Drafter
Clerk 09/12/2011
title
AN ORDINANCE authorizing the issuance and sale of junior lien variable rate demand sewer revenue bonds in the principal amount of $100,000,000 to finance capital improvements to the county's sewer system; authorizing the form, terms, maturity, and interest rate modes for the bonds; authorizing the covenants and conditions under which the bonds will be issued; and approving an agreement to sell the bonds to U.S. Bank National Association.
Body
PREAMBLE:
The county owns and operates facilities for conveying and treating sewage and controlling combined sewer overflows, including but not limited to wastewater treatment plants, interceptor and trunk sewers, pumping stations, regulator stations, outfall sewers, storm sewers to divert stormwater from sanitary sewers, lands for application of biosolids, property rights, and buildings and other structures (collectively the "Sewer System" or the "System"), all in accordance with a comprehensive plan for metropolitan water pollution abatement under the authority of chapters 36.56 and 35.58 of the Revised Code of Washington ("RCW").
Long term service agreements with participating municipalities and other entities (the "Participants") obligate the county to treat and dispose of sewage collected by the Participants. The Participants must pay the costs of such services including debt service on bonds payable from sewer revenues, including the bonds authorized herein, and other indebtedness payable from and secured by sewer revenues. Comparable rates and charges have been established for customers who deliver sewage to the System but are not subject to a contract with the county for such service.
In accordance with RCW 35.58.200(3), the county has declared that the health, safety and welfare of people within the metropolitan area require that certain Participants discharge sewage collected by those Participants into facilities of the System.
The county has issued the following series of sewer revenue bonds with a senior lien on revenues of the Sewer System (the "Parity Bonds"):
Designation |
Ordinance |
Date of Issue |
Original Principal |
Outstanding Principal (As of 6/1/2011) |
2001 Bonds |
14225 |
11/28/2001 |
$270,060,000 |
$179,830,000 |
2002A Bonds |
14406 |
8/14/2002 |
100,000,000 |
94,960,000 |
2002B Bonds |
14406 |
10/03/2002 |
346,130,000 |
202,775,000 |
2003A Bonds |
14406 |
4/24/2003 |
96,470,000 |
90,155,000 |
2004A Bonds |
14753 |
3/18/2004 |
185,000,000 |
185,000,000 |
2004B Bonds |
14753 |
3/18/2004 |
61,760,000 |
55,080,000 |
2006 Bonds |
15385 |
5/16/2006 |
124,070,000 |
124,070,000 |
2006 (2nd) Bonds |
15385 |
11/30/2006 |
193,435,000 |
183,405,000 |
2007 Bonds |
15758 |
6/26/2007 |
250,000,000 |
250,000,000 |
2008 Bonds |
16133 |
8/14/2008 |
350,000,000 |
350,000,000 |
2009 Bonds |
16133 |
8/12/2009 |
250,000,000 |
250,000,000 |
2010 Bonds |
16868 |
7/29/2010 |
334,365,000 |
334,215,000 |
2011 Bonds |
16868 |
1/25/2011 |
175,000,000 |
175,000,000 |
The county has issued the following series of limited tax general obligation bonds additionally secured by a lien on revenues of the Sewer System junior and subordinate to the lien thereon of the Parity Bonds (the "Parity Lien Obligations"):
Designation |
Ordinance |
Date of Issue |
Original Principal |
Outstanding Principal (As of 6/1/2011) |
Series 2005 |
15033 |
4/21/2005 |
$ 200,000,000 |
$ 200,000,000 |
Series 2008 |
15779 |
2/12/2008 |
236,950,000 |
227,885,000 |
Series 2009 |
16133 |
4/8/2009 |
300,000,000 |
300,000,000 |
The county has issued the following series of sewer revenue bonds with a lien on revenues of the Sewer System junior and subordinate to the lien thereon of the Parity Bonds and the Parity Lien Obligations (the "Junior Lien Obligations"):
Designation |
Ordinance |
Date of Issue |
Original Principal |
Outstanding Principal (As of 6/1/2011) |
Series 2001A |
14171, 16719 |
4/15/2001 |
$ 50,000,000 |
$ 50,000,000 |
Series 2001B |
14172, 16720 |
4/15/2001 |
50,000,000 |
50,000,000 |
The county has issued the following series of limited tax general obligation bonds additionally secured by a lien on revenues of the Sewer System junior and subordinate to the lien thereon of the Parity Bonds, the Parity Lien Obligations and the Junior Lien Obligations (the "Multi-Modal LTGO/Sewer Revenue Bonds"):
Designation |
Ordinance |
Date of Issue |
Original Principal |
Outstanding Principal (As of 6/1/2011) |
Series 2010A |
16721 |
1/21/2010 |
$ 50,000,000 |
$ 50,000,000 |
Series 2010B |
16722 |
1/21/2010 |
50,000,000 |
50,000,000 |
The county has issued its Sewer Revenue Anticipation Notes, Commercial Paper Series A, in the aggregate principal amount of $100,000,000 at any time outstanding (the "Commercial Paper Notes"), with a lien on revenues of the Sewer System junior and subordinate to the lien thereon of the Parity Bonds, the Parity Lien Obligations, the Junior Lien Obligations and the Multi-Modal LTGO/Sewer Revenue Bonds, pursuant to Ordinance 12057, as amended.
The ordinances authorizing the issuance of the currently outstanding obligations of the System permit additional Junior Lien Obligations to be issued on the terms and conditions set forth in the ordinances authorizing the currently outstanding Junior Lien Obligations. The county wishes to issue not to exceed $100,000,000 in additional Junior Lien Obligations (the "Bonds") as provided in this ordinance. The county has received an offer from U.S. Bank National Association ("U.S. Bank") to purchase the Bonds on the terms set forth in this ordinance and in its proposed bondholder's agreement, and the council wishes to accept U.S. Bank's offer and approve the bondholder's agreement, as provided in this ordinance.
BE IT ORDAINED BY THE COUNCIL OF KING COUNTY:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Certain Definitions. As used in this ordinance, the following terms and phrases shall have the meanings set forth in this Section unless the context clearly indicates that another meaning is intended (singular definitions herein shall be deemed to include the plural thereof and vice versa):
"Account" means each Remarketing Proceeds Account, County Purchase Account and Liquidity Facility Purchase Account established within the Purchase Fund.
"Accreted Value" means with respect to any Capital Appreciation Bonds, as of any date of calculation, the sum of the amounts set forth in the ordinance, resolution or motion authorizing such bonds as the amounts representing the initial principal amount of such bonds plus the interest accumulated, compounded and unpaid thereon as of the most recent compounding date, as provided in the ordinance, resolution or motion authorizing the issuance of such bonds; provided that if such calculation is not made as of a compounding date, such amount shall be determined by straight-line interpolation as of the immediately preceding and the immediately succeeding compounding dates.
"Additional Junior Lien Obligations" means those revenue bonds or other revenue obligations that may be issued by the county after the issuance of the Bonds with a lien on Revenue of the System equal to the lien thereon of the Junior Lien Obligations.
"Additional Subordinate Lien Obligations" means those revenue bonds or other revenue obligations that may be issued by the county with a lien on Revenue of the System equal to the lien thereon of the Commercial Paper Notes and the Bank Note.
"Agency Customer" means any city, town, water-sewer district or other political subdivision, person, firm or private corporation that collects sewage from customers and disposes of any portion of that sewage into the Metropolitan Sewerage System and is not a Participant.
"Alternate Credit Enhancement" or "Alternate Liquidity Facility" means a letter of credit, insurance policy, line of credit, surety bond, standby purchase agreement or other security or liquidity instrument, as the case may be, issued in accordance with the terms hereof as a replacement or substitute for any Credit Enhancement or Liquidity Facility, as applicable, then in effect.
"Alternate Rate" means, on any Rate Determination Date, for any Interest Rate Mode, a rate per annum equal to 110% of (a) the SIFMA Municipal Swap Index of Municipal Market Data most recently available as of the date of determination, or (b) if such index is no longer available, or if the SIFMA Municipal Swap Index is no longer published, the S&P Weekly High Grade Index (formerly the J.J. Kenny Index), or if neither the SIFMA Municipal Swap Index nor the S&P Weekly High Grade Index is published, the index determined to equal the prevailing rate determined by the Remarketing Agent for tax-exempt state and local government bonds meeting criteria determined in good faith by the Remarketing Agent to be comparable under the circumstances to the criteria used by the Securities Industry and Financial Markets Association to determine the SIFMA Municipal Swap Index just prior to when the Securities and Financial Markets Association stopped publishing the SIFMA Municipal Swap Index. The Registrar shall make the determinations required by this definition, upon notification from the county, if there is no Remarketing Agent, if the Remarketing Agent fails to make any such determination or if the Remarketing Agent has suspended its remarketing efforts in accordance with the Remarketing Agreement; provided, however, that if neither the SIFMA Municipal Swap Index nor the S&P Weekly High Grade Index is available, the county shall designate in writing the index for the Registrar to use.
"Annual Debt Service" means, for designated obligations of the System, with respect to any calendar year, the sum of the following:
(1) The interest on such designated obligations due (i) on all interest payment dates (other than January 1) in such calendar year, and (ii) on January 1 of the next succeeding year, plus any Payment Agreement Payments due on such dates in respect of Payment Agreements for such obligations and minus any Payment Agreement Receipts due in such period in respect of Payment Agreements for such obligations.
(i) For purposes of calculating the amounts required to pay interest on such designated obligations, capitalized interest and accrued interest paid to the county upon the issuance of such obligations, and Debt Service Offsets pledged to the payment of such designated obligations will be excluded.
(ii) The amount of interest deemed to be payable on any such obligations bearing interest at a variable rate shall be calculated on the assumption that the interest rate on such obligations would be equal to the rate (the "assumed RBI rate") that is 90% of the average Bond Buyer Revenue Bond Index or comparable index during the fiscal quarter preceding the quarter in which the calculation is made; provided, however, that for purposes of determining actual compliance in any past calendar year with the rate covenants made in Section 5.1 of this ordinance, the actual amount of interest paid on any issue of variable rate obligations shall be taken into account.
(2) The principal due (at maturity or upon the mandatory redemption of Term Bonds prior to their maturity) for such designated obligations (i) on all principal payment dates (other than January 1) of such calendar year and (ii) on January 1 of the next succeeding year.
(3) An amount for assumed payments of principal of any of such designated obligations that are Balloon Maturity Bonds calculated for the applicable calendar year by amortizing the then outstanding principal amount of such obligations in accordance with a maturity schedule not exceeding 30 years from the date of issuance of such Balloon Maturity Bonds and resulting in approximately level debt service based on their actual interest rates (if such obligations bear interest at fixed rates) or on the assumed interest rate calculated as provided in Paragraph (1)(ii) of this definition (if such obligations bear interest at a variable rate).
In the case of Capital Appreciation Bonds, the Accreted Value due at maturity or upon the mandatory redemption of Term Bonds that are Capital Appreciation Bonds shall be included in the calculation of Annual Debt Service, and references in this ordinance to principal of Parity Bonds shall include the Accreted Value due at maturity or upon the mandatory redemption of any Capital Appreciation Bonds.
Notwithstanding the foregoing, debt service on bonds with respect to which a Payment Agreement is in force shall be calculated by the county to reflect the net economic effect of the terms of the bonds and the applicable Payment Agreement, in accordance with the requirements set forth in the ordinances applicable to such bonds.
"Applicable Factor" means (i) during the Initial Period, 70% and (ii) during any subsequent LIBOR Index Rate Period, 70%, or such other percentage as may be designated in writing by the county as the Applicable Factor for that LIBOR Index Rate Period pursuant to Section 2.9(i) hereof.
"Applicable Spread" means
(i) During the Initial Period, 57 basis points, which Applicable Spread is subject to the maintenance of the ratings assigned to the unenhanced Junior Lien Obligations (the "Ratings") by each Rating Agency. If any Rating changes, the Applicable Spread will be the number of basis points associated with the new Rating, as set forth in the following schedule:
Credit Rating |
Applicable Spread |
Fitch (to the extent that Fitch then maintains a Rating) |
S&P (to the extent that S&P then maintains a Rating) |
Moody's (to the extent that Moody's then maintains a Rating) |
|
A+ or higher |
A+ or higher |
A1 or higher |
57 |
A |
A |
A2 |
72 |
A- |
A- |
A3 |
92 |
BBB+ |
BBB+ |
Baa1 |
117 |
Below BBB+ |
Below BBB+ |
Below Baa1 |
Default |
|
|
|
|
If there is a split among the Ratings by the Rating Agencies, the lowest rating will prevail for purposes of determining the Applicable Spread. Any change in the Applicable Spread shall apply to the LIBOR Index Rate on which any Rating change occurs.
(ii) During any subsequent LIBOR Index Rate Period, the number of basis points or schedule of basis points set forth in the applicable Bank Purchase Agreement approved by the Finance Director pursuant to Section 8.2 of this ordinance.
"Authorized Denominations" means (i) with respect to Bonds in a Daily Mode, Weekly Mode, or LIBOR Index Mode, $100,000 and any integral multiple of $5,000 in excess thereof, (ii) with respect to Bonds in a Flexible Mode, $100,000 and any integral multiple of $1,000 in excess thereof, and (iii) with respect to Bonds in a Term Rate Mode or a Fixed Rate Mode, $5,000 and any integral multiple thereof.
"Automatic Termination Event" means an event of default set forth in a Reimbursement Agreement between the county and a Liquidity Provider that would result in the immediate and automatic termination or suspension of the Liquidity Facility prior to its stated expiration date without prior notice from the Liquidity Provider to the Tender Agent
"Available Amount" means the amount available under any Credit Enhancement or Liquidity Facility, as applicable, to pay the principal of and interest on the Bonds and/or the Purchase Price of the Bonds, as applicable.
"Balloon Maturity Bonds" means any obligations of the System, other than Term Bonds, the entire principal amount of which is due at maturity without serial bond payments or sinking fund redemption payments, including the Bonds.
"Bank" means U.S. Bank, as the initial Owner of the Bonds and its successors and assigns in accordance with the terms of the Bank Purchase Agreement and the terms hereof and any subsequent Owner of the Bonds during any LIBOR Index Rate Period.
"Bank Note" means the bank note authorized to be issued by Ordinance 12057 of the county, as amended, to secure payment of the Commercial Paper Notes.
"Bank Purchase Agreement" means, during the Initial Period, the Bondholder's Agreement between the county and U.S. Bank, as the same may be amended from time to time, and during any LIBOR Index Rate Period other than the Initial Period, means any agreement between the county and a Bank that may be designated as a Bank Purchase Agreement.
"Bank Purchase Date" means (i) the Initial Bank Purchase Date and (ii) during any LIBOR Index Rate Period other than the Initial Period, the date designated by the county pursuant to Section 2.9(i) hereof.
"Beneficial Owner" means, when the Bonds are held in a Book-Entry System, any Person who acquires a beneficial ownership interest in a Bond held by the Securities Depository. When the Bonds are not held in a Book-Entry System, Beneficial Owner means Owner for purposes of this ordinance.
"Bond Counsel" means any firm of nationally recognized municipal bond attorneys selected by the county and experienced in the issuance of municipal bonds and matters relating to the exclusion of the interest thereon from gross income for Federal income tax purposes.
"Bond Register" means the registration books maintained by the Registrar for purposes of identifying ownership of the Bonds.
"Bondowners' Trustee" means the bank or financial institution selected by the Owners of the Bonds pursuant to Section 6.2 of this ordinance.
"Bonds" means the King County, Washington, Junior Lien Variable Rate Demand Sewer Revenue Bonds, Series 2011, authorized to be issued in the aggregate principal amount of not to exceed $100,000,000 pursuant to Section 2.1 of this ordinance.
"Book-Entry System" means the system maintained by a Securities Depository described in Article II of this ordinance.
"Business Day" means any business day other than (i) a Saturday or Sunday or (ii) a day on which the Bank, the Calculation Agent, the Registrar, the Paying Agent, the Tender Agent, or the Remarketing Agent, if any, are required or authorized to be closed or (iii) a day on which the office of the Credit Provider or Liquidity Provider at which it will pay draws or advances are required or authorized to be closed, or (iv) a day on which The New York Stock Exchange is closed.
"Calculation Agent" means, during the Initial Period, the Bank, and thereafter means the Paying Agent or any other Person appointed by the county, with the consent of the Bank, to serve as Calculation Agent for the Bonds.
"Capital Appreciation Bonds" means any Parity Bonds the interest on which is compounded, accumulated and payable only upon redemption or on the maturity date of such Parity Bonds; provided, however, that Parity Bonds may be deemed to be Capital Appreciation Bonds for only a portion of their term pursuant to the ordinance, resolution or motion authorizing their issuance. On the date on which Parity Bonds no longer are Capital Appreciation Bonds, they shall be deemed outstanding in a principal amount equal to their Accreted Value.
"Certified Public Accountant" means an independent certified public accountant (or firm of certified public accountants) selected by the county and having a favorable national reputation.
"Closing Date" means the date of delivery of the Bonds to the Bank as the initial purchaser thereof.
"Commercial Paper Notes" means the King County, Washington, Sewer Revenue Bond Anticipation Notes, Commercial Paper Series A, authorized, issued, and outstanding from time to time pursuant to Ordinance 12057 of the county passed on December 11, 1995, as amended.
"Comprehensive Plan" means the county's comprehensive water pollution abatement plan authorized by RCW 35.58.200 and defined in King County Code ("K.C.C.") 28.82.150 as the Comprehensive Sewage Disposal Plan adopted by Resolution 23 of the Metro Council on April 22, 1959, and all amendments thereto, together with any amendments hereafter approved by ordinance of the county.
"Conversion Date" means with respect to the Bonds in a particular Interest Rate Mode, the day on which another Interest Rate Mode for the Bonds begins.
"Conversion Notice" means the notice from the county to the other Notice Parties of the county's intention to change the Interest Rate Mode with respect to the Bonds.
"County Bonds" means Bonds held by the Registrar for and on behalf of the county or any nominee for (or any Person who owns such Bonds for the sole benefit of) the county pursuant to Section 3.14(c) of this ordinance.
"County Purchase Account" means each account with that name established within the Bond Purchase Fund pursuant to Section 3.14 of this ordinance.
"Credit Enhancement" means any letter of credit, insurance policy, surety bond, line of credit or other instrument, if any, that secures or guarantees the payment of principal of and interest on the Bonds.
"Credit Provider" means any bank, insurance company, pension fund or other financial institution that provides a Credit Enhancement or Alternate Credit Enhancement for the Bonds.
"Current Mode" shall have the meaning specified in Section 2.10(a)(i) of this ordinance.
"Daily Mode" means the Interest Rate Mode during which the Bonds bear interest at the Daily Rate.
"Daily Rate" means the per annum interest rate on any Bond in the Daily Mode determined pursuant to Section 2.6(a) of this ordinance.
"Daily Rate Period" means the period during which a Bond in the Daily Mode bears interest at a Daily Rate, which shall be from the Business Day upon which a Daily Rate is set to but not including the next succeeding Business Day.
"Debt Service Offset" means receipts of the county that are (i) legally available to pay debt service on obligations payable from Revenue of the System, including without limitation federal interest subsidy payments, and (ii) pledged to the payment of obligations payable from Revenue of the System.
"Default" means any of the events or conditions set forth in Section 6.1 of this ordinance.
"Default Rate" has the meaning set forth in the Bank Purchase Agreement.
"Delayed Remarketing Period" has the meaning specified in Section 3.15(b) of this ordinance.
"Determination of Taxability" means and shall be deemed to have occurred on the first to occur of the following:
(i) on that date when the county files any statement, supplemental statement or other tax schedule, return or document that discloses that an Event of Taxability has in fact occurred;
(ii) on the date when the county is advised in writing by the Commissioner or any District Director of the Internal Revenue Service (or any other government official or agent exercising the same or a substantially similar function from time to time) that, based upon filings of the county, or upon any review or audit of the county or upon any other ground whatsoever, an Event of Taxability has occurred; or
(iii) on that date when the county receives notice from any current or former Owner or Beneficial Owner of a Bond that the Internal Revenue Service (or any other government official or agency exercising the same or a substantially similar function from time to time) has assessed as includable in the gross income of such current or former Owner or Beneficial Owner the interest on the Bond due to the occurrence of an Event of Taxability;
provided, however, that no Determination of Taxability shall occur under subparagraph (ii) or (iii) above unless the county has been afforded the opportunity, at its expense, to contest any such assessment, and, further, no Determination of Taxability shall occur until such contest, if made, has been finally determined; provided further, however, that upon demand from the current or former Owner or Beneficial Owner, the county shall promptly reimburse such Owner or Beneficial Owner for any payments, including any taxes, interest, penalties or other charges, that such Owner or Beneficial Owner has been obligated to make as a result of the Determination of Taxability.
"DTC" means The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, and any successor thereto.
"DTC Participants" means those broker-dealers, banks and other financial institutions for which DTC holds bonds or other securities as securities depository.
"Electronic Means" means telecopy, facsimile transmission, etransmission or other similar electronic means of communication providing evidence of transmission.
"Event of Taxability" means a change in law or fact or the interpretation thereof, or the occurrence or existence of any fact, event or circumstance (including, without limitation, the taking of any action by the county, or the failure to take any action by the county, or the making by the county of any misrepresentation herein or in any certificate required to be given in connection with the issuance, sale or delivery of the Bonds) that has the effect of causing interest paid or payable on the Bonds to become included, in whole or in part, in the gross income of the current or former Owner or Beneficial Owner for federal income tax purposes.
"Excess Interest" has the meaning set forth in Section 2.9(h) hereof.
"Expiration Date" means the stated expiration date of any Credit Enhancement or Liquidity Facility, as it may be extended from time to time as provided in the Credit Enhancement or in the Liquidity Facility or Reimbursement Agreement, as applicable, or any earlier date on which the Credit Enhancement or the Liquidity Facility may terminate at the direction of the county, expire or be cancelled.
"Favorable Opinion of Bond Counsel" means, with respect to any action the occurrence of which requires such an opinion, an unqualified Opinion of Counsel, which shall be a Bond Counsel, to the effect that such action is permitted under this ordinance and will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of the Bonds).
"Finance Director" means the director of the finance and business operations division of the county or his or her designee, or the successor to the duties of that office.
"Fiscal Agency Agreement" means the agreement of that name dated February 1, 2007, as amended, between the State of Washington and The Bank of New York Mellon, and any amendments and supplements thereto and replacements thereof.
"Fixed Rate" means the per annum interest rate on any Bond in the Fixed Rate Mode determined pursuant to Section 2.7(b) of this ordinance.
"Fixed Rate Bond" means a Bond in the Fixed Rate Mode.
"Fixed Rate Mode" means the Interest Rate Mode during which the Bonds bear interest at the Fixed Rate.
"Fixed Rate Period" means for the Bonds in the Fixed Rate Mode, the period from the Conversion Date upon which the Bonds were converted to the Fixed Rate Mode to but not including the Maturity Date for the Bonds.
"Flexible Mode" means the Interest Rate Mode during which the Bonds bear interest at the Flexible Rate.
"Flexible Rate" means the per annum interest rate on a Bond in the Flexible Mode determined for such Bond pursuant to Section 2.5 of this ordinance. The Bonds in the Flexible Mode may bear interest at different Flexible Rates.
"Flexible Rate Bond" means a Bond in the Flexible Mode.
"Flexible Rate Period" means the period of from one to 270 calendar days (which period must end on a day preceding a Business Day) during which a Flexible Rate Bond shall bear interest at a Flexible Rate, as established by the Remarketing Agent pursuant to Section 2.5 of this ordinance. The Bonds in the Flexible Mode may be in different Flexible Rate Periods.
"Future Parity Bonds" means any sewer revenue bonds, warrants or other obligations that may be issued in the future as Parity Bonds.
"Government Obligations" means those obligations now or hereafter defined as such in Chapter 39.53 of the Revised Code of Washington, as such chapter may be hereafter amended or restated.
"Initial Bank Purchase Date" means the date that is three years after the Closing Date.
"Initial Period" means the initial LIBOR Index Rate Period commencing on the Closing Date and ending on the first to occur of (i) the Initial Bank Purchase Date, (ii) the Conversion Date next succeeding the Closing Date, or (iii) the Maturity Date. "Interest Accrual Period" means the period during which a Bond accrues interest payable on the next Interest Payment Date applicable thereto. Each Interest Accrual Period shall commence on (and include) the last Interest Payment Date to which interest has been paid (or, if no interest has been paid, from the Closing Date) to, but not including, the Interest Payment Date on which interest is to be paid. If, at the time of authentication of any Bond, interest is in default or overdue on the Bonds, such Bond shall bear interest from the date to which interest has previously been paid in full or made available for payment in full on Outstanding Bonds.
"Interest Payment Date" means each date on which interest is to be paid and is: (i) with respect to the Bonds in the Flexible Mode, each Mandatory Purchase Date applicable thereto; (ii) with respect to the Bonds in the Daily Mode or Weekly Mode, the first Business Day of each month; (iii) with respect to the Bonds in a Term Rate Mode or a Fixed Rate Mode, the first day of the sixth calendar month following the month in which such Term Rate Mode or a Fixed Rate Mode takes effect, and the first day of each sixth calendar month thereafter or, upon the receipt by the Registrar of a Favorable Opinion of Bond Counsel, any other six-month interval chosen by the county (beginning with the first such day which is at least three months after the Conversion Date) and, with respect to a Term Rate Period, the final day of the current Interest Period if other than a regular six-month interval; (iv) with respect to the Bonds in the LIBOR Index Mode, the first Business Day of each month (beginning with the first such day after the Closing Date or a Conversion Date, as applicable); (v) (without duplication as to any Interest Payment Date listed above) each Maturity Date; and (vi) with respect to any Liquidity Provider Bonds, the dates set forth in the Reimbursement Agreement.
"Interest Period" means, for the Bonds in a particular Interest Rate Mode, the period of time that the Bonds bear interest at the rate (per annum) that becomes effective at the beginning of such period, and includes a Flexible Rate Period, a Daily Rate Period, a Weekly Rate Period, a LIBOR Interest Period, a Term Rate Period and a Fixed Rate Period.
"Interest Rate Mode" means, as the context may require, the Flexible Mode, the Daily Mode, the Weekly Mode, the LIBOR Index Mode, the Term Rate Mode or the Fixed Rate Mode.
"Junior Lien Bond Fund" means the "King County, Washington, Junior Lien Obligation Redemption Fund" created pursuant to Section 5.01 of Ordinance 14171.
"Junior Lien Obligations" means the bonds identified as such in the Preamble to this ordinance, together with the Bonds and any Additional Junior Lien Obligations. "Junior Lien Obligations" include any obligations owed by the county under any Reimbursement Agreement.
"Letter of Representations" means the Blanket Issuer Letter of Representations heretofore entered into by the county with DTC, or any similar agreement or document relating to a successor to DTC as Securities Depository.
"LIBOR" means, for any day, the London interbank offered rate for U.S. dollar deposits for a one-month period, as reported as of such day on Reuters Screen LIBOR01 Page or any successor thereto, which shall be that one-month LIBOR rate in effect on the Rate Determination Date, such rate to be reset monthly as set forth in Section 2.9(a) hereof.
"LIBOR Index Mode" means the Interest Rate Mode during which the Bonds bear interest at the LIBOR Index Rate.
"LIBOR Index Rate" means a per annum rate of interest, calculated on each Rate Determination Date, equal to the product of the Applicable Factor and LIBOR in effect on that date, plus the Applicable Spread.
"LIBOR Index Rate Conversion Date" means (a) the date on which the Bonds begin to bear interest at the LIBOR Index Rate or, (b) if the Bonds have previously borne interest at the LIBOR Index Rate during a LIBOR Index Rate Period then ending, the Bank Purchase Date occurring at the end of the then ending LIBOR Index Rate Period.
"LIBOR Index Rate Period" means (a) the Initial Period and (b) each period thereafter from and including a LIBOR Index Rate Conversion Date to but excluding the earlier of (i) the immediately succeeding Bank Purchase Date and (ii) the Maturity Date. "LIBOR Interest Period" means, during the LIBOR Index Mode, the period from (and including) the Closing Date to but not including the next succeeding Interest Payment Date and thereafter means the period from (and including) an Interest Payment Date to but not including the following Interest Payment Date.
"Liquidity Facility" means any letter of credit, line of credit, standby purchase agreement or other instrument then in effect that provides for the payment of the purchase price of Bonds upon the tender thereof if remarketing proceeds are insufficient therefor.
"Liquidity Facility Purchase Account" means the account by that name created pursuant to Section 3.14 of this ordinance.
"Liquidity Provider" means any bank, insurance company, pension fund or other financial institution that provides a Liquidity Facility or Alternate Liquidity Facility for the Bonds.
"Liquidity Provider Bonds" means any Bonds purchased by a Liquidity Provider with funds drawn on or advanced under a Liquidity Facility.
"Long-Term Mode" means a LIBOR Index Mode, a Term Rate Mode or a Fixed Rate Mode.
"Mandatory Purchase Date" means: (i) for a Flexible Rate Bond, the first Business Day following the last day of each Flexible Rate Period for that Bond; (ii) for Bonds in the Term Rate Mode, the first Business Day following the last day of each Term Rate Period; (iii) any Conversion Date; (iv) any Substitution Date; (v) the fifth Business Day prior to any Expiration Date (other than as a result of an Automatic Termination Event); (vi) the date specified by the Registrar following the occurrence of an event of default (other than an Automatic Termination Event) under the Reimbursement Agreement, which date shall be a Business Day not more than 25 nor less than 20 days after the Registrar's receipt of written notice of such event of default from the Credit Provider or the Liquidity Provider and in no event later than the day preceding the termination date specified by the Credit Provider or the Liquidity Provider; (vii) the date specified by the Registrar following receipt of notice by the Registrar from the Credit Provider that the Credit Enhancement will not be reinstated following a drawing to pay interest on the Bonds (other than interest on Bonds no longer Outstanding after such drawing), which date shall be a Business Day not more than five days after the Registrar's receipt of such notice; (viii) for Bonds in the Daily Mode or Weekly Mode, any Business Day specified by the county not less than 20 days after the Registrar's receipt of such notice and in no event later than the day preceding the Expiration Date; (ix) a Bank Purchase Date, (x) with respect to each Bond then in the LIBOR Index Mode and each Unremarketed Bond following the occurrence of a Default and written direction from the Bank for the Tender Agent to call the Bonds for mandatory tender for purchase, the twentieth Business Day after the Tender Agent receives that notice; and (xi) with respect to each Bond then in the LIBOR Index Mode, the date that is the last Business Day prior to the 120th day following a Taxable Date.
"Maturity Date" means January 1, 2042, and, if established pursuant to Section 2.10(b)(v) of this ordinance upon a change to the Fixed Rate Mode, any Serial Maturity Date.
"Maximum Rate" means (i) with respect to all Bonds other than Liquidity Provider Bonds, Bonds in the LIBOR Index Mode and Unremarketed Bonds, a rate of interest equal to the lesser of (a) 15% per annum or (b) the per annum interest rate used to calculate the Available Amount under the Liquidity Facility, (ii) with respect to Liquidity Provider Bonds, the rate specified in the Reimbursement Agreement, and (iii) with respect to Bonds in the LIBOR Index Mode and Unremarketed Bonds, the rate specified in the applicable Bank Purchase Agreement. In no event shall such rate(s) exceed the highest rate allowed by law.
"Moody's" means Moody's Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the county after consultation with the Remarketing Agent.
"MSRB" means the Municipal Securities Rulemaking Board or any successors to its functions.
"Multi-Modal LTGO/Sewer Revenue Bonds" means the county's Multi-Modal Limited Tax General Obligation Bonds (Payable from Sewer Revenue), Series 2010A and Series 2010B, and any additional limited tax general obligation bonds of the county payable from Revenue of the System and having the same lien on such revenue as those bonds.
"Net Revenue" means Revenue of the System less Operating and Maintenance Expenses.
"New Mode" shall have the meaning specified in Section 2.10(a) of this ordinance.
"New York Banking Day" means any day (other than a Saturday or Sunday) on which commercial banks are open for business in New York, New York.
"Notice Parties" means the county, the Bank, the Registrar, the Paying Agent, the Tender Agent, the Remarketing Agent, if any, the Credit Provider, if any, and the Liquidity Provider, if any.
"Operating and Maintenance Expenses" means all normal expenses incurred by the county in causing the System to be maintained in good repair, working order and condition and shall include payments to any private or governmental agency for the operation or maintenance of facilities or for the disposal of sewage but shall exclude any allowance for depreciation.
"Opinion of Counsel" means a written legal opinion from a firm of attorneys experienced in the matters to be covered in the opinion.
"Outstanding," when used as of a particular time with reference to Bonds, means all Bonds delivered hereunder except:
(a) Bonds cancelled by the Registrar or surrendered to the Registrar for cancellation;
(b) Bonds paid or deemed to have been paid within the meaning of this ordinance; and
(c) Bonds in lieu of or in substitution for which replacement Bonds have been executed by the county and delivered by the Registrar hereunder.
Notwithstanding the foregoing, Liquidity Provider Bonds shall remain Outstanding until the Liquidity Provider is paid all amounts due on such Bonds.
"Owner" means the registered owner of a Bond, including the Securities Depository, if any, or its nominee.
"Parity Bond Fund" means the "Water Quality Revenue Bond Account" designated pursuant to Section 30 of Ordinance 12076 of the county for the purpose of paying and securing the payment of the Parity Bonds.
"Parity Bond Reserve Account" means the bond reserve account in the Parity Bond Fund securing the payment of the Parity Bonds.
"Parity Bonds" means the bonds identified as such in the Preamble to this ordinance, together with any Future Parity Bonds. "Parity Bonds" include any Parity Payment Agreements and parity reimbursement agreements entered into with the provider of a Credit Facility securing any Parity Bonds.
"Parity Lien Obligation Bond Fund" means the Water Quality Limited Tax General Obligation Bond Redemption Fund, established pursuant to Section 8 of Ordinance 11241 of the county, to provide for payment of Parity Lien Obligations.
"Parity Lien Obligation Payment Agreement" means a Payment Agreement under which the county's payment obligations are expressly stated to constitute a charge and lien on the Revenue of the System equal in rank with the charge and lien upon such revenue securing amounts required to be paid into the Parity Lien Obligation Bond Fund to pay and secure the payment of principal of and interest on the Parity Lien Obligations.
"Parity Lien Obligations" means bonds identified as such in the Preamble to this ordinance and any additional Parity Lien Obligations. "Parity Lien Obligations" include any Parity Lien Obligation Payment Agreements and parity reimbursement agreements entered into with the provider of a Credit Facility securing any Parity Lien Obligations.
"Parity Payment Agreement" means a Payment Agreement under which the county's payment obligations are expressly stated to constitute a charge and lien on the Revenue of the System equal in rank with the charge and lien upon such revenue securing amounts required to be paid into the Bond Fund to pay and secure the payment of principal of and interest on the Parity Bonds.
"Participant" means each city, town, county, water-sewer district, municipal corporation, person, firm or private corporation that disposes of any portion of its sanitary sewage into the Sewer System and has entered into a Service Agreement with the county.
"Paying Agent" means the Registrar or such other or additional Paying Agent designated from time to time pursuant to Section 7.1 of this ordinance.
"Payment Agreement" means, to the extent permitted from time to time by applicable law, a written agreement entered into by the county (i) in connection with or incidental to the issuance, incurring or carrying of bonds or other obligations of the county secured in whole or in part by a lien on Revenue of the System; (ii) for the purpose of managing or reducing the county's exposure to fluctuations or levels of interest rates, currencies or commodities or for other interest rate, investment, asset or liability management purposes; (iii) with a Qualified Counterparty; and (iv) which provides, on either a current or forward basis, for an exchange of payments determined in accordance with a formula specified therein.
"Payment Agreement Payments" means the amounts periodically required to be paid by the county to the Qualified Counterparty pursuant to a Payment Agreement. The term "Payment Agreement Payments" does not include any termination payment required to be paid with respect to a Payment Agreement.
"Payment Agreement Receipts" means the amounts periodically required to be paid by the Qualified Counterparty to the county pursuant to a Payment Agreement.
"Person" means a corporation, association, partnership, limited liability company, joint venture, trust, organization, business, individual or government or any governmental agency or political subdivision thereof.
"Principal Office" means, with respect to the Registrar and Paying Agent, the designated office of the Registrar indicated in Section 10.3 of this ordinance; or such other or additional offices as may be specified to the county by the Registrar or Paying Agent.
"Principal Payment Date" means any date upon which the principal amount of Bonds is due hereunder, including the Maturity Date, any Serial Maturity Date, any Redemption Date, or the date the maturity of any Bond is accelerated pursuant to the terms hereof or otherwise.
"Professional Utility Consultant" means a licensed professional engineer, a Certified Public Accountant, or other independent person(s) or firm(s) selected by the county having a favorable reputation for skill and experience with sewer systems of comparable size and character to the System in such areas as are relevant to the purposes for which they are retained.
"Public Works Trust Fund Loans" means loans to the county by the State of Washington Department of Community, Trade and Economic Development under the Public Works Trust Fund loan program pursuant to loan agreements in effect as of the date of this ordinance and any loan agreements hereafter entered into by the county under the Public Works Trust Fund loan program, the repayment obligations of which are secured by a lien on Revenue of the System equal to the lien thereon established by such loan agreements.
"Purchase Date" means (i) for a Bond in the Daily Mode or the Weekly Mode, any Business Day selected by the Beneficial Owner of said Bond pursuant to the provisions of Section 3.6 of this ordinance, and (ii) any Mandatory Purchase Date.
"Purchase Fund" means the fund by that name created in Section 3.14 of this ordinance.
"Purchase Price" means an amount equal to the principal amount of any Bonds purchased on any Purchase Date, plus accrued interest to the Purchase Date (unless the Purchase Date is an Interest Payment Date, in which case the Purchase Price shall not include accrued interest, which shall be paid in the normal course).
"Purchaser Rate" has the meaning set forth in the applicable Bank Purchase Agreement.
"Qualified Counterparty" means with respect to a Payment Agreement an entity (i) whose senior long term debt obligations, other senior unsecured long term obligations or claims paying ability or whose payment obligations under a Payment Agreement are guaranteed by an entity whose senior long term debt obligations, other senior unsecured long term obligations or claims paying ability are rated (at the time the Payment Agreement is entered into) at least as high as A3 by Moody's and A- by S&P, or the equivalent thereof by any successor thereto, and (ii) who is otherwise qualified to act as the other party to a Payment Agreement under any applicable laws of the State.
"Rate Determination Date" means any date on which the interest rate on Bonds is determined, which, (i) in the case of the Flexible Mode, shall be the first day of an Interest Period; (ii) in the case of the Daily Mode, shall be each Business Day commencing with the first day (which must be a Business Day) the Bonds become subject to the Daily Mode; (iii) in the case of the Weekly Mode, (A) initially, each Tuesday or, if Tuesday is not a Business Day, then the Business Day next succeeding such Tuesday or such other day as may be established pursuant to Section 2.6(c) of this ordinance, and (B) not later than the Business Day preceding a Conversion Date, a Substitution Date or a Mandatory Purchase Date specified in clause (viii) of the definition of Mandatory Purchase Date; (iv) in the case of the Term Rate Mode, shall be a Business Day no earlier than 15 Business Days and no later than the Business Day next preceding the first day of an Interest Period, as determined by the Remarketing Agent; (v) in the case of the LIBOR Index Mode, shall be the date that is two New York Banking Days before the first day of each LIBOR Interest Period, except as provided in Section 2.1(a); and (vi) of this ordinance in the case of the Fixed Rate Mode, shall be a date determined by the Remarketing Agent which shall be at least one Business Day prior to the Conversion Date.
"Rate Stabilization Fund" means the fund of that name created pursuant to Section 13.D of Ordinance 12314 of the county.
"Rating Agency" means Moody's or Standard & Poor's or, if either Moody's or Standard & Poor's does not furnish a rating on the Bonds, then each such nationally recognized rating agency then rating the Bonds.
"Rating Confirmation Notice" means a notice from Moody's or S&P, as appropriate, confirming that the rating on the Bonds will not be lowered or withdrawn (other than a withdrawal of a short-term rating upon a change to a Long-Term Mode) as a result of the action proposed to be taken.
"Record Date" means (i) with respect to Bonds in a Short-Term Mode, the last Business Day before an Interest Payment Date; and (ii) with respect to Bonds in a Long-Term Mode, the 15th day (whether or not a Business Day) of the month next preceding each Interest Payment Date.
"Redemption Date" means the date fixed for redemption of Bonds subject to redemption in any notice of redemption given in accordance with the terms hereof.
"Redemption Price" means an amount equal to the principal of and premium, if any, and accrued interest, if any, on the Bonds to be paid on the Redemption Date.
"Registrar" means initially, the fiscal agency of the State of Washington in New York, New York, or any successor Registrar appointed pursuant to Section 7.1 of this ordinance. The Registrar's duties include registering and authenticating the Bonds, maintaining the Bond Register, registering the transfer of Bonds, paying interest on and principal of the Bonds, paying the Purchase Price of tendered Bonds, and holding the Credit Enhancement and Liquidity Facility.
"Reimbursement Agreement" means any reimbursement agreement, credit agreement, line of credit agreement, standby purchase agreement or other agreement, by and between the county and a Credit Provider or Liquidity Provider.
"Remarketing Agent" means any investment banking firm appointed as provided in Section 7.2 of this ordinance.
"Remarketing Agreement" means any agreement between the county and a Remarketing Agent, as it may be amended or supplemented from time to time in accordance with its terms.
"Remarketing Proceeds Account" means the account by that name created pursuant to Section 3.14 of this ordinance.
"Revenue Fund" means the "Water Quality Operating Account" as designated by Section 30 of Ordinance 12076 of the county.
"Revenue of the System" means all the earnings, revenues and money received by the county from or on account of the operations of the Sewer System and the income from the investment of money in the Revenue Fund or any account within such fund, but does not include (i) any money collected pursuant to the Service Agreements applicable to administrative costs of the county other than costs of administration of the System and (ii) any Debt Service Offsets.
"Rule" means the Securities and Exchange Commission's Rule 15c2under the Securities Exchange Act of 1934, as amended.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, duly organized and existing under and by virtue of the laws of the State of New York, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "S&P" shall be deemed to refer to any other nationally recognized securities rating agency selected by the county after consultation with the Remarketing Agent, if any.
"Securities Depository" means DTC or such other securities depository as the county may designate in a certificate of the county delivered to the Registrar if the Bonds are to be held in a Book-Entry System.
"Senior Lien Payments" means, for any calendar year, the sum of the following:
(1) Annual Debt Service for such year for then outstanding Parity Bonds and Parity Lien Obligations; and
(2) any other payments described in Paragraphs Second through Fifth of Section 4.2 of this ordinance required to be made during such year.
"Serial Bonds" means the Bonds maturing on the Serial Maturity Dates, as determined pursuant to Section 2.10(b) of this ordinance.
"Serial Maturity Dates" means the dates on which the Serial Bonds mature, as determined pursuant to Section 2.10(b) of this ordinance.
"Serial Payments" means the payments to be made in payment of the principal of the Serial Bonds on the Serial Maturity Dates.
"Service Agreements" means the sewage disposal agreements entered into between the county and municipal corporations, persons, firms, private corporations, or governmental agencies providing for the disposal by the county of sewage collected from such contracting parties.
"Short-Term Mode" means the Daily Mode, the Weekly Mode or the Flexible Mode.
"SRF Loans" means loans to the county by the State of Washington Department of Ecology pursuant to loan agreements in effect as of the date of this ordinance and any loans and loan agreements hereafter entered into by the county under the State of Washington water pollution control revolving fund loan program, the repayment obligations of which are secured by a lien on Revenue of the System equal to the lien thereon established by such loan agreements.
"Statutory Tax Rate" means as of any date of determination, the highest federal income tax rate (expressed in decimals) applicable in each tax year on the taxable income of corporations pursuant to Section 11 of the Code, without regard to any minimum additional tax provision or provisions, which as of the date hereof is 0.35.
"Subordinate Lien Obligations" means the Commercial Paper Notes, the Bank Note and any Additional Subordinate Lien Obligations.
"Substitution Date" means the date upon which an Alternate Credit Enhancement or Alternate Liquidity Facility is scheduled to be substituted for the Credit Enhancement or Liquidity Facility then in effect.
"System" or "Sewer System" means the sewers and sewage disposal facilities now or hereafter acquired, constructed, used or operated by the county for the purpose of carrying out the Comprehensive Plan.
"Taxable Date" means the date as of which interest on the Bonds is first included in gross income of the Owner of the Bond (including, without limitation, any previous Owner) thereof as a result of an Event of Taxability as such a date is established pursuant to a Determination of Taxability.
"Taxable Rate" means as of any date of determination, the quotient obtained by dividing the then current interest rate on the Bonds by (1.00 minus the Statutory Tax Rate) and expressing that quotient as an interest rate per annum (rounded to two decimals).
"Tax Certificate" means the federal tax certificate with respect to certain federal tax matters executed on behalf of the county upon the issuance of each series of the Bonds.
"Tender Agent" means the Registrar or such other or additional Tender Agent designated from time to time.
"Tender Notice" means a notice delivered by Electronic Means or in writing that states (i) the principal amount of such Bond to be purchased pursuant to Section 3.6 of this ordinance, (ii) the Purchase Date on which such Bond is to be purchased, (iii) applicable payment instructions with respect to the Bonds being tendered for purchase and (iv) an irrevocable demand for such purchase.
"Tender Notice Deadline" means (i) during the Daily Mode, 11:00 A.M. on any Business Day and (ii) during the Weekly Mode, 5:00 P.M. on the Business Day seven days prior to the applicable Purchase Date.
"Term Rate" means the per annum interest rate for the Bonds in the Term Rate Mode determined pursuant to Section 2.7(a) of this ordinance.
"Term Rate Mode" means the Interest Rate Mode during which the Bonds bear interest at the Term Rate.
"Term Rate Period" means the period from (and including) the Conversion Date or the date of initial issuance of the Bonds, as applicable, to (but excluding) the last day of the first period that the Bonds shall be in the Term Rate Mode as established by the county for the Bonds pursuant to Section 2.10(a)(i) of this ordinance and, thereafter, the period from (and including) the beginning date of each successive Interest Period selected for the Bonds by the county pursuant to Section 2.7(a) of this ordinance while it is in the Term Rate Mode to (but excluding) the commencement date of the next succeeding Interest Period, including another Term Rate Period. Except as otherwise provided in this ordinance, an Interest Period for the Bonds in the Term Rate Mode must be at least 180 days in length.
"Unremarketed Bonds" means Bonds that on the applicable Bank Purchase Date have not been successfully converted to another Interest Rate Mode or remarketed to a Person other than the Bank.
"U.S. Bank" means U.S. Bank National Association.
"Unremarketed Bonds Rate" means the Maximum Rate, provided that in no event shall such rate exceed the highest rate allowed by law.
"Variable Rate Mode" means the Short-Term Mode or the Term Rate Mode.
"Variable Rate Parity Bonds" and "Variable Rate Parity Lien Obligations" mean Parity Bonds and Parity Lien Obligations bearing interest at a variable rate of interest provided that at least one of the following conditions is met: (i) at the time of issuance the county has entered into a Payment Agreement with respect to such Parity Bonds or Parity Lien Obligations, as applicable, which Agreement converts the effective interest rate to the county on such bonds from a variable interest rate to a fixed interest rate, or (ii) the Parity Bonds or Parity Lien Obligations bear interest at a variable rate but are issued concurrently in equal par amounts with other Parity Bonds or Parity Lien Obligations bearing interest at a variable rate and that are required to remain outstanding in equal amounts at all times, if the net effect of such equal par amounts and variable rates at all times is a fixed rate of interest to the county.
"Weekly Mode" means the Interest Rate Mode during which the Bonds bear interest at the Weekly Rate.
"Weekly Rate" means the per annum interest rate on the Bonds in the Weekly Mode determined pursuant to Section 2.6(b) of this ordinance.
"Weekly Rate Period" means the period during which a Bond in the Weekly Mode bears a Weekly Rate, which shall be the period commencing on the day following the Rate Determination Date of each week to and including the Rate Determination Date of the following week, except (i) in connection with a conversion to the Weekly Rate, in which case the first Weekly Rate Period shall be from the Conversion Date to and including the Rate Determination Date of the following week, (ii) in the case of a Substitution Date or Mandatory Purchase Date specified in clause (viii) of the definition of Mandatory Purchase Date, in which case the Weekly Rate Period prior to the Substitution Date or such Mandatory Purchase Date shall end on the day before the Substitution Date or such Mandatory Purchase Date and a new Weekly Rate Period shall commence on the Substitution Date or such Mandatory Purchase Date and end on the Rate Determination Date of the following week and (iii) in connection with a conversion from the Weekly Mode, the last Weekly Rate Period shall end on the day next preceding the Conversion Date.
SECTION 1.2. Interpretation.
(a) All references to Section numbers or Article numbers that do not specify the document to which such Section numbers or Article numbers relate shall be deemed to refer to Section numbers or Article numbers in this ordinance.
(b) Whenever in this ordinance there is specified a time of day at or by which a certain action must be taken, such time shall be local time in New York City, except as otherwise specifically provided in this ordinance.
(c) If the date for making any payment or the last day for the performance of any act or the exercise of any right provided in this ordinance is not a Business Day, the 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 ordinance, except as otherwise specifically provided herein.
ARTICLE II
AUTHORIZATION, ISSUANCE AND MODES OF THE BONDS
SECTION 2.1. Authorization, Delivery and Registration.
(a) Authorization; Initial Mode. To finance a portion of the cost of capital improvements to the System, the county will issue a series of Junior Lien Obligations in the aggregate principal amount of not to exceed $100,000,000 designated as the "King County, Washington, Junior Lien Variable Rate Demand Sewer Revenue Bonds, Series 2011" (the "Bonds"). The Bonds shall be dated the date of their authentication and delivery to the Bank and shall bear interest at the applicable rate or rates during each applicable Interest Accrual Period until the entire principal amount of the Bonds has been paid.
The Bonds shall be issued initially in the LIBOR Index Mode and shall bear interest at the LIBOR Index Rate from (and including) the Closing Date through to the Initial Bank Purchase Date and may be converted to another Interest Rate Mode (including a subsequent LIBOR Index Mode) as provided herein. The initial LIBOR Index Rate on the Bonds shall be determined two New York Banking Days prior to the Closing Date and shall be set forth in the Bank Purchase Agreement. Thereafter the interest rate to be applicable to the Bonds shall be determined as provided in Section 2.9(a) of this ordinance until the Interest Rate Mode for the Bonds is changed, as provided herein.
(b) Registration Covenant; Registrar. The county covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. In accordance with K.C.C. Chapter 4.84, the county hereby adopts for the Bonds the system of registration specified and approved by the Washington State Finance Committee, which utilizes the fiscal agency of the State of Washington in New York City as registrar, authenticating agent, paying agent and transfer agent for the Bonds (the "Registrar"). The Registrar shall keep, or cause to be kept, at its corporate trust office, sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the county (the "Bond Register"). So long as any Bonds remain Outstanding, the Registrar shall make all necessary provisions to permit the exchange or registration of transfer of Bonds at its principal corporate trust office. The Registrar is authorized, on behalf of the county, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this ordinance and to carry out all of the Registrar's powers and duties under this ordinance. The Registrar shall be responsible for its representations contained in the Certificate of Authentication on the Bonds.
(c) Initial Registration. The Bonds shall be registered initially in the name of the Bank, with one Bond in a denomination corresponding to the total principal amount of the Bonds designated to mature on the Maturity Date.
(d) Transfer or Exchange of Certificated Bonds. So long as the Bonds are not held in a Book-Entry System, the transfer of ownership of any Bond may be registered and such Bonds may be exchanged, but no transfer of any Bond will be valid unless it is surrendered to the Registrar with the assignment form appearing on the Bond duly executed by the Owner or the Owner's duly authorized agent in a manner satisfactory to the Registrar. Upon surrender, the Registrar will cancel the surrendered Bond and authenticate and deliver, without charge to the Owner or transferee therefor, a new Bond (or Bonds at the option of the new Owner) of the same date and Maturity Date and for the same aggregate principal amount in any Authorized Denomination, naming as Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for the surrendered and canceled Bond. Any Bond may be surrendered to the Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date and Maturity Date in any Authorized Denomination. Other than in connection with an optional or mandatory tender for purchase, the Registrar is not obligated to transfer or exchange any Bond during the 15-day period prior to the selection of Bonds for redemption or the Maturity Date or following any publication of notice of redemption. No charge will be imposed upon Owners in connection with any transfer or exchange, except for taxes or governmental charges related thereto.
(e) Securities Depository. To facilitate conversion of the Bonds to an Interest Rate Mode other than the LIBOR Index Mode during the Initial Period, the county may provide for the Bonds to be held by DTC or by another Securities Depository in fully immobilized form in a Book-Entry System. The Finance Director shall notify the Registrar in writing of the appointment of any such Securities Depository.
If DTC is appointed as Securities Depository, the provisions of the Letter of Representations heretofore executed by the county and delivered to DTC shall govern the arrangements for registering, paying and transferring interests in the Bonds. The county, the Registrar, and the Paying Agent will have no responsibility or obligation to DTC Participants or the persons for whom they act as nominees with respect to the accuracy of any records maintained by DTC or any DTC Participant as to the Bonds, the payment by DTC or any DTC Participant of any amount in respect of the principal or redemption price of or interest on the Bonds, any notice that is permitted or required to be given to Owners under this ordinance (except any such notices as must be given by the county to the Registrar, the Paying Agent, or to DTC), the selection by DTC or by any DTC Participant of any person to receive payment in the event of a partial redemption of the Bonds, or any consent given or other action taken by DTC as the Owner of the Bonds.
While the Bonds are held by DTC in a Book-Entry System, purchases of the Bonds, in Authorized Denominations, may be made through brokers and dealers, who must be or act through DTC Participants. Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (i) to any successor Securities Depository or its nominee, provided that any such successor must be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any substitute Securities Depository appointed by the county pursuant to subsection (f) of this Section 2.1; or (iii) to any person as provided in subsection (h) of this Section 2.1.
(f) Substitute Depository. Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the county that it is no longer in the best interests of owners of beneficial interests in the Bonds to continue the system of book-entry transfers through DTC or its successor (or any substitute depository or its successor), the county may appoint a substitute depository or terminate the use of a depository. Any such substitute depository must be qualified under any applicable laws to provide the services proposed to be provided by it.
(g) Issuance of New Bonds to Successor/Substitute Depository. In the case of any transfer pursuant to clause (i) or (ii) of subsection (e) of this Section 2.1, the Registrar will, upon receipt of all Outstanding Bonds, together with a written request on behalf of the county, issue a single new Bond registered in the name of such successor or such substitute depository, or its nominee, as the case may be, all as specified in the written request of the county.
(h) Termination of Book-Entry System. If (i) a Securities Depository resigns and no substitute Securities Depository can be obtained, or (ii) the Finance Director determines that it is in the best interests of the county or the Beneficial Owners of the Bonds that they be able to obtain bond certificates, the ownership of the Bonds may then be transferred to any person or entity as herein provided, and the Bonds will no longer be held in a Book-Entry System. The county will deliver a written request to the Registrar, together with a supply of definitive Bonds, to issue Bonds as herein provided in any Authorized Denomination. Upon receipt of all then Outstanding Bonds by the Registrar, together with a written request on behalf of the county to the Registrar, new Bonds will be issued in such denominations and registered in the names of such persons as are specified in such written request.
SECTION 2.2. Denominations, Method of Payment, Authentication, and Form of Bonds.
(a) Registered Ownership. The Bonds shall be issued in the form of fully registered Bonds in Authorized Denominations. Except as may be specifically set forth herein, the Registrar, the Remarketing Agent, if any, and the county may treat the Owner (including a Securities Depository or its nominee, if the Bonds are held in a Book-Entry System) of a Bond as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and the county, Registrar, and Remarketing Agent, if any, will not be affected by any knowledge or notice to the contrary; and payment of the principal of and premium, if any, and interest on such Bond will be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability of such Bond to the extent of the sum or sums so paid. All Bonds at maturity or on earlier redemption paid pursuant to the provisions of this Section shall be cancelled by the Registrar.
(b) Method of Payment of Bonds. The principal of and premium, if any, and interest on the Bonds shall be payable in lawful money of the United States of America. Unless otherwise provided in any writing with or from the Securities Depository, if any, the interest on the Bonds shall be paid by the Paying Agent on the Interest Payment Dates by wire transfer of immediately available funds to an account specified by the Owner in a writing delivered to the Paying Agent. Any such specified account shall remain in effect until revised by such Owner by an instrument in writing delivered to the Paying Agent. The principal of and premium, if any, on each Bond shall be payable on the Principal Payment Date, upon surrender thereof at the Principal Office of the Paying Agent.
(c) Form of Bonds; Execution. The Bonds shall each be in substantially the form set forth on Attachment A to this ordinance, with appropriate or necessary insertions, depending upon the omissions and variations as permitted or required hereby.
The Bonds shall be executed on behalf of the county by the manual or facsimile signatures of the county executive and the clerk of the county council, and the official seal of the county shall be reproduced thereon. The validity of any Bond so executed will not be affected by the fact that one or more of the officers whose signatures appear on that Bond have ceased to hold office at the time of issuance or authentication or at any time thereafter.
(d) Authentication. No Bond 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 Registrar. Such authentication shall be proof that the Owner is entitled to the benefit of the trusts hereby created.
(e) Lost, Mutilated or Destroyed Bonds. If any Bond shall become mutilated, the Registrar shall authenticate and deliver a new Bond of like series, amount, date, interest rate and tenor in exchange and substitution for the Bond so mutilated, upon the owner's paying the expenses and charges of the county and the Registrar in connection therewith and upon surrender to the Registrar of the Bond so mutilated. Every mutilated Bond so surrendered shall be canceled and destroyed by the Registrar.
In case the Bonds or any of them shall be lost, stolen or destroyed, the Registrar may authenticate and deliver a new Bond or Bonds of like series, amount, date, and tenor to the Registered Owner thereof upon the owner's paying the expenses and charges of the county and the Registrar in connection therewith and upon his/her filing with the Registrar evidence satisfactory to the Registrar that such Bond or Bonds were actually lost, stolen or destroyed and of his/her ownership thereof, and upon furnishing the county and Registrar with indemnity satisfactory to the Finance Director and the Registrar.
SECTION 2.3. Payment of Principal of and Interest on Bonds; Acceptance of Terms and Conditions.
(a) The interest on the Bonds shall become due and payable on the Interest Payment Dates in each year to and including the Maturity Date, and on each Redemption Date. The principal of the Bonds shall become due and payable on the Principal Payment Dates.
(b) By the acceptance of its Bond, the Owner and each Beneficial Owner thereof will be deemed to have agreed to all the terms and provisions of such Bond as specified in such Bond and this ordinance including, without limitation, the applicable Interest Periods, interest rates (including any applicable Alternate Rate), Purchase Dates, Mandatory Purchase Dates, Purchase Prices, mandatory and optional purchase and redemption provisions applicable to such Bond, method and timing of purchase, redemption, payment, etc. Such Owner and each Beneficial Owner further agree that if, on any date upon which one of its Bonds is to be purchased, redeemed or paid at maturity or earlier due date, funds are on deposit with the Paying Agent or the Registrar to pay the full amount due on such Bond, then such Owner or Beneficial Owner shall have no rights under this ordinance other than to receive such full amount due with respect to such Bond and that interest on such Bond shall cease to accrue as of such date.
(c) While any Bonds are Liquidity Provider Bonds, they will bear interest and be payable at the times and in the amounts required under the Liquidity Facility.
SECTION 2.4. Calculation and Payment of Interest; Change in Interest Rate Mode; Maximum Rate.
(a) When a Short-Term Mode is in effect, interest will be calculated on the basis of a 365/366-day year for the actual number of days elapsed. When a LIBOR Index Mode is in effect, interest will be calculated on the basis of a 360-day year for the actual number of days elapsed. When a Term Rate Mode or Fixed Rate Mode is in effect, interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. Payment of interest on each Bond will be made on each Interest Payment Date for that Bond for unpaid interest accrued during the Interest Accrual Period to the Owner of record of that Bond on the applicable Record Date.
(b) Bonds in any Interest Rate Mode, other than a Fixed Rate Mode, may be changed to any other Interest Rate Mode at the times and in the manner hereinafter provided. After any such change in Interest Rate Mode (other than a change to a Fixed Rate Mode), the Bonds may again be changed to a different Interest Rate Mode at the times and in the manner hereinafter provided. A Fixed Rate Mode must be in effect until the Maturity Date and may not be changed to any other Interest Rate Mode.
(c) No Bonds may bear interest at an interest rate higher than the Maximum Rate.
(d) In the absence of manifest error, the determination of interest rates (including any determination of rates in connection with a New Mode) and interest periods by the Remarketing Agent and the record of interest rates maintained by the Paying Agent shall be conclusive and binding upon the Remarketing Agent, the Paying Agent, the Registrar, the county, the Owners and the Beneficial Owners.
SECTION 2.5. Determination of Flexible Rates and Interest Periods During Flexible Mode. An Interest Period for the Bonds in the Flexible Mode shall be of such duration of from one to 270 calendar days, ending on a day preceding a Business Day or the Maturity Date, as the Remarketing Agent shall determine in accordance with the provisions of this Section. A Flexible Rate Bond can have an Interest Period, and bear interest at a Flexible Rate, different from another Flexible Rate Bond. In making the determinations with respect to Interest Periods, subject to limitations imposed by the second preceding sentence and in Section 2.4 of this ordinance, on each Rate Determination Date for a Flexible Rate Bond, the Remarketing Agent shall select for such Bond the Interest Period that would result in the Remarketing Agent's being able to remarket such Bond at par in the secondary market at the lowest average interest cost for all Flexible Rate Bonds; provided, however, that if the Remarketing Agent has received notice from the county that the Bonds are to be changed from the Flexible Mode to any other Interest Rate Mode, the Remarketing Agent shall select Interest Periods that do not extend beyond the resulting applicable Mandatory Purchase Date of the Bonds.
Except while the Bonds are registered in a Book-Entry System, in order to receive payment of the Purchase Price the Owner of any Bond in the Flexible Mode must present such Bond to the Paying Agent, by 12:00 noon on the Rate Determination Date, in which case, the Paying Agent shall pay the Purchase Price to such Owner by 3:00 P.M. on the same day.
By 1:00 P.M. on each Rate Determination Date, the Remarketing Agent, with respect to each Bond in the Flexible Mode that is subject to adjustment on such date, shall determine the Flexible Rate(s) for the Interest Periods then selected for such Bond and shall give notice by Electronic Means to the Paying Agent and the county of the Interest Periods, the Purchase Date(s) and the Flexible Rate(s). The Remarketing Agent shall make the Flexible Rate and Interest Period available after 2:00 P.M. on each Rate Determination Date by telephone or Electronic Means to any Beneficial Owner or Notice Party requesting such information.
SECTION 2.6. Determination of Interest Rates During the Daily Mode and the Weekly Mode. The interest rate for the Bonds in the Daily Mode or Weekly Mode shall be the rate of interest per annum determined by the Remarketing Agent on and as of the applicable Rate Determination Date as the minimum rate of interest that, in the opinion of the Remarketing Agent under then-existing market conditions, would result in the sale of the Bonds in the Daily Rate Period or Weekly Rate Period, as applicable, at a price equal to the principal amount thereof, plus interest, if any, accrued through the Rate Determination Date during the then current Interest Accrual Period.
(a) During the Daily Mode, the Remarketing Agent shall establish the Daily Rate by 10:00 A.M. on each Rate Determination Date. The Daily Rate for any day during the Daily Mode which is not a Business Day shall be the Daily Rate established on the immediately preceding Rate Determination Date. The Remarketing Agent shall make the Daily Rate available no less frequently than once each week by Electronic Means to each Notice Party requesting such rate.
(b) During the Weekly Mode, the Remarketing Agent shall establish the Weekly Rate by 4:00 P.M. on each Rate Determination Date. The Weekly Rate shall be in effect during the applicable Weekly Rate Period. The Remarketing Agent shall make the Weekly Rate available no later than 5:00 P.M. on the Business Day following the Rate Determination Date by Electronic Means to each Notice Party requesting such rate.
(c) During the Weekly Mode, if permitted by the applicable Remarketing Agreement, the county may change the day of the week specified in clause (iii) (A) of the definition of "Rate Determination Date" for the Bonds, subject to the approval of the Remarketing Agent. The Remarketing Agent shall give 30 days' notice of any such change to the Notice Parties.
SECTION 2.7. Determination of Term Rates and Fixed Rates.
(a) Term Rates. Except as provided in Section 2.8 of this ordinance, once the Bonds are changed to the Term Rate Mode, the Bonds shall continue in the Term Rate Mode until changed to another Interest Rate Mode in accordance with Section 2.10 of this ordinance. The Term Rate shall be determined by the Remarketing Agent not later than 4:00 P.M. on the Rate Determination Date, and the Remarketing Agent shall make the Term Rate available by telephone or by Electronic Means to any Notice Party requesting such rate. The Term Rate shall be the minimum rate which, in the sole judgment of the Remarketing Agent, would result in a sale of the Bonds at a price equal to the principal amount thereof on the Rate Determination Date for the Interest Period selected by the county in writing delivered to the Remarketing Agent before such Rate Determination Date. If a new Interest Period is not selected by the county prior to a Rate Determination Date, the new Interest Period shall be the same length as the current Interest Period (or such lesser period as shall be necessary to comply with the last sentence of this paragraph). The Remarketing Agent shall make the Term Rate available by telephone or Electronic Means after 5:00 P.M. on the Rate Determination Date to any Notice Party requesting such Term Rate. Upon request of any Notice Party the Paying Agent shall give notice of such rate by Electronic Means. No Interest Period in the Term Rate Mode may extend beyond the applicable Maturity Date.
(b) Fixed Rates. The Remarketing Agent shall determine the Fixed Rate for the Bonds being converted to the Fixed Rate Mode in the manner and at the times as follows: not later than 4:00 P.M. on the applicable Rate Determination Date, the Remarketing Agent shall determine the Fixed Rate (or Rates, if the Bonds will have Serial Maturity Dates in accordance with Section 2.10(b)(v) of this ordinance). Except as set forth in Section 2.10(b)(v) of this ordinance, the Fixed Rate shall be the minimum interest rate which, in the sole judgment of the Remarketing Agent, will result in a sale of the Bonds at a price equal to the principal amount thereof on the Rate Determination Date. The Remarketing Agent shall make the Fixed Rate available by telephone or by Electronic Means after 5:00 P.M. on the Rate Determination Date to any Notice Party requesting such Fixed Rate. Upon request of any Notice Party the Paying Agent shall give notice of such rate by Electronic Means. Subject to Section 2.10(b)(v) of this ordinance, the Fixed Rate so established shall remain in effect until the Maturity Date of such Bonds.
SECTION 2.8. Alternate Rates. The following provisions shall apply if (i) the Remarketing Agent fails or is unable to determine the interest rate or Interest Period for the Bonds other than when the Bonds are in the LIBOR Index Mode, (ii) the method by which the Remarketing Agent determines the interest rate or Interest Period with respect to the Bonds (or the selection by the county of the Interest Periods for Bonds in the Term Rate Mode) shall be held to be unenforceable by a court of law of competent jurisdiction or (iii) if the Remarketing Agent suspends its remarketing effort in accordance with the Remarketing Agreement. These provisions shall continue to apply until such time as the Remarketing Agent (or the county if applicable) again makes such determinations. In the case of clause (ii) above, the Remarketing Agent (or the county, if applicable) shall again make such determination at such time as there is delivered to the Remarketing Agent and the county an opinion of Bond Counsel to the effect that there are no longer any legal prohibitions against such determinations. The following shall be the methods by which the interest rates and, in the case of the Flexible and Term Rate Modes, the Interest Periods, shall be determined for the Bonds as to which any of the events described in clauses (i), (ii) or (iii) shall be applicable. Such methods shall be applicable from and after the date any of the events described in clauses (i), (ii) or (iii) first become applicable to the Bonds until such time as the events described in clauses (i), (ii) or (iii) are no longer applicable to the Bonds. These provisions shall not apply if the county fails to select an Interest Period for the Bonds in the Term Rate Mode for a reason other than as described in clause (ii) above.
(a) For Flexible Rate Bonds, the next Interest Period shall be from, and including, the first day following the last day of the current Interest Period for the Bonds to, but excluding, the next succeeding Business Day and thereafter shall commence on each Business Day and extend to, but exclude, the next succeeding Business Day. For each such Interest Period, the interest rate for the Bonds shall be the applicable Alternate Rate in effect on the Business Day that begins an Interest Period.
(b) If the Bonds are in the Daily Mode or the Weekly Mode, then the Bonds shall bear interest during each subsequent Interest Period at the Alternate Rate in effect on the first day of such Interest Period.
If the Bonds are then in the Term Rate Mode, then the Bonds shall automatically convert to Flexible Rate Bonds, with an Interest Period commencing on the first day following the last day of the current Interest Period for the Bonds to, but excluding, the next succeeding Business Day and thereafter shall commence on each Business Day and extend to, but exclude, the next succeeding Business Day. For each such Interest Period, the interest rate for the Bonds shall be the applicable Alternate Rate in effect at the beginning of each such Interest Period.
SECTION 2.9. LIBOR Index Rates. (a) During each LIBOR Index Rate Period, the Bonds shall, subject to Section 2.9(e), (f) and (g) of this ordinance, bear interest at the LIBOR Index Rate. The Calculation Agent shall determine the LIBOR Index Rate on each Rate Determination Date during the LIBOR Index Rate Period, and such rate shall become effective on the first day of the LIBOR Interest Period next succeeding the Rate Determination Date, commencing on and including the first day of the applicable LIBOR Interest Period to but excluding the last day of such LIBOR Interest Period. The LIBOR Index Rate shall be rounded upward to the third decimal place.
(b) Notice of Rates. Promptly following the determination of any Rate, the Remarketing Agent or the Calculation Agent, as applicable, shall give notice thereof to the Paying Agent. The county and any Owner or Beneficial Owner may obtain any interest rate on or after the applicable Rate Determination Date upon request to the Calculation Agent.
(c) Determination of Rate Conclusive. The determination of any interest rate by the Calculation Agent shall be conclusive and binding upon the county, the Paying Agent and the Owners or Beneficial Owners absent manifest error.
(d) No Liability. In determining the interest rate or rates that the Bonds shall bear as provided in this Section, the Calculation Agent shall not have any liability to the county, the Paying Agent, the Registrar or any Owner or Beneficial Owners except for its negligence or willful misconduct.
(e) Interest on Unremarketed Bonds. Notwithstanding any other provision of this ordinance, each Unremarketed Bond shall bear interest for each day it is an Unremarketed Bond at a rate per annum equal to the Purchaser Rate for that day.
(f) Adjustments to LIBOR Index Rates. From and after any Taxable Date, the interest rate on Bonds during a LIBOR Interest Rate Period shall be established at a rate at all times equal to the Taxable Rate.
(g) Default Rate. Notwithstanding the foregoing but subject to the interest rate limitations of Section 2.9(a) of this ordinance, from and after the occurrence and during continuation of a Default, the interest rate for Bonds bearing interest at a LIBOR Index Rate and for Unremarketed Bonds shall be equal to the Default Rate.
(h) Excess Interest. Anything herein to the contrary notwithstanding, if the rate of interest payable on the Bonds during a LIBOR Interest Rate Period or on Unremarketed Bonds shall exceed the Maximum Rate for any Interest Period, then (i) such Bonds shall bear interest at the Maximum Rate during such LIBOR Interest Rate Period and (ii) interest on such Bonds at the rate equal to the difference between (A) the rate of interest borne by such Bonds without regard to the Maximum Rate and (B) the Maximum Rate (the "Excess Interest") shall be deferred until such date as the rate of interest borne by such Bonds without regard to the Maximum Rate ceases to exceed the Maximum Rate, at which time such portion of the deferred Excess Interest shall be payable with respect to such Bonds as will cause the rate of interest then paid thereon to equal the Maximum Rate, which payments of deferred Excess Interest shall continue to apply until all deferred Excess Interest with respect to such Bonds is fully paid.
(i) Redemption or Conversion. The county may by written notice to the Bank, at least 120 days prior to the Initial Bank Purchase Date or any subsequent Bank Purchase Date, optionally redeem or convert the Bonds to another Interest Rate Mode (including conversion to a new LIBOR Index Rate) to be effective on any interest payment date prior to the Initial Bank Purchase Date or subsequent Bank Purchase Date upon compliance with the applicable provisions hereof. At least 120 days prior to the Initial Bank Purchase Date or any subsequent Bank Purchase Date, the county may request that (i) the Bank continue holding the Bonds following the Initial Bank Purchase Date or subsequent Bank Purchase Date, as applicable, or (ii) provide liquidity or credit enhancement necessary to facilitate the conversion of the Bonds to such new Interest Rate Mode, and the Bank will respond to such request within sixty (60) days after receipt such request from the county. The Bank may, in its sole and absolute discretion, decide to accept or reject any such request, and no consent shall become effective unless the Bank has consented thereto in writing. If the Bank rejects such request or fails to definitively respond to such request within such sixty (60) day period, the Bank shall be deemed to have refused to grant such request and the county shall be required to repurchase the Bonds on the Initial Bank Purchase Date or subsequent Bank Purchase Date (unless the Bonds are converted to Unremarketed Bonds in accordance with the terms of the applicable Bank Purchase Agreement) for a purchase price of 100% of the par amount plus accrued interest to the Initial Bank Purchase Date or subsequent Bank Purchase Date, as applicable. The consent of the Bank, if granted, shall be conditioned upon the preparation, execution and delivery of documentation in form and substance satisfactory to the Bank. Notwithstanding the foregoing, the Applicable Factor and Applicable Spread with respect to the Bonds for the subsequent Interest Period shall be an Applicable Factor and Applicable Spread that permits the Bonds to be remarketed at par.
SECTION 2.10. Changes in Interest Rate Mode. Subject to the provisions of this Section, and with respect to Bonds bearing interest at the LIBOR Index Rate, subject to the terms of the applicable Bank Purchase Agreement, the county may effect a change in Interest Rate Mode with respect to the Bonds by following the procedures set forth in this Section. If a change in Interest Rate Mode will make the Bonds subject to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended, it shall be a condition to the conversion that the county shall have executed a continuing disclosure undertaking satisfying the requirements of such Rule and shall cooperate with the Remarketing Agent, if any, and any Underwriter (as defined in such Rule) in satisfying the requirements of such Rule.
(a) Changes to Interest Rate Modes Other Than to Fixed Rate Mode. All or a portion of the Bonds (other than Bonds in the Fixed Rate Mode) may be changed from one Interest Rate Mode to another Interest Rate Mode (other than the Fixed Rate Mode) as follows:
(i) Conversion Notice; Notice to Owners. No later than a Business Day that is at least seven (7) Business Days prior to the date on which the Tender Agent is required to notify the registered owners (or such shorter time as may be agreed to by the county, the Registrar, the Tender Agent and the Remarketing Agent) preceding the proposed Conversion Date, the county shall give written notice to the Notice Parties of its intention to effect a change in the Interest Rate Mode from the Interest Rate Mode then prevailing (for purposes of this Section, the "Current Mode") to another Interest Rate Mode (for purposes of this Section, the "New Mode") specified in such written notice, and, if the change is to a Term Rate Mode, the length of the initial Interest Period as set by the county. Such notice shall be accompanied by a Favorable Opinion of Bond Counsel. In the case of a change to a Term Rate Mode or from one Term Rate Mode to another Term Rate Mode, the notice to the Notice Parties will also state whether a Liquidity Facility or Credit Enhancement will be in effect with respect to the Bonds following such change and the identity of any provider of such Liquidity Facility or Credit Enhancement. Notice of the proposed change in Interest Rate Mode will be given by the Tender Agent to the Owners of the Bonds not later than the 20th day next preceding the Conversion Date; provided, however, that no notice need be given for a Conversion Date occurring on the first Business Day following the last day of a Flexible Rate Period or Term Rate Mode or on a Substitution Date. Such notice shall state: (1) the Interest Rate Mode to which the conversion will be made and the Conversion Date; (2) in the case of a change from any Interest Rate Mode that the Bonds will be subject to mandatory purchase on the Conversion Date (regardless of whether all of the conditions to the change in the Interest Rate Mode are satisfied) and the Purchase Price of the Bonds; and (3) information with respect to required delivery of bond certificates and payment of Purchase Price, unless a Book-Entry System is in effect.
(ii) Determination of Interest Rates. The New Mode shall commence on the Conversion Date and the interest rate(s) (together, in the case of a change to the Flexible Mode, with the Interest Period(s)) shall be determined by the Remarketing Agent (or the county in the case of the Interest Period for the Bonds converted to the Term Rate Mode) in the manner provided in Sections 2.5, 2.6 and 2.7 of this ordinance, as applicable. Such determination shall be conclusive and binding upon the county, the Registrar, and the Owners of the Bonds to which such rate will be applicable.
(iii) Conditions Precedent:
(A) The Conversion Date shall be:
(1) in the case of a change from the Flexible Mode to another Interest Rate Mode, the next Mandatory Purchase Date for all of the Flexible Rate Bonds;
(2) in the case of a change from the Daily, Weekly Mode or the LIBOR Index Mode to another Interest Rate Mode (other than to the Daily or Weekly Mode), any Interest Payment Date and in the case of a change from the Daily or Weekly Mode to the Daily or Weekly Mode, any Business Day; and
(3) in the case of a change from the Term Rate Mode to another Interest Rate Mode, or from a Term Rate Period to a Term Rate Period of a different duration, or from a LIBOR Index Mode to another Interest Rate Mode, the Conversion Date shall be limited to any Interest Payment Date on which the Bonds are subject to optional redemption or to the last Interest Payment Date of the current Term Rate Period, as the case may be. Such Bonds shall be purchased on that Conversion Date at a Purchase Price equal to 100% of the principal amount thereof, provided that if such Bonds would otherwise be subject to optional redemption on such Conversion Date at a Redemption Price of more than 100% of the principal amount thereof, such Bonds shall be purchased at a Purchase Price equal to that Redemption Price.
(B) If the Bonds to be converted are in the Flexible Mode, no Interest Period set after delivery by the county to the Remarketing Agent of the notice of the intention to effect a change in Interest Rate Mode shall extend beyond the day preceding the proposed Conversion Date.
(C) The following items shall have been delivered to the Registrar, the Paying Agent, and the Remarketing Agent, if any, on or prior to each Conversion Date:
(1) a Favorable Opinion of Bond Counsel dated the Conversion Date and addressed to the Notice Parties;
(2) if there is to be a Liquidity Facility or an Alternate Liquidity Facility or a Credit Enhancement or an Alternate Credit Enhancement delivered in connection with such change, the items required by Section 3.13(d) of this ordinance; and
(3) a Rating Confirmation Notice, or if the Conversion Date is a Mandatory Purchase Date, a notice from the Rating Agencies of the rating(s) to be assigned the Bonds on such Conversion Date.
(D) It is a condition to the conversion of the Bonds from the LIBOR Index Mode that all Bonds being converted be remarketed on the Conversion Date.
(b) Change to Fixed Rate Mode. At the option of the county, all or any portion of the Bonds bearing interest at a Daily Rate, a Weekly Rate, LIBOR Index Rate or a Flexible Rate (in an amount that is an Authorized Denomination for the new Rate Period) may be changed to the Fixed Rate Mode, as provided in this Section 2.10(b). On any Business Day which is at least seven (7) Business Days prior to the date on which the Paying Agent is required to notify the registered owners (or such shorter time as may be agreed to by the county, the Registrar and the Remarketing Agent, but in any event not less than the 20th day next preceding the Conversion Date) before the proposed Conversion Date, the county shall give written notice to the Notice Parties stating that the Interest Rate Mode will be changed to the Fixed Rate Mode and setting forth the proposed Conversion Date. Such notice shall also state whether or not there shall be Credit Enhancement with respect to the Bonds following such change and, if so, the identity of the Credit Provider. In addition, such notice shall state whether some or all of the Bonds to be converted shall be converted to Serial Bonds and, if so, the applicable Serial Maturity Dates and Serial Payments, all as determined pursuant to subsection (v) of this subsection (b). Such notice shall be accompanied by a Favorable Opinion of Bond Counsel. Any such change in Interest Rate Mode shall be made as follows:
(i) Conversion Date. The Conversion Date shall be:
(A) in the case of a change from the Flexible Mode, the next Mandatory Purchase Date for the Flexible Rate Bonds;
(B) in the case of a change from the Daily or Weekly Mode or LIBOR Index Mode, any Interest Payment Date; and
(C) in the case of a change from the Term Rate Mode or the LIBOR Index Mode, the Conversion Date shall be limited to any Interest Payment Date on which the Bonds are subject to optional redemption or to the next Mandatory Purchase Date for the Term Rate Bonds, as the case may be. Such Bonds shall be purchased on such Conversion Date at a Purchase Price equal to 100% of the principal amount thereof; provided, however, that if such Bonds would otherwise be subject to optional redemption on such Conversion Date at a Redemption Price of more than 100% of the principal amount thereof, such Bonds shall be purchased at a Purchase Price equal to such Redemption Price.
(ii) Notice to Owners. Not later than the 20th day next preceding the Conversion Date, the Paying Agent shall mail, in the name of the county, a notice of such proposed change to the Owners of the Bonds stating that the Interest Rate Mode will be changed to the Fixed Rate Mode and the proposed Conversion Date. Such notice shall also state that such Owner is required to tender such Owner's Bonds for purchase on such proposed Conversion Date regardless of whether all of the conditions to the change to the Fixed Rate Mode are satisfied.
(iii) General Provisions Applying to Change to Fixed Rate Mode. The change to the Fixed Rate Mode shall not occur unless the following items shall have been delivered to the county, the Registrar, the Credit Provider, if any, and the Remarketing Agent, if any, on or prior to the Conversion Date:
(A) a Favorable Opinion of Bond Counsel dated the Conversion Date and addressed to the county, the Registrar and the Remarketing Agent, if any;
(B) if there is to be Credit Enhancement delivered in connection with such change, the items required by Section 3.13(d) of this ordinance in connection with the delivery of an Alternate Credit Enhancement, and
(C) notice from the Rating Agencies of the rating(s) to be assigned the Bonds on such Conversion Date.
(iv) Determination of Interest Rate. The Fixed Rate (or rates in the case of Serial Bonds) for the Bonds to be converted to the Fixed Rate Mode shall be established by the Remarketing Agent on the Rate Determination Date applicable thereto pursuant to the provisions of Section 2.7(b) of this ordinance. Such Rate shall remain in effect until the Maturity Date of the Bonds.
Such determination shall be conclusive and binding upon the county, the Registrar, the Credit Provider, if any, and the Owners of the Bonds to which such rate will be applicable. Not later than 5:00 P.M. on the date of determination of the Fixed Rate, the Remarketing Agent shall provide notice of such rate to the Registrar by Electronic Means and to the Credit Provider and the county by telephone.
(v) Serialization and Sinking Fund; Price. Upon conversion of the Bonds to the Fixed Rate Mode, the Bonds shall be remarketed at par, shall mature on the same Maturity Date(s) and be subject to the same mandatory sinking fund redemption, if any, and special redemption provisions, if any, as set forth in this ordinance for any prior Interest Rate Mode; provided, however, that if the county shall deliver to the Registrar a Favorable Opinion of Bond Counsel, the county may elect to (1) have some of the Bonds be Serial Bonds and some subject to sinking fund redemption even if such Bonds were not Serial Bonds or subject to mandatory sinking fund redemption prior to such change, (2) change the optional redemption dates and/or premiums set forth in Section 3.3(b) of this ordinance, and/or (3) sell some or all of the Bonds at a premium or a discount to par.
(c) Failure to Satisfy Conditions Precedent to an Interest Rate Conversion. If the conditions described above in subsections (a) or (b) of this Section 2.10, as applicable, have not been satisfied by the applicable Conversion Date, then the New Mode will not take effect (although, except in the case of a failed conversion from the LIBOR Index Mode, any mandatory purchase will be made on such date if notice has been sent to the Owners stating that such Bonds would be subject to mandatory purchase on such date). If the failed change in Interest Rate Mode was from the Flexible Mode, the Bonds shall remain in the Flexible Mode with interest rates and Interest Periods to be established by the Remarketing Agent on the failed Conversion Date in accordance with Section 2.5 of this ordinance. If the failed change in Interest Rate Mode was from the Daily Mode, the Bonds shall remain in the Daily Mode, and if the failed change in Interest Rate Mode was from the Weekly Mode, the Bonds shall remain in the Weekly Mode, in each case with interest rates established in accordance with the applicable provisions of Section 2.6 of this ordinance on and as of the failed Conversion Date. If the failed change in Interest Rate Mode was from the Term Rate Mode, then the Bonds shall stay in the Term Rate Mode for an Interest Period ending on the following Interest Payment Date for the Bonds in the Term Rate Mode, and the interest rate shall be established by the Remarketing Agent on the failed Conversion Date in accordance with Section 2.7(a) of this ordinance. If the failed change in Interest Rate Mode was from the LIBOR Index Mode, then the Bonds will not be subject to mandatory tender, and the Bonds will remain in the LIBOR Index Mode, with interest rates established in accordance with the applicable provisions of Section 2.9 of this ordinance on and as of the failed Conversion Date.
(d) Rescission of Election. Notwithstanding anything herein to the contrary, the county may rescind any election by it to change an Interest Rate Mode as described above prior to the Conversion Date by giving written notice thereof to the Notice Parties prior to 10:00 A.M. on the Business Day preceding such Conversion Date. If the Tender Agent receives notice of such rescission prior to the time the Tender Agent has given notice to the Owners of the Bonds, then such notice of change in Interest Rate Mode shall be of no force and effect. If the Tender Agent receives notice from the county of rescission of an Interest Rate Mode change after the Tender Agent has given notice thereof to the Owners of the Bonds, then if the proposed Conversion Date would have been a Mandatory Purchase Date, such date shall continue to be a Mandatory Purchase Date except if the conversion is from the LIBOR Index Mode. If the proposed change in Interest Rate Mode was from the Flexible Mode, the Bonds shall remain in the Flexible Mode with interest rates and Interest Periods to be established by the Remarketing Agent on the proposed Conversion Date in accordance with Section 2.5 of this ordinance. If the proposed change in Interest Rate Mode was from the Daily Mode, the Bonds shall remain in the Daily Mode, and if the proposed change in Interest Rate Mode was from the Weekly Mode, the Bonds shall remain in the Weekly Mode, in each case with interest rates established in accordance with the applicable provisions of Section 2.6 of this ordinance on and as of the proposed Conversion Date. If the proposed change in Interest Rate Mode was from the Term Rate Mode, then the Bonds shall stay in the Term Rate Mode for an Interest Period ending on the following Interest Payment Date for the Bonds in the Term Rate Mode, and the interest rate shall be established by the Remarketing Agent on the proposed Conversion Date in accordance with Section 2.7(a) of this ordinance. If the Remarketing Agent is unable to determine the interest rate on the proposed Conversion Date, the provisions of Section 2.8 of this ordinance shall apply in effect at the beginning of each such Interest Period. If the proposed change in Interest Rate Mode was from the LIBOR Index Mode, the Bonds shall remain in the LIBOR Index Mode, with interest rates established in accordance with the applicable provisions of Section 2.9 of this ordinance on and as of the proposed Conversion Date.
ARTICLE III
REDEMPTION AND PURCHASE OF BONDS BEFORE MATURITY
SECTION 3.1. Optional Redemption of Flexible Rate Bonds. Bonds in the Flexible Mode are not subject to optional redemption prior to their respective Purchase Dates. Bonds in the Flexible Mode shall be subject to redemption at the option of the county in whole or in part on their respective Purchase Dates at a redemption price equal to the principal amount thereof.
SECTION 3.2. Optional Redemption of Bonds in the Daily Mode or the Weekly Mode. Bonds in the Daily Mode or the Weekly Mode are subject to optional redemption by the county, in whole or in part (and if in part, with any Liquidity Provider Bonds redeemed first), in Authorized Denominations on any Business Day, at a redemption price equal to the principal amount thereof, plus, accrued interest, if any, to the Redemption Date. Liquidity Provider Bonds shall be redeemed in accordance with the applicable Reimbursement Agreement. So long as a Credit Enhancement is in effect for Bonds in the Daily Mode or Weekly Mode, no optional redemption of such Bonds shall be permitted without (i) the prior written consent of the Credit Provider or (ii) the deposit by the county with the Registrar on or prior to the Redemption Date of funds sufficient to reimburse the Credit Provider for the draw on the Credit Enhancement to pay the Redemption Price for such Bonds.
SECTION 3.3. Optional Redemption of Bonds in the Term Rate or the Fixed Rate Mode.
(a) Bonds in a Term Rate Mode shall be subject to redemption, in whole or in part, on their individual Mandatory Purchase Dates, at the option of the county at a redemption price equal to the principal amount thereof.
(b) The county, in connection with a change to a Long-Term Mode, may establish the redemption provisions for any such Bonds so changed to a Long-Term Mode at any time without premium; provided that notice describing such provisions shall be submitted to the Paying Agent, the Registrar and the Remarketing Agent, together with a Favorable Opinion of Bond Counsel, addressed to them.
SECTION 3.4. Redemption of Bonds in the LIBOR Index Mode.
(a) Optional Redemption. Bonds in the LIBOR Index Mode are subject to redemption prior to their stated maturity, at the option of the county, in whole or in part, at a redemption price equal to the principal amount thereof, in such amounts as may be specified by the county on any Interest Payment Date, subject to any limitations or conditions set forth in the Bank Purchase Agreement.
(b) Mandatory Redemption of Unremarketed Bonds. Unremarketed Bonds shall be redeemed on the dates, at the prices, and in the amounts set forth in the applicable Bank Purchase Agreement.
SECTION 3.5. Notice and Effect of Redemption.
(a) Timing of Notice. The county shall give the Registrar sufficient notice of any redemption of Bonds to permit the Registrar to give notice to the Securities Depository at least 30 days prior to the proposed Redemption Date for Bonds in any Long-Term Mode and at least 15 days prior to the proposed Redemption Date for Bonds in any ShortTerm Mode. While the Bonds are in certificated form, the Registrar will give written notice of any redemption of Bonds by first class mail, postage prepaid, not less than 30 days (for Bonds in any Long-Term Mode) or not less than 15 days (for Bonds in any Short-Term Mode) nor more than 60 days before the proposed Redemption Date to the registered owners of Bonds that are to be redeemed at their last addresses shown on the Bond Register. While the Bonds are held in a Book Entry-System, notice of any redemption will be provided in accordance with the operational arrangements of the Securities Depository referred to in the Letter of Representations, and, except as provided in an undertaking to provide continuing disclosure under the Rule, the county will provide no additional published or other notice.
(b) Contents of Notice. Each notice of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) the CUSIP numbers of the Bonds being redeemed, (4) if less than all outstanding Bonds are to be redeemed, identification information and principal amounts of the Bonds to be redeemed, (5) the dated date of the Bonds, (6) the rate of interest for each Bond being redeemed, (7) that the Bonds are to be surrendered for payment at the principal office of the Registrar, (8) any condition to such redemption, (9) that on the Redemption Date, upon the satisfaction of any such condition, the Redemption Price will become due and payable upon each Bond or portion called for redemption and interest shall cease to accrue from the Redemption Date, (10) the date of the notice, and (11) any other information needed to identify the Bonds being redeemed. The requirements of this Section are deemed complied with when notice is mailed, whether or not it is actually received by the owner.
(c) Notice of Redemption on Mandatory Purchase Date. Notwithstanding anything herein to the contrary, no notice of redemption is required to be given for a redemption occurring on a Mandatory Purchase Date.
(d) Effect of Redemption. Unless any condition for redemption is not satisfied, the county will provide funds to the Registrar that, in addition to other money, if any, held by the Registrar, will be sufficient to redeem on the Redemption Date all Bonds to be redeemed. From the Redemption Date, interest on all such paid and redeemed Bonds will cease to accrue.
SECTION 3.6. Optional Tenders of Bonds in the Daily Mode or the Weekly Mode. Subject to Section 3.11 of this ordinance, the Beneficial Owners of Bonds in a Daily Mode or a Weekly Mode may elect to have their Bonds (or portions of those Bonds in amounts equal to an Authorized Denominations) purchased on any Business Day at a price equal to the Purchase Price, upon delivery of a Tender Notice to the Tender Agent by the Tender Notice Deadline. Immediately upon receipt of a Tender Notice, the Tender Agent shall notify the Remarketing Agent and provide the Remarketing Agent with a copy of such Tender Notice.
SECTION 3.7. Mandatory Purchase on Mandatory Purchase Date. The Bonds shall be subject to mandatory purchase on each Mandatory Purchase Date. The Tender Agent shall give notice of such mandatory purchase by mail to the Owners of the Bonds subject to mandatory purchase no less than 20 days prior to the Mandatory Purchase Date described in clauses (iii), (iv), (v), (vi), (viii), (ix), (x) and (xi) of the definition of Mandatory Purchase Date and no less than 3 days prior to the Mandatory Purchase Date described in clause (vii) of the definition of Mandatory Purchase Date. No notice shall be given of the Mandatory Purchase Date at the end of each Interest Period for Flexible Rate Bonds or at the end of Term Rate Period for Bonds in the Term Rate Mode. Any notice shall state the Mandatory Purchase Date, the Purchase Price, the numbers of the Bonds to be purchased if less than all of the Bonds owned by such Owner are to be purchased, and that interest on Bonds subject to mandatory purchase shall cease to accrue from and after the Mandatory Purchase Date. The failure to mail such notice with respect to any Bond shall not affect the validity of the mandatory purchase of any other Bond with respect to which notice was so mailed. Any notice mailed will be conclusively presumed to have been given, whether or not actually received by any Owner or Beneficial Owner. The Tender Agent shall also give a copy of such notice to the Rating Agencies.
SECTION 3.8. Remarketing of Bonds; Notices.
(a) Remarketing of Bonds. The Remarketing Agent shall use its best efforts pursuant to the terms and conditions of the Remarketing Agreement to offer for sale at par up to the Maximum Rate:
(i) all Bonds or portions thereof as to which notice of tender pursuant to Section 3.6 of this ordinance has been given;
(ii) all Bonds required to be purchased on a Mandatory Purchase Date described in clauses (i), (ii), (iii), (iv), (v), (vii), (viii), (ix), (x) or (xi) of the definition thereof;
(iii) any Liquidity Provider Bonds (A) purchased on a Purchase Date described in clause (i) or (ii) above, (B) with respect to which the Liquidity Provider has provided notice to the Registrar and the Remarketing Agent that it has reinstated the Available Amount, (C) with respect to which an Alternate Liquidity Facility and Alternate Credit Enhancement is in effect (if such bonds were secured by a Credit Enhancement prior to becoming Liquidity Provider Bonds which Credit Enhancement is no longer in effect), or (D) that are being marketed as Fixed Rate Bonds; and
(iv) any County Bonds; provided, however, that the Remarketing Agent will not remarket Bonds held by or for the account of the county, or any affiliate of the county, without a Favorable Opinion of Bond Counsel addressed to the county, the Registrar and the Remarketing Agent. In connection with the remarketing of any Bonds with respect to which notice of redemption or notice of mandatory purchase has been given, the Remarketing Agent will notify each person to which such Bonds are remarketed of such notice of redemption or notice of mandatory purchase.
(b) Notice of Remarketing; Registration Instructions; New Bonds. On each date on which a Bond is to be purchased:
(i) the Remarketing Agent shall notify by Electronic Means the Tender Agent by 12:00 noon of the principal amount of tendered Bonds it has remarketed;
(ii) unless the Remarketing Agent has delivered the notice described in clause (i) above, the Remarketing Agent shall notify the Tender Agent by Electronic Means not later than 1:00 P.M. of such information as may be necessary to register and deliver Bonds remarketed with respect thereto;
(iii) the Remarketing Agent shall cause the proceeds of the remarketing by such Remarketing Agent of tendered Bonds to be paid to the Tender Agent in immediately available funds not later than 12:15 P.M. on the Purchase Date for such Bonds; and
(iv) if the Bonds are no longer in the Book-Entry System, the Tender Agent shall authenticate new Bonds for the respective purchasers thereof, which shall be available for pick-up by the Remarketing Agent not later than 2:30 P.M.
(c) Draw on Liquidity Facility. On each date on which a Bond is to be purchased, (i) if the Remarketing Agent has given notice to the Tender Agent pursuant to clause (b)(i) above that it has been unable to remarket any of the Bonds or (ii) if the Tender Agent has not received from the Remarketing Agent an amount sufficient to pay the Purchase Price of tendered Bonds, by 12:00 Noon on the Purchase Date, then the Tender Agent shall direct the Registrar (if the two are separate entities) to draw on the Liquidity Facility (or if no Liquidity Facility is in effect, request funds from the county) by 12:00 Noon in an amount equal to the Purchase Price of all such Bonds that have not been successfully remarketed, requesting payment not later than 2:30 P.M. on the Purchase Date. If a Liquidity Facility is in effect, the Registrar shall also give the county notice by 2:30 P.M. on the Purchase Date if it does not have funds in the Remarketing Proceeds Account and the Liquidity Facility Purchase Account sufficient to pay the Purchase Price of Bonds tendered on such Purchase Date. Any draw on a Liquidity Facility to be made on a Substitution Date shall be on the Liquidity Facility being replaced. In no event shall the Liquidity Facility be drawn on to purchase any Liquidity Provider Bonds or any County Bonds.
SECTION 3.9. Source of Funds for Purchase of Bonds. By 3:00 P.M. on the date on which a Bond is to be purchased, and except as set forth in Section 3.11(b)(ii) of this ordinance, the Tender Agent shall purchase tendered Bonds from the tendering Owners at the applicable Purchase Price by wire transfer in immediately available funds. Funds for the payment of such Purchase Price shall be derived solely from the following sources (delivered by the Registrar to the Tender Agent, if the two are separate entities) in the order of priority indicated and none of the Tender Agent, the Registrar nor the Remarketing Agent shall be obligated to provide funds from any other source:
(a) immediately available funds on deposit in the Remarketing Proceeds Account;
(b) immediately available funds on deposit in the Liquidity Facility Purchase Account; and
(c) money of the county on deposit in the County Purchase Account.
If no Liquidity Facility is in effect, then the county shall be obligated to deposit amounts into the County Purchase Account sufficient to pay the Purchase Price to the extent that amounts on deposit in the Remarketing Proceeds Account are insufficient therefor. If a Liquidity Facility is in effect, then the county may, but is not obligated to, deposit amounts into the County Purchase Account sufficient to pay the Purchase Price to the extent that amounts on deposit in the Remarketing Proceeds Account and the Liquidity Facility Purchase Account are insufficient therefor. For purposes of this paragraph, a Liquidity Facility shall be deemed to be in effect so long as the Liquidity Provider is contractually obligated to honor future draws on the Liquidity Facility pursuant to Section 3.8(c) of this ordinance, even if the Liquidity Provider in fact has failed to honor past draws on the Liquidity Facility and has declared its intent not to honor future draws on the Liquidity Facility or otherwise is in breach of its obligations under the Liquidity Facility.
SECTION 3.10. Delivery of Bonds. On each date on which a Bond is to be purchased, such Bond shall be delivered as follows:
(a) Bonds sold by the Remarketing Agent and described in Section 3.9(a) of this ordinance shall be delivered by the Remarketing Agent to the purchasers of such Bonds by 3:00 P.M.;
(b) Bonds purchased by the Tender Agent with money described in Section 3.9(b) of this ordinance shall be registered immediately in the name of the Liquidity Provider or its nominee (which may be the Securities Depository) on or before 3:00 P.M.; and
(c) Bonds purchased by the county with money described in Section 3.9(c) of this ordinance shall be registered, immediately in the name of the county or its nominee on or before 3:00 P.M. Bonds so owned by the county shall continue to be Outstanding under the terms of this ordinance and be subject to all of the terms and conditions of this ordinance and shall be subject to remarketing by the Remarketing Agent.
SECTION 3.11. Book-Entry Tenders.
(a) Notwithstanding any other provision of this Article III to the contrary, all tenders for purchase during any period in which the Bonds are registered in the name of Cede & Co. (or the nominee of any successor Securities Depository) shall be subject to the terms and conditions set forth in the Letter of Representations and to any regulations promulgated by DTC (or any successor Securities Depository). For so long as the Bonds are registered in the name of Cede & Co., as nominee for DTC, the tender option rights of Owners of Bonds may be exercised only by DTC by giving notice of its election to tender Bonds or portions thereof at the times and in the manner described above. Beneficial Owners will not have any rights to tender Bonds directly to the Tender Agent. Procedures under which a Beneficial Owner may direct a Direct DTC Participant or DTC, or an Indirect DTC Participant acting through a Direct DTC Participant, to exercise a tender option right in respect of Bonds or portions thereof in an amount equal to all or a portion of such Beneficial Owner's beneficial ownership interest therein shall be governed by standing instructions and customary practices determined by such Direct DTC Participant or Indirect DTC Participant. For so long as the Bonds are registered in the name of Cede & Co., as nominee for DTC, delivery of Bonds required to be tendered for purchase shall be effected by the transfer on the applicable Purchase Date of a book-entry credit to the account of the Tender Agent of a beneficial interest in such Bonds.
(b) Notwithstanding anything expressed or implied herein to the contrary, so long as the Book-Entry System for the Bonds is maintained:
(i) there shall be no requirement of physical delivery to or by the Tender Agent, the Remarketing Agent or the Registrar of:
(A) any Bonds subject to mandatory or optional purchase as a condition to the payment of the Purchase Price therefor;
(B) any Bonds that have become Liquidity Provider Bonds; or
(C) any remarketing proceeds of such Bonds or Liquidity Provider Bonds; and
(ii) except as provided in subsection (b)(iii) below, none of the Registrar, the Tender Agent nor the Paying Agent shall have any responsibility for paying the Purchase Price of any tendered Bond or for remitting remarketing proceeds to any person; and
(iii) the Tender Agent's sole responsibilities in connection with the purchase and remarketing of a tendered Bond shall be to:
(A) draw upon the applicable Liquidity Facility if the Remarketing Agent notifies the Tender Agent as provided herein that such Bond has not been remarketed on or before the Purchase Date therefor, which draw shall be in an amount equal to the difference between such Purchase Price and any remarketing proceeds received by the Remarketing Agent in connection with a partial remarketing of such Bond, and to remit the amount so drawn to or upon the order of the Securities Depository for the benefit of the tendering Beneficial Owners; and
(B) remit any proceeds derived from the remarketing of a Liquidity Provider Bond to the Liquidity Provider.
SECTION 3.12. No Book-Entry System. When the Bonds are not held in a Book-Entry System, the following procedures shall be followed:
(a) Bonds shall be delivered (with all necessary endorsements) at or before 12:00 noon on the Purchase Date at the Principal Office of the Paying Agent; provided, however, that payment of the Purchase Price shall be made pursuant to this Section only if the Bond so delivered to the Paying Agent conforms in all respects to the description thereof in the notice described in this Section. Payment of the Purchase Price with respect to purchases under this Section shall be made to the Owners of tendered Bonds by wire transfer in immediately available funds by the Paying Agent by 3:00 P.M. on the Purchase Date.
(b) If a Bond to be purchased is not delivered by the Owner to the Paying Agent by 12:00 noon on the date on which that Bond is to be purchased, the Paying Agent shall hold any funds received for the purchase of those Bonds in the Purchase Fund in trust and shall pay such funds to the former Owners of the Bonds upon presentation of the Bonds. Such undelivered Bonds shall cease to accrue interest as to the former Owners on such purchase date and money representing the Purchase Price shall be available against delivery of those Bonds at the Principal Office of the Paying Agent; provided, however, that any funds which shall be so held by the Paying Agent and which remain unclaimed by the former Owner of a Bond not presented for purchase for a period of three years after delivery of such funds to the Paying Agent, shall, to the extent permitted by law, upon request in writing by the county and the furnishing of security or indemnity to the Paying Agent's satisfaction, be paid to the county free of any trust or lien and thereafter the former Owner of such Bond shall look only to the county and then only to the extent of the amounts so received by the county without any interest thereon, and the Paying Agent shall have no further responsibility with respect to such money or payment of the purchase price of such Bonds. The Paying Agent shall authenticate a replacement Bond for any undelivered Bond that may then be remarketed by the Remarketing Agent.
(c) The Paying Agent shall hold all Bonds properly tendered to it for purchase hereunder as agent and bailee of, and in escrow for the benefit of, the respective Owners of the Bonds which shall have so tendered such Bonds until money representing the Purchase Price of such Bonds shall have been delivered to or for the account of or to the order of such Owners.
SECTION 3.13. Credit Enhancement and Liquidity Facility.
(a) A Credit Enhancement will not initially be provided for the Bonds. From time to time while the Bonds remain outstanding, the county may elect to provide a Credit Enhancement with respect to the Bonds (but not during a LIBOR Index Rate Period). While a Credit Enhancement is in effect with respect to the Bonds, the Registrar shall, on the Business Day preceding each Interest Payment Date and Principal Payment Date, before 4:00 P.M. on such day, draw on the Credit Enhancement in accordance with the terms thereof so as to receive thereunder by 1:00 P.M. on said Interest Payment Date and Principal Payment Date, an amount, in immediately available funds, equal to the amount of interest and principal payable on the Bonds on such Interest Payment Date and Principal Payment Date. The proceeds of such draws shall be applied to pay principal of and interest on the Bonds prior to the application of any other funds held by the Registrar therefor. Such amounts shall be held uninvested and separate and apart from all other funds.
From time to time while the Bonds remain outstanding, upon delivery to the Registrar of a Favorable Opinion of Bond Counsel, the county may elect to terminate a Credit Enhancement with respect to the Bonds without obtaining an Alternate Credit Enhancement, and such Bonds would then be subject to mandatory tender on the Mandatory Purchase Date described in clause (v) of the definition of Mandatory Purchase Date.
(b) A Liquidity Facility will not initially be provided for the Bonds. While a Liquidity Facility is in effect with respect to the Bonds, on each date on which a Bond is to be purchased, the Tender Agent, by demand given by Electronic Means before 12:00 Noon, shall draw on the Liquidity Facility in accordance with the terms thereof so as to receive thereunder by 2:30 P.M. on such date an amount, in immediately available funds, sufficient, together with the proceeds of the remarketing of Bonds on such date, to enable the Tender Agent to pay the Purchase Price in connection therewith. The proceeds of such draw shall be paid to the Tender Agent, who shall deposit said proceeds in the Liquidity Facility Purchase Account pursuant to Section 3.14(b) of this ordinance.
From time to time while the Bonds remain outstanding, upon delivery to the Registrar of a Favorable Opinion of Bond Counsel, the county may elect to terminate a Liquidity Facility with respect to the Bonds without obtaining an Alternate Liquidity Facility, and such Bonds would then be subject to mandatory tender on the Mandatory Purchase Date described in clause (v) of the definition of Mandatory Purchase Date.
(c) Notwithstanding the foregoing paragraphs of this Section, if a Credit Provider and Liquidity Provider are the same entity, the Registrar shall not draw on the Credit Enhancement with respect to any payments due or made in connection with Liquidity Provider Bonds. In no event shall the Registrar draw on the Credit Enhancement with respect to any payments made or made in connection with Bonds not covered by the Credit Enhancement or Bonds listed on the Bond Register as owned by the county.
(d) The county may provide an Alternate Credit Enhancement or Alternate Liquidity Facility on any day on which the Bonds could otherwise be subject to redemption at par not later than the fifth (5th) Business Day prior to the Expiration Date of the Credit Enhancement or Liquidity Facility then in effect. The county shall give the Notice Parties written notice of the proposed substitution of an Alternate Credit Enhancement or Alternate Liquidity Facility no less than 2 Business Days prior to the date on which the Registrar is required to provide notice of the proposed substitution to the Owners of the Bonds. The Registrar shall give notice of such Substitution Date in accordance with Section 3.7 of this ordinance. On or before the Substitution Date there shall be delivered to the Registrar or the Tender Agent, as applicable (i) the Alternate Credit Enhancement or the Alternate Liquidity Facility in substitution for the Credit Enhancement or Liquidity Facility then in effect, (ii) a Favorable Opinion of Bond Counsel, (iii) a written Opinion of Counsel for the provider of the Alternate Credit Enhancement or Alternate Liquidity Facility, as applicable, to the effect that such Alternate Credit Enhancement or Alternate Liquidity Facility is a valid, legal and binding obligation of the provider thereof, and (iv) unless waived by such entity in a writing delivered to the Registrar or the Tender Agent, as applicable, written evidence satisfactory to the Credit Provider and the Liquidity Provider of the provision for purchase from the Liquidity Provider of all Liquidity Provider Bonds, at a price equal to the principal amount thereof plus accrued and unpaid interest, and payment of all amounts due to the Credit Provider and the Liquidity Provider under the Reimbursement Agreement(s) on or before the effective date of such Alternate Letter of Credit or Alternate Liquidity Facility. Upon the satisfaction of the conditions described in the preceding sentence, the Registrar shall accept such Alternate Credit Enhancement or Alternate Liquidity Facility on the close of business on the Substitution Date and shall surrender the Credit Enhancement or Liquidity Facility then in effect to the provider thereof on the Substitution Date; provided, however, that the Registrar shall not surrender the Credit Enhancement or Liquidity Facility then in effect unless and until the Registrar has received all amounts drawn thereunder. As provided in Section 3.8(c) of this ordinance, any draw on a Liquidity Facility to be made on a Substitution Date shall be on the Liquidity Facility being replaced. If any condition to the substitution is not satisfied, the substitution shall not occur but the Bonds shall remain subject to mandatory purchase on the proposed Substitution Date.
(e) In the event of an extension of the Expiration Date, the county will give to the Notice Parties and Owners of the affected Bonds a written notice of the new Expiration Date at least 21 days prior to the fifth Business Day prior to the Expiration Date in effect prior to the extension.
(f) The references to "Liquidity Facility" and "Liquidity Provider" will be disregarded during any period during which a Liquidity Facility is not in effect. The references to "Credit Enhancement" and "Credit Provider" will be disregarded during any period during which a Credit Enhancement is not in effect.
(g) Any claim by the Registrar or the Tender Agent on any amounts drawn under the Credit Enhancement or the Liquidity Facility or on any amounts on deposit in the account described in subsection (a) of this Section 3.13 in which proceeds of draws on the Credit Enhancement are deposited or the Liquidity Facility Purchase Account shall be subordinate to the lien thereon of the Bonds.
SECTION 3.14. Purchase Fund. There is hereby established and there shall be maintained with the Tender Agent, as agent for the Registrar, a separate fund to be known as the "Purchase Fund." The Tender Agent shall further establish separate accounts within the Purchase Fund to be known as the "Liquidity Facility Purchase Account" and the "Remarketing Proceeds Account" and the "County Purchase Account." All funds in any account within the Purchase Fund shall be held solely for the benefit of Owners of the Bonds.
(a) Remarketing Proceeds Account. Upon receipt of the proceeds of a remarketing of a Bond on the date such Bond is to be purchased, the Tender Agent will deposit those proceeds in the Remarketing Proceeds Account for application to the Purchase Price of that Bond. Notwithstanding the foregoing, upon the receipt of the proceeds of a remarketing of Liquidity Provider Bonds, the Tender Agent will immediately pay such proceeds to the Liquidity Provider to the extent of any amount owing to the Liquidity Provider.
(b) Liquidity Facility Purchase Account. Upon receipt from the Registrar of the immediately available funds transferred to the Tender Agent pursuant to Section 3.9(b) of this ordinance, the Tender Agent will deposit such money in the Liquidity Facility Purchase Account for application to the Purchase Price of the Bonds to the extent that the money on deposit in the Remarketing Proceeds Account is not sufficient. Any amounts deposited in the Liquidity Facility Purchase Account and not needed with respect to the Purchase Price for any Bonds will be immediately returned to the Liquidity Provider.
(c) County Purchase Account. Upon receipt of funds from the county pursuant to Section 3.9(c) of this ordinance, the Tender Agent shall deposit those funds in the County Purchase Account for application to the Purchase Price of the Bonds. Any amounts deposited in the County Purchase Account and not needed with respect to the Purchase Price for any Bonds will be immediately refunded to the county.
(d) Investment. Amounts held in the Liquidity Facility Purchase Accounts and the Remarketing Proceeds Accounts by the Paying Agent shall be held uninvested and separate and apart from all other funds and accounts.
SECTION 3.15. Insufficient Funds for Tenders.
(a) If money sufficient to pay the Purchase Price of all tendered Bonds to be purchased on any Purchase Date is not available (1) no purchase shall be consummated on such Purchase Date, (2) all tendered Bonds shall be returned to the Owners thereof, and (3) all remarketing proceeds shall be returned to the Remarketing Agent for return to the Persons providing such money.
(b) All Bonds shall bear interest at the Unremarketed Bonds Rate during the period of time from and including the applicable Purchase Date to (but not including) the date that all such tendered Bonds are successfully remarketed (the "Delayed Remarketing Period").
(c) The county may direct the conversion of the tendered Bonds to a different Interest Rate Mode during the Delayed Remarketing Period in accordance with Section 2.10 of this ordinance; provided that the county is not required to comply with the notice requirements described in Section 2.10 of this ordinance.
(d) Subject to the terms of the Remarketing Agreement, the Remarketing Agent shall continue to use its best efforts to remarket all of the tendered Bonds.
(e) During the Delayed Remarketing Period, the Registrar may, upon written direction of the county, apply funds provided by the county to the redemption of such tendered Bonds, as a whole or in part on any Business Day during the Delayed Remarketing Period, at a redemption price equal to the principal amount thereof, together with interest accrued thereon to the date fixed for redemption, without premium. The Registrar shall give five Business Days' notice of such redemption to the Owners of the Bonds to be redeemed.
(f) During the Delayed Remarketing Period, interest on such tendered Bonds shall be paid to the Owners thereof (i) on the first Business Day of each calendar month occurring during the Delayed Remarketing Period and (ii) on the last day of the Delayed Remarketing Period.
SECTION 3.16. Amendments on Mandatory Purchase Date. The owner of a Bond shall be deemed to have consented to any amendment proposed to become effective on any Mandatory Purchase Date for such Bond.
SECTION 3.17. No Defeasance in Short-Term Mode. Bonds in any Short-Term Mode may not be defeased. Any defeasance of Bonds in any Long-Term Mode must be in accordance with the defeasance provisions set forth in Section 4.4 of this ordinance.
ARTICLE IV
SECURITY FOR THE BONDS
SECTION 4.1. Junior Lien Bond Fund. A special fund of the county designated the "King County, Washington, Junior Lien Obligation Redemption Fund" (the "Junior Lien Bond Fund") has been created for the purpose of paying Junior Lien Obligations. The Junior Lien Bond Fund shall be held separate and apart from all other funds and accounts of the county and shall be a trust fund for the owners of Junior Lien Obligations.
The county hereby irrevocably obligates and binds itself for as long as any Bonds remain Outstanding to set aside and pay into the Junior Lien Bond Fund from Revenue of the System, on or prior to the respective dates the same become due (and if such payment is made on the due date, such payment shall be made in immediately available funds):
(1) Such amounts as are required to pay the interest scheduled to become due on Outstanding Bonds (including all Liquidity Provider Bonds at the rate provided under the applicable Reimbursement Agreement and Unremarketed Bonds at the rate provided under the applicable Bank Purchase Agreement); and
(2) Such amounts with respect to Outstanding Bonds as are required (A) to pay maturing principal, (B) to make any required sinking fund payments, and (C) to redeem Outstanding Bonds in accordance with any mandatory redemption provisions (including all Liquidity Provider Bonds and Unremarketed Bonds on the dates and in the amounts set forth in the applicable Bank Purchase Agreement).
(3) Other amounts due under the applicable Bank Purchase Agreement.
So long as the county maintains the Credit Enhancement, the payment requirements of this Section 4.1 shall be deemed satisfied by draws on the Credit Enhancement; provided, however, that the Credit Enhancement must not be drawn upon to make any payments of principal of or interest on Liquidity Provider Bonds.
SECTION 4.2. Revenue Fund. All Revenue of the System shall be deposited in the Revenue Fund as collected. The Revenue Fund shall be held separate and apart from all other funds and accounts of the county, and the Revenue of the System deposited therein shall be used only for the following purposes and in the following order of priority:
First, to pay all Operating and Maintenance Expenses;
Second, to make all required deposits into the debt service account in the Parity Bond Fund to provide for the payment of principal of and interest on Parity Bonds as the same become due and payable and to make any Payment Agreement Payments with respect to any Parity Payment Agreements;
Third, to make all payments required to be made pursuant to a reimbursement agreement or agreements (or other equivalent documents) with the providers of any debt service reserve insurance, sureties or letters of credit securing Parity Bonds, provided that if there is not sufficient money to make all payments under such reimbursement agreements the payments will be made on a pro rata basis;
Fourth, to establish and maintain the Parity Bond Reserve Account (including making deposits into such account and paying the costs of obtaining debt service reserve insurance, sureties or letters of credit);
Fifth, to make all required payments of principal of and interest on the Parity Lien Obligations as the same become due and payable and to make Payment Agreement Payments with respect to any Parity Lien Obligation Payment Agreements;
Sixth, to make all required payments of principal of and interest on Junior Lien Obligations as the same become due and payable, to make all Payment Agreement Payments for any Payment Agreements entered into with respect to Junior Lien Obligations, to make any payments required to be made to the Bank pursuant to the Bank Purchase Agreement, and to make any payments required to be made to any providers of any credit enhancements or liquidity facilities for Junior Lien Obligations;
Seventh, to make all required payments of principal of and interest on Multi-Modal LTGO/Sewer Revenue Bonds as the same become due and payable, to make all Payment Agreement Payments for any Payment Agreements entered into with respect to Multi-Modal LTGO/Sewer Revenue Bonds, and to make any payments required to be made to providers of any credit enhancements or liquidity facilities for Multi-Modal LTGO/Sewer Revenue Bonds;
Eighth, to make all required payments of principal of and interest on the Subordinate Lien Obligations as the same become due and payable;
Ninth, to make all required payments of principal and interest on bonds, notes, warrants and other evidences of indebtedness, the lien and charge against Revenue of the System of which is junior and inferior to the Subordinate Lien Obligations, as the same shall become due and payable;
Tenth, to make all required payments of principal and interest due on the SRF Loans and the Public Works Trust Fund Loans as the same become due and payable; and
Any surplus money that the county may have on hand in the Revenue Fund after making all required payments set forth above may be used by the county (i) to make necessary improvements, additions and repairs to and extensions and replacements of the System, (ii) to purchase or redeem and retire outstanding sewer revenue bonds of the county, (iii) to make deposits into the Rate Stabilization Fund, (iv) to make any termination payment required to be paid with respect to a Payment Agreement, or (v) for any other lawful purposes of the county related to the System.
SECTION 4.3. Pledge of Revenue.
(a) Lien on Revenue of the System. The Bonds and the lien thereof created and established hereunder shall be obligations only of the Junior Lien Bond Fund. The Bonds shall be payable solely from and secured solely by Revenue of the System and by drawings under the Credit Enhancement or the Liquidity Facility; provided, however, that any series of Additional Junior Lien Obligations also may be payable from and secured by a separate credit or liquidity facility pledged specifically to or provided for that series of Additional Junior Lien Obligations, and such separate credit or liquidity facility shall not secure payment of the Bonds. No Additional Junior Lien Obligations shall be secured by the Credit Enhancement or the Liquidity Facility unless the Credit Provider or the Liquidity Provider, as the case may be, shall amend the Credit Enhancement or increase the Available Amount under the Liquidity Facility, as the case may be, to account for such Additional Junior Lien Obligations. Unless the Credit Enhancement is so amended or the Available Amount is so increased, funds drawn under the Credit Enhancement or the Liquidity Facility must be held separately and are not available for payments with respect to any other Junior Lien Obligations.
From and after the time of issuance and delivery of the Bonds and so long thereafter as any of the same remain Outstanding, the county hereby irrevocably obligates and binds itself to set aside and pay into the Junior Lien Bond Fund out of Revenue of the System, on or prior to the date on which the interest on, premium, if any, or principal of and interest on the Bonds shall become due, the amount necessary to pay such interest, premium, or principal and interest coming due on the Bonds.
The amounts herein covenanted to be paid out of the Revenue of the System and deposited into the Junior Lien Bond Fund shall constitute and the county hereby grants and pledges to the owners of the Bonds. to the Bank with respect to obligations owed to it under a Bank Purchase Agreement, and to any Credit Provider and Liquidity Provider with respect to obligations owed to them under a Reimbursement Agreement, a lien and charge on such Revenue junior, subordinate and inferior to Operating and Maintenance Expenses; junior, subordinate and inferior to the lien and charge on such Revenue for the payments required to be made into the Parity Bond Fund and the accounts therein; junior, subordinate and inferior to the lien and charge on such Revenue of the payments required to be made into the Parity Lien Obligation Bond Fund and the accounts therein; equal to the lien and charge on such Revenue to pay and secure the payment of the outstanding Junior Lien Obligations and any Additional Junior Lien Obligations; and superior to all other liens and charges of any kind or nature, including, inter alia, the lien and charge on such Revenue to pay and secure the payment of the Commercial Paper Notes, the Bank Note and any Additional Subordinate Lien Obligations, and the SRF Loans and Public Works Trust Fund Loans.
The Bonds shall not be deemed to constitute a general obligation or a pledge of the faith and credit of the county, or a debt or a pledge of the faith and credit of the State of Washington or any other municipal corporation or political subdivision thereof. Neither the State of Washington nor any other municipal corporation or political subdivision thereof shall be obligated to pay the principal of or interest on the Bonds, and neither the faith and credit nor the taxing power of the county, the State of Washington or any other municipal corporation or political subdivision thereof is pledged to the payment of the principal of or interest on the Bonds.
(b) Due Regard for Expenses of Maintenance and Operation. The county council hereby declares that, in fixing the amounts to be paid into the Junior Lien Bond Fund and the accounts therein out of the Revenue of the System, it has exercised due regard for the necessary Operating and Maintenance Expenses and has not obligated the county to set aside, pay into and maintain in said fund and accounts a greater amount of the Revenue of the System than in its judgment will be available over and above such necessary Operating and Maintenance Expenses.
SECTION 4.4. Defeasance. If money and/or noncallable Government Obligations maturing at such time or times and bearing interest to be earned thereon in amounts (together with such money, if necessary) sufficient to redeem and retire, refund or defease part or all of Bonds in a Long-Term Mode in accordance with their terms, are set aside in a special account of the county to effect such redemption and retirement, and such money and the principal of and interest on such Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on the Bonds so provided for, and such Bonds shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive the money so set aside and pledged, and such Bonds shall be deemed not to be outstanding hereunder. Bonds in any Short-Term Mode may not be defeased.
ARTICLE V
COVENANTS OF THE COUNTY
SECTION 5.1. Rate Covenants. The county hereby makes the following covenants and agrees with the Owners of the Bonds for as long as any of the same remain Outstanding.
(a) General Rate Covenant. The county shall establish, maintain and collect rates and charges for sewage disposal service for each calendar year that shall be fair and nondiscriminatory and adequate to provide the county with Revenue of the System sufficient (1) to pay all Operating and Maintenance Expenses during such calendar year; (2) to pay punctually all amounts described in Paragraphs Second through Tenth in Section 4.2 of this ordinance due during such calendar year; and (3) to pay any and all amounts that the county is now or may hereafter become obligated by law or contract to pay during such calendar year from the Revenue of the System.
(b) Coverage Requirement.
(i) Subject to the provisions of subparagraph (ii) of this Section 5.1(b), the county hereby covenants with the owners of the Bonds for so long as any of the same are Outstanding that the county will at all times establish, maintain and collect rates and charges for sewage disposal service that, together with the interest to be earned on investments made of money in the Revenue Fund, Parity Bond Fund, Parity Lien Obligation Bond Fund, Junior Lien Bond Fund, and Construction Account will provide in each calendar year Net Revenue, after deducting therefrom amounts required in such year to pay Annual Debt Service on Parity Bonds and Parity Lien Obligations, in an amount equal to at least 1.10 times the amounts required to pay Annual Debt Service for all Junior Lien Obligations for such year.
(ii) There shall be added to Revenue of the System for any calendar year any amount withdrawn from the Rate Stabilization Fund and deposited in the Revenue Fund. There shall be subtracted from Revenue of the System for any year any amounts in such year withdrawn from the Revenue Fund and deposited into the Rate Stabilization Fund in such year.
SECTION 5.2. Other Covenants. The county hereby makes the following additional covenants and agrees with the Owners of the Bonds for as long as any of the same remain Outstanding.
(a) Maintain in Good Order. The county shall cause the System and the business in connection therewith to be operated in a safe, sound, efficient, and economic manner in compliance with all health, safety, and environmental laws, regulatory body rules, regulatory body orders and court orders applicable to the county's operation of the System, and shall cause to be maintained, preserved, reconstructed, expanded and kept, with all appurtenances and every part and parcel thereof, in good repair, working order and condition, and shall from time to time cause to be made, without undue deferral, all necessary or proper repairs, replacements and renewals, so that all times the operation of the System shall be properly and advantageously conducted.
(b) Books and Records. The county will cause proper books of record and accounts of operation of the System to be kept, including an annual financial report.
(c) Annual Audit. The county shall cause its books of accounts, including its annual financial report, to be audited annually by the State auditor's office or other State department or agency as may be authorized and directed by law to make such audits, or by a Certified Public Accountant. The county will furnish such audit to the owner or holder of any Bond upon written request therefor.
(d) Insurance. The county will at all times carry fire and extended coverage and such other forms of insurance on such of the buildings, equipment, facilities and properties of the Sewer System as under good practice are ordinarily carried on such buildings, equipment, facilities and properties by municipal or privately owned utilities engaged in the operation of sewer systems and will also carry adequate public liability insurance at all times, provided that the county may, if deemed advisable by the county council, institute or continue a self insurance program with respect to any or all of the aforementioned risks.
(e) Construction. The county shall cause the construction of any duly authorized and ordered portions of the Comprehensive Plan to be performed and completed within a reasonable time and at the lowest reasonable cost.
(f) Collection of Revenue. The county shall so operate and maintain the System and conduct its affairs as to entitle it at all times to receive and enforce payment to it of sewage disposal charges payable (i) pursuant to the ordinance or ordinances establishing a tariff of rates and charges for sewage disposal services and (ii) under any Service Agreement that the county has now or may hereafter enter into and to entitle the county to collect all revenues derived from the operation of the System. The county shall not release the obligations of any person, corporation or political subdivision under such tariff of rates and charges or the Service Agreements and shall at all times, to the extent permitted by law, defend, enforce, preserve and protect the rights and privileges of the county and of the holders of the Bonds under or with respect thereto.
In accordance with RCW 35.58.200(3), the county shall require any county, city, special district or other political subdivision to discharge to the System all sewage collected by such entity from any portion of the Seattle metropolitan area that can drain by gravity flow into facilities of the System that serve such areas if the county council declares that the health, safety or welfare of the people within the metropolitan area require such action.
(g) Legal Authority. The county has full legal right, power and authority to adopt this ordinance, to sell, issue and deliver Bonds as provided herein, and to carry out and consummate all other transactions contemplated by this ordinance.
(h) Due Authorization. By all necessary official action prior to or concurrently herewith, the county has duly authorized and approved the execution and delivery of, and the performance by the county of its obligations contained in, the Bonds and in this ordinance and the consummation by it of all other transactions necessary to effectuate this ordinance in connection with the issuance of Bonds, and such authorizations and approvals are in full force and effect and have not been amended, modified or supplemented in any material respect.
(i) Binding Obligation. This ordinance constitutes a legal, valid and binding obligation of the county.
(j) No Conflict. The adoption of this ordinance, and compliance on the county's part with the provisions contained herein, will not conflict with or constitute a breach of or default under any constitutional provisions, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, ordinance, motion, agreement or other instrument to which the county is a party or to which the county or any of its property or assets are otherwise subject, nor will any such adoption, execution, delivery, sale, issuance or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the county or under the terms of any such law, regulation or instrument, except as may be provided by this ordinance.
(k) Performance Under Ordinance. None of the proceeds of the Bonds will be used for any purpose other than as provided in this ordinance, and the county shall not suffer any amendment or supplement to this ordinance, or any departure from the due performance of the obligations of the county hereunder, that might materially adversely affect the rights of the owners from time to time of the Bonds.
(l) Sale or Disposition. The county will not sell or voluntarily dispose of all of the operating properties of the System unless provision is made for payment into the appropriate bond funds of a sum sufficient to pay the principal of and interest on all outstanding Parity Bonds, Parity Lien Obligations and Junior Lien Obligations, in accordance with the terms thereof, nor will the county sell or voluntarily dispose of any part of the operating properties of the System unless the county has first complied with any applicable covenants of the Parity Bonds and Parity Lien Obligations.
SECTION 5.3. Tax Covenants.
(a) General. The county intends that interest on the Bonds be excludable from gross income for federal income tax purposes pursuant to sections 103 and 141 through 150 of the Code, and the applicable regulations. The county covenants not to take any action, or knowingly to omit to take any action within its control, that if taken or omitted would cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the Code, for federal income tax purposes.
(b) Tax Certificate. Upon the issuance of the Bonds, the Finance Director is authorized to execute a federal tax certificate (the "Tax Certificate"), which will certify to various facts and representations concerning the Bonds, based on the facts and estimates known or reasonably expected on the date of issuance of the Bonds, and make certain covenants with respect to the Bonds, including but not limited to the following:
(i) No Private Activity Bonds. The proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "private activity bonds" within the meaning of the Code, as further described in the Tax Certificate. Moreover, the county covenants that it will use the proceeds of such Bonds (including interest or other investment income derived from Bond proceeds), regulate the use of property financed or refinanced, directly or indirectly, with such proceeds, and take such other and further action as may be required so that such Bonds will not be "private activity bonds."
(ii) No Federal Guarantee. The county has not and will not take any action, and has not knowingly omitted and will not knowingly omit to take any action within its control, that, if taken or omitted would cause such Bonds to be "federally guaranteed" within the meaning of the Code, as further described in the Tax Certificate.
(iii) No Arbitrage Bonds. The county reasonably expects that the proceeds of such Bonds will not be used in a manner that would cause such Bonds to be "arbitrage bonds" within the meaning of the Code, as further described in the Tax Certificate.
(iv) No Hedge Bonds. The county reasonably expects that at least 85% percent of the proceeds of such Bonds will be spent within three years of the date such Bonds are issued to carry out the governmental purposes of such Bonds.
The county covenants that it will comply with the Tax Certificate unless it receives advice from nationally recognized bond counsel or the Internal Revenue Service that certain provisions have been amended or no longer apply to the Bonds.
(c) Arbitrage Rebate. If the county does not qualify for an exception to the requirements of Section 148(f) of the Code relating to the payment of arbitrage rebate to the United States, the county will take all necessary steps to comply with the requirement that certain amounts earned by the county on the investment of the "gross proceeds" of the Bonds (within the meaning of the Code) be rebated.
SECTION 5.4. Additional Obligations of the Sewer System.
(a) Senior Lien Bonds. The county reserves the right to issue additional Parity Bonds and Parity Lien Obligations on the terms and conditions set forth in the ordinances authorizing issuance of the Parity Bonds and the Parity Lien Obligations.
(b) Additional Junior Lien Obligations. The county also reserves the right to issue Additional Junior Lien Obligations, but only if such Junior Lien Obligations are issued (i) for the purpose of refunding any then outstanding Junior Lien Obligations or (ii) for any lawful purpose of the county related to the System and the following conditions are met:
(A) At the time of issuing such Additional Junior Lien Obligations, there shall be no default in the payment of the principal of or interest on any Parity Bonds, Parity Lien Obligations, Junior Lien Obligations, Subordinate Lien Obligations, the Public Works Trust Fund Loans or the SRF Loans.
(B) The county shall have on file one of the following certificates:
(1) certificate of the Finance Director showing that Net Revenue in any 12 consecutive months out of the most recent 18 months preceding the issuance of such Additional Junior Lien Obligations, based on financial statements of the System prepared by the county and after deducting therefrom the Senior Lien Payments required in each calendar year during the life of such Additional Junior Lien Obligations, shall be at least equal to 1.10 times the Annual Debt Service for the proposed Additional Junior Lien Obligations and all then outstanding Junior Lien Obligations in each year during the life of such Additional Junior Lien Obligations; or
(2) A certificate from a Professional Utility Consultant (which certificate may not be dated more than 90 days prior to the date of delivery of such Additional Junior Lien Obligations) showing that in his or her professional opinion the Net Revenue, estimated on the basis of all factors as he or she may consider reasonable, for each of the five calendar years next following the year in which such Additional Junior Lien Obligations are to be issued, after deducting therefrom Senior Lien Payments for each such year, shall be at least equal to 1.10 times the Annual Debt Service for the proposed Additional Junior Lien Obligations and all then outstanding Junior Lien Obligations in each of those five years.
(c) Obligations with Inferior Lien. Nothing herein contained shall prevent the county from issuing revenue bonds, notes or other obligations that are a charge upon the Revenue of the System junior or inferior to the payments required to be made therefrom into the Junior Lien Bond Fund to pay and secure the payment of any Junior Lien Obligations.
SECTION 5.5. Payment Agreements.
(a) General. To the extent and for the purposes permitted from time to time by Chapter 39.96 RCW and other applicable provisions of State law, the county may enter into Payment Agreements with respect to any Junior Lien Obligations, subject to the conditions set forth in this Section and in other provisions of this ordinance.
(b) Manner and Schedule of Payments. Each Payment Agreement shall set forth the manner in which the Payment Agreement Payments and the Payment Agreement Receipts shall be calculated and a schedule of payment dates.
(c) Authorizing Ordinance. Prior to entering into a Payment Agreement, the county council shall pass an ordinance authorizing such agreement and setting forth such provisions as the county deems necessary or desirable and are not inconsistent with the provisions of this ordinance.
(d) Calculation of Payment Agreement Payments and Debt Service on Junior Lien Obligations with Respect to which a Payment Agreement is in Force. It is the intent of the county, for purposes of Sections 5.1(b) and 5.4(b) of this ordinance, that debt service on Junior Lien Obligations with respect to which a Payment Agreement is in force shall be calculated to reflect the net economic effect on the county intended to be produced by the terms of the Junior Lien Obligations and the terms of the Payment Agreement. In calculating such amounts, the county shall be guided by the following requirements.
(i) The amount of interest deemed to be payable on any Junior Lien Obligations with respect to which a Payment Agreement is in force shall be an amount equal to the amount of interest that would be payable at the rate or rates stated in those Junior Lien Obligations plus Payment Agreement Payments minus Payment Agreement Receipts.
(ii) For any period during which Payment Agreement Payments are not taken into account in calculating interest on any outstanding Junior Lien Obligations because the Payment Agreement is not then related to any outstanding Junior Lien Obligations, Payment Agreement Payments on that Payment Agreement shall be calculated based upon the following assumptions:
(A) County Obligated to Make Payments Based on Fixed Rate. If the county is obligated to make Payment Agreement Payments based on a fixed rate and the Qualified Counterparty is obligated to make payments based on a variable rate index, payments by the county will be based on the assumed fixed payor rate, and payments by the Qualified Counterparty will be based on a rate equal to the average rate determined by the variable rate index specified by the Payment Agreement during the fiscal quarter preceding the quarter in which the calculation is made; and
(B) County Obligated to Make Payments Based on Variable Rate Index. If the county is obligated to make Payment Agreement Payments based on a variable rate index and the Qualified Counterparty is obligated to make payments based on a fixed rate, payments by the county will be based on a rate equal to the average rate determined by the variable rate index specified by the Payment Agreement during the fiscal quarter preceding the quarter in which the calculation is made, and the Qualified Counterparty will make payments based on the fixed rate specified by the Payment Agreement.
(e) Prior Notice to Rating Agencies. The county shall give notice to each Rating Agency 30 days prior to the date it intends to enter into a Payment Agreement with respect to any Junior Lien Obligations.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. Defaults. The county hereby finds and determines that the failure or refusal of the county or any of its officers to perform the covenants and obligations of this ordinance will endanger the operation of the System and the application of Revenue of the System and such other money, funds and securities to the purposes herein set forth. Any one or more of the following constitute a Default under this ordinance:
(a) The county fails to make payment of the principal of any Bonds when the same become due and payable whether by maturity or scheduled redemption prior to maturity;
(b) At any time the Bonds bear interest at a LIBOR Index Rate, the county fails to make payment of the Purchase Price of the Bonds when the same becomes due and payable.
(c) The county fails to make payment of any installment of interest on any Bonds when the same becomes due and payable;
(d) The county fails to perform any other covenant, condition, or agreement on the part of the county contained in this ordinance, and such failure continues for a period of 30 days;
(e) The county (i) admits in writing its inability to pay its debts generally as they become due; (ii) files a petition in bankruptcy or seeking a composition of indebtedness under any state or federal bankruptcy or insolvency law; (iii) makes an assignment for the benefit of its creditors; (iv) consents to the appointment of a receiver of the whole or any substantial part of the System; or (v) consents to the assumption by any court of competent jurisdiction under the provisions of any other law for the relief or aid of debtors of custody or control of the county or of the whole or any substantial part of the System; or
(f) An event of default occurs under the applicable Bank Purchase Agreement.
(g) At any time during the Initial Period a default occurs under that certain Line of Credit Agreement dated December 20, 1995, among the county, Bayerische Landesbank (formerly known as Bayerische Landesbank Girozentrale), acting through its New York Branch (the "Line of Credit Bank") and The Bank of New York, as Issuing and Paying Agent, as amended, supplemented or otherwise modified, that results in the acceleration of any amounts owed thereunder to the Line of Credit Bank.
SECTION 6.2. Remedies.
(a) Control by Bank. So long as the Bank is sole Owner of the Bonds, upon the occurrence and continuation of a Default, the Bank will be entitled to exercise any of the remedies provided under this Section without the necessity of appointing a Bondowners' Trustee. Upon the occurrence of a Default under Section 6.1(g), the Bonds shall be automatically accelerated and the principal of and interest on the Bonds shall be immediately due and payable.
(b) Control by Credit Provider. Upon the occurrence and continuation of a Default, the Credit Provider, if any, shall be entitled to exercise, on behalf of the Bondowners, any of the remedies provided under this Section and, for as long as the Credit Provider is not in default of its obligations under the Credit Enhancement, the Credit Provider shall be the only party entitled to exercise the remedies provided under this Section.
(c) Bondowners' Trustee. Upon the occurrence of a Default and so long as such Default has not been remedied, and subject to the rights of the Bank and the Credit Provider as provided in subsections (a) and (b) above, a Bondowners' Trustee may be appointed for the Bonds by the owners of 51% in principal amount of the Outstanding Bonds by an instrument or concurrent instruments in writing signed and acknowledged by such Bondowners or by their attorneys-in-fact duly authorized and delivered to such Bondowners' Trustee, notification thereof being given to the county. Any Bondowners' Trustee appointed under the provisions of this Section shall be a bank or trust company organized under the laws of a state or a national banking association. The fees and expenses of a Bondowners' Trustee shall be borne by the Bondowners and not by the county. The bank or trust company acting as a Bondowners' Trustee may be removed at any time, and a successor Bondowners' Trustee may be appointed, by the owners of 51% in principal amount of the Bonds Outstanding, by an instrument or concurrent instruments in writing signed and acknowledged by such Bondowners or by their attorneys-in-fact duly authorized. The Bondowners' Trustee may resign upon 60 days' notice and a new Bondowners' Trustee appointed by the owners of at least 51% in principal amount of Bonds; provided, however, that no such resignation or removal shall be effective until a successor Bondowners' Trustee shall have been appointed and shall have delivered a written instrument of acceptance of the duties and responsibilities of the Bondowners' Trustee under this ordinance to the county and the Owners of the Bonds then Outstanding.
The Bondowners' Trustee appointed in the manner herein provided, and each successor thereto, is hereby declared to be a trustee for the owners of all Bonds then Outstanding and is empowered to exercise all the rights and powers herein conferred on the Bondowners' Trustee.
(d) Legal Action by Bondowners' Trustee. Subject to the rights of the Credit Provider, upon the happening of a Default and during the continuation thereof, the Bondowners' Trustee may, and upon the written request of the Owners of not less than 25% in principal amount of Bonds then Outstanding shall, take such steps and institute such suits, actions or other proceedings, all as it may deem appropriate for the protection and enforcement of the rights of Bondowners to collect any amounts due and owing to or from the county, or to obtain other appropriate relief, and may enforce the specific performance of any covenant, agreement or condition contained in this ordinance or the Bonds. Any action, suit or other proceedings instituted by a Bondowners' Trustee hereunder shall be brought in its name as trustee for the Bondowners, and all such rights of action upon or under any of the Bonds or the provisions of this ordinance may be enforced by a Bondowners' Trustee without the possession of any of said Bonds, and without the production of the same at any trial or proceedings relating thereto except where otherwise required by law. Any such suit or proceeding instituted by the Bondowners' Trustee shall be brought for the ratable benefit of all Owners of the Bonds, subject to the provisions of this ordinance. The respective owners of said Bonds by taking and holding the same, shall be conclusively deemed irrevocably to appoint a Bondowners' Trustee the true and lawful trustee of the respective Owners of said Bonds, with authority to institute any such action, suit or proceeding; to receive as trustee and deposit in trust any sums that become distributable on account of said Bonds; to execute any paper or documents for the receipt of such money, and to do all acts with respect thereto that the Bondowner himself might have done. Nothing herein shall be deemed to authorize or empower any Bondowners' Trustee to consent to accept or adopt, on behalf of any Owner of said Bonds, any plan of reorganization or adjustment affecting the said Bonds or any right of any Owner thereof, or to authorize or empower the Bondowners' Trustee to vote the claims of the Owners thereof in any receivership, insolvency, liquidation, bankruptcy, reorganization or other proceeding to which the county shall be a party.
(e) Restrictions on Legal Action by Individual Bondowners. No Owner or Beneficial Owner of any Bonds shall have any right to institute any action, suit or proceedings at law or in equity for the enforcement of the same unless:
(i) a Default shall have happened and be continuing; and
(ii) a Bondowners' Trustee has been appointed as herein provided, and
(iii) such owner previously has given to the Bondowners' Trustee written notice of the Default as to which such suit, action or proceeding is to be instituted; and
(iv) the Owners of 25% in principal amount of the Bonds then Outstanding, after the occurrence of such Default, have made written request of the Bondowners' Trustee and have afforded the Bondowners' Trustee a reasonable opportunity to institute such suit, action or proceedings; and
(v) the Bondowners' Trustee has been offered security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby; and
(vi) the Bondowners' Trustee has refused or neglected to comply with such request within a reasonable time.
No Owner or Beneficial Owner of any Bond shall have any right in any manner whatever by his or her action to affect or impair the obligation of the county, which is absolute and unconditional, to pay from Revenue of the System or draws on the Credit Enhancement or Liquidity Facility the principal of and interest on said Bonds to the respective Owners thereof when due.
(f) Waivers of Default; Remedies not Exclusive. The remedies herein conferred upon or reserved to the Owners of the Bonds and to a Bondowners' Trustee are not intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. The privileges herein granted shall be exercised from time to time and continued so long as and as often as the occasion therefor may arise.
The Credit Provider may on behalf of the Owners of all Bonds then Outstanding waive any past Default and its consequences, except a default in the payment of the principal of, premium, if any, or interest on any of the Bonds. No such waiver shall extend to or shall affect any subsequent Default or shall impair any rights or remedies consequent thereon. No delay or omission of the Credit Provider to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such Default or acquiescence therein.
ARTICLE VII
REGISTRAR, PAYING AGENT AND TENDER AGENT FUNCTIONS; APPOINTMENT OF REMARKETING AGENT
SECTION 7.1. Duties of Registrar.
(a) Registrar as Initial Paying Agent and Tender Agent. The Registrar shall be the Paying Agent and Tender Agent for the Bonds. The county may at any time appoint an additional or successor Paying Agent or Tender Agent. Any appointment of an additional or successor Paying Agent or Tender Agent shall be made by written instrument executed by the Finance Director and shall be effective immediately after the Registrar shall have consented to such appointment in writing and such paying agent or tender agent shall have accepted its obligations under this ordinance by delivery of a written instrument to that effect to the county and the Registrar.
(b) Fiscal Agency Agreement. Registrar shall perform its duties as Registrar, Paying Agent and Tender Agent hereunder in accordance with the Fiscal Agency Agreement. Unless the county exercises its right under Section 7.1(c) of this ordinance to remove the Registrar, any successor fiscal agent under the Fiscal Agency Agreement shall serve as Registrar under this ordinance. Notwithstanding anything to the contrary in the Fiscal Agency Agreement, the Registrar shall not seek any indemnity or other security as a condition precedent to drawing on any Liquidity Facility or Credit Enhancement, making any payment of principal of, interest on or the Purchase Price for any Bonds, or effecting any mandatory purchase or redemption of any Bonds.
(c) Removal of Registrar. The county may remove the Registrar at any time at the option of the Finance Director upon prior notice to the Notice Parties and appointment by the Finance Director on behalf of the county of a successor Registrar on terms and conditions to be set forth in a written agreement between the county and such successor Registrar. Any successor Registrar must be a trust company or commercial bank with trust powers. No resignation or removal of the Registrar shall be effective until a successor is appointed and the successor Registrar accepts the duties of the Registrar hereunder and receives the Credit Enhancement and Liquidity Facility, together with all other funds then held by the Registrar, Paying Agent and Tender Agent.
SECTION 7.2. Appointment of Remarketing Agent.
(a) Finance Director to Appoint Remarketing Agent. If necessary or desirable to comply with provisions of this ordinance, the Finance Director may appoint a Remarketing Agent to remarket Bonds and perform other duties of the Remarketing Agent described in this ordinance. Any Remarketing Agent must be a member of the Financial Industry Regulatory Authority, have a capitalization of at least $50,000,000, be authorized by law to perform all the duties set forth in this ordinance and be acceptable to the Credit Provider and Liquidity Provider, if any. The Finance Director is authorized to execute and deliver a Remarketing Agreement with the Remarketing Agent on behalf of the county. The council authorizes and directs the Finance Director and all other proper officers, agents, attorneys and employees of the county to cooperate with the Remarketing Agent in preparing and executing such additional agreements, certificates, and other documentation on behalf of the county as shall be necessary or advisable in providing for appointment of the Remarketing Agent. The Remarketing Agent shall keep such books and records as are consistent with prudent industry practice and make such books and records available for inspection by the Notice Parties at all reasonable times.
(b) Removal or Resignation of Remarketing Agent. The Remarketing Agent may at any time resign and be discharged of the duties and obligations with respect to the Bonds created by this ordinance as set forth in the Remarketing Agreement. The Remarketing Agent may suspend its remarketing efforts as set forth in the Remarketing Agreement. The county council authorizes the Finance Director to remove the Remarketing Agent at any time, in accordance with the Remarketing Agreement, when the Finance Director, in consultation with the county's financial advisors, determines that such removal is necessary or beneficial to the county. Any successor Remarketing Agent shall be appointed by the Finance Director, shall be a member of the Financial Industry Regulatory Authority, shall have a capitalization of at least $50,000,000, shall be authorized by law to perform all the duties set forth in this ordinance and shall be acceptable to the Credit Provider and Liquidity Provider, if any. The council authorizes and directs the Finance Director and all other proper officers, agents, attorneys and employees of the county to cooperate with any successor Remarketing Agent in preparing and executing such additional agreements, certificates, and other documentation on behalf of the county as shall be necessary or advisable in providing for replacement of the Remarketing Agent.
The delivery to the Registrar of a certificate of the Finance Director setting forth the effective date of the appointment of a successor Remarketing Agent and the name of such successor shall be conclusive evidence that (i) if applicable, the predecessor Remarketing Agent has been removed in accordance with the provisions of this ordinance and (ii) such successor has been appointed and is qualified to act as Remarketing Agent under the terms of this ordinance.
(c) Merger or Consolidation. If the Remarketing Agent consolidates with, merges or converts into, or transfers all or substantially all of its assets (or, in the case of a bank, national banking association or trust company, its corporate assets) to, another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Remarketing Agent.
ARTICLE VIII
SALE OF BONDS; EXTENSION OF BANK PURCHASE AGREEMENT; CREDIT ENHANCEMENT AND LIQUIDITY FACILITY
SECTION 8.1. Sale of Bonds. The Bonds shall be sold by negotiated sale to the Bank pursuant to the bondholder's agreement (the "Bank Purchase Agreement") set forth as Attachment B to this ordinance. The council authorizes the Finance Director to execute and deliver the Bank Purchase Agreement on behalf of the county, with such changes as may be consistent with this ordinance and approved by counsel to the county. The Finance Director and all other proper officers, agents, attorneys and employees of the county are hereby authorized and directed to do everything necessary for the prompt execution and delivery of the Bonds to the Bank and for the proper application and use of the proceeds of sale thereof, all in accordance with the Bank Purchase Agreement and this ordinance.
SECTION 8.2. Extension or Replacement of Bank Purchase Agreement. The Finance Director is hereby authorized to negotiate (i) one or more extensions of the Bank Purchase Agreement or (ii) the assignment of the Bonds to an Owner other than the Bank pursuant to a Bank Purchase Agreement with that Owner, on terms and conditions acceptable to the Finance Director and approved by counsel to the county.
SECTION 8.3. Credit Enhancement and Liquidity Facility. The county council authorizes the Finance Director to obtain a Credit Enhancement or Liquidity Facility or to obtain an Alternate Credit Enhancement or Alternate Liquidity Facility at any time and from time to time when the Finance Director, in consultation with the county's financial advisors, determines that obtaining any such instruments is necessary or beneficial to the county. The council authorizes and directs the Finance Director and all other proper officers, agents, attorneys and employees of the county to cooperate with any such Credit Provider or Liquidity Provider, or the providers of any Alternate Credit Enhancement or Alternate Liquidity Facility, in preparing and executing such agreements, certificates, and other documentation on behalf of the county as shall be necessary or advisable in providing for any such instrument.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Amendments without Owners' Consent. This ordinance may be amended or supplemented from time to time, without the consent of the Owners by a supplemental ordinance passed by the county council for one or more of the following purposes:
(a) to add additional covenants of the county or to surrender any right or power herein conferred upon the county; or
(b) to cure any ambiguity or to cure, correct or supplement any defective (whether because of any inconsistency with any other provision hereof or otherwise) provision of this ordinance or to make any other provisions with respect to matters or questions arising under this ordinance, provided such action shall not impair the security hereof or adversely affect the interests of the Owners; or
(c) to provide or modify procedures permitting the Bonds to be held in a Book-Entry System or Owners to utilize a certificated system of registration for Bonds; or
(d) to modify, alter, amend, supplement or restate this ordinance in any and all respects necessary, desirable or appropriate in connection with the delivery of an Alternate Credit Enhancement or Alternate Liquidity Facility (other than modifying notice provisions to Owners of the Bonds); or
(e) to modify, alter, amend, supplement or restate this ordinance in any and all respects necessary, desirable or appropriate to satisfy the requirements of any Rating Agency to obtain or retain a rating on the Bonds as the county deems necessary, provided that such action shall not impair the security hereof or materially adversely affect the interests of the Owners; or
(f) for any purpose, (i) on any Mandatory Purchase Date and (ii) at any time during the Daily Mode or the Weekly Mode, provided that notice of such amendment is given by first class mail to each Owner of Bonds at least 30 days prior to the effective date of such amendment.
SECTION 9.2. Amendments with Owners' Consent. This ordinance may be amended from time to time by a supplemental ordinance; provided, that (a) no amendment shall be made that affects the rights of some but fewer than all of the Owners of the Outstanding Bonds without the consent of the Owners of 51% in aggregate principal amount of the Bonds so affected, and (b) without the consent of the Owners of all Outstanding Bonds affected thereby, no amendment shall be made that alters the interest rates or premium on or principal amount of any Bonds, the Maturity Date, Interest Payment Dates, purchase upon tender or redemption provisions of any Bonds or this Section 9.2. Notwithstanding any provision of this Section 9.2 to the contrary, so long as no event of default has occurred under the Credit Enhancement, any provision of this ordinance may be amended with the consent solely of the Credit Provider for such Credit Enhancement.
SECTION 9.3. Consent of Credit Provider and Liquidity Provider Required. Any amendment or supplement to this ordinance shall require the prior written consent of the Credit Provider and Liquidity Provider if the rights of the Credit Provider or the Liquidity Provider, as the case may be, will be adversely affected thereby.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Specific Authorization. In addition to the authority granted to the Finance Director elsewhere in this ordinance, the Finance Director may, in his or her discretion, without further action by the county council, (a) authorize conversions from one Mode to another and execute agreements and certificates as necessary or desirable to effect such conversions, and (b) execute a continuing disclosure undertaking on behalf of the county when necessary to comply with the Rule.
SECTION 10.2. Acts of Owners. Any action to be taken by Owners may be evidenced by one or more concurrent written instruments of similar tenor signed or executed by such 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 or by any other method satisfactory to the Registrar. Any action by the Owner of any Bond shall bind all future Owners of the same Bond or of any Bond issued upon the exchange or registration of transfer thereof in respect of anything done or suffered by the county or the Registrar in pursuance thereof.
SECTION 10.3. Notices to Notice Parties. Except as otherwise specifically provided for in this ordinance, all notices required by the terms hereof to be given to the Registrar, the county or the Owners of the Bonds shall be deemed given, if given in writing and mailed by first-class mail, postage prepaid, and
(a) if to the Registrar, addressed to The Bank of New York Mellon, at 101 Barclay Street, 7W, New York, NY 10286, Attention: Corporate Trust Registrar Administration;
(b) if to the county, addressed to King County, Office of the Director, Finance and Business Operations Division, at 500 Fourth Avenue, Room 600, Seattle, WA 98104, Attention: Treasury Services;
(c) if to the Credit Provider, addressed to it at the address set forth in the Reimbursement Agreement;
(d) if to the Liquidity Provider, addressed to it at the address set forth in the Reimbursement Agreement;
(e) if to the Remarketing Agent, addressed to it at the address set forth in the Remarketing Agreement; and
(f) if to any owner of a Bond, addressed to such owner at the address set forth in the Bond Register; or, as to the county or the Registrar, as any of them shall from time to time designate by notice in writing to the others.
SECTION 10.4. Notice to Rating Agencies. So long as the Bonds bear a rating from any Rating Agency, at such time as there is a change in the Registrar, Tender Agent, Paying Agent, Remarketing Agent, Credit Provider, or Liquidity Provider, or any successors thereto, any amendment is made to this ordinance, or a Credit Enhancement or Liquidity Facility expires or terminates or is extended or replaced, or whenever there is (i) a conversion of the Bonds from one Interest Rate Mode to another, (ii) a redemption or defeasance of the Bonds, or (iii) a mandatory tender for purchase of the Bonds in the event of nonreinstatement of interest after an interest drawing on the Credit Enhancement or Liquidity Facility, the county shall give written notice of the same to Moody's at 7 World Trade Center, 250 Greenwich Street, New York, NY 10007, Attention: Public Finance Group - Full Support Group; and to Standard & Poor's, 55 Water Street, New York, NY 10041, Attention: Municipal Structured Finance Group. In addition, so long as the Bonds bear a rating from any Rating Agency, copies of all notices required to be given under this ordinance shall likewise be given to such Rating Agency at the addresses set forth in the preceding sentence, and the county shall provide to any Rating Agency any other information reasonably requested by the Rating Agency to maintain the ratings of the Bonds.
SECTION 10.5. Legal Investments. The county reserves the right to purchase Bonds at any time as a legal investment for funds of the county including but not limited to funds held by the county for the investment pool established pursuant to K.C.C. Chapter 4.10.
SECTION 10.6. Severability. In case any one or more of the provisions of this ordinance or of the Bonds shall, for any reason, be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this ordinance or of such Bonds, and this ordinance and the Bonds shall be construed and enforced to the end that the transactions contemplated hereby be effected and the obligations contemplated hereby be enforced as if such illegal or invalid provisions had not been contained therein.
SECTION 10.7. Effective Date. This ordinance shall be effective 10 days after its enactment, in accordance with Article II of the county charter.
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