anyone on its behalf or with its written consent, to the Trustee, which is
hereby authorized to receive any and all such property at any and all times and to hold and apply
the same subject to the terms hereof.
TO HAVE AND TO HOLD the Trust Estate, whether now owned or hereafter acquired,
unto the Trustee and its respective successors in said trusts and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal
and proportionate benefit, security and protection of all present and future owners of the Bonds,
from time to time issued under and secured by this Indenture without privilege, priority or
distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds (except as
otherwise specifically provided herein);
PROVIDED HOWEVER, that if the Issuer, its successors or assigns, shall cause to be
paid the principal of the Bonds and the interest and premium, if any, due or to become due
thereon, at the times and in the manner mentioned in the Bonds, and shall cause the payments to
be made into the Bond Fund as required under Article V or shall provide, as permitted by Article
XIII, for the payment thereof, and shall keep, perform and observe all the covenants and
conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and
shall payor cause to be paid to the Trustee and the Paying Agent all sums of money due or to
become due in accordance with the terms and provisions hereof, then this Indenture and the
rights hereby granted shall cease, determine and be void; otherwise this Indenture to be and
remain in full force and effect.
All Bonds issued and secured hereunder are to be issued, authenticated and delivered and
the Revenues hereby assigned and pledged are to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the Issuer has agreed and covenanted, and does hereby agree and
covenant, with the Trustee and with the respective owners from time to time of the Bonds, as
follows:
ARTICLE I
DEFINITIONS
Section 1.1.
Definitions,
Terms used in this Indenture (except in Exhibit A to this Indenture) with the initial letter
capitalized and not otherwise defined in this Indenture have the meanings specified below. In
addition, all capitalized terms defined in the Lease Agreement and not defined herein, shall have
the meanings herein specified in the Lease Agreement.
2
The words "hereof," "herein," "hereto," "hereby" and "hereunder" (except in the form of
Bond) refer to the entire Indenture, All words and terms importing the singular number shall,
where the context requires, import the plural number and vice versa.
"Act" means Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia
Annotated, known as the "Revenue Bond Law," as amended.
"Additional Bonds" means any Bonds issued pursuant to, and upon compliance with,
Article III.
"Additional Rent" means the rent payments payable by the Company pursuant to Section
5(b) of the Lease Agreement.
"Administrative Expenses" means fees and expenses of the Trustee, the Issuer and the
Paying Agent.
"Affiliate" means any Person, including the Guarantor, directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company; and "control"
means the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
"Authorized Company Representative" means any person or persons at the time
designated to act on behalf of the Company by a written certificate, signed on behalf of the
Company by anyone of its officers or authorized representatives and furnished to the Issuer and
the Trustee, containing the specimen signature of each such person.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978, as
amended from time to time, or any substitute or replacement legislation.
"Basic Rent" means the rent payments payable by the Company pursuant to Section 5(a)
of the Lease Agreement.
"Beneficial Owners" shall have the meaning set forth in Section 2.11.
"Bond Counsel" means any firm of nationally recognized bond counsel selected by the
Issuer and acceptable to the Company.
"Bond Fund" means the trust fund of that name created pursuant to Section 5.1 (a).
"Bond Resolution" means the resolution of the Issuer adopted on November 21, 2000,
authorizing the issuance of the Bonds.
"Bonds" means the Issuer's $ Special Facility Airport Revenue Bonds
(Garrett Aviation Services Project), Series 2000, and any Additional Bonds.
"Book Entry Bond" means a Bond authorized to be issued to and,' except as provided in
Section 2.l1, restricted to being registered in the name of a Securities Depository.
3
"Business Day" means a day (a) other than a day on which banks located in the City of
New York, New York or the cities in which the principal offices of the Trustee and the Paying
Agent are located are required or authorized by law or executive order to close and (b) on which
the New York Stock Exchange is not closed.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable
Treasury Regulations thereunder.
"Company" means GE Engine Services - Corporate Aviation Services, Inc. d/b/a Garrett
Aviation Services, a corporation organized under the laws of the State of Delaware, and its
successors and assigns.
"Company Bonds" means Bonds owned or held by the Company (or any Insider or
Affiliate of the Company designated in writing to the Trustee as such) and registered in the name
of the Company (or such Insider or Affiliate of the Company), or in the name of a nominee
designated in writing to the Trustee by the Company (or such Insider or Affiliate of the
Company).
"Construction Fund" means the trust fund of that name created pursuant to Section 6.1 (b),
"Corporate Trust Office" means the office of the Trustee at which at any particular time
its corporate trust business shall be principally administered, which office at the date of
execution of this Indenture is located at 385 Rifle Camp Road, West Patterson, New Jersey
07424.
"Costs of the Project" and "Costs" mean the total cost, paid or incurred, to study, plan,
design, finance, acquire, construct, reconstruct, install or otherwise implement the Project,
including improvements to another Project, and shall include, but shall not be limited to, the
following costs and expenses relating to such Project and the reimbursement to the Issuer or the
Company for any such items previously paid by the Issuer or the Company:
(a) the cost of all lands, real or personal properties, rights, easements and
franchises acquired;
(b) the cost of all financing charges and interest prior to and during
construction and for up to six (6) months after completion of construction (or such longer period
as may be permitted by the Act);
(c) the cost of the acquisition, construction, expanSIOn, installation and
equipping of the Project;
(d) the cost of engineering, architectural, planning, development, and
supervisory services, fiscal agents' and legal expenses, plans and specifications, and other
expenses necessary or incident to determining the feasibility or practicability of the Project,
administrative expenses, and such other expenses as may be necessary or incident to any
financing with Bond proceeds;
4
(e) the cost of placing the Project in operation;
(f) the cost of condemnation of property necessary for construction and
operation;
(g) the costs of issuing any Bonds to finance the Project; and
(h) any other costs which may be incident to the Project prior to completion.
"Counsel" means legal counsel who may be, except as otherwise provided herein, counsel
to the Company or the Issuer.
"Determination of Taxability" means a final determination (from which no right of appeal
exists) by the Internal Revenue Service or by a court of competent jurisdiction in the United
States (or an opinion of Bond Counsel obtained by, and at the expense of, the Company) that, as
a result of failure by the Company to observe or perform any covenant, condition or agreement
on its part to be observed or performed under the Lease Agreement or the Tax Regulatory
Agreement or as a result of the inaccuracy of any representation or agreement made by the
Company under the Lease Agreement or the Tax Regulatory Agreement, the interest payable on
any Bond is includable (for federal income tax purposes) in the gross income of the owner of
such Bond (other than an owner who is a "substantial user" or "related person" within the
meaning of Section 147(a) of the Code), which final determination (but not any such opinion)
follows proceedings of which the Company has been given written notice in which the Company
has, at its sole expense and to the extent deemed sufficient by the Company, been given an
opportunity to participate, either directly or in the name of the owner of such Bond.
"Direct Participant" means securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations which participate in the Securities
Depository with respect to the Bonds.
"DTC" means The Depository Trust Company, acting as the initial Securities Depository
as set forth in Section 2.11.
"Event of Default" means an occurrence or event specified and described in Section 9 .1.
"Extraordinary Optional Redemption" means any redemption of Bonds made pursuant to
Section 7.1(a).
"Financing Documents" means this Indenture, the Lease Agreement, the Guaranty
Agreement and the Bonds.
"Fund" means any of the funds established with the Trustee or the Paying Agent under
this Indenture.
"Government Obligations" means direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of America for full and
timely payment and which are not subject to redemption by the issuer thereof.
5
"Guarantor" means General Electric Company, a corporation organized and existing
under the laws ofthe State of New York, and its successors and assigns.
"Guaranty Agreement" means the Corporate Guaranty Agreement from the Guarantor to
the Issuer and the Trustee dated as of December l, 2000.
"Indenture" means this Indenture of Trust as amended or supplemented at the time in
question.
"Insider" means an "insider" as defined in the Bankruptcy Code.
"Interest Payment Date" means each June I and December], commencing June], 200],
through the final maturity of the Bonds.
"Investment Company" means an investment company registered under the Investment
Company Act of 1940, as amended.
"Investment Securities" means obligations in which the Issuer is permitted to invest
moneys of the Issuer under applicable law, which have (or are collateralized by obligations
which have) a rating by any Rating Agency which is equal to or greater than the [third] highest
long-term rating of such Rating Agency, or which bears (or are collateralized by obligations
which have) the [second] highest short-term rating of such Rating Agency. Obligations in which
the Issuer is permitted to invest proceeds of the Bonds are described, as of the date of this
Indenture, in Section 36-82-7 of the Official Code of Georgia Annotated.
"Issue Date" means the date on which the Bonds are first authenticated and delivered to
the initial purchasers against payment therefor.
"Issuer" means Augusta, Georgia, a political subdivision of the State of Georgia, and its
successors and assigns.
"Issuer Representative" means the Mayor of the Issuer or such other officer or employee
of the Issuer as shall be appointed by the Issuer in such capacity.
"Lease Agreement" means the Amendment to Lease Agreements dated July 15, ] 976,
and October l, 1996, and Lease Agreement dated as of , between the Issuer and
the Company, as the same may be amended from time to time to the extent pennitted hereby or
thereby.
"Letter of Representations" shall have the meaning specified in Section 2. ] 1.
"Moody's" means Moody's Investors Service, Inc., a corporation organized and existing
under the laws of the State of Delaware, its successors and their assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Company by notice to the Trustee and the Issuer.
6
"Outstanding" when used with reference to Bonds means all Bonds authenticated and
delivered under this Indenture as of the time in question, except:
(a) All Bonds theretofore canceled or required to be canceled under
Section 2.9;
(b) Bonds for the payment or redemption of which provision has been made in
accordance with Article XIII; provided that, if such Bonds are being redeemed, the
required notice of redemption shall have been given or provision satisfactory to the
Trustee shall have been made therefor; and
(c) Bonds in substitution for which other Bonds have been authenticated and
delivered pursuant to Article II.
"Paying Agent" means The Bank of New York, with its principal corporate trust office
currently located at 385 Rifle Camp Road, West Patterson, New Jersey 07424, as paying agent,
registrar, transfer agent, authenticating agent and tender agent, or any successor paying agent,
registrar, transfer agent, authenticating agent and tender agent or agents appointed pursuant to
Article XI, at the business address designated in writing to the Issuer and the Trustee as its
principal office for its duties as Paying Agent hereunder.
"Person" means an individual, a corporation, a partnership, an association, a joint stock
company, a trust, any unincorporated organization, a governmental body or a political
subdivision, a municipal corporation, public corporation or any other group or organization of
individuals.
"Project" means, collectively, the Hangar Expansion and the Test Facility (as each such
term as defined in the Lease Agreement).
"Purchase Contract" means the Purchase Contract among the Issuer, the Company, the
Guarantor and Salomon Smith Barney, Inc., in its capacity as the initial purchaser of the Bonds.
"Rating Agency" means Moody's or S&P.
"Register" means the registration books of the Issuer kept by the Paying Agent as
described in Section 2.5(a).
"Registered Owner" or "Owner" means the Person in whose name a Bond is registered on
the Register pursuant to Article II.
"Regular Record Date" means the close of business on the fifteenth (l5th) day preceding
the Interest Payment Date.
"Responsible Officer" means, with respect to the Trustee or Paying Agent, for purposes
of this Indenture, any Vice President, Assistant Vice President or Assistant Treasurer of the
Trustee or Paying Agent, or any trust officer, or any officer or employee customarily performing
functions similar to those performed by the person who at the time shall be such officers, or to
7
whom any corporate trust matter is referred because of his knowledge of and familiarity with a
particular subject, who shall, in any case, be working in corporate trust administration, or any
successor thereto, and who shall be responsible for the administration of this Indenture.
"Revenues" means the amounts pledged hereunder to the payment of principal of,
premium, if any, and interest on the Bonds, consisting of the following: (i) all amounts of Basic
Rent payable from time to time by the Company pursuant to the Lease Agreement, and all
receipts of the Trustee credited under the provisions of this Indenture against said amounts
payable; (ii) any portion of the net proceeds of the Bonds deposited with the Trustee under
Section 4.1 (a); and (iii) any amounts paid into the Bond Fund from the Construction Fund in
accordance with the provisions hereof, including income on investments,
"S&P" means Standard & Poor's Ratings Service, a division of The McGraw Hill
Companies, a corporation organized and existing under the laws of the State of New York, its
successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any
other nationally recognized securities rating agency designated by the Company by notice to the
Issuer and the Trustee.
"Securities Depository" means, with respect to a Book Entry Bond, DTC or any person,
firm, association or corporation constituting a "clearing agency" (securities depository) registered
under Section 17 A of the Securities Exchange Act of 1934, as amended, which may at any time
be substituted in its place to act as Securities Depository for the Bonds, or its successors, or any
nominee therefor.
"Special Record Date" means the date and time established by the Trustee for
determinations of which Registered Owners shall be entitled to receive overdue interest on the
Bonds pursuant to Section 2.7(b)(3).
"State" means the State of Georgia.
"Supplemental Indenture" or "indenture supplemental hereto" means any indenture
amending or supplementing this Indenture which may be entered into in accordance with the
provisions of this Indenture.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement dated as of the date
of issuance of the Bonds between the Issuer and the Company, as amended or supplemented
from time to time.
"Trust Estate" means the trust estate as defined in the granting clauses in this Indenture.
"Trustee" means The Bank of New York, a New York banking corporation having its
principal corporate trust office currently located at 385 Rifle Camp Road, West Patterson, New
Jersey 07424, serving as trustee pursuant to this Indenture and any successor trustee appointed
pursuant to Section 1 0.7 or 10.8 at the time serving as successor Trustee hereunder, and any
separate or co-trustee serving as such hereunder.
8
ARTICLE II
THE BONDS
Section 2,1.
Issuance of Bonds; Disposition of Proceeds,
(a) There are hereby authorized to be issued airport revenue bonds In an
aggregate principal amount of $
(b) Subject to Section 2.12, upon the execution and delivery of this Indenture,
the Issuer shall execute the Bonds and deliver them to the Paying Agent for authentication. At
the written direction of the Issuer, the Paying Agent shall authenticate the Bonds, and make them
available for delivery to the purchasers thereof upon receipt by the Trustee of the amount due the
Issuer for the initial delivery of the Bonds pursuant to the terms of the Purchase Contract. The
proceeds of the Bonds shall be used as provided in Article IV hereof.
Section 2,2,
Issuer,
Form and Denominations of Bonds; Bonds as Limited Obligations of
(a) Form and Authorized Denominations. All Bonds shall be designated
"Special Facility Airport Revenue Bonds (Garrett Aviation Services Project), Series 2000," shall
be dated December I, 2000 (the "Dated Date") , shall be issuable only in registered fom1 in the
denominations of $5,000 or whole multiples thereof, shall be numbered R-l upward, shall be
substantially in the form attached to this Indenture as Exhibit "A," shall bear interest at the rate
of _% payable semiannually on each June I and December I, commencing June 1,2001, and
shall mature on December 1, 2010. The Bonds shall bear interest from December _, 2000.
Interest shall be computed on a basis of a 360-day year of twelve 30-day months.
(b) BONDS AS LIMITED OBLIGATIONS OF ISSUER. THE BONDS
SHALL BE LIMITED OBLIGATIONS OF THE ISSUER AND SHALL NOT CONSTITUTE
A DEBT OF THE ISSUER NOR PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER.
THE BONDS SHALL NOT BE PAYABLE FROM OR A CHARGE UPON ANY FUNDS
OTHER THAN THE REVENUES AND AMOUNTS PLEDGED TO THE PAYMENT
THEREOF, NOR SHALL THE ISSUER BE SUBJECT TO ANY PECUNIARY LIABILITY
THEREON. NO OWNER OR OWNERS OF THE BONDS SHALL EVER HAVE THE
RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE ISSUER TO
PAY THE BONDS OR INTEREST THEREON, NOR TO ENFORCE PAYMENT OF THE
BONDS AGAINST PROPERTY OF THE ISSUER; NOR SHALL THE BONDS
CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON
ANY PROPERTY OF THE ISSUER, EXCEPT FOR REVENUES AND ANY OTHER FUNDS
PLEDGED TO SECURE THE BONDS.
All covenants, promises, agreements, duties and obligations of the Issuer set forth in the
Financing Documents shall be solely the covenants, promises, agreements, duties and obligations
of the Issuer and shall not be deemed to be, or be, the covenants, promises, agreements, duties or
obligations of any member, officer, employee or agent of the Issuer or the State in his or her
9
individual capacity, and no recourse shall be had for the payment of the principal of, or interest
on, the Bonds or any other amount payable hereunder or in connection herewith, or for any claim
based hereon or on the Bonds or the Lease Agreement or the Guaranty Agreement, against any
such member, officer, employee or agent in his or her individual capacity.
Section 2.3,
Execution,
The Bonds shall be executed by the manual or facsimile signature of the Mayor of the
Issuer and attested by the manual or facsimile signature of the Clerk of the Issuer and shall have
impressed or printed thereon or affixed thereto the official seal of the Issuer. The validity of any
Bond so executed shall not be affected by the fact that one or more of the authorized officers or
members of the Issuer whose signatures appear on such Bond have ceased to be an authorized
officer or member at the time of issuance or authentication or at any time thereafter.
Section 2.4,
Authentication,
No Bonds shall be valid for any purpose hereunder until the certificate of authentication
printed thereon is duly executed by the manual signature of an authorized signatory of the Paying
Agent, acting as authenticating agent. Such authentication or registration shall be proof that the
Registered Owner is entitled to the benefit of the trusts hereby created.
Section 2,5,
Transfer and Exchange,
(a) The ownership of each Bond shall be recorded in the Register, which
books shall be kept by the Paying Agent, acting as bond registrar, at its principal corporate trust
office and shall contain such information as is necessary for the proper discharge of the duties of
the Trustee and the Paying Agent hereunder.
(b) Bonds may be transferred or exchanged as follows:
(l) Any Bond may be transferred if endorsed for such transfer by the
Registered Owner thereof or his attorney duly appointed in writing and surrendered by
such Registered Owner or his duly appointed attorney to the Paying Agent at its principal
corporate trust office, whereupon the Paying Agent shall authenticate and make available
for delivery to the transferee a new Bond or Bonds in the same denominations as the
Bond surrendered for transfer or in different authorized denominations equal in the
aggregate to the principal amount of the surrendered Bond.
(2) Any Bond or Bonds may be exchanged for one or more Bonds and
in the same principal amount, but in a different authorized denomination or
denominations. Each Bond so to be exchanged shall be surrendered by the Registered
Owner thereof or his duly appointed attorney to the Paying Agent at its principal
corporate trust office, whereupon a new Bond or Bonds shall be authenticated and
delivered to the Registered Owner.
10
(3) In the case of any Bond properly surrendered for partial
redemption, the Paying Agent shall authenticate and make available for delivery a new
Bond in exchange therefor, such new Bond to be in an authorized denomination equal to
the unredeemed principal amount of the surrendered Bond without cost to the Owner;
provided that, at its option, the Paying Agent may certify the amount and date of partial
redemption upon the partial redemption certificate, if any, printed on the surrendered
Bond and return such surrendered Bond to the Registered Owner in lieu of an exchange.
(4) No additional resolutions need be adopted by the Board of
Directors of the Issuer or any other body or person so as to accomplish the foregoing
conversion and exchange or replacement of any Bond or portion thereof, and the Paying
Agent shall provide for the completion, authentication, and delivery of the substitute
Bonds in the manner prescribed herein.
(c) Except as provided in subparagraph 2.5(b)(3) above, the Paying Agent
shall not be required to effect any transfer or exchange during the fifteen (15) days immediately
preceding the date of mailing of any notice of redemption or at any time following the mailing of
any such notice in the case of Bonds selected for such redemption. No charge shall be imposed
upon Registered Owners in connection with any transfer or exchange, except for taxes or
governmental charges related thereto. No transfers or exchanges shall be valid for any purposes
hereunder except as provided above.
(d) If the Trustee and the Issuer, at the written direction of the Company, enter
into a Letter of Representations with a Securities Depository as provided in Section 2.11, the
Issuer shall execute and the Paying Agent shall, in accordance with Section 2.4, authenticate a
Bond to be held by such Securities Depository, which (i) shall be denominated in an amount
equal to the aggregate principal amount of Bonds to be held by the Securities Depository
(provided that, unless such Bond is being issued on the Issue Date, the Trustee has received a
like aggregate principal amount of Bonds for transfer in accordance with this Section 2.5), (ii)
shall be registered in the name of the Securities Depository or its nominee in accordance with
this Section 2.5, (iii) shall be delivered by the Trustee to the Securities Depository or pursuant to
the Securities Depository's instmctions, and (iv) shall bear a legend substantially to the effect
that unless the Bond is presented by an authorized representative of the Securities Depository to
the Issuer or its agent for registration of transfer, exchange or payment, any transfer, exchange,
pledge or other use for value or otherwise is wrongful.
(e) Notwithstanding any other provision of this Section 2.5, subject to the
prOVISIOns of the immediately succeeding paragraph, any Bond registered in the name of a
Securities Depository or its nominee may be transferred, in whole but not in part, in accordance
with this Section 2.5, to a nominee (or a different nominee) ofthe Securities Depository, or to the
Securities Depository, or a successor Securities Depository selected or approved by the
Company, or to a nominee of such successor Securities Depository.
If the Securities Depository which is the record owner (or whose nominee is the record
owner) of the Bonds notifies the Issuer, the Tmstee or the Company that it is unwilling or unable
11
to continue as record owner of the Bonds, or if such Securities Depository shall no longer be
eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, the Issuer and the Trustee, upon written direction of the
Company, shall appoint a successor Securities Depository. If a successor Securities Depository
is not appointed within ninety (90) days after the Company receives notice or becomes aware of
the events stated in the preceding sentence, or if the Issuer and the Trustee, upon written
direction of the Company, elect not to appoint a successor Securities Depository, upon surrender
for transfer of the Bond registered in the name of the Securities Depository or its nominee, the
Issuer shall execute, and the Paying Agent shall authenticate, a new Bond or Bonds, for a like
aggregate principal amount, bearing numbers not contemporaneously then Outstanding, which
shall be in the authorized denominations and registered in the name of the transferee or
transferees specified in written instructions delivered pursuant to the last two sentences of this
paragraph, in accordance with this Section 2.5. The Issuer and the Trustee shall discontinue an
agreement with a Securities Depository within a reasonable amount of time after receipt of
written direction from the Company. In such event, the Issuer shall execute and the Paying
Agent shall authenticate, upon receipt of the Bond registered in the name of the Securities
Depository or its nominee, a new Bond or Bonds, for a like aggregate principal amount, bearing
numbers not contemporaneously then Outstanding, in the authorized denominations and
registered in the name of a transferee or transferees specified in written instructions delivered
pursuant to the following two sentences, in accordance with this Section 2.5. Upon any
surrender of Bonds for transfer pursuant to this paragraph, the Securities Depository shall specify
in written instructions delivered to the Issuer, the Trustee and the Company, the name of the
transferee or transferees and the authorized denominations of the new Bonds. If the transferee
specified in such instructions is not a successor Securities Depository described above in this
paragraph, then the transferees shall be the Beneficial Owners of the Bonds specified in such
instructions and the Trustee shall make available for delivery new Bonds duly Authenticated by
the Paying Agent to such transferees in authorized denominations proportionate to their
beneficial interest in the Bonds as specified in said instructions.
Section 2.6,
Mutilated, Destroyed, Lost or Stolen Bonds.
(a) If any Bond is mutilated, lost, stolen or destroyed, the Registered Owner
thereof shall be entitled to the issuance of a substitute Bond provided that:
(1) in all cases, the Registered Owner must provide indemnity to the
Issuer, the Company, the Trustee and the Paying Agent satisfactory to each such party to
be indemnified against any and all claims arising out of or otherwise related to the
issuance of substitute Bonds pursuant to this Section;
(2) in the case of a mutilated Bond the Registered Owner shall
surrender the Bond to the Paying Agent for cancellation; and
(3) in the case of a lost, stolen or destroyed Bond, the Registered
Owner shall provide evidence, satisfactory to the Paying Agent, of the ownership and the
loss, theft or destruction of the affected Bond.
12
Upon compliance with the foregoing, a new Bond of like tenor and denomination,
executed by the Issuer, shall be authenticated by the Paying Agent and made available for
delivery to the Registered Owner, all at the expense of the Registered Owner to whom the
substitute Bond is delivered. Notwithstanding the foregoing, the Paying Agent shall not be
required to authenticate and deliver any substitute for a Bond which has been called for
redemption or which has matured or is about to mature and, in any such case, the principal or
redemption price then due or becoming due shall be paid by the Paying Agent in accordance with
the terms of the mutilated, lost, stolen or destroyed Bond without substitution therefor.
Section 2.7,
Entitled Thereto,
Payments of Principal, Redemption Price and Interest; Persons
(a) The principal or redemption price of each Bond shall be payable in lawful
money of the United States of America upon surrender of such Bond to the principal office of the
Paying Agent. Such payments shall be made to the Registered Owner of the Bond so
surrendered, as shown on the registration books maintained by the Paying Agent on the date of
payment.
(b) Each Bond shall bear interest and be payable III lawful money of the
United States of America as to interest as follows:
(1) Each Bond shall bear interest (A) from the date of authentication, if
authenticated on an Interest Payment Date to which interest has been paid or duly
provided for, or (B) from the last preceding Interest Payment Date to which interest has
been paid or duly provided for (or the Issue Date if no interest thereon has been paid) in
all other cases.
(2) Subject to the provisions of Section 2. 7(b )(3), the interest due on
any Bond on any Interest Payment Date shall be paid to the Registered Owner of such
Bond as shown on the Register as of the Regular Record Date.
(3) If the funds available under this Indenture are insufficient on any
Interest Payment Date to pay the interest then due, the Regular Record Date shall no
longer be applicable with respect to the Bonds. If sufficient funds for the payment of
such overdue interest thereafter become available, the Trustee shall immediately establish
a special interest payment date for the payment of the overdue interest and a Special
Record Date (which shall be a Business Day) for determining the Registered Owners
entitled to such payments, and shall promptly so notify the Paying Agent. Notice of such
date so established shall be mailed by the Trustee to' each Owner at least ten (10) days
prior to the Special Record Date, but not more than thirty (30) days prior to the special
interest payment date. The overdue interest shall be paid on the special interest payment
date to the Registered Owners, as shown on the Register as of the close of business on the
Special Record Date.
13
Section 2,8,
Temporary Bonds,
Pending preparation of definitive Bonds, the Issuer may issue, in lieu of definitive Bonds,
one or more temporary printed or typewritten Bonds in authorized denominations, of
substantially the tenor recited above. At the request of the Issuer, the Paying Agent shall
authenticate definitive Bonds in exchange for and upon surrender of an equal principal amount of
temporary Bonds. Until so exchanged, temporary Bonds shall have the same rights, remedies
and security hereunder as definitive Bonds. Temporary Bonds shall be numbered consecutively
upward from TR-l.
Section 2.9,
Cancellation of Surrendered Bonds,
The Paying Agent shall cancel (a) all Bonds surrendered for transfer or exchange, for
payment at maturity or for redemption (unless the surrendered Bond is to be partially redeemed
and the Paying Agent elects to return the Bond, certified as to the partial redemption, to the
Registered Owner thereof pursuant to Section 2.5(b)(3)), and (b) all Bonds purchased by the
Issuer or the Company and surrendered to the Paying Agent for cancellation. The Paying Agent
shall deliver such canceled Bonds to the Issuer.
Section 2.10, Acts of Registered Owners; Evidence of Ownership,
Any action to be taken by Registered Owners may be evidenced by one or more
concurrent written instruments of similar tenor signed or executed by such Registered Owners in
person or by an agent appointed in writing. The fact and date of the execution by any Person of
any such instrument may be proved by acknowledgment before a notary public or other officer
empowered to take acknowledgments or by an affidavit of a witness to such execution. Any
action by the Registered Owner of any Bond shall bind all future Registered Owners of the same
Bond in respect of anything done or suffered by the Issuer, the Trustee or the Paying Agent in
pursuance thereof.
Section 2,11. Book Entry System,
The Bonds shall be initially issued in the name of Cede & Co., as nominee for DTC, as
Registered Owner of the Bonds, and held in the custody of DTC. The Issuer and the Trustee
acknowledge that they have executed and delivered an agreement with DTC dated on or prior to
the Issue Date, and that the terms and provisions of said agreement (or any successor agreement
with DTC or a successor Securities Depository (the "Letter of Representations")) shall govern in
the event of any inconsistency between the provisions of this Indenture and any such Letter of
Representations. A single Bond certificate will be issued and delivered to DTC or to the Trustee,
as custodian for DTC. The actual purchasers of the Bonds (the "Beneficial Owners") will not
receive physical delivery of Bond certificates except as provided herein. For so long as DTC
shall continue to serve as Securities Depository for the Bonds as provided herein, all transfers of
beneficial ownership interests will be made by book-entry only, and no investor or other party
purchasing, selling or otherwise transferring beneficial ownership of Bonds is to receive, hold or
deliver any Bond certificate. The Issuer, the Trustee, the Paying Agent, the Guarantor and the
14
Company shall have no responsibility or liability of any kind for transfers of beneficial
ownership interests in the Bonds.
Bond certificates are required to be delivered to, and registered in the name of, the
Beneficial Owner under the following circumstances:
(a) The Securities Depository determines to discontinue providing its service
with respect to the Bonds. Such a determination may be made at any time by the Securities
Depository giving reasonable notice to the Issuer or Trustee and discharging its responsibilities
with respect thereto under applicable law or otherwise as provided by the Letter of
Representations (or any successor agreement).
(b) The Company (with the consent of the Issuer) determines that continuation
of the system of book-entry transfer through the Securities Depository is not in the best interests
of the Company.
In the event that Bond certificates are required to be issued to Beneficial Owners, the
Trustee, the Company, the Paying Agent, the Guarantor and the Issuer shall be fully protected in
conclusively relying upon a certificate of the S.ecurities Depository or any Direct Participant as to
the identity of, and the principal amount of, Bonds held by Beneficial Owners.
The Issuer, the Company, the Paying Agent, the Guarantor and the Trustee will recognize
the Securities Depository or its nominee as the Registered Owner for all purposes, including with
respect to notices and voting.
With respect to Bonds registered in the name of the Securities Depository or its nominee,
the Issuer, the Trustee, the Company, the Guarantor and the Paying Agent, shall be entitled to
treat the Person in whose name any Bond is registered in the Register as the absolute owner of
such Bond for all purposes of this Indenture, and neither the Issuer, the Trustee, the Company,
the Guarantor nor the Paying Agent shall have any responsibility, liability or obligation with
respect to (a) the accuracy of the records of the Securities Depository, its nominee, or any other
person with respect to any ownership interest in the Bonds, (b) the delivery to any Person, other
than a Registered Owner as shown on the Register, of any notice with respect to the Bonds,
including any notice of redemption, (c) the selection of the particular Bonds or portions thereof
to be redeemed in the event of a partial redemption of the Bonds Outstanding or (d) the payment
to any Person, other than a Registered Owner as shown in the Register, of any amount with
respect to the principal of, redemption premium, if any, purchase price or interest on the Bonds.
Notwithstanding any other provision of this Indenture to the contrary, so long as a
Securities Depository is acting in such capacity with respect to the Bonds, interest on the Bonds
and all notice with respect to the Bonds, including any notices of redemption of all or part of the
Bonds, shall be made and given, respectively, at the times, in the manner and in accordance with
the Letter of Representations (or any successor agreement).
Whenever during the term of the Bonds the beneficial ownership thereof is determined by
a book entry with a Securities Depository, the requirements of this Indenture of holding,
15
delivering or transferring Bonds shall be deemed modified to require the appropriate person to
meet the requirements of such Securities Depository as to registering or transferring the book
entry to produce the same effect.
If at any time DTC or a successor Securities Depository ceases to hold the Bonds, all
references hereto to DTC or a successor Securities Depository shall be of no further force or
effect.
Section 2,12, Delivery of the Bonds.
Upon the execution and delivery of this Indenture, the Issuer shall execute and deliver the
Bonds to the Paying Agent and the Paying Agent shall authenticate the Bonds and deliver them
to, or at the direction of, the purchasers as directed by the Issuer as hereinafter in this Section
provided.
Prior to the delivery by the Paying Agent of any of the Bonds, the following items shall
be filed with the Paying Agent and the Trustee:
(a) A copy, duly certified by the Clerk of the Issuer, of the Bond Resolution.
(b) Original executed counterparts of the Lease Agreement (less the Exhibits
thereto), this Indenture and the Guaranty Agreement.
( c) A written request and authorization to the Paying Agent on behalf of the
Issuer and signed by the Mayor of the Issuer to authenticate and deliver the Bonds to, or as
directed by, Salomon Smith Barney, Inc., registered in the name of Cede & Co., as nominee for
DTC.
(d) An OpInIOn of Counsel for the Issuer stating in the OpInIOn of such
Counsel that each of this Indenture and the Lease Agreement has been duly authorized by and
lawfully executed and delivered on behalf of the Issuer, is in full force and effect and is legal,
valid and binding upon the Issuer in accordance with its respective terms, except to the extent
limited by bankruptcy, insolvency, reorganization or other laws affecting creditors' rights.
(e) An opinion of Bond Counsel stating in the opinion of such Bond Counsel
that the Issuer is duly authorized and entitled to issue the Bonds, and the Bonds have been duly
authorized, executed and delivered by the Issuer and constitute legal, valid and binding limited
obligations of the Issuer.
(f) An opinion or opinions of Counsel for the Company and the Guarantor
stating in the opinion or opinions of such Counsel that each of the Lease Agreement and the
Guaranty Agreement and any other agreement executed and delivered on behalf of the Company
or the Guarantor, as applicable, in connection with the transactions contemplated by this
Indenture has been duly authorized by, and lawfully executed and delivered on behalf of, the
Company and the Guarantor, and that each such agreement is valid and binding upon the
Company and the Guarantor, as applicable, in accordance with its terms, except to the extent
16
limited by general principles of equity or bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other laws affecting creditors' rights.
(g) All such other documents, proceedings, opinions and information as shall
be requested by Bond Counsel, including, without limitation, a transcript of the proceedings of
validation held in the Superior Court of Richmond County, Georgia.
Section 2,13, CUSIP Numbers,
The Issuer in issuing the Bonds may use "CUSIP" numbers (if then generally in use),
and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Bonds or as contained in any notice of a
redemption and that reliance may be placed only on the other identification numbers printed on
the Bonds, and any such redemption shall not be affected by any defect in or omission of such
numbers. The Issuer will promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III
ADDITIONAL BONDS
Section 3,1.
Issuance of Additional Bonds,
Subject to receipt by the Trustee of the documents set forth in Section 3.2, there may be
issued one or more series of Additional Bonds (a) to pay additional Costs to complete the
Project, (b) to expand or improve the Project, (c) to refund all or a portion of any series of Bonds
or (d) for any combination of such purposes. Each such series of Additional Bonds shall be
issued pursuant to supplements to this Indenture and to the Lease Agreement and shall be equally
and ratably secured under this Indenture with the Bonds and any Additional Bonds issued
pursuant to this Article, without preference, priority or distinction of any Bonds over any other
Bonds. Unless provided otherwise in a supplement to this Indenture, all such Additional Bonds
shall be in substantially the same form as the Bonds, but shall bear such date or dates, bear
interest at such rate or rates, have such maturity amount or amounts and date or dates, and
redemption dates and redemption premiums, contain an appropriate series designation, and be
issued at such prices as shall be approved by the Issuer (with the consent of the Company).
The Issuer shall not issue any Bonds payable from Revenues except the Bonds and
Additional Bonds as provided in this Article III.
Section 3,2.
Execution and Delivery of Additional Bonds,
The Trustee shall authenticate and deliver Additional Bonds, but only upon receipt of the
following:
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(a) An original executed counterpart of a supplement to the Lease Agreement
providing for additional rent sufficient to pay principal of and interest on the Additional Bonds
and an original executed counterpart of a supplement to the Guaranty Agreement.
(b) A certificate of the Company, dated as of the date of delivery of such
Additional Bonds and signed by an Authorized Company Representative, stating that either (1)
to the best of his knowledge as of the date of such certificate, no event or condition is happening
or existing which constitutes, or which, with notice or lapse of time or both, would constitute, an
Event of Default or (2) if any such event or condition is happening or existing, specifying such
event or condition and stating in detail reasonably acceptable to the Trustee that such event or
condition will be corrected promptly after the issuance of such Additional Bonds.
(c) A certified copy of a resolution or resolutions of the Issuer (1) authorizing
the execution and delivery of a supplement to this Indenture and to the Lease Agreement, and (2)
approving the interest rate or rates, maturity date or dates, amounts maturing on such date or
dates and redemption provisions for the Additional Bonds.
(d) A certified copy of a resolution or resolutions of the Company and the
Guarantor authorizing the execution and delivery of a supplement to this Indenture, to the Lease
Agreement and to the Guaranty Agreement.
( e) An original executed counterpart of a supplement to this Indenture
authorizing the issuance and providing for the details of such Additional Bonds.
(f) If such Additional Bonds are for the purpose of completing or improving
the Project, a written statement of the architect or contractor selected to supervise the completion
of or additions to the Project stating that the proceeds of such Additional Bonds, together with
any other moneys available for such purpose, will be sufficient to pay the remaining Costs of the
Project.
(g) If such Additional Bonds are for the purpose of refunding all or part of one
or more series of Bonds:
(1) Irrevocable instructions from the Issuer, at the direction of the
Company, to redeem or pay at maturity all obligations to be refunded; and
(2) For refundings to occur more than ninety (90) days after the
issuance of Additional Bonds for such purpose, computations, either prepared by or on
behalf of the Company and verified by an independent certified public accountant or
prepared by an independent certified public accountant, or other evidence satisfactory to
the Trustee, showing that the proceeds (excluding accrued interest) of such Additional
Bonds, together with any other moneys deposited with the Trustee for such purpose, shall
be sufficient to provide for the payment of the obligations to be refunded either at
maturity or upon earlier redemption and the expenses incident to such refunding.
] 8
(h) An opinion of Counsel to the Issuer, subject to customary exceptions and
qualifications, as to the due authorization, execution, delivery and enforceability of the
documents required to be executed by the Issuer.
(i) An opinion or opinions of the Counsel to the Company and the Guarantor,
subject to customary exceptions and qualifications, as to the due authorization, execution,
delivery and enforceability of the documents required to be executed by the Company and the
Guarantor.
(j) An opinion of Bond Counsel, subject to the customary exceptions and
qualifications, (1) as to the validity of the Additional Bonds, (2) that, if applicable, the interest
payable on such Additional Bonds will be excludable from gross income for Federal income tax
purposes, (3) that the issuance of such Additional Bonds is permitted under the terms of this
Indenture and (4) that the issuance of such Additional Bonds does not affect adversely the
exclusion from gross income for Federal income tax purposes of interest on any Bonds then
Outstanding the interest on which is then intended to be so excluded.
(k) A transcript of proceedings of validation held in the Superior Court of
Richmond County, Georgia.
Section 3,3,
Use of Proceeds of Additional Bonds,
The Trustee shall apply the net proceeds of Additional Bonds as follows:
(a) Accrued interest, if any, on the Additional Bonds from their dated date to
the date of their delivery shall be deposited in the Bond Fund.
(b) The balance shall be deposited in (a) the Construction Fund, if such
Additional Bonds are issued to complete or improve the Project or (b) an escrow account held by
the Trustee, if such Additional Bonds are issued for the purpose of refunding any series of
Bonds, in an amount sufficient to pay the principal of and premium, if any, and interest on the
Bonds to be refunded, with any remaining proceeds being deposited in a special account in the
Construction Fund to be used within one (1) year after the issuance of such Additional Bonds to
pay costs of issuance.
ARTICLE IV
DEPOSIT OF BOND PROCEEDS
Section 4,1.
Deposit of Proceeds of Bonds,
The proceeds of the Bonds delivered to the Trustee pursuant to Section 2.1 shall be
applied by the Trustee as follows:
(a) In the Bond Fund, established pursuant to Section 5.1, a sum equal to the
accrued interest, if any, paid by the initial purchasers of the Bonds; and
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(b) In the Construction Fund, established pursuant to Section 5.1, the balance
of the proceeds (minus the underwriter's discount) received from the initial purchasers of the
Bonds.
ARTICLE V
BOND FUND AND CONSTRUCTION FUND
Section 5,1.
Establishment of Bond Fund and Construction Fund.
(a) There is hereby created by the Issuer, and ordered established with the
Trustee, a trust fund to be designated "Augusta, Georgia - Garrett Aviation Services Project
Bond Fund" ("Bond Fund") which is pledged and shall be used to pay the principal of, premium,
if any, and interest on the Bonds. Moneys in the Bond Fund shall be applied as provided in
Section 5.3.
(b) There is hereby created by the Issuer, and ordered established with the
Trustee, a trust fund to be designated "Augusta, Georgia - Garrett Aviation Services Project
Construction Fund" ("Construction Fund"). Moneys in the Construction Fund shall be applied as
provided in Section 5.4.
Section 5,2,
Payments into Bond Fund.
There shall be deposited in the Bond Fund, as and when received, (a) any accrued interest
paid upon the initial delivery of the Bonds; (b) any amount in the Construction Fund directed to
be paid into the Bond Flmd under Sections 5.5 and 5.6; (c) all Revenues; and (d) all other
moneys, if any, received by the Trustee or the Paying Agent under and pursuant to the Lease
Agreement and Guaranty Agreement, or from any other source which are required or which are
accompanied by directions that such moneys are to be paid into the Bond Fund.
Section 5,3,
Use of Moneys in Bond Fund,
(a) Except as otherwise provided in this Section 5.3 and as provided in
Sections 5.7 and 5.9, moneys in the Bond Fund shall be used solely for the payment of the
principal of, and premium, if any, on, the Bonds at maturity or upon acceleration or for the
redemption of the Bonds prior to maturity and for the payment of the interest on the Bonds when
due.
(b) The Issuer hereby authorizes and directs the Trustee to withdraw, from
time to time, sufficient moneys from the Bond Fund to payor cause to be paid the principal of,
and premium, if any, and interest on, the Bonds as the same become due and payable (whether at
maturity or upon redemption or acceleration), which authorization and direction the Trustee
hereby accepts.
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Section 5.4,
Payments into Construction Fund; Disbursements,
The proceeds from the sale of the Bonds (excluding accrued interest, if any, and the
underwriter's discount) shall be deposited in the Construction Fund and used to pay Costs of the
Project. Moneys in the Construction Fund shall be expended pursuant to requisitions, in the
foml attached tO,this Indenture as Exhibit "B," signed by an Authorized Company Representative
and delivered to the Trustee stating with respect to each payment to be made:
(a) The requisition number;
(b) The name and address of the person, firm or corporation to whom payment
is due or has been made, which may include the Issuer and the Company;
( c) The amount to be, or which has been, paid; and
(d) That each obligation mentioned therein has been properly incurred, is a
proper charge against the Construction Fund to pay Costs of the Project and has not been the
basis of any previous requisition from the Construction Fund or from the proceeds (including
investment income) of any other obligations issued by, or on behalf of any state or political
subdivision, including authorities, agencies, departments or other similar issuers.
The Trustee is hereby authorized and directed to make the disbursement pursuant to each
such requisition and to issue its checks therefor. In making any such disbursement, the Trustee
may rely on any such requisition. The Trustee shall keep and maintain adequate records
pertaining to the Construction Fund and all disbursements therefrom and shall provide monthly
statements of transactions and investments pertaining to the Construction Fund to the Issuer and
the Company so long as any Bonds remain Outstanding.
Section 5,5,
Completion of Project.
The completion of the Project and payment or provision made for payment of the full
costs of the Project shall be evidenced by the filing with the Trustee of a certificate in the form
attached to this Indenture as Exhibit "C." Any balance remaining in the Construction Fund on
the completion date set forth in such certificate shall be (to the extent allowable under the Code)
(a) transferred, with the opinion of Bond Counsel, to the Bond Fund to be applied to the payment
of interest on the Bonds accrued during the acquisition, expansion, construction and equipping of
the Project or (b) used as provided in the opinion of Bond Counsel.
Section 5.6,
Transfer of Construction Fund,
If all of the Bonds are paid or deemed to be paid or canceled as herein provided or if the
principal of the Bonds shall have become due and payable pursuant to Article IX, then,
notwithstanding anything herein to the contrary, any balance then remaining in the Construction
Fund shall without further authorization be deposited in the Bond Fund by the Trustee.
21
Section 5.7,
Non-presentment of Bonds,
In the event any Bond or portion thereof shall not be presented for payment when the
principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption
thereof, or in the event that any interest payment remains unclaimed, then if funds sufficient to
pay such interest, if any, or purchase such Bond or portion thereof, including all interest accrued
thereon to such date and any premium due in connection therewith or that portion of the purchase
price representing accrued interest or premium, shall have been made available to the Trustee or
the Paying Agent, all liability of the Issuer for the payment or purchase of such Bond or the
payment of such interest and all liability of the Company for the payment or purchase of such
Bond or the payment of such interest shall forthwith cease, detem1ine and be completely
discharged, and thereupon it shall be the duty of the Trustee with respect to principal and interest
payments to hold such fund or funds (uninvested), without liability for interest thereon, in trust
for the benefit of, and subject to a security interest in favor of, the owner of such Bond who shall
thereafter be restricted exclusively to such fund or funds, for any claim of whatever nature on his
part under this Indenture or on, or with respect to, said Bond or interest. Subject to applicable
law, any moneys so deposited with, and held by, the Trustee or the Paying Agent in the Bond
Fund for the benefit of such Persons, if any, for two (2) years after the date upon which such
moneys were so deposited, shall be repaid to the Company on written request of the Company
(and with the consent of the Issuer), and thereafter such Persons shall look only to the Company
for the purpose of payment from such moneys and then only to the extent of the amounts so
deposited with the Company, without interest thereon, and the Issuer and the Trustee shall have
no responsibility with respect to such moneys and all liability of the Issuer, the Trustee and the
Paying Agent with respect to such moneys shall thereupon cease, terminate and be completely
discharged.
Section 5,8,
Moneys to Be Held in Trust,
All moneys required to be deposited with, or paid to, the Trustee for the account of the
Bond Fund or the Construction Fund shall be held by the Trustee in trust, and except for moneys
deposited with or paid to the Trustee for the redemption of Bonds, notice of the redemption of
which has been duly given, and except for moneys which have been deposited with the Trustee
pursuant to Article XIII, and except for moneys held pursuant to Section 5.7, shall, while held by
the Trustee, constitute part of the Tmst Estate and be subject to the lien or security interest
created hereby.
Section 5,9.
Repayment to the Company,
Subject to the provisions of Section 5.7, any amounts remaining in the Bond Fund or any
other fund or account established pursuant to this Indenture after payment in full of the Bonds (or
provision therefor having been made in accordance herewith), and payment in full of the fees,
charges and expenses of the Issuer, the Trustee and the Paying Agent and payment in full of all
other amounts required to be paid hereunder and under the Lease Agreement shall be paid to the
Company.
22
ARTICLE VI
INVESTMENTS
Section 6,1.
Investment of Funds,
Pending disbursement of the amounts on deposit in any Fund, the Trustee is hereby
directed to invest and reinvest such amounts in Investment Securities promptly upon receipt of
specific written instructions from the Company. All such investments shall be credited to the
Fund from which the money used to acquire such investments shall have come, and all income
and profits on such investments shall be credited to, and all losses thereon shall be charged
against, such Fund. As amounts invested are needed for disbursement from the Bond Fund or
the Construction Fund, the Trustee shall cause a sufficient amount of the investments credited to
that Fund to be redeemed or sold and converted into cash to the credit of that Fund. The Trustee
shall not be liable or responsible for any loss, fee, tax or other charge resulting from any such
investment or reinvestment, or liquidation of an investment as herein authorized. Moneys held in
the Bond Fund for the payment of Bonds pursuant to Section 5.7, shall not be invested or
reinvested by the Trustee or the Paying Agent. The Trustee may make any and all investments
permitted herein through its own bond department.
Section 6,2,
Non-Arbitrage Covenant,
(a) Pursuant to Section _ of the Tax Regulatory Agreement, the Company
has agreed and covenanted that it shall not permit at any time or times any of the proceeds of the
Bonds or other funds of the Company to be used directly or indirectly, to acquire any asset or
obligation, the acquisition of which would cause the Bonds to be "arbitrage bonds" for purposes
of Section 148 of the Code. The Company further agrees and covenants that it shall do and
perform all acts and things necessary in order to assure that the requirements of Section 148( d)(3)
of the Code are met.
(b) The Issuer covenants and agrees that it will not knowingly take any action,
knowingly permit any action to be taken or fail to take any action, to the extent permitted by
applicable law, with respect to the use or investment of the proceeds of any Bonds or Basic Rent
payable under the Lease Agreement, or any other amounts regardless of the source or where held,
which may result in the Bonds being treated as "arbitrage bonds" within the meaning of such
term as used in Section 148 of the Code, and the Treasury Regulations proposed or adopted
thereunder as the san1e may be in effect from time to time and as the same are applicable to the
Bonds. The Issuer further covenants and agrees that (i) it will comply with and take all actions
required of it by the Tax Regulatory Agreement; and (ii) it will not knowingly take any action,
knowingly permit any action to be taken or knowingly fail to take any action to the extent
permitted by applicable law, with respect to the use or investment of the proceeds of any Bonds,
with respect to the payments derived under the Lease Agreement, or any other amounts
regardless of the source or where held, which will cause the interest of the Bonds to be
includable in the gross income of the owners thereof for purposes of federal income taxation. The
Trustee covenants and agrees that it will not take any action, permit any action to be taken or fail
23
to take any action with respect to investments of any amounts held by the Trustee relating to the
Bonds, to the extent the Trustee has investment discretion under this Indenture, that may result in
the Bonds being treated as "arbitrage bonds" within the meaning of such term as used in Section
148 of the Code and the Treasury Regulations proposed or adopted thereunder as the same may
be in effect from time to time and as the same are applicable to the Bonds.
Section 6,3.
Rebate Account.
There is hereby established a special trust account to be designated the "Augusta, Georgia
- Garrett Aviation Services Project Rebate Account" (hereinafter referred to as the "Rebate
Account"), to be held by the Trustee. The Company has covenanted and agreed that it will (a)
prepare and file with the Trustee and the Issuer a report setting forth the "Rebate Amount"
determined in accordance with Section _ of the Tax Regulatory Agreement, and (b) deposit
or cause to be deposited into the Rebate Account any and all Rebate Amounts promptly
following a determination of any such Rebate Amount.
(a) Moneys in the Rebate Account, including investment earnings thereon, if
any, shall not be subject to the pledge of this Indenture and shall not constitute part of the Trust
Estate. Amounts deposited in the Rebate Account shall be applied solely to pay amounts owed
to United States pursuant to Section 148(f) of the Code except to the extent otherwise permitted
by Section _ of the Tax Regulatory Agreement.
(b) The Trustee, upon receipt of written instructions from an Authorized
Company Representative in accordance with Section _ of the Tax Regulatory Agreement,
shall pay to the United States out of amounts in the Rebate Account (a) no later than thirty (30)
days after the end of each five-year period following the date of issuance of Bonds, an amount
certified to the Trustee by an Authorized Company Representative such that, together with
amounts previously paid, the total amount paid to the United States is equal to 90% of the Rebate
Amount calculated as of the end of the most recent Computation Period (as defined in the Tax
Regulatory Agreement), and (b) not later than thirty (30) days after the date on which all of the
Bonds have been paid or redeemed, 100% of the Rebate Amount as of the end of the final
Computation Period as certified to the Trustee by an Authorized Company Representative.
ARTICLE VII
REDEMPTION OF BONDS
Section 7,1.
Bonds Subject to Redemption,
The Bonds shall be subject to redemption prior to maturity as set forth below:
(a) Extraordinarv Optional Redemption. The Bonds shall be subject to
redemption at the option of the Issuer, at the written direction of the Company, in whole or in
part, at any time as described below from funds available for such purpose in the Bond Fund, at
an Extraordinary Optional Redemption price equal to 100% of the principal amount thereof, plus
24
accrued interest to the redemption date, if one or more of the following events shall have
occurred:
(1) All or a portion of the Project shall have been damaged or
destroyed or title to, or the temporary use of, all or a portion of the Project, shall have
been taken under the exercise of the power of eminent domain by any governmental
authority as in each case, in the opinion of the Company, (a) normal operations at the
Project are interrupted, or (b) the restoration of the Project is not economically feasible;
or
(2) As a result of changes in laws or administrative action, the Lease
Agreement becomes void or unenforceable.
(b) Special Mandatorv Redemption. The Bonds are subject to a special
mandatory redemption prior to maturity as follows:
The Bonds are subject to redemption not later than one-hundred-
eighty (180) days after the occurrence of a Detern1ination of
Taxability at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, to the redemption
date. Any such Special Mandatory Redemption shall be in whole
unless it is finally determined that redemption of a portion of the
Bonds Outstanding would result in interest payable on the
remaining Bonds Outstanding after any redemption pursuant to this
Section being not includable in the gross income (for Federal
income tax purposes) of the owners thereof (except for any owner
who is a "substantial user" of the Proj ect or a "related party" within
the meaning of Section 147(a) of the Code) in which event the
Bonds may be redeemed in part, in such aggregate principal
amount as is deemed necessary by such final determination to
insure that interest is excluded from gross income for Federal
income tax purposes.
If the Trustee receives written notice from any Registered Owner stating that:
(1) the Registered Owner has been notified in writing by the Internal
Revenue Service that it proposes to include the interest on any Bond in the gross income
of such Registered Owner for the reasons stated in the definition of "Determination of
Taxability" set forth herein or any other proceeding has been instituted against such
Registered Owner which may lead to a final determination as described in the aforesaid
definition, and
25
(2) such Registered Owner will afford the Company the opportunity to
contest the same, either directly or in the name of the Registered Owner, and until a
conclusion of any appellate review, if sought, and the Trustee is satisfied that such
information is accurate,
then the Trustee shall promptly give notice thereof to the Company and the Issuer and to
the Registered Owners of the Bonds then Outstanding. The Trustee shall thereafter
coordinate any similar requests or notices it may have received from other Registered
Owners and shall keep informed of the progress of any administrative proceedings or
litigation. If a Determination of Taxability thereafter occurs, the Trustee shall make
demand for prepayment of Basic Rent pursuant to the terms of the Lease Agreement or
necessary portion thereof from the Company and give notice of the Special Mandatory
Redemption of the appropriate anlOunt of the Bonds on the earliest practicable date
within the required period of one-hundred eighty (180) days. In taking any action or
making any determination under this Section, the Trustee may conclusively rely on an
opinion of Counsel.
Section 7,2,
Selection of Bonds for Redemption,
In the event that fewer than all Bonds subject to redemption are to be redeemed, Bonds
shall be selected by the Paying Agent for redemption by lot from Bonds subject to such
redemption. In the case of Bonds of varying denominations, each Bond shall be treated as
representing that number of Bonds which is obtained by dividing the face amount thereof by the
smallest authorized denomination.
Section 7,3,
Notice of Redemption,
The Company shall deliver notice by first class mail to the Issuer, the Trustee and the
Paying Agent of its intention to prepay the anlounts due under the Lease Agreement and cause
the Bonds to be called for Extraordinary Optional Redemption at least forty (40) days (or such
lesser period of time as to which the Paying Agent shall consent in order to enable it to give the
notice required in the second succeeding sentence) prior to the proposed redemption date. The
Paying Agent shall cause notice of any redemption of Bonds hereunder, which notice shall be
prepared by the Company, to be mailed to the Registered Owners of all Bonds to be redeemed at
the registered addresses appearing in the Register. Each such notice shall (i) be mailed by first
class mail at least thirty (30) days prior to the redemption date, (ii) identify the Bonds to be
redeemed (specifying the CUSIP numbers, if any, assigned to the Bonds), (iii) specify the
redemption date and the redemption price, and (iv) state that on the redemption date the Bonds
called for redemption will be payable at the principal office of the Paying Agent, that from that
date interest will cease to accrue and that no representation is made as to the accuracy or
correctness of the CUSIP numbers printed therein or on the Bonds. Any notice mailed as
provided in this Section shall be conclusively presumed to have been duly given, whether or not
the Owner receives the notice. If a Bond is presented to the Paying Agent for transfer after notice
of redemption of such Bond has been mailed as herein provided, the Paying Agent shall deliver a
copy of such notice of redemption to the new Owner of such Bond. No defect affecting any
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Bond, whether in the notice of redemption or mailing thereof (including any failure to mail such
notice), shall affect the validity of the redemption proceedings for any other Bonds.
With respect to any notice of Extraordinary Optional Redemption of Bonds, unless upon
the giving of such notice such Bonds shall be deemed to have been paid within the meaning of
Article XIII, such notice may state that such redemption shall be conditional upon the receipt by
the Trustee on or prior to the date fixed for such redemption of funds sufficient to pay the
principal of, and premium, if any, and interest on, such Bonds to be redeemed, and that if such
funds shall not have been so received said notice shall be of no further force and effect and the
Issuer shall not be required to redeem such Bonds. In the event that such notice of redemption
contains such a condition and such funds are not so received, the redemption shall not be made
and the Paying Agent shall within a reasonable time thereafter give notice, in the manner in
which the notice of redemption was given, that such funds were not so received.
The Paying Agent shall also send a notice of prepayment or redemption by first class mail
to the Registered Owner of any Bond who has not sent the Bonds in for redemption sixty (60)
days after the redemption date.
In addition to the foregoing notice, further notice may be given by the Paying Agent as
set out below, but no defect in said further notice nor any failure to give all or any portion of
such further notice shall in any manner (i) defeat the effectiveness of a call for redemption if
notice thereof is given as above prescribed or (ii) give rise to any liability on the part of the
Issuer, the Company, the Trustee or the Paying Agent:
(a) Each further notice of redemption given hereunder may contain the
information required in the first paragraph of this Section 7.3 plus (i) the date of issue of the
Bonds; (ii) the rate or rates of interest borne by the Bonds; (iii) the maturity date of the Bonds;
and (iv) any other descriptive information needed to identify accurately the Bonds being
redeemed.
(b) Each further notice of redemption may be sent at least five (5) days before
the date the redemption notice to the Registered Owners is required to be given as provided in
the first paragraph of this Section 7.3, by first-class mail, postage prepaid or overnight delivery
service, to all registered securities depositories then in the business of holding substantial
amounts of obligations of types comprising the bonds (such depositories as of the date hereof
being The Depository Trust Company, New York, New York; and Midwest Securities Trust
Company, Chicago, Illinois).
(c) Each further notice of redemption may be published one time in The Bond
Buyer of New York, New York or, if such publication is impractical, in some other financial
newspaper or journal which regularly carries notices of redemption of other obligations similar to
the Bonds, such publication to be made at the time the redemption notice to the Registered
Owners is required to be given as provided in the first paragraph of this Section 7.3.
(d) Each further notice of redemption may be given at least two (2) days
before the date the redemption notice to the Registered Owners is required to be given as
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provided in the first paragraph of this Section 7.3 by (i) first-class mail, postage prepaid, or (ii)
overnight delivery service, to two of the following services selected by the Company and at the
address provided to the Paying Agent by the Company:
(1) Financial Information, Inc.'s Financial Daily Called Bond Service;
(2) Interactive Data Corporation's Bond Service;
(3) Kenny Information Service's Called Bond Service;
(4) Moody's Municipal and Government Called Bond Service; or
(5) S&P's Called Bond Record.
Section 7.4.
Effect of Redemption.
If payment of the redemption price of the Bonds has been duly provided for on the
redemption date, then interest will cease to accrue, and the Registered Owners will have no rights
with respect to such Bonds nor will they be entitled to the benefits of this Indenture except to
receive payment of the redemption price thereof and unpaid interest accrued to the date fixed for
redemption.
Section 7,5.
Purchase in Lieu of Redemption,
Notwithstanding anything contained herein to the contrary, the Company may elect to
purchase any Bonds that have been called for redemption under Section 7.1 on the redemption
date by giving the Trustee, the Paying Agent and the Issuer written notice at least two (2)
Business Days prior to the date the Bonds are to be redeemed.
ARTICLE VIII
P A YMENT~ FURTHER ASSURANCES
Section 8,1.
Bonds,
Payment of Principal or Redemption Price of, and Interest on,
The Issuer shall promptly payor cause to be paid the principal of, premium, if any, and
interest on, every Bond issued hereunder according to the terms thereof, but shall be required to
make such payment or cause such payment to be made only out of Revenues. The Issuer hereby
appoints the Paying Agent to act as the paying agent for the Bonds and designates the principal
corporate trust office of the Paying Agent as the place of payment for the Bonds, such
appointment and designation to remain in effect until notice of change is filed with the Trustee.
Section 8,2,
Performance of Covenants; the Issuer,
The Issuer covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Indenture, in any and every Bond
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executed, authenticated and delivered hereunder and in all of its proceedings pertaining thereto;
provided, however, that except for the matters set forth in Section 8.1 the Issuer shall not be
obligated to take any action or execute any instrument pursuant to any provision hereof until it
shall have been requested to do so by the Company.
Section 8,3,
Right to Payments under Lease Agreement,
The Issuer covenants that it will defend its right to the payment of Basic Rent to the
Trustee, for the benefit of the Registered Owners of the Bonds against the claims and demands of
all Persons whomsoever. The Issuer covenants and agrees that, except as herein and in the Lease
Agreement provided, it will not sell, convey, mortgage, encumber or otherwise dispose of any
part of the Revenues or its rights to Basic Rent.
Section 8.4,
Further Assurances; Recordings and Filings.
(a) The Issuer and the Company covenant that each, as appropriate, will do,
execute, acknowledge, and deliver, or cause to be done, executed, acknowledged and delivered,
such indentures supplemental hereto and such further acts, instruments and transfers as is
reasonably necessary for the better assigning, pledging and continning unto the Trustee the Trust
Estate assigned and the Revenues pledged hereunder.
(b) At the expense of the Company, the Issuer covenants that it will cooperate
with the Company in causing this Indenture, or any related instruments or documents relating to
the assignment made by the Issuer under this Indenture to secure the Bonds, to be recorded and
filed in the manner and in the places which may be required by law to preserve and protect fully
the security of the holder of the Bonds and the rights of the Trustee hereunder.
Section 8,5,
Inspection of Project Books,
The Issuer agrees, to the extent pemlitted by law, that all books and documents in its
possession relating to the Project shall, during normal business hours upon prior written notice,
be open to inspection by such accountants or other agencies as the Trustee may from time to time
designate.
Section 8,6,
Rights Under Lease Agreement and Guaranty Agreement,
The Lease Agreement and Guaranty Agreement, duly executed counterparts of which
have been filed with the Trustee, set forth the covenants and obligations of the Issuer, the
Company and Guarantor, and reference is hereby made to the same for a detailed statement of
said covenants and obligations of the Company and Guarantor, respectively, thereunder. The
Issuer agrees that the Trustee in its name or in the name of the Issuer may enforce all rights of the
Issuer to Basic Rent, for and on behalf of the holders of the Bonds, whether or not the Issuer is in
default hereunder. Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any and all of its rights under either the Lease Agreement or the Guaranty
Agreement.
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ARTICLE IX
EVENTS OF DEF AUL T AND REMEDIES
Section 9.1.
Events of Default Defined.
Each of the following shall be an Event of Default hereunder:
(a) Failure to make punctual payment of any installment of interest upon any
Bond when due and payable and such failure shall continue unremedied for a period of two (2)
days;
(b) Failure to make when due the punctual payment of the principal of, and
premium, if any, on, any Bond at the stated maturity thereof, or upon redemption thereof or upon
the maturity thereof by declaration;
(c) The occurrence of a "default" under Section LJ of the Lease Agreement;
or
(d) Failure on the part of the Issuer to perform or observe any of its covenants,
agreements or conditions in this Indenture or in the Bonds and failure to remedy the same after
notice thereof pursuant to Section 9.13.
Section 9.2.
Acceleration and Annulment Thereof.
If any Event of Default has occurred and is continuing of which a Responsible Officer of
the Trustee has received written notice, the Trustee may, and at the written direction of the
Registered Owners of not less than a majority in aggregate principal amount of the Bonds then
Outstanding shall, by notice in writing delivered to the Issuer and the Company, declare the
principal of all Bonds then Outstanding and the interest accrued thereon to the date of such
declaration immediately due and payable, and upon such declaration such principal and interest
shall become due and payable immediately at the place of payment provided therein, anything in
this Indenture or in the Bonds to the contrary notwithstanding; provided, however, that no such
declaration shall be made if the Company or the Guarantor cures such Event of Default prior to
the date of the declaration. Upon any such declaration, interest on the Bonds shall cease to
accrue and the Trustee shall declare the whole principal amount of Basic Rent to be immediately
due and payable and may exercise and enforce such rights as exist under the Lease Agreement
and the Guaranty Agreement. The above provisions are subject to waiver, rescission and
annulment as provided in Section 9.13.
Immediately following any such declaration of acceleration, the Trustee shall cause to be
mailed notice of such declaration by first class mail or telecopy to each Registered Owner of a
Bond at his last address appearing on the Register. Any defect in or failure to give such notice of
such declaration shall not affect the validity of such declaration.
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Section 9.3.
Legal Proceedings by Trustee.
If any Event of Default has occurred and is continuing of which the Trustee is deemed to
have notice hereunder or of which a Responsible Officer has received written notice, the Trustee
in its discretion may, and upon the written request of the Registered Owners of not less than a
majority in principal amount of the Bonds then Outstanding and upon receipt of indemnity to its
satisfaction shall, in its own name:
(a) By mandamus, or other suit, action or proceeding at law or in equity,
enforce all rights of the Registered Owners, including the right to require the Issuer or the
Company to carry out any other agreements with, or for the benefit of, the Registered Owners;
(b) Bring suit upon the Bonds; and
(c) By action or suit in equity enjoin any acts or things which may be
unlawful or in violation of the rights of the Registered Owners.
Section 9.4.
Discontinuance of Proceedings by Trustee.
If any proceeding taken by the Trustee on account of any Event of Default is discontinued
or is determined adversely to the Trustee, then the Issuer, the Trustee, the Company and the
Registered Owners shall be restored to their former positions and rights hereunder as though no
such proceeding had been taken.
Section 9.5.
Registered Owners May Direct Proceedings.
Anything in this Indenture to the contrary notwithstanding, the Registered Owners of not
less than a majority in aggregate principal amount of the Bonds then Outstanding hereunder shall
have the right, at any time, by an instrument or instruments in writing executed and delivered to
the Trustee and indemnification of the Trustee satisfactory to it against costs, expenses (including
legal fees and expenses) and liabilities, to direct the method and place of conducting all remedial
directions to be taken in connection with the terms and conditions of this Indenture, or for the
appointment of a receiver or any other proceeding hereunder provided that such direction shall
not be otherwise than in accordance with law or the provisions of this Indenture (including
without limitation Section 9.2) and shall not result in the personal liability of the Trustee. The
Trustee may take any other action under this Indenture which is not inconsistent with such
direction.
Section 9.6.
Limitations on Actions by Registered Owners.
No Registered Owner shall have any right to pursue any remedy hereunder or for the
appointment of a receiver unless (a) the Trustee shall have been given written notice of an Event
of Default (or shall be deemed to have notice thereof as provided in Section 10.3(h)), (b) the
Registered Owners of not less than a majority in aggregate principal amount of the Bonds then
Outstanding shall have requested the Trustee, in writing, to exercise the powers hereinabove
granted or to pursue such remedy in its or their name or names, ( c) the Trustee shall have been
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offered indemnity satisfactory to it against all costs, expenses and liabilities, and (d) the Trustee
shall have failed to comply with such request for a period of sixty (60) days after such request.
Nothing in this Indenture contained shall, however, affect or impair the right of any Registered
Owner to enforce the payment of the principal of, premium, if any, and interest on any of its
Bonds at and after the maturity thereof.
Section 9.7.
Trustee May Enforce Rights Without Possession of Bonds.
All rights under this Indenture and the Bonds may be enforced by the Trustee without the
possession of any Bonds or the production thereof at the trial or other proceedings relative
thereto, and any proceeding instituted by the Trustee shall be brought in its name for the ratable
benefit of the Registered Owners of the Bonds without necessity of joining as plaintiffs or
defendants any Registered Owners of the Bonds, and any recovery of judgment shall be for the
equal and ratable benefit of the Registered Owners of the Bonds then Outstanding.
Section 9.8.
Remedies Not Exclusive.
Except as limited by the terms of Section 14.1, no remedy herein conferred is intended to
be exclusive of any other remedy or remedies, and each remedy is in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by statute.
Section 9.9.
Delays and Omissions Not to Impair Rights.
No delay or omission in respect of exercising any right or power accruing upon any Event
of Default shall impair such right or power or be a waiver of such Event of Default, and every
remedy given by this Article may be exercised from time to time and as often as may be deemed
expedient.
Section 9.10. Application of Moneys.
All moneys received by the Trustee pursuant to any right given or action taken under the
provisions of this Article or under Section 5.2 or 5.6 shall, after payment of the costs and
expenses of the proceedings resulting in the collection of such moneys and of the expenses,
liabilities and advances incurred or made by the Trustee, the Paying Agent and their respective
counsel, be deposited in the Bond Fund; and all moneys in the Bond Fund (other than moneys
held for the payment of a particular Bond) during the continuation of an Event of Default
hereunder shall be applied as follows:
(a) Unless the principal of all of the Bonds shall have become or shall have
been declared due and payable, all such moneys shall be applied:
First - to the payment to the Persons entitled thereto of all interest then due
on the Bonds (other than Company Bonds) and, if the amount available shall not
be sufficient for such purpose, to the payment ratably of interest due on the Bonds
to the Persons entitled thereto (other than Company Bonds) without any
discrimination or privilege;
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Second - to the payment to the Persons entitled thereto (other than
Company Bonds) of the unpaid principal of the Bonds which shall have become
due (other than Bonds matured or called for redemption for the payment of which
moneys and/or Governnlental Obligations are held pursuant to this Indenture), in
the order of their due dates, or, if the amount available shall not be sufficient to
pay in full Bonds due on any particular date, to the payment ratably of such
principal according to the amount of principal due on such date, to the Persons
entitled (other than Company Bonds), thereto without any discrimination or
privilege; and
Third - to the payment of the principal of, premium, if any, and interest on,
Company Bonds in the same manner as above provided.
(b) If the principal of all the Bonds shall have become due or shall have been
declared due and payable, all such moneys shall be applied first, to the payment of the principal
and the interest then due and unpaid upon the Bonds (other than Company Bonds and other than
installments of interest and amounts of principal of Bonds matured or called for redemption, for
the payment of which moneys and/or Governmental Obligations are held pursuant to this
Indenture) without preference or priority of principal over interest or of interest over principal, or
of any installment of interest over any other installment of interest, or of any Bond over any other
Bond (other than Company Bonds) without any discrimination or privilege, and second, to the
payment of principal of, and interest on, Company Bonds in the same manner.
(c) 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
this Article, then, subj ect to the provisions of Section 9.1 O(b) in the event that the principal of all
the Bonds shall later become due or be declared due and payable, the moneys shall be applied in
accordance with the provisions of Section 9.1 O(a).
Whenever moneys are to be applied pursuant to the provisions of this Section, such
moneys shall be applied as soon as practicable as the Trustee shall in good faith determine
having due regard to the amount of such moneys available for application and the likelihood of
additional moneys becoming available for such application in the future. Whenever the Trustee
shall apply such funds, it shall fix the date (which shall be the date of acceleration of the Bonds
or if there shall not have been an acceleration, such date as shall be determined by the Trustee)
upon which such application is to be made and upon such date interest on the amounts of
principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it
may deem appropriate of the deposit with it of any such moneys and of the fixing of any such
date, and shall not be required to make payment to the Registered Owner of any Bond until such
Bond shall be presented to the Trustee.
Whenever all principal of, premium, if any, and interest on, all Bonds have been paid
under the provisions of this Section 9.10 and all expenses (including legal fees and expenses) and
charges of the Trustee have been paid, any balance remaining in the Bond Fund shall be paid to
the Company in accordance with, and subject to, the provisions of Section 5.9.
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Section 9.11. Trustee and Registered Owners Entitled to All Remedies.
It is the purpose of this Article IX to make available to the Trustee and the Registered
Owners all lawful remedies; but should any remedy herein granted be held unlawful, the Trustee
and the Registered Owners shall nevertheless be entitled to every other remedy provided by law.
It is further intended that, insofar as lawfully possible, the provisions of this Article shall apply to
and be binding upon any trustee or receiver who may be appointed hereunder.
Section 9.12. Waiver of Events of Default.
The Trustee may in its discretion waive any Event of Default hereunder and rescind its
consequences, and shall do so upon the written request of the Registered Owners of not less than
a majority in aggregate principal amount of all Bonds then Outstanding; provided, however, that
there shall not be waived any Event of Default in the payment of the principal of, or premium on,
any Outstanding Bonds when due (whether at maturity or by redemption) or any Event of
Default in the payment when due of the interest on any such Bonds, unless prior to such waiver
and rescission, all arrears of principal of and interest, with interest at the rate bome by the Bonds
on the date on which such principal or interest became due and payable on overdue principal and
(to the extent permitted by law) on overdue installments of interest, and all arrears of premium, if
any, when due, together with the reasonable expenses of the Trustee and of the Registered
Owners of such Bonds, including reasonable attomeys' fees and expenses paid or incurred, shall
have been paid or for which payment shall be provided. In the case of any such waiver and
rescission, or in case any proceeding taken by the Trustee on account of any such default shall
have been discontinued or abandoned or determined adversely, then and in every such case the
Issuer, the Trustee and the Registered Owners shall be restored to their former positions and
rights hereunder, respectively, but no such waiver and rescission shall extend to any subsequent
or other default, or impair any right or remedy consequent thereon. All waivers under this
Indenture shall be in writing and copies thereof shall be delivered to the Issuer and to the
Company.
If, after the principal of all Bonds then Outstanding shall have been declared to be due
and payable, all arrears of principal of and interest upon such Bonds, and interest on overdue
principal and (to the extent permitted by law) on overdue installments of interest at the rate bome
by the Bonds on the date on which such principal or interest became due and payable, and the
premium, if any, on all Bonds then Outstanding which shall have become due and payable
otherwise than by acceleration, and all other sums payable under this Indenture, except the
principal of, and interest on, the Bonds which by such declaration shall have become due and
payable, shall have been paid by or on behalf of the Issuer, together with the reasonable expenses
of the Trustee and of the Registered Owners of such Bonds, including reasonable attomeys' fees
and expenses paid or incurred, then and in every such case, and, if the Registered Owners of not
less than a majority in aggregate principal amount of the Bonds then Outstanding shall have
made the written direction specified in Section 9.2, and if no other defaults shall have occurred
and be continuing, the Trustee may annul such declaration of maturity and its consequences,
which annulment shall be binding upon all Registered Owners; but no such annulment shall
extend to or affect any subsequent default or impair any right or remedy consequent thereon. In
34
the case of any such annulment, the Company, the Issuer, the Trustee and the Registered Owners
shall be restored to their former positions and rights under this Indenture. All arumlments under
this Indenture shall be in writing and a copy thereof shall be delivered to the Issuer and to the
Company.
Section 9.13. Notice of Event of Default under Section 9.1(d); Opportunity of
Company to Cure Defaults.
(a) Anything herein to the contrary notwithstanding, no default under Section
9.1(d) shall constitute an Event of Default until actual notice of such default, requiring that it be
remedied and stating that such notice is a "Notice of Default" hereunder, by first-class mail,
postage prepaid shall be given to the Issuer and the Company by the Trustee or to the Issuer, the
Company and the Trustee by the Registered Owners of not less than a majority in aggregate
principal amount of all Bonds Outstanding, and the Company or the Issuer shall have had sixty
(60) days after receipt of such notice to correct said default or cause said default to be corrected,
and shall not have corrected said default or caused said default to be corrected within the
applicable period; provided, however, if said default be such that it cannot be corrected within
the applicable period, it shall not constitute an Event of Default if corrective action is instituted
within the applicable period and diligently pursued until the default is corrected and the fact of
such non-correction, corrective action and diligent pursuit is evidenced to the Trustee by a
certificate of an Authorized Company Representative.
(b) If the Issuer shall, for whatever reason, at any time fail to pay any amount
or perform any act which it is obligated to payor perform and, as a result, a default or Event of
Default occurs or may occur, the Company shall have the right to perform such act or pay such
amount on behalf of the Issuer and thereby cure or prevent such default or Event of Default.
ARTICLE X
THE TRUSTEE
Section 10.1. Certain Duties and Responsibilities of Trustee.
(a) The Trustee accepts the trusts hereby created and agrees to perform the
duties herein required of it upon the terms and conditions hereof. The Trustee agrees that it shall
have the right, power and authority, at all times, to do all things consistent with the express
provisions of this Indenture which it may deem necessary or advisable in order to: (i) enforce the
provisions of this Indenture, (ii) take any action with respect to any Event of Default, (iii)
institute, appear in or defend any suit or other proceeding with respect to an Event of Default, or
(iv) protect the interests of the Registered Owners of any Outstanding Bonds. The Trustee shall
be responsible only for performing those duties of the Trustee specifically provided for herein
and no implied duties or liabilities shall be read into this Indenture against the Trustee or any
successor Trustee.
(b) The permIssIve rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and, except as provided in the next succeeding
35
sentence in respect of the period during the continuance of an Event of Default, the Trustee shall
not be liable for any action reasonably taken or omitted to be taken by it in good faith and
reasonably believed by it to be within the discretion or power conferred upon it hereby, or be
responsible other than for its own negligence or willful misconduct. In case an Event of Default
has occurred and is continuing of which a Responsible Officer of the Trustee has been notified as
provided in Section I 0.3(h) or of which it is deemed to have notice pursuant to such Section, the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise as a prudent man would exercise under the
circumstances in the conduct of his own affairs.
(c) The Trustee shall not be required to give any bond or surety or otherwise
expend its own funds in respect of the execution of its rights and duties under this Indenture.
(d) No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct.
(e) Whether or not therein expressly so provided, every prOVISIOn of this
Indenture 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 10.2. Notice If Default Occurs.
Within forty-five (45) days after the receipt by a Responsible Officer of written notice of
the occurrence of any default hereunder, the Trustee shall give to the parties to the Financing
Documents and the Registered Owners written notice of such default hereunder actually known
to a Responsible Officer of the Trustee, unless such default shall have been cured or waived;
provided, however, that, in the case of a default of the character described in Section 9.1(d), the
Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith
determines that the withholding of such notice is in the interest of the Registered Owners; and
provided, further, that in the case of any default of the character described in Section 9.1(d) no
such notice to Registered Owners shall be given until at least thirty (30) days after the receipt by
a Responsible Officer of written notice of the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default.
Section 10.3. Certain Rights of Trustee and Paying Agent.
Except as otherwise provided in Section 10.1:
(a) Each of the Trustee and the Paying Agent may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution, ordinance, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture
or other paper or document (whether in its original or facsimile f0TI11) believed by it to be
genuine and to have been signed or presented by the proper party or parties;
36
(b) Any request or direction of the Issuer or the Company mentioned herein
shall be sufficiently evidenced by a writing signed by an Issuer Representative or an Authorized
Company Representative and any resolution or ordinance of the Issuer may be sufficiently
evidenced by a copy of such resolution or ordinance certified by an Issuer Representative;
(c) Whenever in the administration of this Indenture the Trustee or Paying
Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee or Paying Agent (unless other evidence is herein
specifically prescribed) may, in good faith, conclusively rely upon a certificate of an Authorized
Company Representative or an Issuer Representative;
(d) The Trustee and the Paying Agent may consult with counsel, engineers or
other experts of its selection and the advice of such counselor any opinion of such counsel 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.
(e) The Trustee and the Paying Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or direction of any of the
Registered Owners pursuant to this Indenture, unless such Registered Owners shall have offered
to the Trustee security or indemnity acceptable to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or direction;
(f) Neither the Trustee nor the Paying Agent shall 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, debenture 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, upon reasonable notice and during regular business
hours, and, subject further to the safety and confidentiality requirements of the Issuer and the
Company, to examine the books, records and premises of the Company and the books and
records of the Issuer conceming the Bonds personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by reason or such
inquiry or investigation;
(g) The Trustee may execute any of the trusts or powers hereunder and
perform any duties hereunder either directly or indirectly, or by, or through, agents or attorneys
and the Trustee shall not be responsible for any misconduct or negligence on the part of any
agent or attorney approved in advance by the Company, which approval shall not be
unreasonably withheld;
(h) The Trustee shall not be required to take notice or be deemed to have
notice of any default or Event of Default hereunder unless a Responsible Officer of the Trustee
shall be specifically notified of such default in writing by the Issuer, the Paying Agent or the
Company or by the Registered Owners of a majority in principal amount of the Outstanding
Bonds, and such notice references the Bonds and this Indenture, and in the absence of such
notice the Trustee may conclusively assume there is no default; provided, however, that the
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Trustee (if it is also the Paying Agent hereunder) shall be required to take and be deemed to have
notice of an Event of Default under Section 9.I(a) and 9.1 (b);
(i) In the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of this Indenture (but
need not confum or investigate the accuracy of mathematical calculations or other facts stated
therein);
U) The Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(k) 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 Registered Owners of a
majority in principal amount of the Outstanding Bonds of any series, 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 this Indenture with respect to the Bonds of
such series;
(1) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; and
(m) The rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indenmified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.
Section 10.4. Not Responsible for Recitals or Issuance of Bonds.
The recitals contained herein and in the Bonds, except the Certificate of Authentication
signed on behalf of the Paying Agent as bond registrar, shall be taken as the statements of the
Issuer, and neither the Trustee nor the Paying Agent assumes responsibility for their correctness.
The Trustee makes no representation as to the validity or sufficiency of this Indenture, except
that the Trustee represents that said Indenture has been duly authorized, executed and delivered
by the Trustee and constitutes a legal, valid and binding obligation of the Trustee in accordance
with the terms hereof, except as its enforceability may be subject to (i) the exercise of judicial
discretion in accordance with general equitable principles and (ii) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of debtors heretofore or
hereafter enacted to the extent that the same may be constitutionally applied. Further, neither the
38
Trustee nor the Paying Agent makes any representations as to the validity or sufficiency of the
Bonds. The Trustee shall not be accountable for the use or application by the Issuer or the
Company of the Bonds or the proceeds thereof or for the compliance with the Investment
Company Act, any state or federal securities laws or the Employee Retirement Insurance
Security Act of 1974.
Section 10.5. Trustee May Deal in Bonds.
The Trustee, in its individual or any other capacity, may become the owner of Bonds and
may otherwise deal with the Issuer or the Company with the same rights it would have if it were
not Trustee.
Section 10.6. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation organized and
doing business as a commercial bank or trust company under the laws of the United States of
America or of any state, authorized under such laws to exercise trust powers, having a combined
capital, surplus and undivided profits of at least $50,000,000, subject to supervision or
examination by federal or state authority. 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 purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus 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 hereinafter specified in this Article.
Section 10.7. Resignation and Removal of Trustee; Appointment of Successor.
(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 10.8.
(b) The Trustee may resign at any time by giving sixty (60) days' written
notice thereof by first-class mail, postage prepaid to the other parties to the Financing
Documents. If an instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within thirty days (30) after the giving of such notice of resignation, the resigning
Trustee may at the expense of the Company petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by the Registered Owners of not
less than a majority in aggregate principal amount of the Outstanding Bonds, by an instrument or
concurrent instruments in writing for removal delivered to the parties to the Financing
Documents. If an instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within thirty (30) days after the giving of such notice of removal, the removed
Trustee may at the expense of the Company petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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(d) Provided that no default has occurred and is continuing hereunder, under
the Lease Agreement or under the Guaranty Agreement, the Trustee may be removed at any time
by the Company, with the consent of the Issuer.
(e) If at any time:
(1) the Trustee shall cease to be eligible under Section 10.6 of this
Indenture or under applicable law and shall fail to resign after written request therefor by
any party to a Financing Document or by a Registered Owner who has been a bona fide
Owner for at least six (6) months, or
(2) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company, Issuer or any Registered Owner who has been a bona fide
Owner for at least six (6) 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.
(f) 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 Issuer, with the prior consent of
the Company, shall promptly appoint a successor Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by the
Owners of a majority in aggregate principal amount of the Outstanding Bonds and notice of
acceptance of such appointment is delivered to the parties to the Financing Documents, 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 Issuer. If no
successor Trustee shall have been so appointed by the Issuer or the Registered Owners and
accepted appointment in the manner hereinafter provided, the Trustee or any Registered Owner
who has been a bona fide Registered Owner for at least six (6) months may, on behalf of himself
and all other Owners similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(g) The Issuer shall give prompt notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written notice of such
event to the Registered Owners, to the parties to the Financing Documents. Each notice shall
include the name of the successor Trustee and the address of its principal corporate trust office.
Section 10.8. Acceptance of Appointment by Successor Trustee.
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the parties to the Financing Documents, including the retiring Trustee, an instrument in writing
accepting such appointment, and thereupon the resignation or removal of the retiring Trustee
40
shall become effective and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its
charges and expenses (including fees and expenses of its counsel), execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property, money
and securities held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such acceptance
such successor Trustee shall be qualified and eligible under this Article, to the extent operative.
Section 10.9. Appointment of Co-Trustee.
It is the purpose of this Indenture that there shall be no violation of any law of any
jurisdiction (including particularly the law of the State) denying or restricting the right of
banking corporations or associations to transact business as trustee in such jurisdiction. It is
recognized that in case of litigation under this Indenture, the Lease Agreement or the Guaranty
Agreement, and in particular in case of the enforcement thereof on default, or in the case the
Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise
any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties,
in trust, as herein granted, or take any action which may be desirable or necessary in connection
therewith, it may be necessary that the Trustee appoint an additional individual or institution as a
separate or co-trustee. The following provisions of this Section are adopted to these ends.
In the event that the Trustee appoints an additional individual or institution as a separate
or co-trustee, each and every remedy, power, right, claim, demand, cause of action, immunity,
estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested
in or conveyed to the Trustee with respect thereto shall be exercisable by, and vest in, such
separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to
exercise such powers, rights and remedies, and only to the extent that the Trustee by the laws of
any jurisdiction (including particularly the State) is incapable of exercising such powers, rights
and remedies and every covenant and obligation necessary to the exercise thereof by such
separate or co-trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer be required by the separate or co-trustee
so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it
such properties, rights, powers, trusts, duties and obligations, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the Issuer; provided, that
if an Event of Default shall have occurred and be continuing, if the Issuer does not execute any
such instrument within fifteen (15) days after request therefor, the Trustee shall be empowered as
an attorney-in-fact for the Issuer to execute any such instrument in the Issuer's name and stead.
In case any separate or co-trustee or a successor to either shall die, become incapable of acting,
resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of
41
such separate or co-trustee, so far as permitted by law, shall vest in, and be exercised by, the
Trustee until the appointment of a new trustee or successor to such separate or co-trustee.
The Trustee shall be entitled to remove any co-trustee so appointed by the Trustee upon
written notice to such co-trustee, the Issuer and the Company.
Section 10.10. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this Article, to the
extent operative, without the execution or filing of any paper or any further act on the part of any
of the parties hereto. Provided, further, the Company shall have the right to replace such Trustee
or Paying Agent in the event of such merger, conversion, consolidation or succession.
Section 10.11. Fees, Charges, Expenses and Indemnification of Trustee.
Pursuant to the provisions of the Lease Agreement, the Trustee shall be entitled to be paid
by the Company such compensation for its services rendered hereunder and to reimbursement for
its actual costs and expenses (including reasonable attorney's fees and expenses) incurred in
connection therewith. The Company agrees to indemnify the Trustee as provided in the Lease
Agreement and such indemnification provisions are expressly incorporated herein.
Section 10.12. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the Company may, at the
option of the Trustee, set forth in writing any action proposed to be taken or omitted by the
Trustee under this Indenture and the date on and/or after which such action shall be taken or such
omission shall be effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three (3) Business Days after the
date any officer of the Company actually receives such application, unless any such officer shall
have consented in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received written instructions in
response to such application specifying the action to be taken or omitted.
ARTICLE Xl
THE PAVING AGENT
Section 11.1. The Paying Agent.
(a) The Issuer hereby appoints The Bank of New York, New York, New
York, as the Issuer's Paying Agent for the Bonds. The Paying Agent shall act in such capacity
42
and as bond registrar, transfer agent, authenticating agent and tender agent. The Paying Agent
shall signify its acceptance of the duties and obligations imposed upon it hereunder by its written
instrument of acceptance addressed to the Issuer and the Company and delivered to the parties
hereto under which the Paying Agent will agree to:
(1) Hold all sums delivered to it by the Trustee or the Company on
behalf of the Issuer for the payment of principal or redemption price of, premium, if any,
and interest on, the Bonds in trust for the benefit of the Registered Owners until such
sums shall be paid to such Registered Owners or otherwise disposed of as herein
provided;
(2) Keep such books and records as shall be consistent with customary
industry practice (including specifically the Register) at its principal office and make the
Register available for inspection upon request by the parties hereto, the Company or any
Registered Owner at all reasonable times.
(b) Except as otherwise provided in this Article:
(1) The Paying Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, ordinance, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or other paper
or document (whether in its original or facsimile form) believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(2) Any request or direction of the Issuer or the Company mentioned
herein shall be sufficiently evidenced by a writing signed by an Issuer Representative or
an Authorized Company Representative and any resolution or ordinance of the Issuer
may be sufficiently evidenced by a copy of such resolution or ordinance certified by an
Issuer Representative;
(3) Whenever in the administration of this Indenture the Paying Agent
shall deem it desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Paying Agent (unless other evidence is herein
specifically prescribed) may, in good faith, conclusively rely upon a certificate of an
Authorized Company Representative or Issuer Representative; and
(4) The recitals contained herein and in the Bonds, except the
Certificate of Authentication signed on behalf of the Paying Agent as bond registrar shall
be taken as the statements of the Issuer, and the Paying Agent assumes no responsibility
for their correctness.
Section 11.2. Paying Agent May Act Through Agents; Answerable Only for
Willful Misconduct or Negligence.
The Paying Agent may execute any powers hereunder and perforn1 any duties required of
it through attomeys, agents, officers, or employees, and shall be entitled to advice of counsel
43
concerning all questions hereunder. The Paying Agent shall not be answerable for the exercise
of any discretion or power under this Indenture, except only its own negligence or willful
misconduct or that of any officer or employee.
Section 11.3. Compensation.
Pursuant to the Lease Agreement, the Company shall pay the Paying Agent compensation
for its services hereunder, including reasonable compensation for all attorneys or agents
reasonably employed by it, and also all its expenses and disbursements.
Section 11.4. Paying Agent May Deal in Bonds.
The Paying Agent may in good faith buy, sell, own, hold and deal in any of the Bonds
and may join in any action which any Registered Owners may be entitled to take with like effect.
The Paying Agent may also engage in, or be interested in, financial or other transactions with the
Company and the Issuer; provided that such transactions are not in conflict with its duties under
this Indenture.
Section 11.5. Removal or Resignation of Paying Agent.
The Issuer, at the direction of the Company, shall discharge the Paying Agent from time
to time and appoint a successor. The Issuer shall also designate a successor if the Paying Agent
resigns or becomes ineligible. The Company may remove the Paying Agent and appoint a
successor by an instrument filed with the Trustee, the Paying Agent and the Issuer. The Paying
Agent may resign by giving at least forty-five (45) days' written notice to the parties hereto, the
Company. No replacement or resignation of the Paying Agent shall be effective until the
successor Paying Agent has accepted the position. If the successor Paying Agent does not
deliver its written acceptance required by this Section 11.5 within thirty (30) days after the
retiring Paying Agent resigns or is removed, the retiring Paying Agent, the Company or the
Registered Owners of a majority in principal amount of the Outstanding Bonds may, at the
expense of the Company, petition any court of competent jurisdiction for the appointment of a
successor Paying Agent. Each successor Paying Agent shall be a bank or trust company having a
capital and surplus of not less than $50,000,000, shall be registered as a transfer agent with the
Securities and Exchange Commission, and shall be capable of performing the duties prescribed
for it herein in New York, New York. The Paying Agent may, but need not, be the same person
as the Trustee. The Trustee shall give notice of the appointment of a successor Paying Agent in
writing to each Registered Owner. The Trustee will promptly certify to the Issuer that it has
mailed such notice to all Registered Owners and such certificate will be conclusive evidence that
such notice was given in the manner required hereby. In the event of the resignation or removal
of the Paying Agent, the Paying Agent shall pay over, assign and deliver any moneys and Bonds,
including unauthenticated Bonds, held by it and the Register maintained by it in such capacity to
its successor who shall hold such Bonds as Paying Agent, and, as required, as tender agent for
the Company.
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Section 11.6. Successor Paying Agents.
(a) Any corporation, association, partnership or firnl which succeeds to the
corporate trust business of the Paying Agent as a whole or substantially as a whole, whether by
sale, merger, consolidation or otherwise, shall thereby become vested with all the property, rights
and powers of such Paying Agent under this Indenture. In case any Bonds shall have been
authenticated, but not delivered, by the Paying Agent then in office, any successor by merger,
conversion or consolidation to such authenticating Paying Agent may adopt such authentication
and deliver the Bonds, so authenticated with the same effect as if such Paying Agent had itself
authenticated such Bonds.
(b) In the event that the Paying Agent shall resign or be removed, or be
dissolved, or if the property or affairs by the Paying Agent shall be taken under the control of any
state or federal court or administrative body because of bankruptcy or insolvency, or for any
other reason, and the Issuer, with the approval of the Company, shall not have appointed its
successor, the Trustee shall be deemed to be Paying Agent for all purposes until a successor is
appointed.
ARTICLE XII
AMENDMENTS AND SUPPLEMENTS
Section 12.1. Amendments and Supplements to Indenture Without Registered
Owners' Consent.
This Indenture may be amended or supplemented from time to time without the consent
of, or notice to, the Registered Owners and with the consent of the Company, by a Supplemental
Indenture entered into by the Issuer and the Trustee, for one or more of the following purposes:
(a) To add additional covenants and agreements of, and limitations and
restrictions upon, the Issuer or to surrender any right or power herein conferred upon the Issuer
which are not contrary to, or inconsistent with, this Indenture as theretofore in effect;
(b) To grant to, or confer or impose upon, the Trustee for the benefit of the
Registered Owners any additional rights, remedies, powers, authority, security, liabilities or
duties which may lawfully be granted, conferred or imposed and which are not contrary to, or
inconsistent with, this Indenture as heretofore in effect;
(c) To cure any ambiguity or omission or to cure, correct or supplement any
defective (whether because of any inconsistency with any other provision hereof or otherwise)
provision of this Indenture in such manner as shall not be inconsistent with this Indenture and
shall not impair the security hereof or adversely affect the Registered Owners;
45
(d) To provide procedures permitting Registered Owners to utilize an
uncertificated system of registration for Bonds or for the issuance of Bonds pursuant to a book
entry system with a securities depository or other entity;
(e) To satisfy the requirements of any rating agency which may from time to
time provide a rating on the Bonds, or in order to obtain or retain such rating on the Bonds as is
deemed necessary by the Company;
(f) To evidence the appointment of a separate Trustee or a co-trustee or to
evidence the succession of a new Trustee hereunder;
(g) To comply with the requirements of the Trust Indenture Act of 1939, as
from time to time amended;
(h) To subject to this Indenture additional revenues, properties or collateral;
(i) To provide for the issuance of coupon bonds (provided, however, that the
Issuer and the Trustee have received an opinion of Bond Counsel to the effect that the issuance of
such coupon bonds complies with all applicable law);
U) To authorize different authorized denominations of the Bonds and to make
correlative amendments and modifications to this Indenture regarding exchangeability of Bonds
of different authorized denominations, redemptions of portions of Bonds of particular authorized
denominations and similar amendments and modifications of a technical nature;
(k) To authorize the issuance of Additional Bonds as permitted by, and upon
compliance with, the provisions of Article III; or
(1) To make any other change which does not adversely affect the rights or
security of the Registered Owners.
The Trustee shall be entitled to receive an opinion of Counsel that any such Supplemental
Indenture entered into by the Issuer and the Trustee complies with the provisions of this Article
XII and the Trustee may conclusively rely upon such opinion.
Section 12.2. Amendments to Indenture with Registered Owners' Consent.
(a) Consent of Majoritv. The Issuer and the Trustee may enter into Indentures
supplemental to this Indenture or amendments to this Indenture modifying, adding to or
eliminating any of the provisions hereof but, if such supplement or amendment is not of the
character described in Section 12.1, only with the consent of the Registered Owners of not less
than a majority of the aggregate principal amount of the Outstanding Bonds, and with the
consent of the Company.
(b) Consent of All Registered Owners. Notwithstanding the foregoing, no
supplement or amendment to this Indenture shall, without the consent of the Registered Owner of
each Outstanding Bond so affected, (i) extend the maturity date of any Bond, or reduce the rate
46
or extend the time of payment of interest thereon, or reduce the principal amount thereof, or
reduce any premium payable upon the redemption thereof, or extend or reduce the amount of any
mandatory redemption requirement or change the method of calculation of interest on the Bonds,
(ii) deprive such Registered Owner of the lien hereof on the Revenues pledged hereunder and on
the Trust Estate, (iii) decrease the amounts of Basic Rent payable by the Company under the
Lease Agreement, (iv) decrease the amounts payable by the Guarantor under the Guaranty
Agreement with respect to its guarantee of the payment of principal of, premium, if any, and
interest on the Bonds, (v) reduce or increase the aggregate principal amount of Bonds the
Registered Owners of which are required to approve any such supplement or amendment to this
Indenture, or (vi) provide a privilege or priority of any Bond over any other Bond.
(c) Effective Date of Amendment. The Trustee shall establish a record date
for purposes of approval of any such amendment or supplement described in subsections (a) and
(b) of this Section 12.2, and shall cause notice of such record date and such proposed amendment
to be given in the sanle manner as notices of redemption are given by the Paying Agent. Such
notice shall be prepared by the Company and shall briefly set forth the nature of the proposed
amendment and shall state that copies thereof are on file at the principal corporate trust office of
the Trustee for inspection by all Registered Owners. If, within sixty (60) days (or such longer
period as shall be prescribed by the Company) following the mailing of such notice, the
Registered Owners of the requisite aggregate principal amount of the Bonds Outstanding at the
time of the record date established for such purpose shall have consented to and approved such
amendment, no Registered Owner of any Bond shall have any right to object to any of the ternlS
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 parties to such amendment from
adopting the same or from taking any action pursuant to the provisions thereof. Upon receipt of
the consent of the Registered Owners of the requisite aggregate principal amount of the Bonds
Outstanding, the Issuer and the Trustee may execute such amendment.
The consent of a Registered Owner shall be evidenced by an instrument executed by such
Registered Owner, delivered to the Trustee, which instrument shall refer to the proposed
amendment described in said notice and shall specifically consent to and approve such
amendment. Any consent given by a Registered Owner as of such record date shall be
irrevocable for a period of six (6) months from the date such consent is given, and shall be
conclusive and binding upon all future Registered Owners ofthe same Bond during such period.
Such consent may be revoked at any time after six (6) months from the date such consent was
given by such Registered Owner or by a successor in title, by filing notice thereof with the
Issuer, the Company and the Trustee, but such revocation shall not be effective if the Registered
Owners of the requisite aggregate principal amount of the Bonds Outstanding have, prior to the
attempted revocation, consented to and approved such amendment.
The Trustee shall be entitled to receive an opinion of Counsel that any such Supplemental
Indenture entered into by the Issuer and the Trustee complies with the provisions of this Article
XII and the Trustee may conclusively rely upon such opinion.
47
Section 12.3. Consents to Supplemental Indentures.
Anything herein to the contrary notwithstanding, a Supplemental Indenture under tllis
Article XII which affects any rights or obligations of the Company or the Paying Agent
hereunder shall not become effective unless and until the affected party or parties shall have
consented to the execution and delivery of such Supplemental Indenture. The Company or the
Paying Agent shall be given prior written notice of the proposed execution and delivery of any
Supplemental Indenture whether or not its rights or obligations are affected. In this regard, the
Trustee shall cause notice of the proposed execution and delivery of any such Supplemental
Indenture together with a copy of the proposed Supplemental Indenture to be mailed by certified
or registered mail to the Company or the Paying Agent at least fifteen (15) days prior to the date
of the mailing of notice of the proposed execution of such Supplemental Indenture as
hereinbefore in Section 12.2 provided. The Company or the Paying Agent shall be deemed to
have consented to the execution and delivery of any such Supplemental Indenture if the
Responsible Officer of the Trustee does not receive at its principal corporate trust office a letter
of protest or objection thereto signed by, or on behalf of, the Company and the Paying Agent on
or before 4:30 p.m., New York City time, of the fifteenth (15th) day after the mailing of said
notice and copy of the proposed Supplemental Indenture.
The Trustee may, but shall not be obligated to, enter into any Supplemental Indenture
which affects the Trustee's own rights, liabilities, duties or immunities under this Indenture or
otherwise.
Section 12.4. Amendments to Lease Agreement and Guaranty Agreement.
The Lease Agreement and Guaranty Agreement may be amended by written agreement of
the Issuer and the Company or Guarantor, as applicable, and with the written consent of the
Trustee and the Paying Agent, but without the consent of or notice to any of the Registered
Owners, as may be required (a) by the provisions of the Lease Agreement, the Guaranty
Agreement or this Indenture, (b) for the purpose of curing any ambiguity or formal defect or
omission or in connection with any other change therein provided no such action is to the
prejudice of the Registered Owners of the Bonds, (c) to secure or maintain ratings on the Bonds
from Moody's and/or S&P, (d) to describe more fully or to amplify or correct the description of
any property leased under the Lease Agreement, (e) to provide for payments of rent under the
Lease Agreement in connection with the issuance of Additional Bonds permitted by, and upon
compliance with, the provisions of Article III, (f) to guarantee under the Guaranty Agreement the
payment of the principal of and interest on any such Additional Bonds permitted to be issued by,
and upon compliance with, the provisions of Article III, or (f) to make any other change which in
the sole determination of the Trustee, based upon an opinion of Bond Counsel, does not
materially adversely affect the Registered Owners; provided, that with respect to any such
amendment the Company provides the Trustee with an opinion of Bond Counsel to the effect that
any such amendment is permitted by applicable law.
Except for the amendments, changes or modifications as provided in the first paragraph
of this Section 12.4, neither the Issuer nor the Company shall enter into any other amendment,
48
change or modification of the Lease Agreement (and the Trustee shall not consent thereto)
without the mailing of notice and the written approval or consent of the Registered Owners of not
less than a majority in aggregate principal anlOunt of the Bonds at the time Outstanding given
and procured as provided in Section 12.2(c); provided that no amendment may be made which
would (a) decrease the amounts of Basic Rent payable under the Lease Agreement or decrease
the amounts payable by the Guarantor under the Guaranty Agreement with respect to its
guarantee of the principal of, premium, if any, and interest on the Bonds; (b) change the date of
payment or prepayment provisions under the Lease Agreement or the Guaranty Agreement; or
(c) change the amendment provisions of the Lease Agreement or the Guaranty Agreement
without the consent of all of the Registered Owners of the Bonds adversely affected thereby.
Section 12.5. Right to Payment.
Notwithstanding any other provisions in this Indenture, the right of the Owner of any
Bond to receive payment of the principal of, and the premium, if any, and interest on, such Bond,
on or after the respective due dates expressed herein, or to institute suit for the enforcement of
any such payment on or after such respective dates, will not be impaired or affected without the
consent of such Owner.
Section 12.6. Execution of Consents.
In executing any consent permitted by this Article the Trustee and the Paying Agent shall
be entitled to receive, and shall be fully protected in conclusively relying upon, an opinion of
Counsel stating that the execution of such consent is authorized or permitted by this Indenture.
The Trustee or the Paying Agent may, but shall not be obligated to, consent to any amendment,
change or modification of the Lease Agreement or Guaranty Agreement which affects the
Trustee's own rights, duties or immunities under this Indenture, Lease Agreement, Guaranty
Agreement or otherwise.
Section 12.7. Amendment to Tax Regulatory Agreement.
The Issuer may, without the consent of the Trustee and without notice to or consent of the
Registered Owners, enter into any amendment or modification of the Tax Regulatory Agreement
upon the delivery to the Trustee of an opinion of Bond Counsel to the effect that the proposed
anlendment or modification will not adversely affect the exclusion from gross income of interest
on the Bonds for Federal income tax purposes.
ARTICLE XIII
DEFEASANCE
Section 13.1. Defeasance.
If the Issuer shall payor cause to be paid, or there shall be otherwise paid or provision for
payment made to or for the Owners of the Bonds the principal, premium, if any, and interest due
or to become due thereon at the times and in the manner stipulated therein, and if the Issuer shall
49
keep, perform and observe all and singular the covenants and promises in the Bonds and in this
Indenture expressed as to be kept, performed and observed by it or on its part, and shall payor
cause to be paid to the Trustee all sums of money due or to become due according to the
provisions hereof, then this Indenture and the lien, rights and interests created hereby shall cease,
determine and become null and void (except as to any surviving rights of payment, registration,
transfer or exchange of Bonds herein provided for), whereupon the Trustee, upon written request
of an Issuer Representative (acting at the direction of the Company), shall cancel and discharge
this Indenture, and execute and deliver to the Issuer such instruments in writing as shall be
requested by an Issuer Representative and requisite to discharge this Indenture, and release,
assign and deliver unto the Issuer any and all the estate, right, title and interest in and to any and
all rights assigned or pledged to the Trustee or otherwise subject to this Indenture, except
amounts in the Bond Fund required to be paid to the Company, under, and in accordance with,
and subject to, Sections 5.7 and 5.9 and except moneys or securities held by the Trustee or the
Paying Agent for the payment of the principal of and premium, if any, and interest on the Bonds.
Section 13.2. Deposit of Funds for Payment of Bonds.
Any Bond or authorized denomination thereof shall be deemed to be paid within the
meaning of this Indenture when (a) payment of the principal of, and premium, if any, on, such
Bond or authorized denomination thereof, plus interest thereon to the due date thereof (whether
such due date is by reason of maturity or upon redemption as provided herein) either (i) shall
have been made or caused to be made in accordance with the terms thereof, (ii) shall have been
provided for by depositing sufficient moneys for such payment with the Trustee and the due date
of such principal, interest and premium, if any, has occurred, or (iii) shall have been provided for
by irrevocably depositing with the Trustee in trust and irrevocably setting aside exclusively for
such payment on such due date (1) funds sufficient to make such payment and/or (2)
Governmental Obligations purchased with funds maturing as to principal and interest in such
amount and at such time as will insure the availability of sufficient moneys to make such
payment, and (b) all necessary and proper fees, compensation and expenses (including legal fees
and expenses) of the Trustee and its counsel pertaining to any such deposit shall have been paid
or the payment thereof provided for to the satisfaction of the Trustee. At such times as a Bond or
authorized denomination thereof shall be deemed to be paid hereunder, as aforesaid, such Bond
or authorized denomination thereof shall no longer be secured by, or entitled to, the benefits of
this Indenture (other than Sections 2.5 and 2.6 in the case of a deposit under clause (a)(iii)
above), except for the purposes of any such payment from such moneys or Governmental
Obligations.
Notwithstanding the foregoing paragraph, in the case of a Bond or authorized
denomination thereof which by its terms may be redeemed prior to the stated maturity thereof, no
deposit under clause (a)(iii) of the immediately preceding paragraph shall be deemed a payment
of such Bond or authorized denomination thereof as aforesaid until: (a) proper notice of
redemption of such Bond or authorized denomination thereof shall have been previously given in
accordance with Article VII or in the event said Bond or authorized denomination thereof is not
to be redeemed within the next succeeding sixty (60) days, until the Company shall have given
the Trustee and the Paying Agent on behalf of the Issuer, in form satisfactory to the Trustee and
50
the Paying Agent, irrevocable instructions to notify, as soon as practicable, the Owner of such
Bond or authorized denomination thereof in accordance with Article VII, that the deposit
required by (a)(iii) above has been made with the Trustee and that said Bond or authorized
denomination thereof is deemed to have been paid in accordance with this Article and stating the
maturity or redemption date upon which moneys are to be available for the payment of the
principal of, and the applicable premium, if any, on, said Bond or authorized denomination
thereof, plus interest thereon to the due date thereof, or (b) the maturity of such Bond or
authorized denomination thereof.
Notwithstanding any provision of any other Article of this Indenture which may be
contrary to the provisions of this Article XIII, all moneys or Governmental Obligations set aside
and held in trust pursuant to the provisions of this Article for the payment of Bonds or authorized
denominations thereof (including interest and premium thereon, if any) shall be applied to and
used solely for the payment of the particular Bonds or authorized denominations thereof
(including interest and premium thereon, if any) with respect to which such moneys and
Govemmental Obligations have been so set aside in trust.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited pursuant to this
Section 13.2 or the principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding Bonds.
Anything in Article XII to the contrary notwithstanding, if moneys or Governmental
Obligations have been deposited or set aside with the Trustee pursuant to this Article for the
payment of Bonds or authorized denominations thereof and the interest and premium, if any,
thereon and such Bonds or authorized denominations thereof and the interest and premium, if
any, thereon shall not have in fact been actually paid in full, no amendment to the provisions of
this Article shall be made without the consent of the Owner of each of the Bonds affected
thereby.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1. Limitations on Recourse.
The Bonds are payable solely from the Revenues pledged hereunder and other moneys
held by the Trustee hereunder for such purpose. The Issuer shall have no liability for any failure
to fulfill, or breach by the Company of, the Company's obligations under the Lease Agreement,
or otherwise, including without limitation the Company's obligation to fulfill the Issuer's
covenants and other obligations under this Indenture.
Section 14.2. No Rights Conferred on Others.
With the exception of rights herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Indenture or the Bonds is intended or shall be construed to give to
51
any person other than the parties hereto, the Company, the Paying Agent and the owners of the
Bonds any legal or equitable right, remedy or claim under or in respect to this Indenture. This
Indenture and all of the covenants, conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto, the owners of the Bonds and the Company as
herein provided.
Section 14.3. Severability.
If any provision of this Indenture shall be held or deemed to be or shall, in fact, be
invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or
provisions hereof or any Constitution or statute or rule of public policy, or for any other reason,
such circumstances shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative or unenforceable to any extent
whatsoever.
Section 14.4. Notices.
Any notice, approval, consent or other communication under this Agreement shall be in
writing and shall be considered given when (1) delivered personally, or (2) mailed by registered
or certified mail, return receipt requested, and receipt has been acknowledged or five (5) days has
elapsed after such mailing or (3) transmitted by telecopy with a confirming copy sent by
ovemight mail or courier service to the parties at the addressed indicated below (or at such other
address as a party may specify by notice to the others pursuant hereto). Notice given by a party's
counsel shall be considered notice given by that party.
(a) to the Company, to:
(b) to the Guarantor, to:
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Attention: Corporate Treasurer
Telecopy No. 203-373-3005
(c) to the Issuer, to:
Augusta, Georgia
c/o Administrator
530 Greene Street
52
Augusta, GA 30906-9600
(d) to the Trustee, to:
The Bank of New York
385 Rifle Camp Road
West Patterson, New Jersey 07424
Attention: Corporate Trust Administration
Telecopy No. 973-357-7840
(e) to the Paying Agent, to:
The Bank of New York
385 Rifle Camp Road
West Patterson, New Jersey 07424
Attention: Corporate Trust Administration
Telecopy No. 973-357-7840
or to such other addresses as may from time to time be furnished to the parties, effective upon the
receipt of notice thereof given as set forth above.
Section 14.5. Notice to Rating Agencies.
The Trustee will promptly notify in writing each Rating Agency then rating the Bonds of
the following events: (a) any change in the Trustee or Paying Agent, (b) any amendment of this
Indenture, (c) any redemption of Bonds pursuant to Article VII or defeasance pursuant to Article
XIII, or (d) any amendment to the Lease Agreement that affects the Company's obligation to
pay Basic Rent and the Guaranty Agreement (other than amendments in respect of its guarantee
of Additional Rent or the provision}relating thereto).
Section 14.6. Holidays.
If the date for making any payment or the last date for performance of any act or the
exercising of any right, as provided in this Indenture, is not a Business Day, such payment may
be made or act performed or right exercised on the next succeeding Business Day with the same
force and effect as if done on the nominal date provided in this Indenture and no interest shall
accrue on the payment so deferred during the intervening period.
Section 14.7. Governing Law.
This Indenture shall be governed, in all respects including validity, interpretation and
effect by, and shall be enforceable in accordance with, the laws of the United States of America
and of the State of Georgia; provided, however, that the rights, privileges, protections,
immunities, benefits and duties of the Trustee and the Paying Agent shall be governed by the
53
ExmBIT A
FORM OF FACE OF BOND
[THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS BOND NOR ANY INTEREST OR PARTICIPATION HEREIN MAYBE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION
UNDER THE SECURITIES ACT OR ANY SUCH STATE SECURITIES LAWS.]
STATE OF GEORGIA
AUGUSTA, GEORGIA
SPECIAL FACILITY AIRPORT REVENUE BONDS
(GARRETT A VIA TION SERVICES PROJECT)
SERIES 2000
[The following legend shall appear so long as the book-entry only system described in
Section 2.11 of the Indenture has not been discontinued.]
THE ISSUER HAS ESTABLISHED A BOOK-ENTRY ONLY SYSTEM OF
REGISTRA TION FOR THIS BOND. EXCEPT AS SPECIFICALL Y PROVIDED
OTHERWISE IN THE INDENTURE, CEDE & CO. WILL BE THE REGISTERED OWNER
AND WILL HOLD THIS BOND ON BEHALF OF THE BENEFICIAL OWNER HEREOF.
BY ACCEPTANCE OF A CONFIRMATION OF PURCHASE, DELIVERY OR TRANSFER,
THE BENEFICIAL OWNER OF THIS BOND SHALL BE DEEMED TO HAVE AGREED TO
SUCH ARRANGEMENT. CEDE & CO., AS REGISTERED OWNER OF THIS BOND, MAY
BE TREATED AS THE OWNER OF IT FOR ALL PURPOSES. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
A-I
Number R-l
Interest Rate
Maturity Date
Dated Date
CUSIP
%
1,
December 1, 2000
Registered Owner:
Principal Amount:
Dollars
($
)
Augusta, Georgia, a political subdivision of the State of Georgia (the Issuer"), for value
received, hereby promises to pay (but only out of the source hereinafter provided) to the
registered owner identified above, or registered assigns as hereinafter provided, on the Maturity
Date identified above unless this Bond shall have been called for redemption prior to maturity
and payment of the redemption price shall have been duly made or provided for, the Principal
Amount identified above, and to pay (but only out of the source hereinafter provided) interest on
the balance of said Principal Amount from time to time remaining unpaid from and including
December _,2000, or from and including the most recent Interest Payment Date (as hereinafter
defined) with respect to which interest has been paid or duly provided for, until payment of said
Principal Amount has been made, at the interest rate per annum shown above (computed on the
basis of a 360-day year consisting of twelve 30-day months) on June 1 and December 1 of each
year (each an "Interest Payment Date") commencing June 1, 2001, until the payment of the
principal amount of this Bond in full. The principal of, redemption price, if any, and interest on,
this Bond are payable in lawful money of the United States of Anlerica at the principal corporate
trust office (the "Principal Office") of The Bank of New York, as Paying Agent, or its successor
(the "Paying Agent"). Payment of interest on any Interest Payment Date shall be made to the
Registered Owner hereof as of the close of business on the Regular Record Date (as defined in
the Indenture) with respect to such Interest Payment Date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF AND SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.
THE BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OF THE
ISSUER NOR A PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER. THE BONDS
SHALL NOT BE PAYABLE FROM OR A CHARGE UPON ANY FUNDS OTHER THAN
THE REVENUES AND AMOUNTS PLEDGED TO THE PAYMENT THEREOF, NOR
SHALL THE ISSUER BE SUBJECT TO ANY PECUNIARY LIABILITY THEREON. NO
OWNER OR OWNERS OF THIS BOND SHALL EVER HAVE THE RIGHT TO COMPEL
ANY EXERCISE OF THE TAXING POWER OF THE ISSUER TO PAY THIS BOND OR
THE INTEREST HEREON, NOR TO ENFORCE PAYMENT OF THIS BOND AGAINST
ANY PROPERTY OF THE ISSUER; NOR SHALL THIS BOND CONSTITUTE A CHARGE,
LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE UPON ANY PROPERTY OF THE
A-2
ISSUER, EXCEPT FOR THE REVENUES AND ANY OTHER FUNDS PLEDGED TO
SECURE THE BONDS.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts and conditions
required to be performed precedent to, and in the execution and delivery of, the Indenture and the
issuance of this Bond have been performed in due time, form and manner as required by law, that
the issuance of this Bond and the issue of which it forms a part does not exceed or violate any
constitutional or statutory limitation, and that payment in full for the Bonds has been received.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Indenture unless and until the certificate of authentication hereon
shall have been duly executed by the Paying Agent.
IN WITNESS WHEREOF, Augusta, Georgia has caused this Bond to be executed by the
manual or facsimile signature of its Mayor and its official corporate seal to be impressed or
imprinted hereon and attested by the manual or facsimile signature of its Clerk.
AUGUSTA, GEORGIA
By:
Mayor
ATTEST:
Clerk
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GE MASTER
IFORM OF REVERSE OF BONDI
This Bond is one of a series of $ in original aggregate principal amount of
revenue bonds designed "Special Facility Airport Revenue Bonds (Garrett Aviation Services
Project), Series 2000 (the "Bonds"), issued by the City pursuant to and in full compliance with
the provisions of the Constitution and laws of the State of Georgia, including specifically, but
without limitation, Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated,
known as the "Revenue Bond Law," as amended, and the Charter of Augusta, Georgia, as
amended. The Bonds have been issued under and are secured by an Indenture of Trust dated
December 1, 2000 (the "Indenture"), between the Issuer and The Bank of New York, as trustee
(the "Trustee") for the purpose of financing the acquisition, expansion, construction and
equipping of airport facilities for lease to GE Engine Services - Corporate Aviation Services, Inc.
d/b/a Garrett Aviation Services (the "Company"), under a Lease Agreement dated , 2000
(the "Lease Agreement"). As further security for the Bonds, the payment of principal of,
premium, if any, and interest on the Bonds are guaranteed by General Electric Company (the
"Guarantor") pursuant to a Corporate Guaranty Agreement dated as of December 1,2000.
The Bonds are all issued under and equally and ratably secured by and entitled to the
benefits of the Indenture, including the security of a pledge and assignment of certain revenues
and receipts derived by the Issuer pursuant to the Lease Agreement, and all receipts of the
Trustee credited under the provisions of the Indenture against such payments, including amounts
realized by the Trustee from repayments by the Company under the Lease Agreement and from
payments by the Guarantor under the Guaranty Agreement, and from any other moneys held by
the Trustee under the Indenture for such purpose, and there shall be no other recourse against the
Issuer or any property now or hereafter owned by it.
This Bond is transferable by the Registered Owner hereof in person or by his attorney
duly authorized in writing at the principal office of the Paying Agent but only in the manner
provided in the Indenture, subject to the (imitations and upon payment of the charges provided in
the Indenture, and upon surrender and cancellation of this Bond.
The Bonds shall be deliverable in the form of registered Bonds without coupons in the
denominations of $5,000 and any whole multiple thereof.
A-4
EXTRAORDINARY OPTIONAL REDEMPTION
The Bonds shall be subject to redemption at the option of the Issuer, at the written
direction of the Company, in whole or in part, at any time as described below from funds
available for such purpose in the Bond Fund, at an Extraordinary Optional Redemption price
equal to 100% of the principal amount thereof, plus accrued interest to the redemption date, if
one or more of the following events shall have occurred:
(1) All or a portion of the Project shall have been danlaged or
destroyed or title to, or the temporary use of, all or a portion of the Project, shall have
been taken under the exercise of the power of eminent domain by any governmental
authority as in each case, in the opinion of the Company, (a) normal operations at the
Project are interrupted, or (b) the restoration of the Project is not economically feasible;
or
(2) As a result of changes in laws or administrative action, the Lease
Agreement becomes void or unenforceable.
SPECIAL MANDA TORY REDEMPTION
The Bonds are subject to a special mandatory redemption prior to maturity as follows:
The Bonds are subject to redemption not later than one-hundred eighty (180) days after
the occurrence of a Determination of Taxability at a redemption price equal to the principal
amount thereof, plus accrued and unpaid interest, if any, to the redemption date. Any such
Special Mandatory Redemption shall be in whole unless it is finally determined that redemption
of a portion of the Bonds Outstanding (as defined in the Indenture) would result in interest
payable on the remaining Bonds Outstanding after any redemption pursuant to this Section being
not includable in the gross income (for Federal income tax purposes) of the owners thereof
(except for any owner who is a "substantial user" of the Project or a "related party" within the
meaning of Section 147(a) of the Code) in which event the Bonds may be redeemed in part, in
such aggregate principal amount as is deemed necessary by such final determination as described
to insure that interest is excluded from gross income for Federal income tax purposes.
If the Trustee receives written notice from any Registered Owner stating that:
(i) the Registered Owner has been notified in writing by the Internal Revenue
Service that it proposes to include the interest on any Bond in the gross income of such
Registered Owner for the reasons stated in the definition of "Determination of Taxability"
set forth herein or any other proceeding has been instituted against such Registered
Owner which may lead to a final determination in the aforesaid definition, and
(ii) such Registered Owner will afford the Company the opportunity to contest
the same, either directly or in the name of the Registered Owner, and until a conclusion of
any appellate review, if sought, and the Trustee is satisfied that such infomlation is
accurate,
A-5
then the Trustee shall promptly give notice thereof to the Company and the Issuer and to the
Registered Owners of the Bonds then Outstanding. The Trustee shall thereafter coordinate any
similar requests or notices it may have received from other Registered Owners and shall keep
informed of the progress of any administrative proceedings or litigation. If a Determination of
Taxability thereafter occurs, the Trustee shall make demand for prepayment of Basic Rent
pursuant to the terms of the Lease Agreement or necessary portion thereof from the Company
and give notice of the Special Mandatory Redemption of the appropriate amount of the Bonds on
the earliest practicable date within the required period of one-hundred eighty (180) days. In
taking any action or making any determination under this Section, the Trustee may conclusively
rely on an opinion of counsel.
"Determination of Taxability" means a final determination (from which no right of appeal
exists) by the Internal Revenue Service or by a court of competent jurisdiction in the United
States (or an opinion of Bond Counsel obtained by, and at the expense of, the Company) that, as
a result of failure by the Company to observe or perform any covenant, condition or agreement
on its part to be observed or performed under the Lease Agreement or the Tax Regulatory
Agreement or as a result of the inaccuracy of any representation or agreement made by the
Company under the Lease Agreement or the Tax Regulatory Agreement, the interest payable on
any Bond is includable (for federal income tax purposes) in the gross income of the owner of
such Bond (other than an owner who is a "substantial user" or "related person" within the
meaning of Section 147(a) of the Code), which final determination (but not any such opinion)
follows proceedings of which the Company has been given written notice in which the Company
has, at its sole expense and to the extent deemed sufficient by the Company, been given an
opportunity to participate, either directly or in the name of the owner of such Bond.
OTHER REDEMPTION PROVISIONS
In the event that fewer than all Bonds subject to redemption are to be redeemed, then the
Paying Agent shall select which Bonds are to be redeemed as provided in the Indenture.
The Paying Agent shall cause notice of any redemption of Bonds to be mailed to the
Registered Owners of all Bonds to be redeemed at their registered addresses at least thirty (30)
days prior to the redemption date in the form required by the Indenture. No defect affecting any
Bond whether in the notice of redemption or mailing thereof (including any failure to mail such
notice) shall affect the validity of the redemption proceedings for any other Bonds.
If payment of the redemption price of the Bonds has been duly provided for on the
redemption date, then interest will cease to accrue and the Registered Owners will have no rights
with respect to such Bonds nor will they be entitled to the benefits of the Indenture except to
receive payment of the redemption price thereof and unpaid interest accrued to the date fixed for
redemption.
DEFAULT PROVISIONS
In case an Event of Default (as defined in the Indenture) shall have occurred, the principal
of all Bonds then Outstanding under the Indenture may become or may be declared due and
A-6
payable prior to their scheduled maturity date, in the manner and with the effect set forth in the
Indenture, upon action by the Trustee, or, in certain circumstances, at the direction of the
Registered Owners of not less than a majority in aggregate principal amount of the Bonds
Outstanding.
GENERAL PROVISIONS
The owner of this Bond shall have no right to enforce the provisions of the Indenture or
to institute action to enforce the covenants therein, or to take any action with respect to any event
of default under the Indenture, or to institute, appear in or defend any suit or other proceedings
with respect thereto, except as provided in the Indenture.
The Issuer, the Trustee and any other agent of the Issuer or the Trustee may treat the
person in whose name this Bond is registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Bond be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary.
If provision is made for the payment of principal of, premium, if any, and interest on, this
Bond in accordance with the Indenture, this Bond shall no longer be deemed Outstanding under
the Indenture, shall cease to be entitled to the benefits of the Indenture and shall thereafter be
payable solely from the funds provided for payment.
Modifications or alterations of the Indenture, or of any supplements thereto, may be made
only to the extent and in the circumstances permitted by the Indenture.
Terms which are used herein as defined terms and which are not otherwise defined shall
have the meanings assigned to them in the Indenture.
A-7
[FORM OF VALIDATION CERTIFICATE]
V ALIDATION CERTIFICATE
State of Georgia )
)
County of Richmond )
The undersigned Clerk of the Superior Court of Richmond County, State of Georgia,
DOES HEREBY CERTIFY that this Bond and the security therefor was validated and
confirmed by the judgment of the Superior Court of Richmond County, on the _ day of
December, 2000, that no intervention or objection was filed opposing the validation of this Bond
and the security therefor, and that no appeal of such judgment of validation has been taken.
IN WITNESS WHEREOF, I have hereunto set my hand and have impressed hereon the
official seal ofthe Superior Court of Richmond County, Georgia.
Clerk Superior Court of
Richmond County, Georgia
(SEAL)
A-8
[FORM OF ASSIGNMENT]
The following abbreviations, when used in the inscription on the face of this Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
UNIT GIFT MIN ACT--
TEN COM
TEN ENT
JT TEN
as tenants in common
as tenants by the entireties
as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT
MIN ACT
(Custodian)
(Cust)
under Uniform Gifts to Minors
(Minor)
Act
(State)
Additional abbreviations may also be used though not in the above list.
A-9
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(Name and Address of Assignee)
the within Bond of the [Issuer] and does hereby irrevocably constitute and appoint
to transfer the said Bond on the books kept for registration thereof with full
power of substitution in the premises.
Dated:
Signature Guaranteed:
Notice: The signature to this assignment must correspond with the name as it appears upon the
face of the within Bond in every particular, without alteration or enlargement or any change
whatever.
Notice: Signature(s) must be guaranteed.
A-I0
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the Indenture.
Date of Authentication:
[PAYING AGENT]
By:
Authorized Signatory
A-II
EXHIBIT B
CONSTRUCTION FUND
CERTIFICATE AND REQUISITION
Date:
Requisition No.
The Bank of New York
385 Rifle Camp Road
West Patterson, New Jersey 07424
Attention: Corporate Trust Administration
Re: Augusta, Georgia Special Facility Airport Revenue Bonds
(Garrett Aviation Services Project), Series 2000
To the Addressee:
This is a requisition in the total amount of $ with respect to the captioned
financing. The names of the persons, firms or corporations to whom payment is due, a brief
description of the services performed and/or materials provided by each and the amount due each
are listed as follows:
(a) Person, Firm or Corporation whom payment is Due:
(see attachment)
(b) Amount Due: $
(c) Brief Description of Services Performed, Materials Provided or purpose for which
the obligation was paid:
The above obligation has been incurred in or about the acqUIsItIon, construction,
expansion, installation and equipping of the Project (as defined in the hereinafter defined
Indenture) in Augusta, Georgia.
The obligations in the total amount above have been incurred for the acquisition,
construction or equipping of the Project, and the san1e are proper charges against the
Construction Fund created under that certain Indenture of Trust dated as of December 1, 2000
(the "Indenture"), between the Augusta, Georgia (the "Issuer"), and you, as trustee, and none of
such obligations have been paid from the Construction Fund (as defined in the Indenture), and
B-1
the bill, invoice or statement of account for each of such obligations, or a copy thereof, IS
attached.
Given this
day of
'-'
GE ENGINE SERVICES -
CORPORATE AVIATION SERVICES, INC.
d/b/a GARRETT AVIATION SERVICES
Authorized Company Representative
Attachments: Supporting Invoices
Schedule I
B-2
SCHEDULE 1
TO
CONSTRUCTION FUND CERTIFICATE REQUISITION
In connection with the aforementioned requisition, the undersigned Authorized Company
Representative hereby certifies as follows:
(1) there has been received no written notice (i) of any lien, right to lien or attachment
upon, or claim affecting the right of any payee to receive payment of, any of the moneys payable
under such requisition to any of the persons, finns, or corporation named therein and (ii) that any
materials, supplies or equipment covered by the requisition are subject to any lien, attachment,
claim or security interest, or if any notice of any such lien, attachment, claim or security interest
has been received, such lien, attachment, claim or security interest has been released or
discharged or will be released or discharged upon payment of the aforementioned requisition;
(2) such requisition contains no items representing payment on account of any percentage
required to be retained at the date of the certificate;
(3) the obligation stated on the requisition has been incurred on or about the Project, each
item is a proper charge against the Construction Fund and the obligation has not been the basis
for a prior requisition which has been paid; and
(4) no default under the Lease Agreement or Event of Default under the Indenture has
occurred which has not been cured or waived or will not be cured or waived as a result of
payment of the requisition and no event exists which, with notice or lapse of time or both
regardless of payment of the requisition, would constitute an event of default.
GE ENGINE SERVICES -
CORPORATE AVIATION SERVICES, INC.
d/b/a GARRETT A VIA TION SERVICES
Authorized Company Representative
B-3
EXHIBIT C
CERTIFICATE OF COMPLETION
The undersigned , as an Authorized Company Representative of GE
Engine Services - Corporate Aviation Services, Inc. d/b/a Garrett Aviation Services (the
"Company"), hereby certifies that, pursuant to that certain Lease Agreement dated as of
1, 2000 (the "Agreement"), between the Company and Augusta, Georgia (the
"Issuer"), that:
(b) the acquisition, construction, expansion and equipping of the Project (as
defined in the Indenture) have been complete substantially in accordance with the Lease
Agreement;
(c) except for amounts retained by , as trustee, for the
Costs ofthe Project not then due and payable, the full Costs of the Project have been paid.
[described unpaid Costs of the Project]
This Certificate is given without prejudice to any rights against third parties which exist
at the date of this Certificate or which may subsequently come into being.
Given this
day of
GE ENGINE SERVICES -
CORPORATE AVIATION SERVICES, INe.
d/b/a GARRETT AVIATION SERVICES
Authorized Company Representative
C-l
STATE OF GEORGIA )
RICHMOND COUNTY)
AMENDMENT TO LEASE AGREEMENTS
DATED JULY 15, 1976 AND OCTOBER 1,1996
AND LEASE AGREEMENT
WHEREAS, a Lease Agreement was made and entered into on July 15,
1976, by and between the Augusta Aviation COnIDlission, an instrumentality of The City
of Augusta, Georgia, and The Garrett Corporation, which Lease Agreement was amended
thereafter to extend the term to December 31, 1997 and to provide for an option to extend
said Lease through December 31, 2007, and for other purposes (hereinafter collectively
referred to as Lease I); and
WHEREAS, The Garrett Corporation by letter dated June 3, 1996
exercised its option to extend the Lease through December 31, 2007, for the rental
amounts set forth in said Lease I; and
WHEREAS, a Lease Agreement was made and entered into as of October
1, 1996, by and between the Augusta Aviation Commission, an instrumentality of the
Augusta-Richmond County Commission, as "Lessor", and UNC/CFC Acquisition
Company d/b/a GARRETT A VIA TION SERVICES, as "Lessee" (hereinafter referred to
as Lease II); and
WHEREAS, UNC/CFC Acquisition d/b/a Garrett Aviation Services
succeeded to the rights and liabilities of The Garrett Corporation; and
WHEREAS, UNC/CFC Acquisition Company has been acquired and
succeeded by GE Engine Services-Corporate Aviation Services, Inc., a Delaware
corporation, which do~s business as Garrett Aviation Services; and
WHEREAS, the Augusta Aviation Commission and Garrett Aviation
Services desire to amend said Lease I and II so as to extend the teml of said Leases; and
WHEREAS, the Augusta Aviation Commission, an instrumentality of the
Augusta-Richmond County Commission, Georgia, as "Lessor" and GE Engine
Services-Corporate Aviation, Inc., d/b/a Garrett Aviation Services, a Delaware
[EXHIB~f ~
11/18/00
corporation, as "Lessee" (hereinafter referred to as "GARRETT" or "Lessee"), desire to
enter into a new lease to provide for the lease and construction of certain additional
improvements on property heretofore leased to Lessee, as hereinafter amended, and to
provide to GARRETT an option and right of first refusal to lease certain other properties;
NOW, THEREFORE, for and in consideration of the promises and the
mutual covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Premises. Lessor, duly authorized, does hereby lease unto Lessee, and the
Lessee does hereby lease and obtain for the purposes herein set forth from the Lessor, for
Lessee's exclusive use, the premises described in Lease I and Lease II and further
described on a survey prepared by , and dated , attached
hereto as Exhibit "A", together with the Hangar Expansion and the Testing Facility to be
constructed on said premises pursuant to this Agreement.
2. Term. Lessor hereby rents, leases and lets unto Lessee, and Lessee hereby
rents and leases from Lessor, for the rental and upon and subject to the terms and
conditions set forth herein, the real property described and set forth on Exhibit "A",
together with all improvements located thereon, the Hangar Expansion and the Testing
Facility to be constructed, and all easements, rights of way and appurtenances pertaining
thereto (collectively, the "Leased Premises") for a term of ten (10) years, through
December 15,2010. This Lease shall create a usufruct only and not an estate for years.
In addition, Lessor hereby grants Lessee the right and option to extend the term of this
lease for an additional period often (10) years ("Extension Term"), such Extension Term,
if exercised, to run from December 16, 2010 through and including December 15, 2020.
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Lessee may exercise its right and option to extend the term for the Extension Term by
giving Lessor written notice not later than June 15,2010. The rent payable during the
Extension Term shall be as provided in Section 5d. below.
3. Hangar Expansion.
a. Lessee, with perrrusslOn of Lessor, constructed in 2000 upon the
Leased Premises an expansion of the hangar as shown and depicted on Exhibit "B"
attached hereto (hereinafter "Hangar Expansion"), at a construction cost of Four Hundred
Fifty Thousand, Six Hundred Ninety-five Dollars ($450,695)
b. On or before December 31, 2000, Lessor shall reimburse Lessee said
sum of Four Hundred Fifty Thousand, Six Hundred Ninety-five Dollars ($450,695).
4. Construction of Test Facility.
a. Lessee shall construct a Testing Facility on the Leased Premises. The
Testing Facility shall consist of a new Turbo Fan Engine Testing Facility, including a
building approximately two hundred twenty-five (225) feet by one hundred (100) feet,
together with ancillary equipment, which design and specifications are hereby approved
as a part of this Agreement and are attached as Exhibit "C" ("Testing Facility").
b. Upon substantial completion of the Testing Facility, Lessor agrees to
reimburse Lessee for all reasonable direct Construction Costs (as hereinafter defined).
Lessor shall reimburse Lessee within thirty (30) days after receipt from Lessee of a
detailed account of such costs of construction and expenses, including any costs of
architectural and engineering fees paid by Lessee, regardless of whether such costs were
paid prior to the date of this Agreement.
c. For purposes of this Paragraph, the terms "costs of construction" and
"Construction Costs" shall include:
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1. all sums paid by the Lessee for labor, materials, utilities,
equipment and equipment rental, permits, licenses, and services utilized or provided in
the construction of the Testing Facility pursuant to above-referenced plans and
specifications; and
11. all sums paid by the Lessor or by Lessee for architectural
and engineering services heretofore or hereafter provided in the design of said Testing
Facility or in connection with supervision of the construction of the same together with
any and all other services reasonably required to be provided by the architect or engineer
employed by Lessee in connection with the construction of said Testing Facility,
including specifically but not exclusively, the solicitation and evaluation of bids for such
construction and the obtaining of the necessary certificate of occupancy; and
111. any other fees and expenses reasonably required to be paid
by Lessee in connection with the completion of construction of said Testing Facility; and
IV. costs incurred or to be incurred by the Augusta Aviation
Commission in arranging for the financing of such improvements.
d. Said Construction Costs, exclusive of interest, shall not exceed Two
Million Six Hundred Thousand and nolI 00 Dollars ($2,600,000.00) without the mutual
written consent of the parties hereto. In the event that Lessee in good faith concludes that
the cost of construction will exceed Two Million Six Hundred Thousand and nolI 00
Dollars ($2,600,000.00), the parties hereto shall confer with the architect and agree upon
reasonable modifications to the plans and specifications which will reduce the
Construction Costs so as to not exceed such maximum limit set forth herein without
unreasonably restricting the ability of the Lessee to utilize said Testing Facility for the
purposes intended by Lessee.
4
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e. The sum of the rental for Lease I and II and the financing of the cost
of the Hangar Expansion and the Construction Costs for the Testing Facility shall be the
basis for the computation of the rental payments to begin January 1, 2001.
5. Rental.
a. Basic Rent. Beginning January 1, 2001, Lessee agrees to pay to the
Trustee under the Indenture of Trust dated as of December 1, 2000 ("Trust Indenhlre") between
Augusta, Georgia and The Bank of New York, as Trustee securing the Special Facility Airport
Revenue Bonds (Garrett Aviation Services Project), Series 2000 (the "Series 2000 Bonds") as
Basic Rent for the Leased Premises a sum equal to:
1. Payments due under the Series 2000 Bonds as and when
such payments come due, payable on June I st and on December 1 st of each year through
December 1st, 2010;
II. The annual fee of the Trustee for the ordinary services of
the Trustee incurred in connection with the Trust Indenture;
lll. The reasonable fees and charges of the Trustee and any
Paying Agent appointed under the Trust Indenture for acting as paying agent as provided
in the Trust Indenture;
IV. The reasonable fees and charges of the Trustee for
extraordinary services rendered by it and extraordinary expenses incurred by it as Trustee
under the Trust Indenture;
v. Any amounts due and payable in the event of an
Extraordinary Optional Redemption or Special Mandatory Redemption as such terms are
defined in the Trust Indenture; and
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VI. All sums necessary to indemnify and save the Trustee harmless against
any liabilities, not arising from the Trustee's own default or gross negligence or bad faith,
which Trustee may incur in the exercise and performance of its rights, powers, trusts, and
duties and obligations hereunder including, without limitation, fees and expenses incurred
in any litigation or the settlement thereof, judgments, penalties, fines, damages,
assessments, indemnities or contributions and reasonable fees and expenses of attorney,
auditors and consultants. b. Additional Rental. Beginning January 1, 2001,
Lessee agrees to pay as Additional Rent to Lessor for the Leased Premises the sum of
1. Twenty-three Thousand, One Hundred Eighty-six and
03/100 Dollars ($23,186.03) per month beginning January 1,2001, which monthly rental
shall continue through December 31, 2005.
II. Twenty-Five Thousand Five Hundred Four and 63/1 00
Dollars ($25,504.63) per month beginning January 1, 2006, which monthly rental shall
continue through December 31, 1010.
c. In addition, upon the closing of the Airport Facility
Revenue Bonds, Lessee shall make a one-time lease payment equal to the amount of the
issuance costs for said bonds in excess of that allowed to be financed under the Internal
Revenue Service Tax Code.
d. If Lessee exercises its right and option to extend the teml
for an additional ten (10) years pursuant to the provisions of Section 2 above, then the
rental payable during such Extension Term shall be as follows:
1. if Lessee elects, and subject 10 all respects to the
agreement, authorization and approval of Lessor to refinance the unpaid principal balance
of the Airport Facility Revenue Bonds issued to finance the original construction of the
Hangar Expansion and Testing Facility as described above (hereinafter together with
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issuance costs called the "Refinanced Indebtedness") through a new refinancing revenue
bond issuance, a sum equal to: (A) the payments of principal and interest on the
Refinanced Indebtedness sufficient to amortize the Refmanced Indebtedness in equal
semi-annual payments over the Extension Term, such Refinanced Indebtedness to bear
interest at the true interest cost at the time of the closing of the financing of the
Refinanced Indebtedness plus twenty-five (25) basis points; plus (B) the sum of Twenty-
Eight Thousand Fifty-Five and 1011 00 Dollars ($28,055.10) per month during the first
through sixth years of the Extension Term and the sum of Thirty Thousand Eight
Hundred Sixty and 611100 Dollars ($30,860.61) per month during the sixth through tenth
years of the Extension Term; plus (C) a one-time lease payment equal to the amount, if
any, of the issuance costs of the Refinanced Indebtedness in excess of that allowed to be
financed under the Internal Revenue Service Tax Code; or,
II. if Lessee elects, or if Lessor does not agree, or IS not
authorized or approved, to refinance the principal balance of the Airport Facility
Revenue Bonds, then: (A) on or before the commencement of the Extension Term,
Lessee shall pay to Lessor a sum equal to the remaining outstanding principal balance of
the Airport Facility Revenue Bonds; and (B) the rental payable during the Extension
Term shall be equal to the fair market rental value of the Leased Premises as of the date
of exercise ("Exercise Date") by Lessee of its option to extend the tenn pursuant to
Section 2 above ("Fair Market Rent"). Fair Market Rent shall be as mutually agreed by
Lessor and Lessee by no later than thirty (30) days after the Exercise Date. If Lessor and
Lessee cannot agree to the Fair Market Rent within the aforesaid thirty day period, then
the Fair Market Rent shall be fixed by appraisal pursuant to the following procedure. In
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the event Lessor and Lessee agree on a Fair Market Rent, such agreement shall be
reduced to a written form and when executed and delivered by both parties will be
binding on Lessor and Lessee. If Lessee has exercised the renewal option pursuant to
Section 2 and no agreement has been reached by the parties with respect to the Fair
Market Rent within thirty (30) days after the Exercise Date, both parties shall appoint an
independent Qualified Appraiser (as defined below) no later than forty (40) days
following the Exercise Date. Each Qualified Appraiser shall arrive at a determination of
Fair Market Rent and submit their determination to Lessor and Lessee within thirty (30)
days after the appointment of the Qualified Appraisers. If only one (1) appraisal is
submitted within the requisite time period, it shall be deemed the Fair Market Rent. If
both appraisals are submitted within such time period, and if the two (2) appraisals so
submitted differ by less than five (5%) percent, the average of the two shall be the Fair
Market Rent. If such appraisals are five (5%) percent or more apart, the two Qualified
Appraisers shall promptly select a third Qualified Appraiser. Within thirty (30) days of
the selection of the third Qualified Appraiser, each Qualified Appraiser shall submit his
or her appraisal of the Fair Market Rent. In the event the third appraisal shall be greater
than the average of the first two (2) appraisals of Lessor and Lessee, then the Fair Market
Rent shall be the average of the two (2) highest appraisals. In the event such third
appraisal shall be lower than the average of the first two (2) appraisals, then the Fair
Market Rent shall be the average of the two (2) lowest appraisals. The Qualified
Appraisers shall submit their final determination to Lessor and Lessee within such thirty
(30) days period, and upon such submission the Fair Market Rent so determined shall be
binding upon Lessor and Lessee. In the event either party fails to name a Qualified
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Appraiser when required hereunder, the Fair Market Rent shall be determined by the
Qualified Appraiser selected by the other party. Each party to this Lease shall pay all
fees of any Qualified Appraiser selected by it and any fees of a third Qualified Appraiser
shall be shared equally by each party hereto. As used herein the term "Qualified
Appraiser" shall refer to an independent MAl appraiser, having not less than ten (10)
years experience appraising commercial and industrial properties in the area where the
Premises are located.
e. Monthly payments shall be made no later than the tenth
(10th) day of the month for the month in which said rental is due.
f. In the event that General Electric Company, as Guarantor
under a Corporate Guaranty Agreement dated December 1, 2000, pays Lessee's
obligations hereunder, the Lessee shall receive a credit against the amount due hereunder
in the amount so paid by the Guarantor, provided that such payment is accompanied by
written notice to the Lessor identifying which payments the Guarantor is making on
behalf of the Lessee.
6. Option to Lease Additional Land.
a. Lessor does hereby grant to Lessee the right to lease an additional
parcel of approximately 10 acres, identified generally by a drawing depicting the area
attached as Exhibit "D", to be specifically identified and described by a survey to be
performed on behalf of GARRETT at GARRETT's expense, with assistance from the
Augusta Aviation Commission, which survey when completed shall be approved by both
GARRETT and the Augusta Aviation Commission and made a part of the Lease
Agreement. Said option shall be for a initial period of two (2) years from the date hereof,
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at an option cost to Lessee of Ten Thousand Dollars ($10,000.00) annually, payable in
advance. The first payment of Ten Thousand Dollars ($10,000.00) shall be due upon
execution of this Agreement, and the second annual payment shall be due one year
thereafter.
b. Upon the expiration of the initial two (2) year option period,
GARRETT shall have the option of reserving a right of first refusal for an additional two
(2) years to lease the property identified in Exhibit "D". Said option shall be at an annual
cost of Ten Thousand Dollars ($10,000.00), payable in advance as above provided. Said
option to reserve a right of first refusal shall expire if not exercised at least three (3)
months before the end of the initial two (2) year option period provided for in
subparagraph (a) above.
c. Each option provided for herein shall be exercised by giving written
notice to the Augusta Aviation Conmlission in writing, as provided in paragraph 26
hereof.
d. The refusal option specified in subparagraph (b) above is granted upon
the express condition that the same shall be void and of no force and effect if Lessor and
Lessee, despite diligent, good faith efforts, do not consummate the leasing of said
property within the two year refusal option period.
e. Lessor agrees that should it desire to lease the identified property to
anyone other than GARRETT and should it receive a bona fide offer acceptable to Lessor
to lease same, before it enters into any lease or contract therefor, will notify Lessee of the
terms and provisions of such offer and does grant to Lessee an option to lease said
property upon the same terms and provisions as such offer might contain. The notice of
an offer and the notice of the exercise of an option shall be in writing as provided in
paragraph 26 hereof. Time shall be of the essence of such option and Lessee must
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exercise any such option within forty-five (45) days of the date of the notice. Should
Lessee exercise its option to lease the addition land, the annual option payments made by
Lessee shall be credited against the rental due from Lessee under this Agreement.
f. Further, GARRETT shall have a right of first refusal during the
term of this Agreement to lease the area currently used by the Augusta Regional Airport
for its maintenance buildings, which is contiguous to the Leased Premises ("Maintenance
Property"), should the Augusta Regional Airport cease to use this area and elect to offer
the area for lease to another party. Lessor agrees, before it enters into any lease or
contract therefor, it will notify Lessee of the terms and provisions of such offer and does
grant to Lessee an option to lease said property upon the same terms and provisions as
such offer might contain. The notice of an offer and the notice of the exercise of an
option shall be in writing and as provided for in paragraph 26 hereof. Time shall be of the
essence of such option and Lessee must exercise any such option within forty-five (45)
days of the date of the notice.
g. At any time after execution of this Agreement, GARRETT shall have
the right, at its expense, to do an environmental assessment of the approximately ten (10)
acres identified in Exhibit liD" and, provided the Augusta Regional Airport has vacated
the Maintenance Property, the Maintenance Property. to enable GARRETT to ascertain
the environmental condition of each of those properties before exercising any of its rights
under this Paragraph 6. Copies of all results of the environmental assessments shall be
furnished by GARRETT to the Augusta Regional Airport Director.
7. Interest: Attorney's Fees. Any Additional Rent or other payment required
to be paid by Lessee to Lessor hereunder, if not paid within 5 days of the due date, shall
bear interest from the date the same becanle due until the date payment is received by
Lessor at the rate of 1.5% per month (18% per annum). If Lessee fails to pay any
Additional Rent or any other payment required to be paid by Lessee to Lessor hereunder
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and the same is collected through the services of an attorney at law, Lessee shall pay to
Lessor attorneys' fees in the amount of 15% of the total amount due from Lessee and all
reasonable expenses of litigation.
8. Utilities. Lessee shall pay all charges for electricity, gas, water, telephone,
sewer service, sewer treatment, telephone and any other communication or utility service
used in or rendered or supplied to the Leased Premises throughout the term of this
Agreement and shall indemnify Lessor and hold it forever harmless against any and all
liability or damages related thereto.
9. Use of the Premises.
a. At all times during the Lease Term, Lessee shall have the right to
conduct a commercial aviation business in upon the premises using the trade names
"AiResearch Aviation Company", "The Garrett Corporation," or any combination
thereof, and any other trade name owned by Lessee, its subsidiaries, or divisions, and for
the following purposes:
b. The sale of aircraft, aircraft parts, supplies and equipment of every
kind and character, and any other items incidental to aviation, except the sale of aviation
fuels, it being expressly understood that no aviation gasoline or turbine fuels shall be
stored or brought upon the Leased Premises for either use or resale by Lessee or its
customers, guests, or patrons, other than fuels purchased from Lessor for Lessee's sole
use (subject to the provisions of Section 10 hereof).
c. The servicing, repair, storage, maintenance, testing, and modification
of aircraft and aircraft parts and aircraft engines owned by Lessee and its customers.
d. The conduct of charter, cargo, and passenger services, provided that
such activities do not result in Lessee being deemed to be or classified as a "Common
Carrier" as defined by the Civil Aeronautics Board.
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e. The conduct of training schools relating to any and all phases of
aviation.
f. Any other activities incidental to Lessee's aviation business.
10. Storage and Sale of Gasoline and Fuels.
a. It is understood and agreed by the parties hereto that Lessor has
reserved unto itself exclusive control of the storage and sale of all aviation gasolines and
fuels on or about Augusta Regional Airport, except as specifically provided for herein.
b. Until such time as the Testing Facility is completed and in use,
GARRETT shall buy fuel from Lessor at Lessor's cost per gallon plus eighty (80~) cents
per gallon.
c. Upon completion of the Testing Facility, fuel for the Testing Facility
shall be sold to GARRETT at Cost to the Augusta Regional Airport, and GARRETT
shall pay to Lessor a fuel flowage fee of eighteen (18~) cents per gallon, to be billed
monthly.
d. "Cost" shall mean the amount the Augusta Regional Airport pays for
the fuel from the distributor, plus applicable tax. In the event that GARRETT produces a
certificate that it is exempt from tax for fuel used in the Testing Facility, no tax shall be
charged to GARRETT. Documentation of the cost of the fuel shall be provided to
GARRETT, upon request.
e. GARRETT shall at its sole expense install a fuel tank on the Leased
Premises for its use solely in connection with the Testing Facility. All such fuel shall
only be used in the Testing Facility and shall not be placed in any aircraft or used for any
other purpose. The following provisions shall govern the sale, delivery, and use of such
fuel, to wit:
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1. All fuel for the Testing Facility shall be delivered by the
distributor directly to GARRETT pursuant to an order for such fuel made solely by
personnel of the Augusta Regional Airport.
11. The Testing Facility tank shall be locked and unlocked by
personnel of the Augusta Regional Airport to insure that only fuel deliveries ordered by
Augusta Regional Airport personnel are placed in the tank;
111. A separate metering device shall be installed at
GARRETT's expense between the tank and all user points, available for reading by
personnel of Augusta Regional Airport at regular intervals, to document the fuel flowing
from the tank to the Test Facility;
IV. GARRETT shall be responsible for all costs related to the
installation and maintenance of the tank and all associated equipment; and
v. The tank shall be of sufficient size (with a minimum size of
10,000 gallons) to allow for the delivery of a full load in addition to whatever minimum
storage might remain in the tank.
f. A handling charge shall be charged to GARRETT for all co-mingled
fuel placed in the tank for the Test Facility, as provided in paragraph (g) hereof.
g. For the defueling and refueling of aircraft and the handling of co-
mingled fuel, GARRETT shall be charged at the rate of $52.00 per hour, to include both
labor and all equipment charges (including fuel for the vehicles and maintenance costs),
billable at one-half hour increments except for after-hours (2200 - 0600 Daily) and
Augusta-Richmond County holidays, which shall be billed at $66.00 per hour with a four
(4) hour minimum, plus thirty (30) minute increments. This charge shall be assessed
each time fuel is being moved, but not sold. This rate shall be increased mmually
beginning in January 2001, and each January thereafter, at three percent (3%) per year.
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h. A work order in substantially the form of Exhibit "F" shall be used to
record the time for which GARRETT will be charged, beginning when a refueling truck
is dispatched to an aircraft on behalf of GARRETT and ending at the time that the
refueling truck leaves the aircraft. A GARRETT representative will sign this work order
and a copy will be provided simultaneously to such representative.
i. A fuel discount/commission program shall be provided for
maintenance customers of GARRETT, GARRETT shall receive no discount/commission
on the first 300,000 gallons of fuel annually, computed on fuel sales for its maintenance
customers processed for payment through a GARRETT work order; thereafter a five
percent (5%) discount/commission until such time as maintenance customers usage
exceeds 500,000 gallons annual usage; and thereafter, the same discount/commission for
such sales for its maintenance customers as Augusta Regional Airport's most favored
base customers.
J. Whenever requested by Lessor or Garrett, a meeting (or schedule of
periodic meetings) of representatives of GARRETT with the Airport Director and Fuel
Subcommittee of the Augusta Aviation Commission shall be held to discuss any
unresolved issues between the parties and to improve communication between the parties.
11. Alterations, Additions and Changes. Lessee shall not, without the prior
written consent of Lessor, which consent shall not unreasonably be withheld or delayed,
make any alterations, changes or additions, structural or otherwise, in or upon any part of
the Leased Premises or erect any exterior signs on the Leased Premises.
12. Repairs and Maintenance. Lessee shall be solely responsible for
maintaining the Leased Premises including specifically but not exclusively the roof,
paving, structures, heating, air conditioning and plumbing and electrical facilities located
therein in good working condition and state of repair at all times during the Lease Term.
At the end of the Lease Term, said Leased Premises shall be returned by Lessee to Lessor
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in the condition they were in on the date of commencement of the lease, fair wear and
tear excepted, including any environnlental remediation which may be required because
of Lessee's activities on the Leased Premises.
13. Title to Equipment and Improvements. It is mutually understood and
agreed that all buildings and structures and all other improvements of a permanent
character now or hereafter constructed or installed upon or included as a part of the
Leased Premises by Lessor or Lessee, including all plumbing, heating, and air
conditioning equipment and other fixtures affixed thereto, shall be and remain the
property of the Lessor and that fee simple title to the same shall be vested in Lessor;
provided, however, all movable equipment, fixtures, and other property brought or
installed upon the Leased Premises by Lessee shall remain the property of the Lessee.
Prior to or within forty-five (45) days after the expiration of the term of this Lease,
Lessee may remove all or any part of its said property from the Leased Premises provided
that the Lessee shall repair and restore any damage to the Leased Premises occasioned by
such removal. If at the expiration of said forty-five (45) days such equipment, fixtures or
other property have not been removed from the Leased Premises, same shall become the
property of Lessor.
14. Inspection by Lessor. Lessor, its authorized officers, employees, agents or
representatives shall have the right to enter upon the Premises to make inspections during
regular business hours when a representative of the Lessee is present, or at any time in
case of an emergency to determine whether Lessee has complied with and is complying
with the terms and conditions of this Agreement; provided, however, that said inspection
shall in no event unduly disrupt or interfere with the operation of Lessee.
15. Rules and Regulations.
a. Lessee agrees that use of the Leased Premises and that its operations in
and upon the Leased Premises shall be conducted in compliance with all local, state and
]6
11/18/00
federal laws, including but not limited to those of, or administered by, the Federal
Aviation Administration or its successor, rules and regulations of the Airport, the
ordinances and Code of Augusta-Richmond County, the rules and regulations of the
Augusta-Richmond County Commission, and all rules and regulations of Lessor. The
Manager of Augusta Regional Airport will at all times be in full and complete charge of
said Airport.
b. Lessee further agrees to endeavor to conduct its business in such a
manner as will develop and maintain the good will and active interest of the general
public.
c. Lessee specifically agrees that its operations shall be conducted in
compliance with all federal, state and local environmental laws, rules and regulations
(collectively, "Environmental Laws"), and agrees to indemnify and hold harmless the
Augusta Aviation Commission, Augusta, Georgia, the Augusta-Richmond County
Commission, and its elected officials, officers, agents, employees and representatives,
from and against any claims, actions, demands or liabilities (collectively, "Liabilities") to
the extent such Liabilities are caused by Lessee's failure to comply with Environmental
Laws. Lessee's obligations hereunder shall include, without limitation, and whether
foreseeable or unforeseeable, all costs of any required repair, cleanup or remediation of
the Leased Premises or the Testing Facility necessary to comply with Environmental
Laws, provided such repair, cleanup or remediation is required because of Lessee's
failure to comply with Environmental Laws.
16. Use of Landing Areas. It is expressly understood and agreed by the
parties hereto that the use of all landing areas at Augusta Regional Airport shall be open
at all times to all persons, firms, and corporations desiring to use same, provided only that
such use shall be in accordance with the rules and regulations of the United States
Govemment, Federal Aviation Administration, the laws of the State of Georgia and the
17
11118/00
rules and regulations of Lessor. Any access to the landing areas from the Leased
Premises shall be provided and maintained by Lessor in accordance with Federal
Aviation Administration standards.
17. Parking. Lessee's employees, patrons, and suppliers shall have the right to
use in common with others the existing public automobile parking areas in the general
vicinity ofthe Lessee's Leased Premises and designated by the Lessor as public parking.
18. No Exclusive Rights. It is understood and agreed by the parties hereto that
nothing herein contained shall be construed to grant or authorize the granting of any
exclusive right within the meaning of Section 303 of the Civil Aeronautics Act, as
amended. In the event of any conflict between the provisions of this paragraph and the
provisions of any other paragraph of this agreement, the terms of this paragraph shall
control.
19. Indemnity; Insurance. (a) Lessee agrees to indemnify and hold harmless
Lessor from any and all claims in any way related to or arising out of any failure of
Lessee to perform its obligations hereunder or related to or arising out of any damage or
injury to property or persons, occurring or allegedly occurring in, on or about the Leased
Premises during the period from the date of this agreement to the end of the Lease Term,
including reasonable attorney's fees and expenses of litigation incurred by Lessor in
connection therewith; provided that Lessee shall not be obligated to indemnify Lessor for
the negligent or intentional acts of Lessor or Lessor's officers, directors, agents,
employees, or contractors. Without limiting the foregoing, Lessee further agrees to
maintain at all times during said period, at Lessee's expense, comprehensive and general
public liability insurance coverage against claims for personal injury, death and/or
property damage occurring in connection with the use and occupancy of the Leased
Premises or arising out of their ownership, improvement, repair or alteration of the
Leased Premises with limits of coverage of not less than $5,000,000.00 for personal
] 8
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injury (including death) and property damage, combined single limit. The foregoing
insurance may be maintained under blanket policies. The indemnity obligations of
Lessee under this Paragraph 19 shall not apply to any claims arising out of or related to
violations of Environmental Laws, Landlord and Tenant hereby acknowledging that such
claims shall only be subject to indemnification under the provisions of Paragraph 15( c)
above.
20. Fire and Other Casualty.
a. Lessee shall purchase and maintain in effect during the term of this
Lease Agreement, and any extension or renewal of this Lease Agreement, policies of
insurance written by a company or companies qualified to do business in the State of
Georgia, providing insurance coverage against fire and extended coverage to all
alterations, modifications and improvements to the Leased Premises, which policies shall
be in an amount equal and sufficient, subject to approval by Lessor, to cover the full
replacement cost of improvements on or to the Leased premises. Lessee shall increase
the insurance coverage in an amount equal and sufficient to cover the replacement cost of
any additional alterations, modifications or improvements on the Leased Premises, in the
event additional alterations, modifications or improvements are made during the term, or
any extension or renewal, of this lease agreement.
b. All policies providing insurance coverage required to be maintained by
Lessee hereunder shall list the Augusta Aviation Commission, Augusta, Georgia, and the
Augusta-Richmond County Commission, Lessee and their officers, agents, members,
employees and successors as named insured, as their interests may appear, and shall be
issued by an insurance carrier or carriers licensed to do business in the State of Georgia
and reasonably acceptable to Lessor. All such policies shall provide that no act or
omission of Lessee or its agents, servants, or employees shall in any way invalidate any
insurance coverage for the other named insured. No insurance policy providing any
19
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Insurance coverage required to be provided by Lessee hereunder shall be cancelable
without at least 15 days advance written notice to Lessor. All insurance required
hereunder may be maintained under blanket policies insuring other facilities of Lessee.
Lessee shall provide Lessor with a certificate of insurance evidencing the foregoing
insurance coverage upon request.
c. The cost of premiums for all policies of insurance required by this
Lease Agreement shall be paid by Lessee.
d. Lessee or its contractor shall furnish builders risk insurance during the
period of construction, as provided in Paragraph 4 hereof, which shall insure the
contractor, Lessor and Lessee, as their interests may appear.
e. If the improvements to be constructed on the Leased Premises shall be
damaged or destroyed by fire or other casualty, the same shall be repaired or replaced
utilizing the proceeds of the insurance coverage required to be maintained by Lessee
under the terms of this Agreement. In the event such damage or destruction renders the
Leased Premises untenable, the rent required to be paid hereunder shall nevertheless
continue to be paid by Lessee without interruption during the period of repair or
replacement.
21. Assignment; Subletting; No Waiver. Lessee shall not, without the prior
written consent of the Lessor, which consent shall not be unreasonably withheld or
delayed, assign this Lease or any interest thereunder, sublet the Leased Premises or any
part thereof or permit the use of the Leased Premises by any party other than Lessee.
Any consent by Lessor hereunder shall apply only to the specific transaction thereby
authorized and shall not be construed as a waiver of the duly of Lessee to obtain from
Lessor consent to any other assignment, subletting or use. In the event Lessor should
grant such consent, all subtenants or assignees shall be liable directly to Lessor for all
obligations of Lessee hereunder, without, however, relieving Lessee from any liability
20
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hereunder. Notwithstanding any provision contained herein to the contrary, Lessee shall
have the right, without first obtaining the consent of Lessor, to assign this Lease to, or
sublet the Leased Premises in one or more subleases to, or permit the use of the Leased
Premises by, any corporation, partnership or other business entity which (directly or
indirectly) controls or is controlled by Lessee or by General Electric Company. For
purposes of the preceding sentence, "control" means that Lessee or General Electric
Company has the power to vote (or direct the voting of) more than fifty percent (50%) of
the voting securities of the entity. Lessee shall provide Lessor with prompt written notice
of any assignment, sublease or use described in the immediately preceding two sentences
and any such assignment, sublease or use shall not release Lessee from its obligations
under this Lease.
22. Right of Entry of Lessor. Lessor reserves the right to enter upon the
Leased Premises at all reasonable times to inspect the property, to perform any work
made necessary by Lessee's default hereunder, to exhibit the property for sale, lease or
for the purpose of obtaining financing.
23. Taxes. Lessee shall pay all personal property taxes which may be
assessed against its equipment, merchandise, or other property located on or about the
Leased Premises and any franchise fees or other taxes or assessments which may be
imposed or assessed against Lessee or its leasehold interest.
24. Default.
a. In addition to all other rights and remedies it may have, Lessor may
immediately terminate, or reenter and attempt to relet without terminating, this Lease
and remove all persons and property from the Lease Premises if Lessee fails to pay Basic
Rent or Additional Rent on the dates such Basic Rent or Additional Rent are due and
payable and such failure remains unremedied for ten (10) days after receiving written
notice from Lessor.
21
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b. In addition to all other rights and remedies it may have, Lessor may
reenter and attempt to relet without terminating, and remove all persons and property
from the Leased Premises, if Lessee (i) fails to observe, perform, or keep any other term,
provision, covenant or condition of Paragraphs 7, 9, 12, 15a., 15c., 20e., and 23 herein
required by Lessee to be observed, kept or performed, for more than thirty (30) days
after Lessee receives written notice of such default or, if such failure cannot reasonably
be cured within thirty days, fails to commence to cure such failure within thirty (30) days
after receiving written notice, or (ii) allows this Lease to be taken under any writ of
execution. In any such event, Lessor may remove such property and store it in a public
warehouse, or elsewhere, for Lessee's account and at Lessee's expense, without service
of notice or resort to legal process, and without being deemed guilty of trespass or
becoming liable for any resulting loss or damage.
c. If Lessor (i) elects to reenter and attempt to relet, or (ii) takes
possession pursuant to legal proceedings or any notice provided by law, it may, from time
to time, make whatever alterations and repairs are required relative to all or part of the
Leased Premises for any term or tern1S (which may extend beyond the term of this lease),
at any rental or rentals, and upon any other terms and conditions lessor deems advisable.
All rentals received by Lessor from each such reletting shall be applied, first, to the
payment of such reletting, including brokerage fee and attorney's fees; third, to the
payment of rent due and payable hereunder. If the rentals received from such reletting
during any month are less than those to be paid during that month by Lessee as
Additional Rent hereunder to Lessee, Lessee shall pay such deficiency to Lessor. Such
deficiency shall be calculated and paid monthly. No such reentry or taking possession of
the Leased premises by Lessor shall be construed to terminate this Lease unless the
termination thereof is ordered by a court of competent jurisdiction. In addition to all other
rights and remedies which Lessor may have at law, in equity or hereunder, Lessor may
22
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recover from Lessee (i) all damages incurred by reason of such breach and (ii)
reasonable attomey's fees. All of the above amounts shall be immediately due and
payable from Lessee to Lessor.
d. Lessee shall pay upon demand all of Lessor's charges and expenses
incurred in recovering all sum due hereunder, or arising out of the breach of any covenant
hereunder or for any other relief against Lessee, including reasonable attorney's fees and
expenses of litigation, the fees of counsel, agents, and others retained by other right and
remedies at law, in equity, or hereunder. If Lessor prevails in any action brought by it
against Lessee for relief hereunder, Lessee shall pay Lessor reasonable attomey's fees
and all court costs.
e. No waiver of any covenant or condition of this Lease or of the breach
thereof shall be deemed to constitute a waiver of any subsequent breach of such covenant
or condition, or to justify or authorize the nonobservance on any other occasion of the
same or any other covenant or condition hereof. No waiver or indulgence granted by
Lessor to Lessee shall be taken as an estoppel against Lessor. Lessor's acceptance of
rent, or its failure to promptly avail itself of any or all of its rights or remedies at any time
while Lessee is in default under any covenant or condition hereof, shall not be construed
as a waiver of such default.
f. Lessor's rights and remedies hereunder shall be deemed to be
cumulative and not exclusive of all other rights and remedies which it may have at law or
in equity (other than its right to terminate tIlis Lease as specifically limited herein), and
Lessor may exercise any such right or remedy at anyone or more times without
impairing its standing to subsequently exercise any other right or remedy.
25. Quiet Enjovment, Ingress and Egress. Lessor covenants and warrants that
Lessee, so long as it shall pay the rentals herein stipulated and shall perform the duties
23
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and obligations herein agreed to be performed by it, shall peaceably and quietly have,
hold and occupy and shall have the exclusive use and enjoyment of the Leased Premises
during the term of this Lease Agreement and any extensions thereof.
26. Notices. All notices, demands, and requests which mayor are required to
be given by either Lessor or Lessee to the other shall be in writing and shall be deemed to
have been properly given when sent postage pre-paid by registered or certified mail (with
retum receipt requested) addressed as follows:
a. If intended for Lessee:
VICE PRESIDENT AND GENERAL MANAGER
GE ENGINE SERVICES--CORPORA TE A VIA TION, INC.
d/b/a GARRETT AVIATION SERVICES
AUGUSTA, GEORGIA 30906-1551.
With a copy to:
GENERAL ELECTRIC COMPANY
3135 EASTON TURNPIKE
FAIRFIELD, CT 06431
A TTENTION: VICE PRESIDENT AND TREASURER
TELECOPY NO. 203-373-3005
If intended for Lessor:
AUGUSTA AVIATION COMMISSION
AUGUSTA REGIONAL AIRPORT
1501 AVIATION WAY
AUGUSTA, GEORGIA 30906-9600
With a copy to:
AUGUSTA, GEORGIA
C/O ADMINISTRATOR
530 GREENE STREET
AUGUSTA, GEORGIA 30911
Either party may change the address and name of addressee to which subsequent notices
are to be sent by notice to the other given as aforesaid.
24
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27. Exculpation: Indemnity. Wherever in this Agreement Lessor's liability is
limited, modified or exculpated or Lessee agrees to indenmify or hold Lessor harmless or
have Lessor named as an additional insured, the tenn Lessor shall mean and include
Augusta, Georgia, the Augusta Aviation Commission, the Augusta-Richmond County
Commission and their members, officers, agents, servants, employees and successors in
office.
28. Covenants Bind and Benefit Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; provided, however, that no one shall
have any benefit or acquire any rights under this Agreement pursuant to any conveyance,
transfer, or assignment in violation of any of its provisions.
29. Governing Law. This Agreement shall be governed and interpreted by the
laws of the state of Georgia.
30. Venue. All claims, disputes and other matters in question between the
Lessor and the Lessee arising out of or relating to the Agreement, or the breach thereof,
shall be decided in the Superior Court of Richmond County, Georgia. The Lessee, by
executing this Agreement, specifically consents to venue in Richmond County and
Waives any right to contest the venue in the Superior Court of Richmond County,
Georgia.
31. Entire Agreement. This Agreement contains the entire agreement of the
parties, and no representations, inducements, promises or agreements, oral or otherwise,
between the parties not embodied herein shall be of any force or effect. No failure of
either party to exercise any power given it hereunder, or to insist upon strict compliance
25
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by either party of any obligations hereunder, and no custom or practice of the parties at
variance with the terms hereof shall constitute a waiver of either party's right to demand
exact compliance with the tem1S hereof.
32. Approval by the Augusta-Richmond County Commission. The Augusta-
Richmond County Commission shall cause this agreement to be executed by its Mayor
for the purpose of acknowledging approval by the Augusta-Richmond County
Commission of said Agreement.
33. Amendment. This Lease may be amended at any time by written
agreement of the Lessor and the Lessee without the prior written consent of any bond
holder or the Trustee so long as the Amendment does not decrease the obligations of the
Lessee to pay Basic Rent under Paragraph 5a. or the amendment is otherwise authorized
by Sectionl2.4 of the Trust Indenture.
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be executed, the day and year first above written.
AUGUSTA, GEORGIA
By: Mayor
ATTEST:
Clerk
AUGUSTA AVIATION COMMISSION
By:
Title:
26
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GE ENGINE SERVICES--CORPORA TE
A VIA TION SERVICES, INC. d/b/a GARRETT
AVIATION SERVICES
By:
As its:
(SEAL)
27
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EXHIBIT LIST
"A" Survey of Area Leased to Garrett Corp.
"B" Hangar Expansion
"C" Design and Specifications for Test Facility
"D" Drawing of 1 0 Acre tract for option
"E" Work Order
28
K&S DRAFT
11.17.00
$
Augusta, Georgia
_ % Special Facility Airport Revenue Bonds
(Garrett Aviation Services Project), Series 2000
PURCHASE CONTRACT
December _,2000
Augusta, Georgia
530 Greene Street
Augusta, Georgia 30911
GE Engine Services - Corporate Aviation, Inc.
d/b/a Garrett Aviation Services
Augusta, Georgia 30906-1551
General Electric Company
31 35 Easton Turnpike
Fairfield, Connecticut 06431
Ladies and Gentlemen:
Salomon Smith Barney Inc. (the "Purchaser"), acting not as a fiduciary or agent for you,
but on behalf of itself, offers to enter into this Purchase Contract with Augusta, Georgia (the
"Issuer"), GE Engine Services - Corporate Aviation, Inc. (d/b/a Garrett Aviation Services), a
Delaware corporation and an indirect wholly-owned subsidiary of General Electric Company
(the "Company"), and General Electric Company, a New York corporation (the "Guarantor"),
which will become binding upon the Issuer, the Company, the Guarantor and the Purchaser upon
your acceptance by execution of this Purchase Contract and its delivery to the Purchaser at or
prior to 5:00 p.m., New York, New York time, on the date hereof. The Purchaser has duly
authorized the execution of this Purchase Contract. Capitalized terms used herein and not
otherwise defined shall have the meanings provided in the Indenture referred to below.
Section 1. Obligations of Purchaser.
Section 1.1. Purchase of Bonds. On the basis of the representations and
agreements contained herein, but subject to the terms and conditions herein set forth, (i) the
Purchaser shall purchase from the Issuer, and the Issuer shall sell to the Purchaser, $
aggregate principal amount of its _% Special Facility Airport Revenue Bonds (Garrett Aviation
Services Project), Series 2000 (the "Bonds"), at a purchase price equal to $ (i.e., the
principal amount of the Bonds, less original issue discount in the amount of $ ), and (ii)
EXHIBIT 3
the Company hereby agrees to pay (A) $ to the Purchaser as an underwriting fee,
and (B) the Purchaser's reasonable expenses and disbursements in acting hereunder as a cost of
issuance of the Bonds. The Bonds shall bear interest at a rate of _ % per annum from the date
of issuance and delivery thereof and shall mature on December 1, 20 I 0, as provided in the Bond
Indenture of Trust, dated as of December 1, 2000 (the "Indenture"), between the Issuer and The
Bank of New York, as trustee (the "Trustee"), pursuant to which the Bonds will be issued. The
proceeds of the sale of the Bonds will be applied by the Issuer to finance the acquisition,
construction and installation of certain airport facilities at Augusta Regional Airport in Augusta,
Georgia, as more fully described in the Indenture and the Lease (hereinafter referred to), and to
pay certain costs in connection therewith, including all or a portion of the costs of issuing the
Bonds. The Issuer will lease the Project to the Company pursuant to a Lease Agreement, dated
, 2000 (the "Lease"), between the Issuer and the Company, pursuant to which the
Company is obligated to pay as rental payments amounts sufficient in time and amount to pay
the principal of and interest due on the Bonds, and certain additional fees and expenses relating
to the Bonds as described in the Lease. As security for the Bonds, the Guarantor will execute
and deliver to the Trustee a Bond Guaranty Agreement, dated as of December 1, 2000 (the
"Guaranty"), whereby the Guarantor will agree to absolutely and unconditionally guarantee to
the Trustee for the benefit of the holders of the Bonds the payment of the principal of, premium,
if any, and interest on the Bonds when due.
In connection with the issuance and delivery of the Bonds, the Issuer, the Company and
the Trustee shall execute and deliver a Tax Regulatory Agreement, dated as of December 1, 2000
(the "Tax Regulatory Agreement"), pursuant to which the Company will make certain
representations, warranties and covenants relating to the Project and the use of the proceeds of
the Bonds. In addition, the Guarantor and the Trustee shall enter into a Continuing Disclosure
Agreement, dated as of December 1, 2000 (the "Disclosure Agreement"), under which the
Guarantor will agree to provide certain annual financial and operating information and notices of
certain material events relating to the Bonds, in order that the Purchaser may comply with the
requirements of Rule 15c2-12 of the Securities and Exchange Commission ("Rule 15c2-12")
promulgated under the Securities Exchange Act of 1934, as amended (the "Securities Exchange
Act"). Execution and delivery of the Tax Regulatory Agreement and the Disclosure Agreement
as aforesaid shall be a condition precedent to the obligations of the Purchase hereunder.
Section 1.2. Representations and Warranties of the Purchaser. The Purchaser
shall offer the Bonds for resale upon the terms and conditions set forth in this Purchase Contract
and the Preliminary Official Statement and the final Official Statement (each as hereinafter
referred to). The Purchaser hereby represents and warrants to and agrees with the Company and
the Issuer that it will not offer or sell any of the Bonds in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof, and that the
Purchaser will take whatever action is required to permit its purchase and resale of the Bonds.
The Purchaser understands that no action has been taken to permit a public offering in any
jurisdiction where action would be required for such purpose.
Section 1.3. Delivery of Bonds. The Issuer will deliver the Bonds to the
Purchaser in the form of one or more global securities in definitive foml at the offices of The
Depository Trust Company ("DTC"), 55 Water Street, New York, New York, against payment of
the purchase price therefor by wire transfer in immediately available funds made at a location to
2
be selected by the Purchaser, the Company and the Issuer at 12:00 noon, New York, New York
time on December _, 2000 or such other date or at such other time or place as the Purchaser,
the Company and the Issuer agree upon; such date and time being hereinafter referred to as the
"Closing Date" and the "Closing," respectively. The Bonds shall be delivered in fully registered
form bearing CUSIP numbers without coupons, registered in the name of Cede & Co., as
nominee for DTC, and interests therein will be held only in book-entry form through DTC,
except in the limited circumstances set forth in the Indenture. The Bonds shall be made available
to the Purchaser at least one business day before the Closing for purposes of inspection, and shall
be left with DTC for safekeeping until release on the Closing Date.
Section 2. Obligations of the Issuer. the Company and the Guarantor.
Section 2.1. Documents to be Delivered. On or prior to the Closing Date, the
Issuer, the Company and the Guarantor shall deliver to the Purchaser:
(a) all available information regarding the Issuer, the Company and the
Guarantor and reasonably requested by the Purchaser to be included in the final Official
Statement (as hereinafter defined) of the Issuer relating to the Bonds and any amendment
or supplement thereto;
(b) executed copies of the Indenture, the Lease, the Guaranty, the Tax
Agreement and the Disclosure Agreement;
(c) certified copies of the ordinance adopted by the Issuer on November 21,
2000, as supplemented by the ordinance adopted by the issuer on December _, 2000
(as supplemented, the "Bond Ordinance"), authorizing the issuance and delivery of the
Bonds and related matters;
(d) a copy of the validation transcript relating to the Bonds;
(e) the opinion of Burnside, Wall, Daniel, Ellison & Revell, Issuer's Counsel;
and
(f) such other documents, certificates and oplillons as are required to be
delivered by the Issuer, the Company and the Guarantor as a condition to the Purchaser's
obligations hereunder as specified in Section 10 hereof.
The Issuer agrees to provide the Purchaser with such reasonable number of additional
copies of the foregoing as the Purchaser shall request.
Section 2.2. Disclosure Documents. The Issuer, the Company and the Guarantor
have caused to be prepared a Preliminary Official Statement, dated November _, 2000 (such
Preliminary Official Statement, including the cover page and all appendices, exhibits, reports and
statements included therein or attached thereto and any amendments and supplements thereto
that may be authorized by the Issuer, the Company and the Guarantor for use with respect to the
Bonds being herein called the "Preliminary Official Statement"), which the Issuer, the Company
and the Guarantor have authorized to be circulated, and the Issuer, the Company and the
Guarantor consent to the use of the Preliminary Official Statement by the Purchaser prior to the
3
date hereof in connection with the offering of the Bonds. The Official Statement with respect to
the Bonds, dated the date hereof (such Official Statement, including the cover page and all
appendices, exhibits, reports and statements included therein or attached thereto and any
amendments and supplements thereto that may be authorized by the Issuer, the Company and the
Guarantor for use with respect to the Bonds being herein called the "Official Statement",
together with the Preliminary Official Statement, the "Disclosure Documents") has been
approved and adopted by the Issuer, and authorized by the Company and the Guarantor. The
Issuer, the Company and the Guarantor hereby consent to the use of copies of the Official
Statement, the Bond Ordinance, the Lease and the Guaranty and other pertinent documents in
connection with the offering and sale of the Bonds.
The Issuer, the Company and the Guarantor agree to provide, or cause to be provided, to
the Purchaser, at the sole expense of the Company, copies of the Official Statement in such
quantities as the Purchaser may reasonably request, but at a minimum in such quantities as may
be necessary for the Purchaser to comply with the requirements of paragraph (b)( 4) of Rule
15c2-12 and the rules of the Municipal Securities Rulemaking Board, within seven business days
hereof and in sufficient time to accompany any confirmation requesting payment from any
customer. Until such time as the Issuer, the Company and the Guarantor have made, or caused to
be made, copies of the Official Statement available to the Purchaser as provided in the preceding
sentence, the Issuer, the Company and the Guarantor agree to furnish, or cause to be furnished, at
the sole expense of the Company, copies of the Preliminary Official Statement in such quantities
as the Purchaser may reasonably request, but at a minimum in such quantities as may be
necessary for the Purchaser to meet its obligations under paragraph (b )(2) of Rule 15c2-12.
Section 3. Representations and Warranties of the Issuer. The Issuer represents and
warrants to and covenants with the Purchaser, the Company and the Guarantor, that:
Section 3.1. Existence; Authority. The Issuer is a municipal corporation of the
State of Georgia created and existing under the Constitution and Laws of the State of Georgia,
and has, and at the Closing Date shall have, full, legal right, power and authority to (i) issue, sell
and deliver the Bonds to the Purchaser as provided herein; (ii) enter into and carry out and
consummate the transactions contemplated by this Purchase Contract, the Indenture, the Lease
and the Tax Regulatory Agreement (collectively, the "Issuer Documents") and the Disclosure
Documents.
Section 3.2. Compliance. The Issuer has complied, and shall at the Closing Date
be in compliance, in all respects, with the Issuer Documents and with all applicable laws of the
State of Georgia.
Section 3.3. Bond Ordinance. The Issuer has duly adopted the Bond Ordinance
at meetings of the members of the Issuer which were called and held pursuant to law and with all
public notice required by law, and pursuant thereto has duly authorized and approved the
Disclosure Documents and has duly authorized and approved the execution and delivery of, and
the performance by the Issuer of, the obligations contained in, the Bonds and the Issue~
Documents.
4
Section 3.4. Disclosure Documents. The Issuer has duly authorized and
approved the execution and delivery of this Purchase Contract and the use by the Purchaser of
the Disclosure Documents. The Purchaser is hereby authorized to distribute copies of the
Disclosure Documents to prospective purchasers and investors in connection with the offering
and sale of the Bonds.
Section 3.5. Issuer's Information. The information set forth in the Disclosure
Documents relating to the Issuer under the headings "THE ISSUER" and "LITIGA nON - The
Issuer" did not, and the information set forth in the Disclosure Documents under such headings,
as of the date of the Closing will not, contain an untrue statement of a material fact or omit to
state a material fact necessary to be stated therein, or necessary to make the statements made
therein, in light of the circumstances under which they were made, not misleading; provided,
however, that none of the representations and warranties of the Issuer in this Purchase Contract
shall apply to statements in or omissions from the Disclosure Documents made in reliance upon
and in conformity with information furnished to the Issuer by or on behalf of the Company, the
Guarantor or the Purchaser.
Section 3.6. Supplemental Disclosure. The Issuer shall advise the Purchaser
promptly of any proposal by the Issuer to amend or supplement the Disclosure Documents or any
part thereof. If at any time from the date hereof until thirty (30) days after the Closing Date an
event occurs as a result of which, in the opinion of the Purchaser, the Disclosure Documents as
then amended or supplemented would contain an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein contained, in the light of
the circumstances under which they were made, not misleading, the Issuer shall supply to the
Company and the Purchaser any information necessary to correct such statement or omission.
Section 3.7. Copies of Disclosure Documents. The Issuer shall cooperate with
the Company in causing to be furnished to the Purchaser, as soon as available, copies of the
Disclosure Documents and all amendments and supplements thereto, in such quantities as the
Purchaser may reasonably request; provided, however, that the Issuer's expenses in connection
with the printing of such documents shall be paid by the Company.
Section 3.8. Litigation. To the Issuer's best knowledge after due inquiry and
other than as disclosed in the Disclosure Documents, no litigation is pending or threatened in any
court in any way affecting the existence of the Issuer or the titles of its officers to their respective
offices, or seeking to restrain or to enjoin the issuance or delivery of the Bonds, or affecting the
collection of receipts or assets of the Issuer pledged or to be pledged to pay the principal of and
interest on the Bonds or the pledge thereof, or in any way contesting or affecting the validity or
enforceability of the Bonds or the Issuer Documents, or contesting the powers of the Issuer with
respect to the Bonds or the Issuer Documents.
Section 3.9. Issuer Documents. The Bonds have been duly authorized and, when
issued, delivered, and paid for as provided herein and in the Indenture, and when duly
authenticated by the Trustee, will have been duly issued and will constitute valid and binding
limited obligations of the Issuer enforceable in accordance with their terms and entitled to the
benefits and security of the Indenture and the Lease, and this Purchase Contract is and, when
executed and delivered, the Indenture, the Tax Regulatory Agreement and the Lease will be,
5
assuming the due and valid authorization, execution and delivery of such documents by the other
parties thereto, the legal, valid and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their respective terms (subject in each instance to any applicable
bankruptcy, reorganization, insolvency, moratorium or other law or laws affecting the
enforcement of creditors' rights generally or relating to a public body such as the Issuer as from
time to time in effect and further subject to the availability of applicable equitable principles and
to the qualification that enforcement of the indemnification provisions of this Purchase Contract
may be limited by federal or state securities laws).
Section 3.1 O. Pledge of Revenues. The Issuer has, and at the Closing will have,
full legal right, power and authority to pledge and assign all its right, title and interest in the
rental payments to be made by the Company to the Issuer under the Lease (except such payments
under the Lease as have been specifically reserved by the Issuer under the terms of the
Indenture).
Section 3.11. No Default. The Issuer has not been in default in the payment of
principal of, premium, if any, or interest on, or otherwise been in default with respect to, any
bonds, notes or other obligations which it has issued, assumed or guaranteed as to payment of
principal, premium, if any, or interest.
Section 4. Covenants of the Issuer. The Issuer covenants with the Purchaser, the
Company and the Guarantor that:
Section 4.1. Qualification for Sale. The Issuer will furnish such information,
execute such instruments and take such other action (except payment of any filing or other fees
or expenses) in cooperation with the Purchaser as the Purchaser may reasonably request to
qualify the Bonds for offer and sale in a public offering, as contemplated hereby, under the blue
sky or other securities laws and regulations of such states and other jurisdictions of the United
States as the Purchaser may designate; provided, however, that the Issuer shall not be required to
register as a dealer or broker or a foreign corporation in any such state or jurisdiction, nor
execute a general consent to service of process or qualify to do business in connection with any
such qualification of the Bonds for sale in any jurisdiction.
Section 4.2. Tax Exemption. The Issuer shall refrain from taking any action or
omitting to take any action that results in the loss of the status of the interest on the Bonds as
excludable from gross income for purposes of Federal income tax.
Section 5. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser and the Issuer that:
Section 5.1. Existence; Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware and is
duly qualified to transact business as a foreign corporation in the State of Georgia. The
Company has full corporate power and authority to lease the Project from the Issuer and to carry
on its business with respect to the Project as currently contemplated.
Section 5.2. Company Agreements. The Company has full corporate power and
authority to execute, deliver and perform its obligations under the Lease, the Tax Regulatory
6
Agreement and this Purchase Contract (collectively referred to herein as the "Company
Agreements"). This Purchase Contract has been duly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting
the rights of creditors generally and by principles of equity, and except as rights to indemnity
may be limited by principles of public policy or applicable securities laws. On or prior to the
Closing Date, the Lease and the Tax Regulatory Agreement shall have been duly authorized,
executed and delivered by the Company and, as of the Closing Date, shall be valid and binding
obligations of the Company enforceable against the Company in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting the rights of creditors
generally and by principles of equity, and except as rights to indemnity may be limited by
principles of public policy or applicable securities laws.
Section 5.3. No Conflict with Material Obligations. The execution, delivery and
performance of the Company Agreements and compliance with the provisions thereof by the
Company will not conflict with, or constitute a breach by the Company or a default by the
Company of, the organizational documents of the Company or any material indenture, mortgage,
deed of trust, note, lease, commitment or other material agreement or material obligation
applicable to, or binding upon, the Company or its material properties.
Section 5.4. Litigation. Other than as disclosed in the Disclosure Documents,
there is no action, suit, proceeding, inquiry or investigation before or by any court, governmental
or public entity pending or, to the best knowledge of the Company, threatened against or
affecting the Company or its properties which (i) affects or seeks to prohibit, restrain or enjoin
the issuance, sale or delivery of the Bonds, the use of the Disclosure Documents or the execution
and delivery by the Company of the Company Agreements, (ii) affects or questions the validity
or enforceability of the Bonds or the Company Agreements, or (iii) questions the completeness
or accuracy of the Disclosure Documents.
Section 5.5. Disclosure Documents. The Information contained in each
Disclosure Document (other than the information contained under the headings "BOOK-ENTRY
ONL Y SYSTEM", "THE ISSUER", "LITIGATION - The Issuer", "UNDERWRITING" and
"TAX MA TIERS" (but only as to statements contained under such headings that relate to a
party other than the Company)), as of its date and as of the Closing, did not and does not contain
any untrue statement of a material fact or omit to state any material fact which is necessary in
order to make the statements contained therein, in light of the circumstances under which they
were made, not misleading.
Section 6. Covenants of the Company. The Company also covenants with the Issuer and
the Purchaser that:
Section 6.1. Proceeds. It will not apply the proceeds of the Bonds in a marmer
contrary to the requirements of the Indenture and the Tax Regulatory Agreement.
7
Section 6.2. No Acquired Bonds. Neither the Company nor any affiliate thereof
has acquired or shall acquire, pursuant to any arrangement, formal or informal, any of the Bonds
except as provided in the Indenture.
Section 6.3. Supplemental Disclosure. If at any time between the date of this
Purchase Contract and the date which is thirty (30) days following the Closing Date, any event of
which the Company has knowledge occurs as a result of which the Disclosure Documents as
then in effect would include any untrue or misleading statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading, the Company shall
promptly notify the Purchaser. In addition, the Company shall promptly advise the Purchaser of
the institution against the Company of any action, suit, proceeding, inquiry or investigation
seeking to prohibit, restrain or otherwise affect the use of the Disclosure Documents in
connection with the offering, sale or distribution of the Bonds. If, in the reasonable opinion of
the Company, such event requires an amendment or supplement to the Disclosure Documents,
there will be prepared an amendment or supplement to the Official Statement in a form and in a
manner acceptable to the Purchaser and the Company, and the Company shall pay the reasonable
costs of such amendment or supplement.
Section 6.4. Tax Exemption. The Company shall refrain from taking any action
or omitting to take any action that results in the loss of the status of the interest in the Bonds as
excludable from gross income for purposes of Federal income tax.
Section 7. Representations and Warranties of the Guarantor. The Guarantor represents
and warrants to the Purchaser and the Issuer that:
Section 7.1. Existence; Authority. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of New York and the
Guarantor is duly qualified to transact business as a foreign corporation in the State of Georgia.
Section 7.2. Guarantor Agreements. The Guarantor has full corporate power and
authority to execute, deliver and perform its obligations under the Guaranty and this Purchase
Contract (collectively referred to herein as the "Guarantor Agreements"). This Purchase
Contract has been duly authorized, executed and delivered by the Guarantor and is a valid and
binding obligation of the Guarantor enforceable against the Guarantor in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting the rights of creditors
generally and by principles of equity, and except as rights to indemnity may be limited by
principles of public policy or applicable securities laws. On or prior to the Closing Date, the
Guaranty shall have been duly authorized, executed and delivered by the Guarantor and, as of the
Closing Date, shall be a valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting
the rights of creditors generally and by principles of equity, and except as rights to indemnity
may be limited by principles of public policy or applicable securities laws.
Section 7.3. No Conflict with Material Obligations. The execution, delivery and
performance of the Guarantor Agreements and compliance with the provisions thereof by the
8
Guarantor will not conflict with, or constitute a breach by the Guarantor or a default by the
Guarantor of, the Restated Certificate of Incorporation, as amended, or By-Laws, as amended, of
the Guarantor or any material indenture, mortgage, deed of trust, note, lease, commitment or
other material agreement or material obligation applicable to, or binding upon the Guarantor or
its material properties.
Section 7.4. Litigation. Other than as disclosed in the Disclosure Documents,
there is no action, suit, proceeding, inquiry or investigation before or by any court, governmental
or public entity pending or, to the best knowledge of the Guarantor, threatened against or
affecting the Guarantor or its properties which (i) affects or seeks to prohibit, restrain or enjoin
the issuance, sale or delivery of the Bonds, the use of the Disclosure Documents or the execution
and delivery by the Guarantor of the Guarantor Agreements; (ii) affects or questions the validity
or enforceability of the Bonds or the Guarantor Agreements; or (iii) questions the completeness
or accuracy of the Disclosure Documents.
Section 7.5. Disclosure Documents. The information contained in each
Disclosure Document (other than the information contained under the headings "BOOK-ENTRY
ONL Y SYSTEM," "THE ISSUER," "LITIGATION - The Issuer," "UNDERWRITING" and
"TAX MA TIERS" (but only as to statements contained under such headings that relate to a
party other than the Guarantor)), as of its date and as of the Closing, did not and does not contain
any untrue statement of a material fact or omit to state any material fact which is necessary in
order to make the statements contained therein, in light of the circumstances under which they
were made, not misleading.
Section 8. Covenants of the Guarantor. The Guarantor also covenants with the Issuer
and the Purchaser that:
Section 8.1. No Acquired Bonds. Neither the Guarantor nor any affiliate thereof
has acquired or shall acquire, pursuant to any arrangement, formal or informal, any of the Bonds
except as provided in the Indenture.
Section 8.2. Supplemental Disclosure. If at any time between the date of this
Purchase Contract and the date which is thirty (30) days following the Closing Date, any event of
which the Guarantor has knowledge occurs as a result of which the Disclosure Documents as
then in effect would include any untrue or misleading statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading, the Guarantor shall
promptly notify the Purchaser. In addition, the Guarantor shall promptly advise the Purchaser of
the institution against the Guarantor of any action, suit, proceeding, inquiry or investigation
seeking to prohibit, restrain or otherwise affect the use of the Disclosure Documents in
connection with the offering, sale or distribution of the Bonds. If, in the reasonable opinion of
the Guarantor, such event requires an amendment or supplement to the Disclosure Documents,
there will be prepared an amendment or supplement to the Disclosure Documents in a form and
in a manner reasonably acceptable to the Purchaser and the Guarantor, and the Guarantor shall
pay the reasonable costs of such amendment or supplement.
9
Section 8.3. Tax Exemption. The Guarantor shall refrain from taking any action
or omitting to take any action that results in the loss of the status of the interest on the Bonds as
excludable from gross income for purposes of Federal income tax.
Section 9. Termination.
Section 9.1. Termination bv Purchaser. The Purchaser may terminate its
obligations hereunder by written notice to the Issuer, the Guarantor and the Company delivered
on or prior to the Closing Date if at any time subsequent to the date hereof and on or prior to the
Closing Date:
(a) Any event shall have occurred or shall exist which, in the reasonable
judgment of the Purchaser, makes or has made untrue or incorrect in any material respect
any statement or information contained in the Disclosure Documents or is not or was not
reflected in the Disclosure Documents but should be or should have been reflected
therein in order to make the statements or information contained therein not misleading in
any material respect; or
(b) In the reasonable judgment of the Purchaser, it is impractical or
inadvisable for the Purchaser to market or sell or enforce agreements to sell Bonds
because (i) trading in securities generally shall have been suspended on the New York
Stock Exchange, Inc., or a general banking moratorium shall have been established by
federal, New York or State of Georgia authorities, or (ii) the State of Georgia shall have
taken any action, whether administrative, legislative, judicial or otherwise which
materially and adversely affects the Purchaser's ability to market or sell the Bonds, or
(iii) a war involving the United States or other national calamity shall have occurred; or
(c) Legislation shall be enacted or any action shall be taken by the Securities
and Exchange Commission which, in the opinion of counsel to the Purchaser, has the
effect of requiring the offer or sale of the Bonds to be registered under the Securities Act,
or any other "security" (as defined in the Securities Act) issued in connection with or as
part of the issuance of the Bonds to be so registered or the Indenture to be qualified as an
indenture under the Trust Indenture Act of 1939, as amended; or
(d) A change in law or regulation or judicial determination eliminating the
exclusion from gross income of interest on the Bonds.
Section 9.2. Termination by Issuer or Purchaser. The Issuer or the Purchaser
shall have the right to cancel the agreement herein to sell, deliver, purchase and receive the
Bonds by notifying the other and the Company and the Guarantor in writing of their intention to
do so if, prior to the Closing Date, a change in existing federal law shall have occurred which
causes Bond Counsel to be unable to render the opinions required by Section 10.2 as to any
matter material to the issuance, delivery, purchase and sale of the Bonds as contemplated by this
Purchase Contract in form and substance satisfactory to the Issuer and the Purchaser.
Section 10. Conditions to Closing. The obligation of the Purchaser to purchase and pay
for the Bonds is subject to the accuracy of the representations and warranties of the Issuer, the
Guarantor and the Company herein as of the date hereof and as of the Closing Date, to the
10
accuracy of statements to be made on behalf of the Issuer, the Guarantor and the Company
hereunder, to the payment of the underwriting fee specified in Section 1 hereof, and to the
performance by the Issuer, the Guarantor and the Company of their obligations hereunder. The
obligation of the Purchaser to purchase and pay for the Bonds and the obligation of the Issuer to
issue and sell the Bonds are subject to the following additional conditions:
Section 10.1. Documents. At the time of Closing, the Issuer Documents, the
Guarantor Agreements and the Company Agreements and all official action of the Issuer, the
Guarantor and the Company relating thereto, shall be in full force and effect and shall not have
been amended, modified or supplemented, except as may have been agreed to in writing by the
Purchaser.
Section 10.2. Opinion of Bond Counsel. At the time of Closing, the Issuer shall
receive the approving opinion of Hunton & Williams, Bond Counsel, dated the Closing Date, in
substantially the form attached as Appendix B to the Official Statement, and a supplemental
opinion of Bond Counsel, dated the Closing Date, in form and substance satisfactory to the
Purchaser and its counsel.
Section 10.3. Trustee Certification. At the time of Closing, the Purchaser shall
receive a certificate of the Trustee, dated the Closing Date and signed by an authorized signatory
of the Trustee, in form and substance satisfactory to counsel to the Purchaser and to the
Purchaser.
Section 10.4. Issuer Certification. At the time of Closing, the Purchaser shall
receive a certificate, dated the Closing Date and signed by an appropriate official ofthe Issuer, in
form and substance satisfactory to counsel to the Purchaser and to the Purchaser.
Section 10.5. Ratings. At the time of Closing, the Purchaser shall have received
written evidence satisfactory to the Purchaser that Moody's Investors Service, Inc. has issued a
rating of "Aaa" on the Bonds and that Standard & Poor's Ratings Group has issued a rating of
"AAA" on the Bonds, and such ratings shall be in effect on the Closing Date.
Section 10.6. Opinion of Company's Counsel. At the time of Closing, the
Purchaser shall receive an opinion of Dewey Ballantine LLP, counsel to the Company, dated the
Closing Date, in form and substance satisfactory to counsel to the Purchaser and to the
Purchaser.
Section 10.7. Opinion of Guarantor's Counsel. At the time of Closing, the
Purchaser shall receive an opinion of counsel to the Guarantor, dated the Closing Date, in form
and substance satisfactory to counsel to the Purchaser and to the Purchaser.
Section 10.8. Opinion of Purchaser's Counsel. At the time of Closing, the.
Purchaser shall receive an opinion of King & Spalding, counsel to the Purchaser, dated the
Closing Date, passing upon such matters for the Purchaser as it shall reasonably request (in
rendering such opinion, such counsel may assume the conclusions contained in the opinions of
Bond Counsel, counsel to the Issuer, counsel to the Company and counsel to the Guarantor are
correct).
11
Section 10.9. Additional Requirements. At the time of Closing, the Issuer, the
Company, the Guarantor and the Trustee shall furnish such additional legal opinions, certificates,
instruments and other documents as Bond Counselor counsel to the Purchaser may reasonably
request to evidence (i) compliance with legal requirements, (ii) the truth and accuracy, as of the
date hereof and as of the date of the Closing, of the representations and warranties contained
herein and of the statements and information contained in the Disclosure Documents, and (iii)
the due performance or satisfaction on or prior to the Closing Date of all agreements then to be
performed and all conditions then to be satisfied.
All the opinions, letters, certificates, instruments and other documents mentioned above
or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance reasonably satisfactory to the Purchaser and
the Issuer, and the Purchaser and the Issuer shall have the right to waive any condition set forth
in this Section 10, but such waiver by one party shall not constitute a waiver by the other party.
If any of the conditions to the obligations of the Purchaser contained in this Purchase Contract
shall not have been satisfied when and as required herein, all obligations of the Purchaser
hereunder may be terminated by the Purchaser at, or at any time prior to, the Closing Date by
written notice to the Issuer and the Company.
Section 11. Indemnification.
Section 11.1. Indemnification by the Company and the Guarantor. The
Company and the Guarantor, jointly and severally, agree to indemnify and hold harmless the
Issuer and the Purchaser, their respective members, officers, directors, employees and agents and
each person who controls the Issuer or the Purchaser within the meaning of the Securities Act or
the Securities Exchange Act (collectively, the "Securities Acts"), against any and all losses,
claims, damages, liabilities, costs and expenses (including without limitation reasonable fees and
disbursements of counsel) incurred by them or any of them in connection with any suit, action or
proceeding, joint or several, to which they may become subject under the Securities Acts, or any
other federal or state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities, costs and expenses (or any suit, action or proceeding in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained Disclosure Documents or in any amendment or supplement thereto
(except if such losses, claims, damages, liabilities, costs and expenses are caused by any such
untrue statement or alleged untrue statement of material fact contained under any of the headings
"THE ISSUER", "TAX MATTERS", "LITIGATION - The Issuer" or "UNDERWRITING" (but
only as to the statements contained under such headings that relate to a party other than the
Company or the Guarantor)), or (ii) the omission or alleged omission to state in the Disclosure
Documents or in any amendment or supplement thereto a fact required to be stated therein or
necessary to make the statements therein, in the light ofthe circumstances under which they were
made, not misleading (except if such losses, claims, damages, liabilities, costs and expenses are
caused by any such omission or alleged omission of material fact contained under any of the
headings "THE ISSUER", "TAX MATTERS", "LITIGATION The Issuer" or
"UNDERWRITING" (but only as to the statements contained under such headings that relate to
a party other than the Company or the Guarantor)); provided, however, (1) that the foregoing
indemnities shall not inure to the benefit of the Purchaser, its members, officers, directors,
employees or agents, or to the benefit of any person controlling the Purchaser, if a copy of the
12
Disclosure Documents was not sent or given by, or on behalf of, such Purchaser to such person
asserting any losses, claims, damages, liabilities, costs and expenses otherwise covered by this
Section at or prior to the written confirmation of the sale by the Purchaser to such person, and if
the Disclosure Documents would have cured the defect giving rise to such loss, claim, damage,
liability, cost and expense, and (2) neither the Company nor the Guarantor shall have any
liability hereunder for any losses, claims, damages, liabilities, costs or expenses resulting from a
breach by the Purchaser or the Issuer of this Purchase Contract or from the negligence or willful
misconduct of the party seeking indenmification. This indemnity agreement shall be in addition
to any liability which the Company and the Guarantor may otherwise have.
Section 11.2. Indenmification by Purchaser. The Purchaser shall indemnify and
hold harmless the Company and the Guarantor, its respective members, officers, directors,
employees and agents and each person who controls the Company and the Guarantor within the
meaning of the Securities Acts, to the same extent as the foregoing indemnity from the Company
and the Guarantor to the Purchaser in the preceding paragraph but only with reference to
statements contained in the Disclosure Documents under the caption "UNDERWRITING" or
any other written information about the Purchaser furnished to the Issuer by, or on behalf of, the
Purchaser specifically for use in the preparation of the Disclosure Documents. This indemnity
agreement shall be in addition to any liability which the Purchaser may otherwise have.
Section 11.3. Notice of Claims, Etc. Promptly after receipt by any party entitled
to indemnification under this Section 11 of notice of the commencement of, or a threat to
commence, any suit, action or proceeding, such indemnified party shall, if a claim in respect
thereof is to be made against the indenmifying party under this Section 11, notify the
indemnifying party in writing thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability which it may have to any indemnified party
unless the failure to provide notice prejudices the defense of such suit, action or proceeding. The
indemnifying party shall be entitled to participate in, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after notice of such suit, action or proceeding,
assume and control the defense thereof, with counsel selected by the indemnifying party. If the
defendants in any such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded, based on a written opinion of counsel,
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel (approved by the indenmifying party) to
assert such legal defenses and otherwise to participate in the defense of such action on behalf of
such indemnified party or parties. The indemnifying party shall not, in connection with any
action indemnified against under Section 11.1 or Section 11.2, be liable for the fees and expenses
of more than one separate firm of attorneys at any point in time representing the indemnified
parties to such action. Each indemnified party shall obtain the indemnifying party's consent
prior to any settlement by such indemnified party of any action indemnified against under
Section 11.1 or Section 11.2, and the indemnifying party shall not be liable in connection with
any settlement effected without the indemnifying party's prior written consent. An indemnified
party shall not unreasonably withhold its consent to any settlement. An indemnified party shall
(at the indemnifying party's expense) provide all reasonable assistance requested by the
indemnifying party in the defense and/or settlement of any such suit, action or proceeding. If the
indemnified party refuses to approve any compromise or settlement recommended by the
13
indemnifying party, the indemnifying party I s liability to the indenmified party hereunder with
respect to such claim or litigation shall not exceed the amount which the indemnifying party
would have paid pursuant to such proposed compromise or settlement.
Section 12. General Provisions.
Section 12.1. Beneficiaries; Successors. This Purchase Contract is made solely
for the benefit of the Issuer, the Company, the Guarantor and the Purchaser (including their
respective successors or assigns), and no other person shall acquire or have any right hereunder
or by virtue hereof. This Purchase Contract shall be binding upon and shall inure to the benefit
of the undersigned and their successors and assigns.
Section 12.2. Notice. Any notice, approval, consent or other communication
under this Agreement shall be in writing and shall be considered given when (1) delivered
personally, or (2) mailed by registered or certified mail, return receipt requested, and receipt has
been acknowledged or five days has elapsed after such mailing, or (3) transmitted by telecopy
with a confirming copy sent by overnight mail or courier service to the parties at the addresses
indicated below (or at such other address as a party may specify by notice to the others pursuant
hereto). Notice given by a party's counsel shall be considered notice given by that party.
14
If to the Issuer, to it at:
If to the Purchaser, to it at:
with a copy to:
If to the Guarantor, to it at:
If to the Company, to it at:
Augusta, Georgia
530 Green Street
Augusta, Georgia 30911
Attn: Administrator
Telecopy:
Salomon Smith Barney Inc.
390 Greenwich Street
New York, New York 10048
Attn: James A. Brodt
Telecopy: (212) 723-8677
King & Spalding
1185 Avenue of the Americas
New York, New York 10036-4003
Attention: Douglas A. Bird, Esq.
Telecopy: (212) 556-2222
General Electric Company
3135 Easton Turnpike
Fairfield, Connecticut 06431
Attention: Corporate Treasurer
Telecopy: (213) 373-3005
Ge Services - Corporate
Aviation Services, Inc.
d/b/a Garrett Aviation Services
Augusta, Georgia 30906-1551
Attention: Vice President
Telecopy:
Section 12.3. Governing Law. This Purchase Contract and the rights and
obligations of the parties hereto (including third party beneficiaries) shall be governed, construed
and interpreted according to the substantive laws of the State of New York without regard to
conflicts or choice of law principles of New York or any other jurisdiction.
Section 12.4. Severability. If any provision of this Purchase Contract shall be
held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any
particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it
conflicts with any other provision or provisions hereof or any Constitution or statute or rule of
public policy, or for any other reason, such circumstances shall not have the effect of rendering
the provision in question invalid, inoperative or unenforceable in any other case or circumstance,
or of rendering any other provision or provisions herein contained invalid, inoperative or
unenforceable to any extent whatsoever.
15
Section 12.5. Captions. The headings of the several Sections of this Purchase
Contract are for convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
Section 12.6. Entire Agreement. This Purchase Contract constitutes the entire
agreement, and supersedes all prior agreements, both written and oral, between the parties with
respect to the subject matter hereof.
Section 12.7. Waiver: Amendments. Any waiver of any breach of this Purchase
Contract shall be limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder. No waiver, amendment, release or modification of this Purchase
Contract shall be established by conduct, custom or course of dealing, but solely by an
instrument in writing.
Section 12.8. Company and Guarantor May Act Through Subsidiaries. The
Company and the Guarantor may take any and all actions and fulfill obligations hereunder
through one or more subsidiaries; provided, however, that the provisions of this Section shall not
in any way alter the obligation of the Company and the Guarantor to comply with the provisions
hereof.
Section 12.9. Exculpated Persons. No shareholder, director, officer, employee or
agent of the Company or the Guarantor (each, an "Exculpated Person") shall have any personal
or individual liability for any of the Company's or the Guarantor's obligations under this
Purchase Contract. In any action conmlenced to enforce the obligations of the Company or the
Guarantor created or arising under this Purchase Contract, no claim shall be asserted and no
judgment shall be enforceable, personally or individually, against any Exculpated Person or any
of such Exculpated Person's successors, assigns, heirs or personal representatives and no such
judgment shall be subject to execution nor be a lien on any assets of any Exculpated Person or
any of such Exculpated Person's SUCGessors, assigns, heirs or personal representatives. The
foregoing provisions shall not be held, construed or deemed to limit or otherwise impair or affect
in any way any other non-recourse, exculpation or jndenmity rights otherwise available to or for
the benefit of any Exculpated Person.
16
Section 12.10. Counterparts. This Purchase Contract may be executed in several
counterparts, each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
Very truly yours,
SALOMON SMITH BARNEY INC.
By
James A. Brodt, Director
Accepted:
GE SERVICES - CORPORATE
AVIATION SERVICES, INC.
d/b/a Garrett Aviation Services
By
Title:
GENERAL ELECTRIC COMPANY
By
Title:
AUGUSTA, GEORGIA
By
Mayor
Attest:
Clerk
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K&S DRAFT
1 t .20.00
PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 27, 2000
NEW ISSUE - Book Entry Only
in the opinion of Bond Counsel, under current law and subject to conditions described in the Section herein
"TAX EXEMPTION," interest on the Bonds (a) will not be included in gross income for Federal income tax
purposes and (b) will be exempt fi'om State of Georgia income taxation. Such interest is an item of tax preference
for purposes of the Federal alternative minimum income tat imposed on individuals and corporations, and a holder
may be subject to other Federal tat consequences as described in the Section herein "TAX EXEMPTION. "
$3,110,000*
Augusta, Georgia
_ % Special Facility Airport Revenue Bonds
(Garrett Aviation Services Project), Series 2000
Dated: Date of Delivery
Due: December 1,2010
The Bonds are limited obligations of Augusta, Georgia (the "Issuer") payable solely from rental payments
to be made by GE Engine Services - Corporate Aviation Services, Inc. (d/b/a Garrett Aviation Services) (the
"Company"), an indirect wholly-owned subsidiary of General Electric Company, under a Lease Agreement, dated as
of December 1, 2000 (the "Lease Agreement"), between the Issuer and the Company, relating to the Project
(hereinafter described). In addition, payment of the principal of and interest on the Bonds is unconditionally
guaranteed by
General Electric Company
(the "Guarantor") pursuant to a Corporate Guaranty Agreement, dated as of December J, 2000 (the "Guaranty"),
delivered by the Guarantor to The Bank of New York, New York, New York, as trustee for the Bonds (the
"Trustee") and the Issuer. The proceeds of the Bonds will be applied by the Issuer to finance the acquisition,
construction, expansion and equipping of certain airport facilities located at Augusta Regional Airport at Bush Field
in Augusta, Georgia (the "Project"), and to pay certain costs in connection therewith, including all or a portion of the
costs of issuing the Bonds. The Project will be leased by the Issuer to the Company pursuant to the Lease
Agreement, under which the Company is required, among other things, to make rental payments sufficient in time
and amount to pay the principal of and interest on the Bonds as the same become due and to pay certain costs in
connection therewith.
The Bonds are being issued under an Indenture of Trust, dated as of December 1, 2000 (the "Indenture"),
between the Issuer and the Trustee, as fully registered bonds in denominations of $5,000 and any integral multiple
thereof (each an "Authorized Denomination") and will be initially registered in the name of Cede & Co., as nominee
of The Depository Trust Company ("DTC"), New York, New York, as securities depository for the book-entry
system of registration for the Bonds. Purchases of Bonds may initially be made only in book-entry form in any
Authorized Denomination. Purchasers of Bonds will not receive certificates representing their interests in Bonds so
purchased. See "BOOK-ENTRY ONLY SYSTEM."
Interest will accrue on the Bonds from the date of delivery thereof at the rate of interest per annum set forth
above, computed on the basis of a 360-day year of twelve 30-day months, and will be paid on June] and
December 1 of each year (each an "Interest Payment Date"), commencing June 1,200 I, and at maturity, by check or
draft mailed to the registered owners of the Bonds as of the close of business on the Record Date (as hereinafter
defined) for each such Interest Payment Date; provided, however, that for so long as the Bonds are registered in
book-entry only form, or for any registered owner of Bonds who provides to the Trustee on or prior to any Record
Date wire transfer instructions, such interest shall be paid on the applicable Interest Payment Date by wire transfer.
NewYork-352795 v4
EXHIBIT
.<l11
t..\
Principal of the Bonds is payable only upon presentation and surrender thereof at the principal corporate trust office
of the Trustee.
The Bonds are subject to extraordinary optional redemption under certain circumstances as provided in the
Indenture, and are subject to mandatory redemption upon a Determination of Taxability with respect to the Bonds.
See "THE BONDS - Redemption." The Bonds are not otherwise subject to redemption prior to the maturity thereof.
This cover page contains only a summary of infonnation regarding the Bonds. Potential investors should
read the entire Official Statement, including all appendices hereto, prior to making an investment decision.
THE BONDS ARE LlMITED OBLlGATlONS OF THE JSSUER, PAYABLE SOLELY FROM
AMOUNTS PAYABLE UNDER THE LEASE AGREEMENT AND THE GUARANTY AND FROM CERTAJN
FUNDS PLEDGED UNDER THE INDENTURE. THE BONDS ARE NOT A DEBT OF THE ISSUER OR OF
THE STATE OF GEORGJA WITHIN THE MEANJNG OF THE CONSTITUTION OR STATUTES OF THE
STATE OF GEORGIA OR A PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER OR OF THE STATE
OF GEORGJA. THE ISSUANCE OF THE BONDS SHALL NOT OBLlGATE THE ISSUER OR THE STATE
OF GEORGIA TO LEVY OR PLEDGE ANY TAXES OR APPROPRIATE ANY FUNDS FOR THE PAYMENT
THEREOF. NO OWNER OF ANY BOND AND NO RECEJVER OR TRUSTEE IN CONNECTION
THEREWITH SHALL HAVE THE RIGHT TO ENFORCE THE PAYMENT OF SUCH BOND AGAINST ANY
PROPERTY OF THE JSSUER OR THE STATE OF GEORGIA, NOR SHALL THE BONDS CONSTITUTE A
CHARGE, LIEN OR ENCUMBRANCE, WHETHER LEGAL OR EQUITABLE, UPON ANY SUCH PROPERTY.
Price: %
The Bonds are offered when, as and if issued by the Issuer and received by the Underwriter, subject to the
approval of legality by Hunton & Williams, Atlanta, Georgia, Bond Counsel, and certain other conditions. Certain
matters will be passed upon for the Issuer by its counsel, Burnside, Wall, Daniel, Ellison & Revell, Augusta,
Georgia. Certain matters (other than the validity of the Bonds and the exclusion of the interest thereon from gross
income for federal income tax purposes) will be passed upon for the Company by its counsel, Dewey Ballantine
LLP, New York, New York, and for the Underwriter by its counsel, King & Spalding, New York, New York. It is
expected that the Bonds will be available for delivery through the facilities of the Depository Trust Company in
New York, New York, on or about December 14,2000.
Salomon Smith Barney
"'Preliminary, subject to change.
T ABLE OF CONTENTS
Page
INTRODUCTION ......................................................................................................................................... I
THE ISSUER............................................................. ...................................................................................2
THE COMPANY ................................... ................................................................................ ................ .......3
THE BONDS .................................................................................................................................................3
General............................................................................................................................................ .3
Payment of Principal and Interest.....................................................................................................4
Transfer and Exchange................................................................................................................... ..4
Redemption..................................................................................................................................... .4
Selection of Bonds for Redemption; Notice ofRedemption............................................................5
BOOK-ENTRY ONLY SYSTEM ................................................................................................................6
SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS ......................................................8
Pledge of Lease Agreement and Funds ............................................................................................8
The Guaranty.................................................................................................................................... 8
THE PROJECT................................................................. ..........................................................................1 0
ESTIMATED SOURCES AND USES OF FUNDS ................................................................................... I 0
SUMMARY OF THE LEASE AGREEMENT...........................................................................................10
Lease PaYlnents ..............................................................................................................................1 0
Lease Agreements Events of Default .......................... ................... ................................................ II
Prepayment of Lease Paynlents...................................................................................................... 12
SUMMARY OF THE TAX REGULATORY AGREEMENT .................................................................... 12
SUMMARY OF TH.E INDENTURE.......................................................................................................... 13
Creation of Funds........................................................................................................................... 13
Defaults and Relnedies ................................................................................................... ................13
Discharge of Indenture ....................................................................................................... ............14
Supplemental Indentures............................................................................................................... .15
Arbitrage and Tax Covenant .......................................................................................................... I 8
TAX EXEMPTION..................................................................................................................................... 19
Opinion of Bond Counsel...............................................................................................................19
Other Tax Matters........................................................................................................................... I 9
THE TRUSTEE........................................................................................................................................... 19
LITIGATION.............. ................................................................................................................................ 19
The Issuer ......................... ..................................................... ................................ ....... ........ ......... .19
The Company. ....... ............................................... ......................................................................... .20
The Guarantor..................................................................................................................... ............20
LEGA L MA TIERS.... .............................................................................................................................. ..20
LEGAL OPINIONS AND ENFORCEABILITY OF REMEDIES.............................................................20
UN DER WRITING......................................................................................................................................2 I
CONTINUING DISCLOSURE ................................................................................................................ ..21
EXEMPTIONS; REQUESTS FOR INFORMATION ............................ ....................................................22
MISCELLANEOUS............................................................. ....................................................................... 22
APPENDIX A - GENERAL ELECTRIC COMPANY
APPENDIX B - FORM OF OPINION OF BOND COUNSEL
No dealer, salesman or any other person has been authorized to give any information or to make
any representation, other than the information and representations contained herein, in connection with
the offering of the Bonds, and, if given or made, such information or representations must not be relied
upon. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy any of
the Bonds in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in
such jurisdiction. Neither the delivery of this Official Statement nor any sale hereunder shall, under any
circumstance, create any implication that there has been no change in the matters referred to herein since
the date hereof.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY
OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE GUARANTOR AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE
NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY ISSUER. FURTHERMORE, NO SUCH COMMISSION OR ISSUER HAS
CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
[Remainder of page intentionally left blank]
$3,110,000*
Augusta, Georgia
_ % Special Facility Airport Revenue Bonds
(Garrett Aviation Services Project), Series 2000
INTRODUCTION
This Official Statement provides certain information concerning the issuance by Augusta,
Georgia (the "Issuer") of $3, 110,000* Special Facility Airport Revenue Bonds (Garrett Aviation Services
Project), Series 2000 (the "Bonds"). The Bonds are authorized to be issued pursuant to the Constitution
and laws of the State of Georgia and by virtue of a resolution adopted by the Issuer on November 21,
2000, as supplemented by a resolution adopted on December , 2000 (the "Bond Resolution"). The
Bonds are issued and secured under an Indenture of Trust, dated as of December 1, 2000 (the
"Indenture"), between the Issuer and The Bank of New York, New York, New York, as trustee (the
"Trustee").
The proceeds of the sale of the Bonds will be applied by the Issuer to finance the costs of the
acquisition, construction, expansion and equipping of certain airport facilities located at the Augusta
Regional Airport at Bush Field in Augusta, Georgia (the "Project"), as hereinafter described, and to pay
certain costs incurred in connection therewith, including all or a portion of the costs of issuing the Bonds.
See "THE PROJECT" and "ESTIMATED SOURCES AND USES OF FUNDS."
The Project will be leased by the Issuer to GE Engine Services - Corporate Aviation Services,
Inc. (d/b/a Garrett Aviation Services) (the "Company"), a Delaware corporation and an indirect
wholly-owned subsidiary of General Electric Company, pursuant to a Lease Agreement, dated as of
December I, 2000 (the "Lease Agreement"), between the Issuer and the Company. Under the terms of
the Lease Agreement, the Issuer will reimburse the Company for the costs of the Project from the
proceeds of the sale of the Bonds. The Lease Agreement requires the Company, among other things, to
make rental payments thereunder in such amounts and at such times as shall be sufficient to provide for
the timely payment of the principal of and interest on the Bonds. See "SECURITY FOR AND
SOURCES OF PAYMENT OF THE BONDS" and "SUMMARY OF THE LEASE AGREEMENT."
As additional security for the payment of the Bonds, General Electric Company, a New York
Corporation (the "Guarantor"), will execute and deliver to the Trustee, simultaneously with the issuance
of the Bonds, a Corporate Guaranty Agreement, dated as of December 1, 2000 (the "Guaranty"), under
which the Guarantor agrees, among other things, to pay to the Trustee, to the extent payments are not
made by the Company under the Lease Agreement or other funds are not available under the Indenture,
amounts sufficient to pay when due the principal of and interest on the Bonds. The Guaranty also
provides that the Gurantor will guarantee the payment of Additional Rent (hereinafter defined) payable by
the Company to the Issuer under the Lease Agreement. The Guaranty is an unconditional obligation of
the Guarantor and is not subject to diminution by set-off, counterclaim, abatement or otherwise. See
"SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS - The Guaranty" and
Appendix A - "GENERAL ELECTRIC COMPANY."
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository
for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC's nominee). One fully-registered Bond certificate will be issued for the entire aggregate
principal amount of the Bonds and will be deposited with DTC. Individual purchases may be made in
Preliminary, subject to change.
book-entry form only in denominations of $5,000 and any integral multiple thereof. See "BOOK-
ENTRY ONLY SYSTEM."
The Bonds are limited obligations of the Issuer and shall be payable solely from amounts payable
by the Company under the Lease Agreement and other funds pledged therefor under the Indenture, and to
the extent such amounts are insufficient therefor, from amounts payable by the Guarantor under the
Guaranty.
THE BONDS ARE NOT A DEBT OF THE ISSUER OR OF THE STATE OF GEORGIA
WITHlN THE MEANING OF THE CONSTITUTION OR STATUTES OF THE STATE OF GEORGIA
OR A PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER OR OF THE STATE OF GEORGIA.
THE ISSUANCE OF THE BONDS SHALL NOT OBLIGATE THE ISSUER OR THE STATE OF
GEORGIA TO LEVY OR PLEDGE ANY TAXES OR APPROPRIATE ANY FUNDS FOR THE
PAYMENT THEREOF. NO OWNER OF ANY BOND AND NO RECEIVER OR TRUSTEE IN
CONNECTION THEREWITH SHALL HAVE THE RIGHT TO ENFORCE THE PAYMENT OF SUCH
BOND AGAINST ANY PROPERTY OF THE ISSUER OR THE STATE OF GEORGIA, NOR SHALL
THE BONDS CONSTITUTE A CHARGE, LIEN OR ENCUMBRANCE, WHETHER LEGAL OR
EQUITABLE, UPON ANY SUCH PROPERTY.
Descriptions of the Bonds and the Project, and summaries of certain provisions of the Lease
Agreement and the Indenture, are included in this Official Statement. Information with respect to the
security for the Bonds, including the Guaranty, is included herein under "SECURITY FOR AND
SOURCES OF PAYMENT OF THE BONDS." A brief description of the Company is included herein
under the heading "THE COMPANY", and a description of the Guarantor, including a list of the
documents filed by the Guarantor with the Securities and Exchange Commission and specifically
incorporated by reference herein, is included as Appendix A to this Official Statement. The descriptions
of the Bonds and of the Indenture, the Lease Agreement and the Guaranty are qualified in their entirety by
reference to the definitive forms of such documents on file with the Trustee. All capitalized terms used in
this Official Statement that are not otherwise defined herein shall have the meanings ascribed to them in
the Indenture.
THE ISSUER
Augusta, Georgia is a political subdivision of the State of Georgia, created on January], 1996
pursuant to Acts of the General Assembly of the State of Georgia (the "Consolidation Act") that
authorized the consolidation of the municipal corporation known as "The City Council of Augusta" and
the political subdivision known as "Richmond County, Georgia". Under the Consolidation Act creating
Augusta, Georgia, the governing authority of the consolidated government is a board of commissioners
designated as the Augusta-Richmond County Commission (the "Commission"). The Commission
consists of a Mayor, who is the chief executive officer of the Commission, and ten commissioners. The
members of the Commission serve terms of office of four years and until a successor is elected and
qualified. All members of the Commission are full voting members, except for the Mayor, who has the
right to vote only to make or break a tie vote on any matter. The Augusta Aviation Commission was
created by the Augusta-Richmond County Commission, and pursuant to its duties under the Augusta-
Richmond County Code has charge over the Augusta Regional Airport at Bush Field generally, subject to
the approval of the Augusta-Richmond County Commission for any contract with a term greater than one
year. Augusta, Georgia is located in the central eastern portion of the State of Georgia bordering the
South Carolina state line, approximately 155 miles east of Atlanta, Georgia and 75 miles southwest of
Columbia, South Carolina.
2
THE COMPANY
[TO BE UPDATED] [On September 17, 1997, General Electric Company caused its
wholly-owned subsidiary Greenwich Air Services, Inc. to acquire all of the issued and outstanding stock
of UNC Incorporated. ONC Incorporated acquired certain of the assets and operations of the Company
from CFC Aviation Services, L.P. in May 1996.
The Company is a leading provider of aviation services to the business aviation aftermarket. The
Company provides a wide range of overhaul services to business aviation and regional airline customers,
including complete engine and airframe repair and overhaul capabilities, full interior and exterior
refurbishments, new aircraft completions, avionics installation and spare parts distribution. The Company
provides aircraft, engine and avionics aftermarket services to a wide range of aircraft and specializes in
aircraft powered by AlliedSignal turbofan engines, which are the leading engine type for the business jet
aviation market. The principal airframes served include GulfStream, Challenger, Lear, Falcon, Citation,
Hawker, Westwind, Jetstar and Astra.
The Company provides its services through six coast-to-coast "fly-in" hangar facilities at the
following airports: Van Nuys, California; Los Angeles International; Houston Intercontinental; Augusta,
Georgia; Springfield, Illinois; and Long Island, New York.]
THE BONDS
The following is a summary of certain provisions of the Bonds. All references to the Bonds are
qualified by reference to the definitive fonn thereof and the information with respect thereto contained in
the Indenture.
So long as DTC acts as the securities depository for the Bonds, all references herein to "holders
of the Bonds", "owners of the Bonds" or "Bondholders" are deemed to be references to Cede & Co., as
nominee for DTC, and not to participants or beneficial owners of interests in the Bonds. See "BOOK-
ENTRY ONLY SYSTEM" below.
General
The Bonds will be issued as fully registered bonds in denominations of $5,000 or any integral
multiple thereof. The Bonds will be dated initially the date of delivery thereof and will bear interest from
such date until paid, payable semiannually on June I and December I of each year, commencing June I,
2001 (each, an "Interest Payment Date"), at the rate of interest per annum set forth on the cover page of
this Official Statement, and will mature on December 1, 20] 0, as set forth on the cover page of this
Official Statement. Interest on the Bonds will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
The interest on any Bond shall be payable from the Interest Payment Date next preceding the date
of authentication thereof to which interest has been paid, unless such Bond is authenticated after a Record
Date (hereinafter defined) and prior to the next succeeding Interest Payment Date, in which case such
Bond shall bear interest from such Interest Payment Date, or if the date thereof is an Interest Payment
Date to which interest has been paid, then from such date, or if the date thereof is prior to June I, 2001,
then from the date of initial issuance and delivery thereof. As used herein, the tenn "Record Date" means
the 15th day of the calendar month next preceding an Interest Payment Date, or if such day is not a
Business Day (as defined in the Indenture), the next preceding Business Day.
3
Payment of Principal and Interest
The principal of any Bond will be payable only upon presentation and surrender thereof at the
principal corporate trust office of the Trustee, whose address is set forth herein under the heading "THE
TRUSTEE". Interest on any Bond will be paid by the Trustee on each Interest Payment Date by check or
draft mailed to the registered owner at such owner's address as it appears on the registration books
maintained by the Trustee at the close of business on the applicable Record Date; provided, however, that
for so long as the Bonds are registered in book-entry only form, or for any registered owner thereof who
provides the Trustee with wire transfer instructions on or prior to the applicable Record Date, such
interest shall be paid by wire transfer in immediately available funds. The principal of and interest on the
Bonds will be payable in lawful money of the United States of America.
Transfer and Exchange
The Bonds may be exchanged and their transfer registered only upon surrender thereof to the
Trustee at its principal corporate trust office or such other location as directed by the Trustee,
accompanied in the case of a transfer by a written instrument of transfer duly executed by the owner or
his duly authorized attorney. The Trustee shall not be required to transfer or exchange any fully
registered Bonds during the period after the close of business on the Record Date for any Interest
Payment Date until such Interest Payment Date, nor during a period of fifteen days next preceding the
mailing of notice of payment or redemption of any Bonds.
Redemption
Extraordinary Optional Redemption. The Bonds shall be subject to redemption at the option of
the Issuer, at the written direction of the Company, in whole or in part, at any time from funds available
for such purpose in the Bond Fund, at a price equal to 100% of the principal amount thereof, plus accrued
interest to the redemption date, if one or more of the following events shall have occurred:
(1) All or a portion of the Project shall have been damaged or destroyed or title to, or
temporary use of, all or a portion of the Project shall have been taken under the exercise of the
power of eminent domain by any governmental authority and in each case, in the opinion of the
Company, (a) normal operations at the Project are interrupted, or (b) the restoration of the Project
is not economically feasible; or
(2) As a result of changes in laws or administrative action, the Lease Agreement
becomes void or unenforceable.
Mandatory Redemption Upon Determination of Taxability. The Bonds are subject to
extraordinary mandatory redemption, at a redemption price equal to the principal amount thereof plus
accrued and unpaid interest, if any, to the redemption date, upon the making of a final written
determination by the Internal Revenue Service or a court of competent jurisdiction (after proceedings in
which the Company participates to the degree it deems sufficient, including but not limited to deciding
whether or not such a determination should be appealed) that, as a result of failure by the Company to
observe any covenant, agreement or representation by the Company in the Lease Agreement or the Tax
Regulatory Agreement, the interest payable on the Bonds is includable for federal income tax purposes in
the gross income of any Bondholder (other than a Bondholder who is a "substantial user" of the Project or
a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as
amended (the "Code")) (the foregoing being herein referred to as a "Determination of Taxability"). Such
obligation to redeem shall arise when (i) the Company, in its discretion does not or, (ii) there being no
further right of appeal on the part of such Bondholder, cannot, contest such determination by an
appropriate proceeding. If the Company does not participate in the above described proceedings to a
4
degree the Company deems sufficient, or contrary to the wishes of the Company, a Determination of
Taxability which is appealable is not appealed, then the Bonds are not required to be redeemed.
Upon the occurrence of a Determination of Taxability as described above, the Bonds shall be
redeemed in whole unless redemption of a portion of the Bonds then outstanding would have the result
that interest payable on the Bonds remaining Outstanding after such redemption would not be includable
in the gross income of any holder of a Bond for federal income tax purposes (other than a holder who is a
"substantial user" of the Project or a "related person" within the meaning of Section I 47(a) of the Code).
In such event, the Bonds may be redeemed in part, in an amount equal to an Authorized Denomination,
from time to time by lot in such manner as the Trustee shall detemline, in such amount as shall be deemed
necessary in the opinion of Bond Counsel to insure that interest on the Bonds is excluded from gross
income for Federal income tax purposes.
The redemption described above shall occur at any time not more than 180 days after receipt by
the Company of the notice or the final determination described above. All amounts payable in respect of
such redemption shall become due and payable on the date fixed for the redemption of the Bonds.
Selection of Bonds for Redemption; Notice of Redemption
In the event that fewer than all Bonds are to be redeemed, Bonds shall be selected for redemption
by lot from Bonds subject to such redemption.
The Company shall deliver notice by first class mail to the Issuer, the Trustee and the Paying
Agent of its intention to prepay the amounts due under the Lease Agreement and cause the Bonds to be
called for redemption at least 40 days prior to the proposed redemption date. The Paying Agent shall
cause notice of any redemption of Bonds to be mailed to the Registered Owners of all Bonds to be
redeemed at the registered addresses appearing in the Register.
Each such notice shall (i) be mailed by first class mail at least 30 days prior to the redemption
date, (ii) identify the Bonds to be redeemed (specifying the CUSIP numbers, if any, assigned to the
Bonds), (iii) specify the redemption date and the redemption price, and (iv) state that on the redemption
date the Bonds called for redemption will be payable at the principal office of the Paying Agent, that from
that date interest will cease to accrue and that no representation is made as to the accuracy or correctness
of the CUSIP numbers printed therein or on the Bonds.
No defect affecting any Bond, whether in the notice of redemption or mailing thereof (including
any failure to mail such notice), shall affect the validity of the redemption proceedings for any other
Bonds.
With respect to any notice of extraordinary optional redemption of Bonds, unless upon the giving
of such notice such Bonds shall be deemed to have been paid within the meaning of the Indenture, such
notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to
the date fixed for such redemption of funds sufficient to pay the principal of, and premium, if any, and
interest on, such Bonds to be redeemed, and that if such funds shall not have been so received said notice
shall be of no further force and effect and the Issuer shall not be required to redeem such Bonds. In the
event that such notice of redemption contains such a condition and such funds are not so received, the
redemption shall not be made and the Paying Agent shall within a reasonable time thereafter give notice,
in the manner in which the notice of redemption was given, that such funds were not so received.
5
BOOK-ENTRY ONLY SYSTEM
The information provided immediately below concerning DTC and the Book-Entry Only System
has been obtained from DTC and is not guaranteed as to accuracy or completeness by and is not to be
construed as a representation by, the Underwriter, the Issuer, the Trustee, the Company or the
Guarantor.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Bond
certificate will be issued for the aggregate principal amount of the Bonds and will be deposited with or for
the benefit ofDTC.
DTC is a limited purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Unifonn Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of
1934, as amended. DTC holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions, such as transfers and pledges,
in deposited securities through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on
file with the Securities and Exchange Commission.
Purchase of Bonds under the DTC System must be made by or through Direct Participants, which
will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of
each Bond (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect Participant through which the
Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be
accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in
the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge
of the actual Beneficial Owners of the Bonds. DTC's records reflect only the identity of the Direct
Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners.
The Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
6
Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are
being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual
procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & CO.'s consenting or voting rights to those Direct Participants to whose
accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the payable date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment on such date. Payments
by Participants to Beneficial Owners will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in "street
name", and will be the responsibility of such Participant and not of DTC, the Trustee or the Issuer, subject
to any statutory or regulatory requirements as may be in effect from time to time. Payments to DTC are
the responsibility of the Trustee, and disbursement of such payments to Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Bonds at
any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event
that a successor securities depository is not obtained, Bond certificates are required to be printed and
delivered.
The Issuer may decide to discontinue use of the system of book entry transfers through DTC (or a
successor securities depository). In that event, if the Issuer does not appoint a successor depository, Bond
certificates will be printed and delivered.
THE ISSUER, THE COMPANY, THE GUARANTOR, THE TRUSTEE AND THE
UNDERWRITER CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC WILL
DISTRIBUTE TO ITS PARTICIPANTS OR THAT DIRECT PARTICIPANTS OR INDIRECT
PARTICIPANTS WILL DISTRIBUTE TO BENEFICIAL OWNERS OF THE BONDS (I) PA YMENTS
OF THE PRINCIPAL OF OR INTEREST ON THE BONDS OR (2) REDEMPTION OR OTHER
NOTICES, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT
PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER
DESCRIBED TN THIS OFFICIAL STATEMENT. THE CURRENT "RULES" APPLICABLE TO DTC
ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT
"PROCEDURES" OF DTC TO BE FOLLOWED IN DEALING WITH ITS PARTICIPANTS ARE ON
FILE WITH DTC.
NEITHER THE ISSUER, THE UNDERWRlTER, THE TRUSTEE, THE COMPANY NOR
THE GUARANTOR WILL HAVE ANY RESPONSIBILITY OR OBLlGA TIONS TO ANY DIRECT
PARTICIPANTS OR INDIRECT PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT
WITH RESPECT TO (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY
SUCH DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (2) THE PAYMENT BY ANY
PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE
PRINCIPAL AMOUNT OR REDEMPTION PRICE OF THE BONDS; (3) THE DELIVERY BY ANY
SUCH DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY
BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE
INDENTURE TO BE GIVEN TO BONDHOLDERS; (4) THE SELECTION OF THE BENEFICIAL
OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE
BONDS; OR (5) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS
BONDHOLDER.
7
SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS
Pledge of Lease Agreement and Funds
The Bonds are limited obligations of the Issuer equally and ratably secured by and payable solely
from payments under the Lease Agreement and certain cash and securities held under the Indenture,
subject to certain conditions contained in the Indenture. Certain investment earnings on moneys held by
the Trustee may be required to be transferred to the Rebate Account created under the Indenture.
Amounts held in the Rebate Account are not pledged to secure the Bonds and consequently will not be
available to make payments on the Bonds.
Pursuant to the Indenture, the Issuer has pledged and assigned to the Trustee all of its right, title,
and interest in and to (i) all payments of Basic Rent under the Lease Agreement, (ii) all cash and
securities held in the funds and accounts established under the Indenture (except the Rebate Account), and
(iii) any and all other property, if any, pledged to the Trustee as security under the Indenture. The Bonds
are not secured by a mortgage on or security interest in the Project or any of the Company's assets,
properties or funds. See "SUMMARY OF THE INDENTURE" for a description of such pledge and
assignment under the Indenture.
The Guaranty
The following is a summary of certain provisions of the Guaranty. Reference is made to the
Guaranty for the detailed provisions thereof This summary is qualified in its entirety by reference to the
Guaranty.
Guarantee of Bonds. Pursuant to the Guaranty, the Guarantor has absolutely and unconditionally
guaranteed to the Trustee for the benefit of the holders at any time and from time to time of the Bonds the
full and prompt payment in accordance with the provisions of the Indenture of (a) the principal of any
Bond when and as the same shall become due and payable, whether at the stated maturity thereof or by
acceleration or call for redemption, prepayment or otherwise, and (b) the interest on any Bond when and
as the same shall become due and payable. If the holder of any Bond shall fail to receive any such
payment as and when said payment becomes due, the Guarantor shall immediately pay to the Trustee, in
lawful money of the United States of America, an amount equal to the required payment.
The Guaranty provides that it shall remain in full force and effect without respect to future
changes in conditions, including changes in law, until the principal of and interest on the Bonds are paid
in full. Any amounts paid by the Company in respect of the Bonds pursuant to the Lease Agreement will
be credited against the obligations of the Guarantor under the Guaranty. The obligation of the Guarantor
to make payment pursuant to the Guaranty shall be deemed to be satisfied upon payment made by it to the
Trustee, and after such payment the Guarantor shall be under no further obligation with respect to such
payment; provided, however, that the Guarantor's obligations pursuant to the Guaranty shall be reinstated
if at any time any payment guaranteed thereunder, in whole or in part, is rescinded or must otherwise be
returned by any Bondholder upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
Guarantee of Additional Rent. Pursuant to the Lease Agreement, the Company is required to
make payments of Additional Rent to the Issuer in respect of certain facilities previously leased to the
Company. Under the terms of the Guaranty, the Guarantor has guaranteed the payment to the Issuer of
such Additional Rent. All rights of the Issuer to such Additional Rent, and the guaranty thereof by the
Guarantor, do not run to the benefit ofthe Trustee and are not pledged to the Trustee under the Indenture.
Merger, Consolidation or Sale of Assets. Under the Guaranty, the Guarantor has agreed that it
shall maintain its corporate existence and shall not merge or consolidate with any other corporation and
8
shall not transfer or convey all or substantially all of its property, assets and licenses, unless in any such
case, the assignee corporation or the corporation resulting from or surviving such merger (if other than the
Guarantor) or consolidation or corporation to which such transfer is made shall expressly assume in
writing and agree to pay and to perform all of the Guarantor's obligations under the Guaranty.
Events of Default; Remedies. The occurrence and continuation of anyone of the following shall
constitute an "Event of Default" under the Guaranty:
(a) failure by the Guarantor to make any payment required to be made on the Bonds
pursuant to the terms of the Guaranty as and when the same shall become due and payable; or
(b) failure by the Guarantor, upon demand, to punctually make any payment of
Additional Rent pursuant to the temlS of the Guaranty when the same shall become due and
payable; or
(c) failure by the Guarantor to comply with the covenants set forth under
"- Merger, Consolidation or Sale of Assets" above, and continuance of such failure for more
than sixty (60) days after such failure so to comply shall first become known to any officer of the
Guarantor.
Whenever any Event of Default set forth in paragraph (a) or (b) above shall have occurred and be
continuing under the Guaranty, the Trustee may, and if requested so to do in writing by the holders of at
least 25% in aggregate principal amount of the Bonds then outstanding, the Trustee shall, proceed first
and directly against the Guarantor under the Guaranty without proceeding against or exhausting any other
remedies which it may have and without resorting to any other security held by the Issuer or the Trustee.
Before taking any action under the Guaranty, the Trustee may require that satisfactory indemnity be
furnished by those Bondholders requesting such action. Except with respect to the guarantee of
Additional Rent and the remedies available to the Issuer in respect thereof, the right to enforce the
Guaranty is vested exclusively in the Trustee for the equal and pro rata benefit of all holders at any time
of the Bonds.
Amendment. The Trustee shall not consent to any amendment or modification of the Guaranty or
waive any of the provisions thereof without the written approval of the holders of (i) all of the Bonds, in
the event such amendment, modification or waiver relates to the Guarantor's payment obligations in
respect of the Bonds or the Events of Default set forth in clauses (a) and (c) above and the available
remedies with respect thereto under the Guaranty, or (ii) not less than 66 2/3% in aggregate principal
amount of the outstanding Bonds with respect to an amendment, modification or waiver of any other
provision of the Guaranty, other than an amendment, modification or waiver ofthe Guarantor's obligation
to pay Additional Rent and the remedies of the Issuer in respect thereof, which shall not require the
consent of the Trustee or the holders of the Bonds. The Guaranty requires the Trustee to publish notice of
any such proposed amendment, modification or waiver in a newspaper of general circulation among
dealers in municipal securities in the City of New York, New York, and to mail such notice by first class
mail, postage prepaid, to all holders of outstanding Bonds. ff within 60 days (or such longer period as
shall be prescribed by the Trustee) following the mailing of such notice, the holders of not less than the
requisite percentage of outstanding Bonds shall have consented to and approved the execution of such
amendment, modification or waiver of the Guaranty, no holder of any Bond shall have the right to object
to any terms and provisions contained therein. No amendment, change, modification, alteration or
termination of the Indenture shall be effective that would in any way increase the Guarantor's obligations
under the Guaranty without obtaining the prior written consent of the Guarantor.
9
THE PROJECT
[TO BE EXPANDED] The Project consists of the expansion of certain hangar facilities of the
Company and the construction of a new building to serve as a turbo fan engine testing facility for the
Company at the Augusta Regional Airport, including certain related equipment.
ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of the proceeds of the sale of the Bonds are as follows:
Sources:
Principal Amount of the Bonds
Original Issue Premium (Discount)
$
Total Sources
$
Uses:
Costs of the Project
Costs ofIssuance'
$
Total Uses
$
Includes underwriter's fee, rating agency fees, accounting and lcgal fees, printing costs and other costs and expenses of issuing
the Bonds.
SUMMARY OF THE LEASE AGREEMENT
The following is a summary of certain provisions of the Lease Agreement and is qualified in its
entirety by reference to the Lease Agreement.
Lease Payments
The Company agrees under the Lease Agreement that it will make rental payments to the Trustee
for the account of the Issuer, in amounts and at such times as shall be sufficient to pay (i) the principal
(whether upon maturity, redemption prior to maturity or maturity by declaration under the circumstances
set forth in the Indenture) of and interest on the Bonds as the same become due, and (ii) the fees and
expenses of the Issuer and of the Trustee, Paying Agent and Registrar for the Bonds as set forth in the
Lease Agreement (collectively, the "Basic Rent"). The Company is entitled to a credit against the Basic
Rent payments set forth in clause (i) to the extent of any amounts held by the Trustee in the Bond Fund.
In addition, the Company agrees to pay additional rental payments relating to certain existing leased
facilities (the "Additional Rent") and the costs of issuance of the Bonds, to the extent not paid by the
Issuer from the proceeds of the sale thereof.
Covenants of the Company
Pursuant to the Lease Agreement, the Company has made certain covenants and agreements
relating to the Leased Premises and its operations thereon, including:
(a) that it will use the Leased Premises (as defined in the Lease Agreement) for the
conduct of such business as is specified in the Lease Agreement, and that no aviation gasoline or
10
turbine fuels shall be brought upon or stored on the Leased Premises either for use by the
Company or for resale;
(b) that it shall maintain the Leased Premises in good working condition and state of
repair and shall return the same to the Issuer at the end of the tenn of the Lease Agreement in the
condition they were in upon commencement of the Lease Agreement, normal wear and tear
expected, including any environmental remediation that may be required as a result of the
Company's activities on the Leased Premises;
(c) that its use of the Leased Premises shall be in compliance with all local, state and
federal laws, rules, regulations and ordinances, including all Environmental Laws (as defined in
the Lease Agreement), and that it shall indemnify and hold harmless the Issuer and certain related
parties from and against any claims, actions, demands or liabilities caused by the Company's
failure to comply with any Environmental Law;
(d) in the event any improvements constructed on the Leased Premises are damaged
by fire or other casualty, that it will repair or replace the same with the proceeds of insurance
required to be maintained by the Company pursuant to the Lease Agreement, and that regardless
of whether such damage renders the Leased Premises untenable, the rental payments of the
Company under the Lease Agreement shall continue unabated; and
(e) that it shall pay all personal property taxes assessed against the Company's
equipment, merchandise or other property located on or about the Leased Premises and any
franchise fees or other taxes or assessments that may be imposed or assessed against the Issuer or
its leasehold interest.
Lease Agreement Events of Default
The occurrence and continuance of any of the following events shall constitute an event of default
under the Lease Agreement (each a "Lease Agreement Event of Default"):
(a) failure by the Company to pay any Basic Rent payment under the Lease
Agreement on the date such Basic Rent payment is due; or
(b) failure by the Company to pay any Additional Rent payment under the Lease
Agreement when due and payable; or
(c) failure by the Company to observe, perform, or keep certain terms, provisions,
covenants and conditions contained in the Lease Agreement and described above under the
heading "- Covenants of the Company", for more than 30 days after the Company receives
written notice of such default or, if such failure cannot reasonably be cured within thirty days,
failure by the Company to commence to cure the same within 30 days after receiving written
notice; or
(d) [default by the Company in the performance or observance of any of the
covenants, conditions or agreements of the Company contained in the Tax Regulatory
Agreement, and failure by the Company to remedy the same within such time as shall prevent the
interest on the Bonds from becoming included in gross income of the holders thereof for Federal
income tax purposes]; or
(e)
execution.
the Company allows the Lease Agreement to be taken under any writ of
11
During the occurrence and continuation of any Lease Agreement Event of Default, the Issuer
shall have all remedies provided by law or in equity. In addition, upon any Lease Agreement Event of
Default set forth in paragraph (a) or (b) above, the Issuer may immediately terminate the Lease
Agreement, or re-enter and attempt to re-Iet without terminating, and remove all persons and property
from the Leased Premises. In any such event, the Issuer may remove such property and store it in a
public warehouse, or elsewhere, for the Company's account and at the Company's expense, without
service of notice or resort to legal process, and without being deemed guilty of trespass or becoming
liable for any resulting loss or damage. No such remedy under the Lease Agreement shall be deemed
exclusive of any other remedy.
Prepayment of Lease Payments
Obligation to Prepay Upon Determination of Taxability. The Company agrees in the Lease
Agreement to pay to the Trustee, for the account of the Issuer, as a prepayment of the Basic Rent
thereunder, an amount (or amounts, from time to time) as determined by the Tmstee which will be
sufficient to redeem the Bonds in whole or (if redemption of part of the Bonds wi II preserve the exclusion
from gross income of interest on the remainder of the Bonds for federal income tax purposes) in part,
upon a Determination of Taxabi]ity relating to the Bonds as described herein under "THE BONDS -
Redemption - Mandatory Redemption Upon Determination of Taxability."
Optional Prepayment Upon Damage, Destruction or Condemnation. The Company may elect to
cause all or a portion of the Bonds to be redeemed from funds availab]e for such purpose in the Bond
Fund, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed plus
accmed interest to the redemption date, if one or more of the events described herein under the heading
"THE BONDS - Redemption - Extraordinary Optional Redemption" shall have occurred. Any such
election must be made by the Company within 180 days of the occurrence of such event by written notice
delivered to the Issuer and the Trustee specifying the amount of Bonds to be redeemed and the date
proposed for redemption, which date shall be not less than 40 days from the date the notice is delivered to
the Trustee and the Issuer. In the event the Company so elects to redeem all or a portion of the Bonds
upon the occurrence of any such event, the Company is obligated under the Lease Agreement to prepay,
on or prior to the redemption date, the Basic Rent due thereunder in an amount sufficient to pay the
principal amount of the Bonds to be redeemed plus accrued interest thereon to the redemption date.
SUMMARY OF THE TAX REGULATORY AGREEMENT
The following is a summary of certain terms of the Tax Regulatory Agreement, to be dated the
date of issuance of the Bonds, between the Issuer and the Company (the "Tax Regulatory Agreement"), to
which reference is made for the detailed provisions thereof.
The Tax Regulatory Agreement will set forth certain representations, statements of intention,
conditions and covenants relating to the activities of the Company, the Bonds, the Project and the
application of the proceeds of the Bonds necessary for or related to compliance with the requirements of
the Internal Revenue code of 1986, as amended (the "Code"). The Company wi II agree generally that it
will do and perform all things necessary or desirable and within its reasonable control to assure that
interest paid on the Bonds will, for the purpose of federal income taxation, be excluded from the gross
income of the owners thereof for federal income tax purposes, unless such recipient is a "substantia] user",
or "related person" within the meaning of Section ] 47(a) of the Code.
The Company will specifically covenant to apply the proceeds of the Bonds in accordance with
certain restrictions imposed by the Code. The Company will further covenant that it shall not permit any
of the proceeds of the Bonds or other funds of the Company to be used directly or indirectly to acquire
]2
any asset or obligation, the acquisition of which would cause the Bonds to be "arbitrage bonds" for
purposes of Section 148 of the Code. The Company will also agree to do all things necessary to assure
that certain continuing arbitrage requirements of Section 148(f) of the Code are met with respect to the
Bonds, including any payment required to be made to the United States of America. The Issuer and the
Company will agree to cause certain information returns to be filed to the extent required by the Code.
The Tax Regulatory Agreement may be amended with the written agreement of the Issuer and the
Company, if an opinion of Bond Counsel to the effect that such amendment will not adversely affect the
exclusion from gross income for federal income tax purposes of interest in the Bonds has been delivered
to the Trustee. Subject to such rights of amendment and a reservation of the right to independently
enforce the obligations of the Company, certain rights and interest of the Issuer in the Tax Regulatory
Agreement will be assigned to the Trustee.
SUMMARY OF THE INDENTURE
The Indenture specifies the details and terms of the Bonds as set out in this Official Statement.
The following is a summary of certain other provisions of the Indenture and is qualified in its entirety by
reference to the Indenture.
Creation of Funds
Bond Fund. The Indenture creates a Bond Fund into which the Trustee shall deposit all amounts
received by the Trustee with respect to the payment of the Bonds or which are required or which are
accompanied by directions that such moneys are to be paid into the Bond Fund. Except as otherwise
required by the Tax Regulatory Agreement or upon certain refunding of the Bonds, moneys in the Bond
Fund, other than income earned thereon which is to be transferred to other funds created in the Indenture
or to the Rebate Fund, shall be used solely for the payment of the principal of, premium, if any, and
interest on the Bonds and for the redemption of the Bonds prior to maturity; provided, however, that upon
satisfaction and discharge of all obligations of the Issuer under the Indenture, amounts remaining in the
Bond Fund shall be paid to the Company.
Moneys in the Bond Fund shall, to the extent permitted by law and pursuant to direction of the
Company, be invested and reinvested by the Trustee in certain types of investments permitted under the
terms of the Indenture.
Construction Fund. The Indenture creates a Construction Fund into which the proceeds of the
sale of the Bonds (exclusive of costs related to the issuance of the Bonds) shall be deposited. Moneys in
the Construction Fund shall be applied to reimburse the Company for advances and payments made with
respect to the Project as described in the Lease Agreement, both prior to and after the delivery of the
Bonds. Moneys in the Construction Fund shall, to the extent permitted by law and at the direction of the
Company, be invested and reinvested by the Trustee in certain types of investments permitted under the
tenns ofthe Indenture.
Defaults and Remedies
Events of Default. The occurrence and continuation of any of the following events shall
constitute an Event of Default under the Indenture:
(a) Failure to make punctual payment of any installment of interest on any Bond on
the date such payment has become due and payable, and such failure shall continue for a period
of two (2) days thereafter; or
13
(b) Failure to make when due the punctual payment of the principal of, and
premium, if any, on any Bond, whether at the stated maturity thereof, upon redemption thereof, or
upon the maturity thereof by declaration; or
(c) The occurrence of a Lease Agreement Event of Default set forth in Section 24(a)
of the Lease Agreement (relating to the payment of Basic Rent or Additional Rent thereunder); or
(d) Failure on the part of the Issuer to perform or observe any of the covenants,
agreements or conditions in the Indenture or in the Bonds and failure to remedy the same after
notice thereof in accordance with the notice and opportunity to cure provisions in the Indenture.
Acceleration and Annulment Thereof If any Event of Default has occurred and is continuing of
which the Trustee has received written notice, the Trustee may, and at the written direction of the holders
of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall, by notice in
writing delivered to the Issuer and the Company, declare the principal of all Bonds then Outstanding and
the interest accmed thereon to the date of such declaration immediately due and payable, and upon such
declaration such principal and interest shall become due and payable immediately at the place of payment
provided therein, anything in the Indenture or in the Bonds to the contrary notwithstanding; provided,
however, that no such declaration shall be made if the Company or the Guarantor cures such Event of
Default prior to the date of the declaration. Upon any such declaration, interest on the Bonds shall cease
to accrue and the Trustee shall declare the whole principal amount of Basic Rent to be immediately due
and payable and may exercise and enforce such rights as they exist under the Lease Agreement and the
Guaranty Agreement. The above provisions are subject to waiver, rescission and annulment as provided
in the Indenture
Immediately following any such declaration of acceleration, the Trustee shall cause to be mailed
notice of such declaration by first class mail or telecopy to each holder of a Bond at his last address
appearing on the Register. Any defect in or failure to give such notice of such declaration shall not affect
the validity of such declaration.
Bondholders May Direct Proceedings. Anything in the Indenture to the contrary notwithstanding,
the holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall
have the right, at any time, by an instrument or instruments in writing executed and delivered to the
Trustee and indemnification of the Trustee satisfactory to it against costs, expenses (including legal fees
and expenses) and liabilities, to direct the method and place of conducting all remedial directions to be
taken in connection with the terms and conditions of the Indenture, or for the appointment of a receiver or
any other proceeding thereunder provided that such direction shall not be otherwise than in accordance
with law or the provisions of the Indenture and shall not result in the personal liability of the Trustee. The
Trustee may take any other action under the Indenture which is not inconsistent with such direction.
Discharge of Indenture
When the principal of and interest on all the Bonds shall have been paid in accordance with their
terms, or provision has been made for such payment as provided in the following paragraph, and if the
Issuer shall not then be in default in any of the other covenants and promises in the Bonds and in the
Indenture, and provision shall also be made for paying all other sums payable under the Indenture,
including the fees and expenses of the Issuer, the Trustee and the Registrar to the date of retirement of the
Bonds, then the right, title and interest of the Trustee in respect of the Indenture shall thereupon cease and
be void (except as to any surviving rights of payment, registration, transfer or exchange of Bonds herein
provided), and thereupon the Trustee, upon written request of the Issuer (acting at the direction of the
Company) shall cancel, discharge and release the Indenture and shall execute, acknowledge and deliver to
the Issuer such instruments in writing as shall be requisite to release the Indenture, and reconvey, release,
assign and deliver to the Issuer any and all ofthe Trust Estate, right, title and interest in and to any and all
14
rights conveyed, assigned or pledged to the Trustee or otherwise subject to the Indenture except amounts
in the Bond Fund required to be paid to the Company under the Indenture and except cash held by the
Trustee for the payment of the principal of and interest on the Bonds pursuant to the Indenture.
Any Bond shall be deemed to be paid within the meaning of the Indenture when (a) payment of
the principal of and interest on such Bond at the applicable interest rate to the due date thereof (whether
such due date be by reason of maturity or upon redemption as provided in the Indenture, or otherwise),
either (i) shall have been made or caused to be made in accordance with the terms thereof, (ii) shall have
been provided for by depositing sufficient moneys for such payment with the Trustee and the due date of
such principal, interest and premium, if any, has occurred, or (iij) shall have been provided for by
irrevocably depositing in the Bond Fund (1) moneys sufficient to make such payment and/or (2)
Government Obligations maturing as to principal and interest in such amount and at such time as will
insure the availability of sufficient moneys to make such payment, and (b) all necessary and proper fees,
compensation and expenses of the Trustee, the Registrar and the Paying Agent pertaining to the Bonds
with respect to which such deposit is made shall have been paid or the payment thereof provided for to
the satisfaction of the Trustee. At such times as a Bond shall be deemed to be paid under the Indenture,
as aforesaid, such Bond shall no longer be secured by or entitled to the benefits of the Indenture, except
for the purposes of any such payment from such moneys or Government Obligations.
Notwithstanding the foregoing paragraph, no deposit under clause (a)(iii) of the immediately
preceding paragraph shall be deemed a payment of such Bonds as aforesaid until: (a) proper notice of
redemption of such Bonds shall have been previously given in accordance with the Indenture or in the
event that such Bonds are not to be redeemed within the next succeeding sixty (60) days, until the
Company on behalf of the Issuer shall have. given the Trustee and the Issuer, in form satisfactory to the
Trustee and the Issuer (any approvals not to be withheld unreasonably), irrevocable instructions to notify,
as soon as practicable, the holders of the Bonds, in accordance with the Indenture, that the deposit
required by (a)(iii) above has been made with the Trustee and that such Bonds are deemed to have been
paid in accordance with the Indenture and stating the maturity or redemption date upon which moneys are
to be available for the payment of the principal of and interest on such Bonds to the due date thereof; or
(b) the maturity of such Bonds.
The provisions of the Indenture relating to (i) the registration of transfer and exchange of Bonds,
(ii) the delivery of Bonds to the Trustee for purchase and the related obligations of the Tmstee with
respect thereto and (iji) the covenants contained in the Indenture with respect to compensation of the
Trustee shall remain in full force and effect with respect to all Bonds until the maturity date of the Bonds
or the last date fixed for redemption of all Bonds prior to maturity, notwithstanding that all or any portion
of the Bonds are deemed to be paid within the meaning of the Indenture; provided, further, that the
provisions with respect to the registration of transfer and exchange of Bonds shall continue to be effective
until the maturity or the last date fixed for redemption of all Bonds.
The Issuer and the Trustee covenant in the Indenture that no deposit will be made or accepted
under the Indenture and no use will be made of any such deposit which would cause the Bonds to be
treated as arbitrage bonds within the meaning of Section I 48(a) of the Code and the Treasury Regulations
proposed or adopted thereunder as the same may be in effect from time to time and as the same are
applicable to the Bonds.
Supplemental Indentures
Amendments and Supplements to Indenture Not Requiring Consent of the Bondholders. The
Indenture may be amended or supplemented from time to time without the consent of, or notice to, the
holders of the Bonds and with the consent of the Company, by a supplemental indenture entered into by
the Issuer and the Tmstee, for one or more of the following purposes:
15
(a) To add additional covenants and agreements of, and limitations and restrictions
upon, the Issuer or to surrender any right or power herein conferred upon the Issuer which are not
contrary to, or inconsistent with, the Indenture;
(b) To grant to, or confer or impose upon, the Trustee for the benefit of the
Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties
which may lawfully be granted, conferred or imposed and which are not contrary to, or
inconsistent with, the Indenture;
(c) To cure any ambiguity or omIssIon or to cure, correct or supplement any
defective (whether because of any inconsistency with any other provision hereof or otherwise)
provision of the Indenture in such manner as shall not be inconsistent with the Indenture and shall
not impair the security hereof or adversely affect the holders of the Bonds;
(d) To provide procedures permitting holders of the Bonds to utilize an
uncertificated system of registration for Bonds or for the issuance of Bonds pursuant to a book
entry system with a securities depository or other entity;
(e) To satisfy the requirements of any rating agency which may from time to time
provide a rating on the Bonds, or in order to obtain or retain such rating on the Bonds as is
deemed necessary by the Company;
(f) To evidence the appointment of a separate Trustee or a co-trustee or to evidence
the succession of a new Trustee under the Indenture;
(g) To comply with the requirements of the Trust Indenture Act of 1939, as from
time to time amended;
(h) To subject to the Indenture additional revenues, properties or collateral;
(i) To provide for the issuance of coupon bonds (provided, however, that the Issuer
and the Trustee have received an opinion of Bond Counsel to the effect that the issuance of such
coupon bonds complies with all applicable law);
U) To authorize different authorized denominations of the Bonds and to make
correlative amendments and modifications to the Indenture regarding exchangeabil ity of Bonds of
different authorized denominations, redemptions of portions of Bonds of particular authorized
denominations and similar amendments and modifications of a technical nature;
(k) To authorize the issuance of Additional Bonds as permitted by, and upon
compliance with, the provisions of the Indenture; or
(I) To make any other change which does not adversely affect the rights or security
of the holders of the Bonds.
The Trustee shall be entitled to receive an opllllon of counsel that any such supplemental
indenture entered into by the Issuer and the Trustee complies with the provisions of the Indenture and the
Trustee may conclusively rely upon such opinion.
Amendments to Indenture with Registered Owners' Consent. The Issuer and the Trustee may
enter into indentures supplemental to the Indenture or amendments to the Indenture modifying, adding to
or eliminating any of the provisions hereof but, if such supplement or amendment is not of the character
described above, only with the consent of the holders of not less than a majority of the aggregate principal
16
amount of the Outstanding Bonds, and with the consent of the Company. Notwithstanding the foregoing,
no supplement or amendment to the Indenture shall, without the consent of the holder of each
Outstanding Bond so affected, (i) extend the maturity date of any Bond, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof, or reduce any premium
payable upon the redemption thereof, or extend or reduce the amount of any mandatory redemption
requirement or change the method of calculation of interest on the Bonds, (ii) deprive such holder of the
lien hereof on the Revenues pledged under the Indenture and on the Trust Estate, (iii) decrease the
amounts of Basic Rent payable by the Company under the Lease Agreement, (iv) decrease the amounts
payable by the Guarantor under the Guaranty Agreement with respect to its guarantee of the payment of
principal of, premium, if any, and interest on the Bonds or its guarantee of the payment of Basic Rent, (v)
reduce or increase the aggregate principal amount of Bonds the holders of which are required to approve
any such supplement or amendment to the Indenture, or (vi) provide a privilege or priority of any Bond
over any other Bond.
The Trustee shall establish a record date for purposes of approval of any such amendment or
supplement and shall cause notice of such record date and such proposed amendment to be given in the
same manner as notices of redemption are given by the Paying Agent. Such notice shall be prepared by
the Company and shall briefly set forth the nature of the proposed amendment and shall state that copies
thereof are on file at the principal corporate trust office of the Trustee for inspection by all holders of the
Bonds. If, within sixty (60) days (or such longer period as shall be prescribed by the Company) following
the mailing of such notice, the holders of the requisite aggregate principal amount of the Bonds
Outstanding at the time of the record date established for such purpose shall have consented to and
approved such amendment, no holder of any Bond shall have any right 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 parties to such amendment from adopting the same or from
taking any action pursuant to the provisions thereof. Upon receipt of the consent of the holders of the
requisite aggregate principal amount of the Bonds Outstanding, the Issuer and the Trustee may execute
such amendment.
The consent of a holder of Bonds shall be evidenced by an instrument executed by such holder,
delivered to the Trustee, which instrument shall refer to the proposed amendment described in said notice
and shall specifically consent to and approve such amendment. Any consent given by a holder of Bonds
as of such record date shall be irrevocable for a period of six (6) months from the date such consent is
given, and shall be conclusive and binding upon all future holders of the same Bond during such period.
Such consent may be revoked at any time after six (6) months from the date such consent was given by
such holder or by a successor in title, by filing notice thereof with the Issuer, the Company and the
Trustee, but such revocation shall not be effective if the holders of the requisite aggregate principal
amount of the Bonds Outstanding have, prior to the attempted revocation, consented to and approved such
amendment.
The Trustee shall be entitled to receive an opllllon of Counsel that any such supplemental
indenture entered into by the Issuer and the Trustee complies with the provisions of the Indenture and the
Trustee may conclusively rely upon such opinion.
Amendments to Lease Agreement and Guaranty Agreement. The Lease Agreement and Guaranty
Agreement may be amended by written agreement of the Issuer and the Company or Guarantor, as
applicable, and with the written consent of the Trustee and the Paying Agent, but without the consent of
or notice to any of the holders of the Bonds, as may be required (a) by the provisions of the Lease
Agreement, the Guaranty Agreement or the Indenture, (b) for the purpose of curing any ambiguity or
formal defect or omission or in connection with any other change therein provided no such action is to the
prejudice of the holders of the Bonds, (c) to secure or maintain ratings on the Bonds from Moody's
Investors Service, Inc. and/or Standard & Poor's Ratings Service, a Division of The McGraw-Hili
Companies, Inc., (d) to describe more fully or to amplify or correct the description of any property leased
17
under the Lease Agreement, (e) to provide for payments of additional rent under the Lease Agreement or
to guarantee such additional rent payments under the Guaranty Agreement in connection with the
issuance of Additional Bonds permitted by, and upon compliance with, the provisions of the Indenture, or
(f) to make any other change which in the sole determination of the Trustee, based upon an opinion of
Bond Counsel, does not materially adversely affect the holders of the Bonds; provided, that with respect
to any such amendment the Company provides the Trustee with an opinion of Bond Counsel to the effect
that any such amendment is permitted by applicable law.
Except for the amendments, changes or modifications as provided above, neither the Issuer nor
the Company shall enter into any other amendment, change or modification of the Lease Agreement or
Guaranty Agreement (and the Trustee shall not consent thereto) without the mailing of notice and the
written approval or consent of the holders of not less than a majority in aggregate principal amount of the
Bonds at the time Outstanding given and procured as provided for in the Indenture; provided that no
amendment may be made which would (a) decrease the amounts of Basic Rent payable under the Lease
Agreement or decrease the amounts payable by the Guarantor under the Guaranty Agreement with respect
to its guarantee of the principal of, premium, if any, and interest on the Bonds; (b) change the date of
payment or prepayment provisions under the Lease Agreement or the Guaranty Agreement; or (c) change
the amendment provisions of the Lease Agreement or the Guaranty Agreement without the consent of all
of the holders of the Bonds adversely affected thereby.
Arbitrage and Tax Covenant
The Issuer covenants and agrees that it will not take any action, pem1it any action to be taken or
fail to take any action, to the extent permitted by applicable law, with respect to the use or investment of
the proceeds of any Bonds or the payments derived under the Lease Agreement, or any other amounts
regardless of the source or where held, which may result in the Bonds being treated as "arbitrage bonds"
within the meaning of such tenn as used in Section 148 of the Code, and the Treasury Regulations
proposed or adopted thereunder as the same may be in effect from time to time and as the same are
applicable to the Bonds. Under the Indenture, the Issuer further covenants and agrees that (i) it will
comply with and take all actions required of it by the Tax Regulatory Agreement; and (ii) it will not take
any action, permit any action to be taken or fail to take any action to the extent permitted by applicable
law, with respect to the use or investment of the proceeds of any Bonds, with respect to the payments
derived under the Lease Agreement, or any other amounts regardless of the source or where held, which
will cause the interest of the Bonds to be includable in the gross income of the owners thereof for
purposes of federal income taxation. The Trustee covenants and agrees that it will not take any action,
permit any action to be taken or fail to take any action with respect to investments of any amounts held by
the Trustee relating to the Bonds, to the extent the Trustee has investment discretion under the Indenture,
that may result in the Bonds being treated as "arbitrage bonds" within the meaning of such term as used in
Section 148 of the Code and the Treasury Regulations proposed or adopted thereunder as the same may
be in effect from time to time and as the same are applicable to the Bonds.
Rebate Account. A Rebate Account shall be established pursuant to the Indenture, to be held by
the Trustee. The Company has covenanted and agreed that it will (a) prepare and file with the Trustee
and the Issuer a report setting forth the "Rebate Amount" determined in accordance with the Tax
Regulatory Agreement, and (b) deposit or cause to be deposited into the Rebate Account any and all
Rebate Amounts promptly following a determination of any such Rebate Amount.
Moneys in the Rebate Account, including investment earnings thereon, if any, shall not be subject
to the pledge of the Indenture and shall not constitute part of the Trust Estate. Amounts deposited in the
Rebate Account shall be applied solely to pay amounts owed to United States pursuant to Section 148(1)
of the Code except to the extent otherwise permitted by the Tax Regulatory Agreement.
18
TAX EXEMPTION
Opinion of Bond Counsel
In the opinion of Bond Counsel, under current law, interest on the Bonds (a) will not be included
in gross income for Federal income tax purposes, except when held by a "substantial user" of the Project
or a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as
amended (the Code), and (b) will be exempt from State of Georgia income taxation. Interest on the
Bonds is an item of tax preference for purposes of the Federal alternative minimum income tax imposed
on individuals and corporations. No other opinion is expressed by Bond Counsel regarding the tax
consequences of the ownership of or the receipt or accrual of interest on the Bonds.
Bond Counsel's opinion will be given in reliance on certifications by representatives of the Issuer,
the Company and the Guarantor as to certain facts relevant to both the opinion and requirements of the
Code, and is subject to the condition that all requirements of the Code that must be satisfied subsequent to
the issuance of the Bonds in order for interest on the Bonds to be, or continue to be, not included in gross
income for federal income tax purposes are so satisfied. The Issuer and the company have covenanted to
comply with provisions of the Code regarding, among other matters, the use, expenditure and investment
of bond proceeds and the timely payment to the United States of any arbitrage rebate amounts with
respect to the Bonds. Failure by the Issuer or the Company to comply with such covenants, among other
things, could cause interest on the Bonds to be included in gross income for Federal income tax purposes
retroactively to their date of issue.
Other Tax Matters
Tn addition to the matters addressed above, prospective purchasers of the Bonds should be aware
that the ownership of tax-exempt obligations may result in collateral Federal income tax consequences to
certain taxpayers, including without limitation financial institutions, property and casualty insurance
companies, S corporations, foreign corporations subject to the branch profits tax, recipients of Social
Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued
indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Bonds should
consult their tax advisors as to the applicability and impact of such consequences.
Prospective purchasers of the Bonds should consult their own tax advisors as to the status of
interest on the Bonds under the tax laws of any state other than Georgia.
THE TRUSTEE
The Bank of New York is serving as Trustee under the Indenture. A successor or co-trustee may
be appointed in accordance with the terms of the Indenture. The principal corporate trust office of the
Trustee is located at The Bank of New York, 385 Rifle Camp Road, West Patterson, New Jersey 07424
Attention: Municipal Finance Department.
LITIGATION
The Issuer
There is not now pending or, to the knowledge of the Issuer, threatened, any litigation restraining
or enjoining the issuance or delivery of the Bonds or questioning or affecting the validity of the Bonds or
the proceedings or Issuer under which the Bonds are to be issued. Neither the creation, organization or
existence of the Issuer nor the title of any of the present members or officials of the Issuer to their
respective offices is being contested. There is no litigation pending or, to the knowledge of the Issuer,
19
threatened, which in any manner questions the right of the Issuer to adopt the Bond Resolution or to enter
into the Indenture or the Lease Agreement, or to secure the Bonds in the manner provided in the
Indenture.
The Company
No action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court,
any governmental agency, or any public board or body is pending or, to the knowledge of the Company,
threatened, affecting the validity of the Lease Agreement, the Indenture or the Bonds, or contesting the
corporate existence or powers of the Company. Any litigation pending or, to the knowledge of its
officers, threatened, against the Company consists of cases that are not expected by the Company,
individually or in the aggregate, to materially adversely affect the Company's financial position or
operations.
The Guarantor
No action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court,
any governmental agency, or any public board or body is pending or, to the knowledge of the Guarantor,
threatened, affecting the validity of the Guaranty or the ability of the Guarantor to perform its obligations
under the Guaranty.
LEGAL MATTERS
Certain legal matters relating to the authorization and validity of the Bonds will be subject to the
approving opinion of Hunton & Williams, Atlanta, Georgia, Bond Counsel, which will be furnished at the
expense of the Company upon delivery of the Bonds, in substantially the form set forth as Appendix B
(the "Bond Opinion"). The Bond Opinion will be limited to matters relating to authorization and validity
of the Bonds and to the tax-exempt status of interest thereon as described in the section "TAX
EXEMPTION." Bond Counsel has not been engaged to investigate the financial resources of the
Company or its ability to provide for payment of the Bonds, and the Bond Opinion will make no
statement as to such matters or as to the accuracy or completeness of this Official Statement or any other
information that may have been relied on by anyone in making the decision to purchase Bonds. Certain
legal matters, will be passed upon for the Issuer by its counsel, Burnside, Wall, Daniel, Ellison & Revell,
Augusta, Georgia. Certain legal matters (other than the validity of the Bonds and the exclusion of the
interest thereon from gross income for federal income tax purposes) will be passed upon for the Company
by its counsel, Dewey Ballantine LLP, New York, New York, and for the Underwriter by its counsel,
King & Spalding, New York, New York.
LEGAL OPINIONS AND ENFORCEABILITY OF REMEDIES
The enforceabi lity of the rights and remedies of the Trustee or the owners of the Bonds under the
Indenture, the Lease Agreement and the Guaranty are in many respects dependent upon judicial actions
which are often subject to discretion and delay. Under existing constitutional and statutory law and
judicial decisions, including specifically Title II of the United States Code (the federal bankruptcy code),
the enforceability of such rights and remedies under the Indenture, the Lease Agreement and the Guaranty
may be limited.
The various legal opinions to be delivered concurrently with the delivery of the Bonds will be
qualified as to the enforceability of the various legal instruments by situations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general
principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or
at law).
20
UNDERWRITING
Salomon Smith Barney Inc. (the "Underwriter") has agreed, subject to certain customary
conditions to closing, to purchase the Bonds at _% of the stated principal amount thereof, upon
payment by the Company to the Underwriter of compensation equal to _% of the stated principal
amount of the Bonds. The Bonds may be offered and sold to certain dealers (including the Underwriter
and other dealers depositing such Bonds into investment trusts) at prices lower than the public offering
prices, and such public offering prices may be changed from time to time by the Underwriter.
CONTINUING DISCLOSURE
No financial or operating data concerning the Issuer is material to any decision to purchase,
hold or sell the Bonds and the Issuer will not provide any such information. The Guarantor has
undertaken all responsibilities for any continuing disclosure to the holders of the Bonds as described
below, and the Issuer shall have no liability to such holders or any other person with respect to such
disclosures.
Pursuant to a Continuing Disclosure Agreement, dated as of December], 2000 (the "Continuing
Disclosure Agreement"), the Guarantor has agreed to file, on an annual basis after the issuance of the
Bonds, its Annual Report on Form 10-K with each Nationally Recognized Municipal Securities
Information Repository ("NRMSIR") recognized by the SEC and with the applicable State Information
Depository ("SID"), if any, of the State of Georgia. The Guarantor shall be entitled to provide such
disclosure by notice to each NRMSIR and the SID, if any, that such information is on file with the SEC.
If the Guarantor ceases to file, or is no longer required to file, an Annual Report on Form 10-K with the
SEC, it shall make an annual filing with each NRMSIR or the Municipal Securities Rulemaking Board,
and the SID, if any, containing substantially the same information theretofore required to be included in
such Form I O-K. In addition, the Guarantor has agreed to provide notice to each NRMSIR and the SID, if
any, notice of certain material events listed below relating to the Bonds and the security therefor. The
agreements of the Guarantor have been made in order to assist the Underwriter in complying with Rule
l5c2-12 (the "Rule") promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as
amended.
Under the terms of the Continuing Disclosure Agreement, the Guarantor has agreed to provide, or
cause to be provided, notice of the occurrence of any of the following events with respect to the Bonds, if
material, in a timely manner and in accordance with the Rule: (i) principal and interest payment
delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves
reflecting financial difficulties; (iv) if applicable, unscheduled draws on credit enhancements reflecting
financing difficulties; (v) if applicable, substitution of credit or liquidity providers, or their failure to
perform; (vi) material adverse tax opinions or events adversely affecting the tax-exempt status of the
Bonds; (vii) modifications to rights of the holders of the Bonds; (viii) calls for redemption of the Bonds;
(ix) defeasance of the Bonds; (x) release, substitution or sale of property securing repayment of the
Bonds; and (xi) rating changes.
The Guarantor may amend the Continuing Disclosure Agreement and any proVISion of the
Continuing Disclosure Agreement may be waived, if: (i) the amendment or waiver is made in connection
with a change in circumstances that arises from a change in legal requirements, change in law or change
in the identity, nature or status of the Guarantor, or type of business conducted by Guarantor, (ii) in the
opinion of parties unaffiliated with the Issuer or the Guarantor (such as the Trustee), the Continuing
Disclosure Agreement, as amended, or the provision as waived, would have complied with the
requirements of the Rule at the time of the primary offering, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances, and (iii) the amendment or waiver
does not materially impair the interests of the Owners, as determined either by parties unaffiliated with
21
the Issuer or the Guarantor (such as the Trustee), or by approving vote of the Owners pursuant to the
terms of the [ndenture at the time of the amendment.
Any failure to comply with the continuing disclosure requirements described above shall not,
however, constitute an event of default under the Indenture, the Lease Agreement or the Guaranty. Under
the Continuing Disclosure Agreement, a Bondholder's sole remedy for such failure is to seek an order for
specific performance.
EXEMPTIONS; REQUESTS FOR INFORMATION
The Bonds are intended to be exempt securities under the Securities Act of 1933, as amended,
and the offer, sale and delivery of the Bonds do not require registration under such Act or qualification of
the Indenture under the Trust Indenture Act of 1939, as amended. The Company and the Guarantor have
agreed to provide any additional information necessary to verify the accuracy of the information
contained herein or in any documents or filings incorporated herein by reference, to the extent either of
them possesses such information or can acquire it without unreasonable effort or expense. Any request
for information or for copies of any of the documents described herein should be directed to Investor
Communications, General Electric Company, 3135 Easton Turnpike, Fairfield, Connecticut 06431; (203)
373-2816. Copies of the Indenture, the Lease Agreement, the Guaranty and the Continuing Disclosure
Agreement will also be available for inspection during normal business hours at the principal corporate
trust office of the Trustee, whose address is set forth herein under the heading "THE TRUSTEE".
MISCELLANEOUS
Brief descriptions of the Issuer, the Bonds, the Indenture, the Lease Agreement and the Guaranty,
and certain information about the Company and the Guarantor, including information contained in the
documents incorporated by reference herein, are included in this Official Statement. Such descriptions do
not purport to be comprehensive or definitive. All references in this Official Statement to the Indenture,
the Lease Agreement and the Guaranty are qualified in their entirety by reference to such documents.
References herein to the Bonds are qualified in their entirety by reference to the form thereof included in
the Indenture and the information with respect thereto included in the aforementioned documents, copies
of which are on file at the principal offices of the Company and the Trustee, and may be obtained on
request as set forth herein under the heading "EXEMPTIONS; REQUESTS FOR INFORMATION."
Any statements made in this Official Statement, including the documents incorporated herein by
reference, involving matters of opinion or estimates, whether or not so expressly stated, are set forth as
such and not as representations of fact, and no representation is made that any of the estimates wi II be
realized.
22
This Official Statement has been duly authorized by the Issuer and approved by the Company and
the Guarantor.
AUGUSTA COUNTY, GEORGIA
By
Mayor
Attest:
By
Clerk
Approved by:
GE ENGINE SERVICES - CORPORATE
AVIATION SERVICES, INC.
(d/b/a Garrett Aviation Services)
By
Title:
GENERAL ELECTRIC COMPANY
By
Title:
23
APPENDIX A
GENERAL ELECTRIC COMPANY
The information contained in this Appendix relates to, and has been obtained from, General
Electric Company ("GE"). The delivery of the Official Statement shall not create any implication that
there has been no change in the affairs of GE since the date hereof or that the information contained or
incorporated by referenced in this Appendix A is correct as of any time subsequent to its date.
General Electric Company ("GE") is one of the largest and most diversified industrial
corporations in the world. From the time of its incorporation in 1892, it has engaged in developing,
manufacturing and marketing a wide variety of products for the generation, transmission, distribution,
control and utilization of electricity. Over the years, development and application of related and new
technologies have broadened considerably the scope of activities of GE and its affiliates. GE's products
include, but are not limited to, lamps; major appliances for the home; industrial electronic products and
components; motors; electrical distribution and control equipment; locomotives; power generation and
delivery products; nuclear power support services and fuel assemblies; commercial and military aircraft
jet engines; materials, including engineered plastics, silicones and cutting materials; and a wide variety of
high-technology products, including products used in aerospace, defense and medical diagnostic
applications.
GE also offers a broad variety of services, including product support services; electrical product
supply houses; electrical apparatus installation, engineering, repair and rebuilding services; and computer-
related information services. Through a wholly-owned subsidiary, General Electric Financial Services,
Inc., GE offers a broad spectrum of financial services including commercial and industrial financing,
distribution sales financing, real estate financing, reinsurance and investment banking. Another
wholly-owned subsidiary, National Broadcasting Company, Inc. ("NBC"), is engaged principally in
furnishing network television services and in operating television stations and in providing cablevision
services. The licensing of patents and providing of technical know-how related to products developed by
GE is also of significance.
With respect to manufacturing operations, it is believed that, in general, GE has a leadership
position (i.e., number one or two) in most major markets served. Aggressive and able competition, often
highly concentrated and worldwide, is encountered in virtually all areas of GE's business activity. In
many instances, the competitive climate is characterized by changing technology requiring continuing
research and development commitments, and by capital-intensive needs to meet customer and producer
requirements. The NBC Television Network is one of three competing major national commercial
broadcasting television networks. It also competes with certain cable and satellite television
programming activities. TIle businesses in which General Electric financial Services, Inc. engages are
subject to strong competition from various types of financial institutions, including commercial banks,
investment banks, and brokerage firms, credit unions, leasing companies, consumer loan companies,
independent finance companies, finance companies associated with manufacturers, and reinsurance
compallles.
GE has substantial export sales from the United States. In addition, GE has majority and minority
interests in a number of foreign companies and joint ventures engaged primarily in manufacturing and
distributing products and providing services outside the United States similar to those sold domestically.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by General Electric Company with the
Securities and Exchange Commission (the "Commission") pursuant to Sections 13(a) and] 5(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), are incorporated in this Official Statement by
reference:
(a) GE's Annual Report on Form I O-K for the year ended December 31, 1999;
(b) GE's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000,
June 30, 2000 and September 30,2000;
(c)
2000; and
GE's Amended Quarterly Report on Form I O-Q/ A for the quarter ended June 30,
(d)
GE's Current Reports on Form 8-K dated April 27, 2000 and October 22, 2000.
All documents filed by GE pursuant to Section 13(a), l3(c), 14 or 15(d) of the Exchange Act after
the date of this Official Statement and prior to the termination of the offering made hereby shall be
deemed to be incorporated in this Official Statement by reference and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded for purposes of this
Official Statement to the extent that a statement contained herein or in any other subsequently filed
document which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Official Statement.
General Electric Company will provide, upon request and without charge, to each person to
whom this Official Statement is delivered, on the request of any such person, a copy of any or all of the
foregoing documents incorporated herein by reference (other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such infonnation). Written or telephone requests
should be directed to Investor Relations, 3135 Easton Turnpike, Fairfield, Connecticut 0643 I; (203) 373-
2816.
AVAILABLE INFORMATION
GE is subject to the informational requirements of the Exchange Act and, in accordance
therewith, files reports, proxy statements and other information with the Commission. Such reports,
proxy statements and other information can be inspected and copied at the office of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices of the Commission at 230
South Dearborn Street, Room 3109, Chicago, T1Jinois 60604 and 26 Federal Plaza, Room 1102, New
York, New York 10007. Copies of such material can also be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Reports, proxy statements and other information concerning GE can also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005, and the Boston Stock
Exchange, One Boston Place, Boston, Massachusetts 02108, on which certain of GE's securities are
listed.
GE also files reports, proxy statements and other information electronically with the Securities
and Exchange Commission. These reports, proxy statements and other information may be obtained
either through the Securities and Exchange Commission's web site or at www.ge.com.
A-2
APPENDIX B
FORM OF OPINION OF BOND COUNSEL
[To be provided]
DB DRAFT
11/21/00
CORPORATE GUARANTY AGREEMENT
CORPORATE GUARANTY AGREEMENT (the "Guaranty Agreement") dated as of
December 1,2000, of General Electric Company, a New York corporation (the "Guarantor"), to
and for the benefit of (i) The Bank of New York, a New York Banking corporation, not in its
individual capacity but solely as trustee ("Trustee") under the Indenture (as defined below) and
(ii) Augusta, Georgia, a political subdivision ofthe State of Georgia (the "city") (the
"Commission").
PRELIMINARY STATEMENT
WHEREAS, the City, the Augusta Aviation Commission, an instrumentality of the City
(the "Commission") and GE Engine Services - Corporate Aviation d/b/a Garrett Aviation
Services, a Delaware corporation (the "Lessee"), have entered into an Amendment to Lease
Agreement dated July 15, 1976 and October 1, 1996 and Lease Agreement of even date herewith
(the "Lease Agreement") pursuant to which the City has agreed to lease the Project (as defined
below) to the Lessee and to make certain additional improvements thereto;
WHEREAS, the Lessee has agreed to make certain rental payments to the City pursuant
to and in accordance with the terms of the Lease Agreement;
WHEREAS, the Lessee is a wholly-owned subsidiary of the Guarantor;
WHEREAS, the Commission proposes to issue $ aggregate principal
amount of its _% Special Facility Airport Revenue Bonds (Garrett Aviation Services Project),
Series 2000 (the "Bonds") under an Indenture of Trust, dated as of December 1,2000, between
the Commission and the Trustee (the "Indenture") for the purpose of providing funds to finance
the acquisition, construction, equipping and improving of certain airport facilities located at
Augusta Regional Airport in Augusta, Georgia (the "Project") and to pay certain costs in
connection therewith;
WHEREAS, the Guarantor is willing to enter into this Guaranty Agreement in order that
(a) the Commission and the City enter into the Lease Agreement and (b) the Commission issues
the Bonds.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Representations of Guarantor. The Guarantor hereby represents and warrants
that it is a corporation duly organized and validly existing under the laws of the State of New
EXHIBIT
5
~
York, is in good standing under the laws of New York with full power to enter into this Guaranty
Agreement and to perform and observe its obligations contained herein. All acts, conditions and
things required to be done and performed on the part of the Guarantor precedent to the execution
and delivery of this Guaranty Agreement and necessary to constitute the same a legal, valid and
binding obligation of the Guarantor enforceable against it in accordance with its terms (except as
enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws affecting the enforcement of creditors' rights and subject to
equitable principles) have been done and performed.
Section 2. (a) Guarantee of the Bonds. The Guarantor hereby absolutely and
unconditionally guarantees to the Trustee for the benefit of the holders of the Bonds (the
"Owners") the full and prompt payment in accordance with the provisions of the Indenture of:
(i) the principal of any Bond when and as the same shall become due and
payable, whether at the stated maturity thereof or by acceleration or call for redemption,
prepayment or otherwise; and
(ii) the interest on any Bond when and as the same shall become due and
payable (collectively, the "Bond Guarantee").
Upon notice from the Trustee to an officer of the Guarantor that any Owner will not receive any
such payment as and when said payment becomes due because sufficient monies under the
Indenture are not available therefor, the Guarantor shall punctually pay to the Trustee, in lawful
money of the United States of America, an amount equal to the required payment. Subject to the
provisions of Section 4(b) hereof and unless all of the Bonds shall have become due at stated
maturity or by acceleration, redemption or prepayment prior to stated maturity or otherwise, each
and every default in payment of the principal of or interest on any Bond shall give rise to a
separate cause of action hereunder and separate suits may be brought hereunder as each cause of
action arises. The Guarantor hereby waives (a) notice ofthe acceptance hereof and of any action
taken or omitted in reliance hereon, (b) any presentment, demand, notice or protest of any kind,
except as required under the Lease Agreement and the Indenture and (c) any other act or thing or
omission or delay to do any other act or thing which might in any manner or to any extent vary
the risk of the Guarantor or which might otherwise operate as a discharge of the Guarantor's
obligations under the Bond Guarantee, except payment.
Any amounts paid by the Lessee to the Trustee pursuant to the Lease Agreement are to be
credited against the Guarantor's obligations under the Bond Guarantee. The obligation of the
Guarantor to make payment pursuant to this Bond Guarantee shall be deemed to be satisfied upon
payment to the Trustee and after such payment the Guarantor shall be under no further obligation
with respect thereto; provided, however, notwithstanding anything in this Bond Guarantee to the
contrary, the Guarantor's obligations pursuant to this Bond Guarantee shall be reinstated (as the
case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded or
must otherwise be returned by any Owners upon the insolvency, bankruptcy or reorganization of
the Lessee or otherwise, all as though such payment had not been made.
2
If any principal of the Bonds shall have been accelerated pursuant to the Indenture and
such acceleration shall have been rescinded and annulled pursuant to the Indenture, then the
amount of principal that was the subject of such acceleration shall no longer be considered as due
under the provisions of this Section 2(a).
(b) Guarantee of Additional Rent. The Guarantor hereby absolutely and
unconditionally guarantees to the City the full and prompt payment, in accordance with the
provisions of the Lease Agreement, of Additional Rent (as such term is defined in the Lease
Agreement), subject to applicable grace periods contained therein (the "Rent Guarantee").
Upon notice from the City to an officer of the Guarantor that the City has not received
Additional Rent as and when such payment becomes due under the Lease Agreement, the
Guarantor shall punctually pay to the Commission, in lawful money of the United States, an
amount equal to the required payment. Each and every default in the Lessee's obligation to pay
Additional Rent shall give rise to a separate cause of action hereunder and separate suits may be
brought hereunder as each cause of action arises. The Guarantor hereby waives (a) notice of the
acceptance hereof and of any action taken or omitted in reliance hereon, (b) any presentment,
demand, notice or protest of any kind, except as required under the Lease Agreement and (c) any
other act or thing or omission to delay to do any other act or thing which might in any manner or
to any extent vary the risk of the Guarantor or which otherwise might operate as a discharge of
the Guarantor's obligations under the Rent Guarantee, except payment.
Any amounts paid by the Lessee to the City pursuant to the Lease Agreement are to be
credited against the Guarantor's obligations under the Rent Guarantee. The obligation of the
Guarantor to make payment pursuant to this Rent Guarantee shall be deemed to be satisfied upon
payment to the City and after such payment the Guarantor shall be under no further obligation
with respect thereto; provided, however, notwithstanding anything in this Rent Guaranty to the
contrary, the Guarantor's obligations pursuant to this Rent Guarantee shall be reinstated (as the
case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded or
must otherwise be returned by the City upon the insolvency, bankruptcy or reorganization of the
Lessee or otherwise, all as though such payment had not been made.
Section 3. Covenants of the Guarantor. The Guarantor shall comply with the following:
(a) Mertzer. Consolidation or Sale of Assets. The Guarantor shall maintain its
corporate existence and shall not merge or consolidate with any other corporation and shall not
transfer or convey all or substantially all of its property, assets and licenses; unless, in any such
case, the assignee corporation or the corporation resulting from or surviving such merger (if other
than the Guarantor) or consolidation or the corporation to which such transfer is made is in
compliance with the terms hereof and shall expressly assume in writing, and agree to pay and to
perform, all of the Guarantor's obligations under this Guaranty Agreement.
(b) Financial Statements. Upon written request from the Trustee or the City,
the Guarantor shall furnish to the Trustee or the City, as appropriate, a copy of the Guarantor's
Annual Report on Form IO-K (or any successor form) filed with the Securities and Exchange
Commission (or any successor agency).
3
(c) Trustee's Fees. The Guarantor covenants to pay all expenses and fees of
the Trustee under the Indenture, to the extent such expenses and fees are not paid by the Lessee
or from the proceeds of the issuance ofthe Bonds.
Section 4. Events of Default and Remedies.
(a) Events of Default. If any of the following events occurs and is continuing,
it is hereby defined and declared to be and constitute an "Event of Default" hereunder:
(i) failure by the Guarantor to punctually make any payment required to be
made under Section 2(a) hereof as and when the same shall become due and payable; or
(ii) failure by the Guarantor, upon demand, to punctually make any payment
required to be made under Section 2(b) hereof as and when the same shall become due
and payable; or
(iii) failure by the Guarantor to comply with the provisions of Section 3(a) of
this Guaranty and continuance of such failure for more than sixty (60) days after such
failure so to comply shall first become known to any officer of the Guarantor.
(b) Remedies Available to the Trustee. Whenever any Event of Default as
described in Sections 4(a)(i) and 4(a)(iii) shall have occurred and is continuing, the Trustee may,
and if requested so to do in writing by the Owners of twenty- five percent (25%) in aggregate
principal amount of the Bonds then outstanding and iffurnished indemnification as hereinafter
provided the Trustee shall be obligated to, proceed hereunder, and the Trustee shall have the right
to proceed first and directly against the Guarantor under this Guaranty Agreement without
proceeding against or exhausting any other remedies which it may have and without resorting to
any other security held by the City or the Trustee. Before taking any action hereunder, the
Trustee may require that satisfactory indemnity be furnished for the reimbursement of all expenses
to which it may be put and to protect it against any and all liability, loss, damage, claim or expense
(including taxes other than those based on the income of the Trustee) incurred by reason of any
action so taken, except liability which is adjudicated to have resulted from the Trustee's
negligence or willful misconduct.
The right to enforce the Bond Guarantee is vested exclusively in the Trustee for the equal
and pro rata benefit of all Owners, unless the Trustee refuses or neglects to act within a
reasonable time after being requested in writing so to do by the Owners of at least twenty-five
percent (25%) in aggregate principal amount ofthe Bonds then outstanding and after being
furnished satisfactory indemnity as aforesaid, in which event the Owner of any of the Bonds may
thereupon so act in the name and behalf of the Trustee or may so act in his own name in lieu of
action by or in the name and behalf of the Trustee. Except to the extent allowed above, no Owner
shall have the right to enforce the Bond Guarantee, and then only for the equal and pro rata
benefit of the Owners of all the Bonds.
Any recovery by any Owner shall be deemed to thereby reduce the amount of any
recovery hereunder to which the Trustee may be entitled, and such Owner shall thereupon, to the
4
extent of such recovery, be excluded from participating in any amount so recovered by the
Trustee.
(c) Remedies Available to the City. Whenever any Event of Default as
described in Sections 4(a)(ii) and 4(a)(iii) shall have occurred and is continuing, as provided in the
Lease Agreement, the City may declare the Lessee's payment obligations to be immediately due
and payable and pursue all remedies available to it under the Lease Agreement. The City may
take whatever action oflaw or in equity may appear necessary or desirable to collect payments
then due or thereafter to become due hereunder or to enforce observance or performance of any
covenant, condition or agreement of the Guarantor under the Rent Guarantee.
(d) No Remedy Exclusive. No remedy herein conferred upon, or reserved to,
the Trustee or the City in Section 4(b) or 4(c) hereofis intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Guaranty Agreement or now or hereafter existing
at law or in equity. No delay or omission to exercise any right or power accruing upon any
default, Event of Default, omission or failure of performance hereunder shall impair any such right
or power or be construed to be a waiver thereof but any such right and power may be exercised
from time to time and as often as may be deemed expedient.
In order to entitle the Trustee to exercise any remedy reserved to it in this Guaranty
Agreement, it shall not be necessary to physically produce the Bonds in any proceedings instituted
by the Trustee or to give any notice, other than such notice as may be herein expressly required.
(e) Remedies Cumulative. The terms of this Guaranty Agreement may be
enforced as to anyone or more breaches, either separately or cumulatively.
Section 5. General Provisions.
(a) Rights Under this Guaranty Agreement. This Guaranty Agreement is made
solely for the benefit of the City, the Trustee and the Owners (including their respective
successors or assigns), and no other person shall acquire or have any right hereunder or by virtue
hereof.
(b) Waivers. Amendments and Modifications. In the event any provision
contained in this Guaranty Agreement should be breached by the Guarantor and thereafter duly
waived by the Trustee and the City, such waiver shall be limited to the particular breach so waived
and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or
modification of this Guaranty Agreement shall be established by conduct, custom or course of
dealing, but, except to the extent described below, solely by an instrument in writing duly
executed by the Trustee and the City.
The Trustee shall not consent to any amendment, release or modification of this Guaranty
Agreement or waive any of the provisions hereof without the written approval or consent of the
Owners of (i) all of the Bonds outstanding at the time consent is given as herein provided with
respect to any amendment, release, modification or waiver of Sections 2(a), 4. 1 (a)(i), 4(a)(iii),
5
4(b), or 4(d) hereof: or (ii) not less than sixty-six and two-thirds percent (66 2/3%) in aggregate
principal amount of the Bonds outstanding at the time given as herein provided with respect to
any other amendment, release, modification or waiver of any of the provisions hereof; provided,
however, the Guarantor shall not need any consent ofthe Trustee or the Owners with respect to
any modification, release or amendment of the Rent Guarantee or provisions related thereto.
If at any time the Guarantor shall request the consent of the Trustee to any such proposed
amendment, release or modification of this Guaranty Agreement or the waiver of any of the
provisions hereof: the Trustee shall (except as hereinafter set forth) cause notice of such proposed
amendment, release, modification or waiver to be published in a newspaper or financial journal of
general circulation among dealers in municipal securities in the City of New York, New York, and
mailed, first class mail, postage prepaid, to all Owners of outstanding Bonds. Such notice shall
briefly set forth the nature of such proposed amendment, release, modification or waiver and shall
state that copies of the instrument embodying the same are on file at the principal corporate trust
office of the Trustee for inspection by all Owners. If, within sixty (60) days or such longer period
as shall be prescribed by the Trustee following the mailing of such notice, the Owners of not less
than the requisite percentage of outstanding Bonds as required in this Section 5(b) shall have
consented to and approved the execution of such amendment, release, modification or waiver of
this Guaranty Agreement as herein provided, no Owner of any Bond shall have any right 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, the
Commission or the Guarantor from executing the same or from taking any action pursuant to the
provisions thereof
The consent of the City shall not be needed with respect to any modification, release or
amendment of the Bond Guarantee or provisions related thereto.
In no event shall any amendment be made without the written consent of the Guarantor.
No amendment, change, modification, alteration or termination of the Indenture or the
Lease Agreement shall be effective that would in any way increase the Guarantor's obligations
under this Guaranty Agreement without obtaining the prior written consent of the Guarantor.
(c) Effective Date. The obligations of the Guarantor hereunder shall arise
absolutely and unconditionally when any Bonds shall have been initially issued, sold and delivered
by the Commission as contemplated in the Indenture.
(d) Governing Law. This Guaranty Agreement and the rights and obligations
of the parties hereto (including third party beneficiaries) shall be governed, construed and
interpreted according to the substantive laws of the State of New York without regard to conflicts
or choice of laws principles of New York or any other jurisdiction.
(e) Entire Agreement. This Guaranty Agreement constitutes the entire
agreement, and supersedes all prior agreements, both written and oral, between the parties with
respect to the subject matter hereof
6
(t) Severability. If any provision of this Guaranty Agreement shall be held or
deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular
case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts
with any other provision or provisions hereof or any Constitution or statute or rule of public
policy, or for any other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid, inoperative or unenforceable
to any extent whatsoever.
(g) Notices. Any notice, approval, consent or other communication under this
Guaranty Agreement shall be in writing and shall be considered given when (1) delivered
personally, or (2) mailed by registered or certified mail, return receipt requested, and receipt has
been acknowledged or five days has elapsed after such mailing, or (3) transmitted by telecopy
with a confirming copy sent by overnight mail or courier service to the parties at the addresses
indicated below (or at such other address as a party may specifY by notice to the others pursuant
hereto). Notice given by a party's counsel shall be considered notice given by that party.
If to Guarantor, to it at:
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Attention: Corporate Treasury Department
Telecopy No. 203-373-3005
If to Trustee, to it at:
The Bank of New York
385 Rifle Camp Road
West Paterson, NJ 07424
Attention: Corporate Trust Administration
Telecopy No. 973-357-7840
If to the City, to it at:
Augusta, Georgia
530 Green Street
Augusta, Georgia 30911
Attention: Administrator
Telecopy:
(h) Captions. The headings of the several Sections of this Guaranty
Agreement are for convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
(i) Successors. This Guaranty Agreement shall be binding upon the
7
undersigned Guarantor and its successors and assigns and shall inure to the benefit of, and shall be
enforceable by the City and its successors and assigns, and the Trustee and its successors and
assigns and, subject to the provisions of Section 4(b) hereof, the Owners until the termination of
this Guaranty Agreement.
(j) Lessee May Act Through Subsidiaries. The Lessee may take any and all
actions and fulfill obligations hereunder through one or more subsidiaries; provided, however, that
the provisions of this Section shall not in any way alter the obligation of the Lessee to comply
with the provisions hereof.
(k) Exculpated Persons. No shareholder, director, officer, employee or agent
of the Guarantor (each, an "Exculpated Person") shall have any personal or individual liability for
any of the Guarantor's obligations under this Guaranty Agreement. In any action commenced to
enforce the obligations of the Guarantor created or arising under this Guaranty Agreement, no
claim shall be asserted and no judgment shall be enforceable, personally or individually, against
any Exculpated Person or any of such Exculpated Person's successors, assigns, heirs or personal
representatives and no such judgment shall be subject to execution nor be a lien on any assets of
any Exculpated Person or any of such Exculpated Person's successors, assigns, heirs or personal
representatives. The foregoing provisions shall not be held, construed or deemed to limit or
otherwise impair or affect in any way any other non-recourse, exculpation or indemnity rights
otherwise available to or for the benefit of any Exculpated Person.
(1) Counterparts. This Guaranty Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
(m) Termination. This Guaranty Agreement shall remain in full force and effect
without respect to future changes in conditions, including change in law, until the payment in full
of the Bonds, at which time this Guaranty Agreement will terminate and the Guarantor shall be
relieved of its obligations hereunder.
8
IN WITNESS WHEREOF, the Guarantor, pursuant to a resolution duly adopted, has
caused this Guaranty Agreement to be executed in its corporate name by its authorized officer,
and to evidence its acceptance the Trustee and the Commission have caused this Guaranty
Agreement to be executed in its corporate name by its authorized officer, all as of the date first
above written.
GENERALELECTIUCCONWANY
By:
Title:
AGREED AND ACCEPTED:
THE BANK OF NEW YORK, as Trustee
By:
Title:
AUGUSTA, GEORGIA
By:
Title:
9
The Mayor and Clerk, or in their absence or incapacity, the Mayor Pro- Tem and Assistant
Clerk, respectively, are hereby authorized and directed to prepare and furnish to the purchasers of
the Bonds, when the Bonds are issued, certified copies of all the proceedings and records of the
Issuer relating to the Bonds, and such other affidavits and certificates as may be required to show
the facts relating to the legality and marketability of the Bonds as such facts appear from the books
and records in the officers' custody and control or as otherwise known to them; and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall constitute
representations of the Issuer as to the truth of all statements contained therein.
Section 18. Actions Approved and Confirmed. All acts and doings of the officers of
the Issuer which are in conformity with the purposes and intents of this Resolution and in
furtherance of the issuance of the Bonds and the execution, delivery and performance of the
Indenture, the Lease Agreement and the Purchase Contract and the approval of the Guaranty
Agreement and Official Statement, shall be, and the same hereby are, in all respects approved
and confirmed.
Section 19. Severability of Invalid Provision. If anyone or more of the agreements
or provisions herein contained shall for any reason whatsoever be held invalid, then such
covenants, agreements or provisions shall be null and void and shall be deemed separable from
the remaining agreements and provisions and shall in no way affect the validity of any of the
other agreements and provisions hereof or of the Bonds authorized hereunder.
Section 20. Repealing Clause. All resolutions or parts thereof of the Issuer in conflict
with the provisions herein contained are, to the extent of such conflict, hereby superseded and
repealed.
Section 21. Effective Date. This Resolution shall take effect immediately upon its
adoption.
ADOPTED this 21st day of November, 2000.
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SECRETARY'S CERTIFICATE
The undersigned Secretary of the Augusta - Richmond County Commission (the
"Issuer"), DOES HEREBY CERTIFY that the foregoing pages of typewritten matter pertaining up
to not to exceed $3,500,000 in aggregate principal amount of Augusta, Georgia Special Facility
Airport Revenue Bonds (Garrett Aviation Services Project), Series 2000, constitute a true and
correct copy of the Resolution adopted on November 21, 2000, by a majority of the commissioners
of the Issuer in a meeting duly called and assembled, which was open to the public and at which a
quorum was present and acting throughout, and that the original of the Resolution appears of record
in the Minute Book of the Issuer which is in the undersigned's custody and control.
WITNESS my hand and the official seal of the Augusta - Richmond
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The Mayor and Clerk, or in their absence or incapacity, the Mayor Pro-Tern and Assistant
Clerk, respectively, are hereby authorized and directed to prepare and furnish to the purchasers of
the Bonds, when the Bonds are issued, certified copies of all the proceedings and records of the
Issuer relating to the Bonds, and such other affidavits and certificates as may be required to show
the facts relating to the legality and marketability of the Bonds as such facts appear from the books
and records in the officers' custody and control or as otherwise known to them; and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall constitute
representations of the Issuer as to the truth of all statements contained therein.
Section 18. Actions Approved and Confirmed. All acts and doings of the officers of
the Issuer which are in conformity with the purposes and intents of this Resolution and in
furtherance of the issuance of the Bonds and the execution, delivery and performance of the
Indenture, the Lease Agreement and the Purchase Contract and the approval of the Guaranty
Agreement and Official Statement, shall be, and the same hereby are, in all respects approved
and confirmed.
Section 19. Severability of Invalid Provision. If anyone or more of the agreements
or provisions herein contained shall for any reason whatsoever be held invalid, then such
covenants, . agreements or provisions shall be null and void and shall be deemed separable from
the remaining agreements and provisions and shall in no way affect the validity of any of the
other agreements and provisions hereof or of the Bonds authorized hereunder.
Section 20. Reoealine Clause. All resolutions or parts thereof of the Issuer in conflict
with the provisions herein contained are, to the extent of such conflict, hereby superseded and
repealed.
Section 21. Effective Date. This Resolution shall take effect immediately upon its
adoption.
ADOPTED this 21st day of November, 2000.
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SECRETARY'S CERTIFICATE
The undersigned Secretary of the Augusta - Richmond County Commission (the
"Issuer"), DOES HEREBY CERTIFY that the foregoing pages of typewritten matter pertaining up
to not to exceed $3,500,000 in aggregate principal amount of Augusta, Georgia Special Facility
Airport Revenue Bonds (Garrett Aviation Services Project), Series 2000, constitute a true and
correct copy of the Resolution adopted on November 21, 2000, by a majority of the commissioners
of the Issuer in a meeting duly called and assembled, which was open to the public and at which a
quorum was present and acting throughout, and that the original of the Resolution appears of record
in the Minute Book of the Issuer which is in the undersigned's custody and control.
"
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WITNESS my hand and the official seal of the Augusta - Richmond
.\~~mmiSSiOn, this .:{J,}~ MY of November, 2000. ~~ ~
~i 11". RK, AU - RICHMOND
J /..
COUNTY COMMISSION
County
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Doc' #: 605892; V. I
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