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HomeMy WebLinkAboutBIL 131 Draft 01 2000-2002 COUI®TT~ O~ IIAVVAI`I ~ ~TAT]E OF I-IA.WAI`I ~II~L NO. 131 ORDINANCE NO. PROVIDING FOR THE ISSUANCE OF COUNTY OF HAWAII IMPROVEMENT DISTRICT NO. 17, KALOKO SUBDIVISION, 2001 SPECIAL ASSESSMENT REFUNDING BONDS IN AN AMOUNT NOT TO EXCEED $10,165,000 WHEREAS, pursuant to Chapter 12 of the Hawaii County Code (1983), as amended (the "Act"), and certain authorizing resolutions adopted by the County Council of the County of Hawaii (the "County Council") pursuant to such Act, the County of Hawaii (the "County") has heretofore established Improvement District No. 17, Kaloko Subdivision (the "Improvement District") and undertaken the construction of certain public improvements benefitting the Improvement District (the "Project"); and WHEREAS, in order to provide funds for the costs of the Project, the County issued $14,000,000 aggregate principal amount of County of Hawaii Improvement District No. 17, Kaloko Subdivision, 1991 Special Assessment Bonds (the "1991 Bonds"), the principal of and interest on which is payable from assessments on assessable properties within the Improvement District; and WHEREAS, TSA Corporation and MID Corporation, as owners of property within the Improvement District, have petitioned the County Council for approval of a proposed refunding plan for the 1991 Bonds (the "Refunding Plan") and the issuance by the County of a new series of special assessment bonds for the Improvement District (the "Bonds") in order to provide funds for the refunding of the 1991 Bonds pursuant to the Refunding Plan; and WHEREAS, pursuant to Resolution No. 144-01, adopted on November 7, 2001 in accordance with the Act (the "Authorizing Resolution"), the County Council has proposed the adoption of the Refunding Plan and authorized further action by the County in connection therewith; and -1- WHEREAS, in connection with the Refunding Plan, the County Council has further determined that the issuance of the Bonds, upon the terms herein provided, is desirable for the purpose of refunding the 1991 Bonds; NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII AS FOLLOWS: ARTICLE I Findings and Definitions Section 1.01. Findings. The County Council finds that (a) the preceding recitals are true; (b) the issuance of the Bonds for the purpose of refunding the 1991 Bonds is desirable; and (c) the sale of the Bonds at private sale, without advertising for bids will result in a lower overall cost. Section 1.02. Definitions. Except as otherwise provided herein, all terms defined in the foregoing Recitals to this Ordinance shall have the meanings set forth in such Recitals. In addition, the following terms shall have the meanings set forth below: "Administrative Expense Account" means the Account designated as the "County of Hawaii, Improvement District No.17, Administrative Expense Account" established by the County within the Special Assessment Fund pursuant to Article IV hereof. "Administrative Expenses" means administrative expenses of the County for which the Special Assessments may be levied in accordance with the Act. "Annual Debt Service" means, for any Bond Year, the sum on the first day of such Bond Year of (i) the interest due in such Bond Year on Outstanding Bonds and Parity Bonds, (ii) the principal amount of Outstanding Bonds and Parity Bonds falling due by their terms in such Bond Year, and (iii) the aggregate principal amount of Bonds and Parity Bonds required to be redeemed or paid in such Bond Year. "Authorized Investment" means, subject to applicable law, United States Treasury notes, bonds, bills or certificates of indebtedness (including United States Treasury Obligations State and Local Government Series) or other direct obligations issued by the United States Treasury for which the faith and credit of the United States are pledged for the payment of principal and interest; and obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley Authority, or other -2- federal agencies or United States government-sponsored enterprises; and any other investment in which funds of the County maybe legally invested. "Bond Payment Fund" means the Fund designated as the "County of Hawaii, Improvement District No. 17, Bond Payment Fund" established by the County with the Paying Agent pursuant to Article IV hereof. "Bond Register" means the bond registration books maintained by the Bond Registrar on behalf of the County with respect to the ownership of the Bonds and transfers and exchanges of such Bonds. "Bond Registrar" means Bank of Hawaii, acting through its Pacific Century Trust division, Honolulu, Hawaii, and its successor or successors as bond registrar for the Bonds hereunder. "Bond Year" means the period of twelve (12) consecutive months ending on each August 1 in any year during which Bonds or Parity Bonds are or will be Outstanding; provided, however, the final Bond Year shall end on the date on which the Bonds or Parity Bonds are fully paid or redeemed. "Bondowner" or "Owner" or "Holder" means the person or persons in whose name or names any Bond or Parity Bond is registered. "Bonds" means the special assessment bonds of the County, designated at its "County of Hawaii, Improvement District No. 17, Kaloko Subdivision, 2001 Special Assessment Refunding Bonds" authorized by this Ordinance. "Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions either in the state in which the Paying Agent has its principal corporate trust office or in the City of New York, New York, are authorized or obligated by law or executive order to be closed. "Code" means the Internal Revenue Code of 1986, as amended. "Director of Finance" means the Director of Finance of the County of Hawaii, Hawaii. "Escrow Agent" means Bank of Hawaii, acting through its Pacific Century Trust division, Honolulu, Hawaii, which shall hold the Escrow Fund as paying agent for the 1991 Bonds. -3- "Escrow Agreement" means the Escrow Agreement to be entered into between the County and the Escrow Agent providing for the deposit of Bond proceeds and other available moneys into the Escrow Fund for the purpose of refunding the 1991 Bonds. "Escrow Fund" means the special escrow fund to be established with the Escrow Agent pursuant to the Escrow Agreement. "Fiscal Year" means the period beginning on July 1 and ending on the next following June 30. "Interest Payment Date" means the semiannual interest payment dates established for the Bonds, as specified in the Issuance Certificate. "Issuance Certificate" means the Certificate of the Director of Finance pursuant to Section 2.02 hereof, setting forth the details relating to issuance of the Bonds. "Ordinance" means this Ordinance, as amended or supplemented pursuant to the terms hereof. "Outstanding," when used with reference to the Bonds or Parity Bonds, means all Bonds or Parity Bonds theretofore or thereupon being authenticated and delivered by the County under this Ordinance except: (i) Bonds or Parity Bonds theretofore canceled by the County or surrendered to the County for cancellation; (ii) Bonds or Parity Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds or Parity Bonds shall have been authenticated and delivered by the County pursuant to this Ordinance; and (iii) Bonds or Parity Bonds deemed to have been paid as provided in Section 8.01 hereof. "Parity Bonds" means all bonds, notes or other similar evidences of indebtedness authorized hereunder and hereafter issued, payable out of the Special Assessments and which, as provided in this Ordinance, rank on a parity with the Bonds. "Paying Agent" means Bank of Hawaii, acting through its Pacific Century Trust division, Honolulu, Hawaii, and its successor or successors as paying agent for the Bonds hereunder. "Rebate Fund" means the Fund designated as the "County of Hawaii, Improvement District No. 17, Rebate Fund" established by the County pursuant to Article IV hereof. -4- "Record Date" means the 15'h day of the month preceding each Interest Payment Date, whether or not such 15"' day is a Business Day. "Reserve Account" means the Account designated as the "County of Hawaii, Improvement District No. 17, Reserve Account" established by the County within the Special Assessment Fund pursuant to Article IV hereof. "Reserve Requirement" means, as of the date of calculation, the lesser of (i) the highest Annual Debt Service payable in the then current or any succeeding Bond Year, or (iii) 125% of the average of the Annual Debt Service payable in the then current and each succeeding Bond Year; provided that the amount deposited into the Reserve Account at the time of issuance of the Bonds or any Parity Bonds shall not exceed 10% of the principal amount thereof (net of original issue discount, if applicable). "Securities Depository" means a recognized securities depository selected by the County to maintain abook-entry system in respect to the Bonds, and shall include any substitute for or successor to the securities depository initially acting as Securities Depository. "Securities Depository Nominee" means, as to any Securities Depository, such Securities Depository or the nominee of such Securities Depository in whose name there shall be registered on the registration books maintained by the Bond Registrar the bond certificates to be delivered to and immobilized at such Securities Depository during the continuation with such Securities Depository of participation in its book-entry system. "Special Assessment Account" means the Account designated as the "County of Hawaii, Improvement District No. 17, Special Assessment Account" established by the County within the Special Assessment Fund pursuant to Article IV hereof. "Special Assessment Fund" means the Fund established by the County pursuant to the Act for the deposit of Special Assessments collected on behalf of the Improvement District. "Special Assessments" means the special assessments authorized to be levied pursuant to the Act by the County on behalf of the Improvement District, as described in the Authorizing Resolution and this Ordinance, together with proceeds from any sale of property collected pursuant to the foreclosure provisions of this Ordinance for the delinquency of such Special Assessments. -5- ARTICLE II The Refunding Plan; Issuance of Bonds Section 2.01. The Refunding Plan. The Refunding Plan of the Improvement District is hereby approved. In connection with the Refunding Plan: (a) The County hereby authorizes the refunding of the 1991 Bonds by call for optional redemption at the applicable redemption price on February 1, 2002. Funds for such redemption shall be provided from the proceeds of the Bonds to be issued pursuant to the Refunding Plan and other available funds of the Improvement District held for payment of the 1991 Bonds, subject to the further provisions hereof. (b) The County hereby approves the assessment roll of the Improvement District, revised to reflect the issuance of $ aggregate principal amount of Bonds, representing the maximum amount of Bonds authorized to be issued hereunder for the refunding of the 1991 Bonds, as set forth in Exhibit A attached hereto and incorporated herein by this reference. Such assessment roll is and shall be deemed to be the final assessment roll with respect to such refunding; provided, however, that if the aggregate principal amount of Bonds actually issued is less than the maximum amount authorized hereunder, the assessments allocated to properties within the Improvement District shall be reduced proportionately based on the applicable percentages of the total assessment amount specified in Exhibit A, as calculated by the Director of Finance without further action by the County Council. Section 2.02. Issuance of Bonds• Issuance Certificate. The issuance and sale of the Bonds, in an aggregate principal amount not to exceed $ , is hereby authorized and approved. The Director of Finance is hereby authorized to determine the final terms of the Bonds and the application of the proceeds thereof, which matters shall be set forth in the Issuance Certificate to be executed and delivered by the Director of Finance in connection with the issuance of the Bonds, in accordance with the following: (a) The following terms of the Bonds shall be as determined by the Director of Finance (and specified in the Issuance Certificate): (i) The date of the Bonds; (ii) The aggregated principal amount of the Bonds, which shall not exceed the maximum authorized amount of $10,165,000; -6- (iii) The maturity date or dates of the Bonds, provided that the final maturity date shall not be later than August 1, 2011; (iv) The Interest Payment Dates for the Bonds; (v) The interest rate or rates on the Bonds, which shall not exceed per annum; (vi) The redemption provisions for the Bonds (including provisions for mandatory sinking fund redemptions and optional redemptions), provided that the redemption price payable upon call for optional redemption (if applicable) shall not exceed % of the principal amount to be redeemed, plus accrued interest to the redemption date; (vii) If bond insurance is to be obtained for the Bonds, the applicable terms relating to such insurance; and (viii) Such additional terms, not otherwise provided herein, as maybe reasonably necessary or desirable in connection with the issuance of the Bonds. (b) The proceeds of the Bonds, together with other available funds of the Improvement District held for payment of, or with respect to, the 1991 Bonds, shall be applied in the amounts determined by the Director of Finance (and specified in the Issuance Certificate), as follows: (i) Accrued interest on the Bonds, from the date of the Bonds to the date of initial delivery thereof, shall be deposited in the Special Assessment Account; (ii) An amount equal to the estimated costs of issuance for the Bonds shall be deposited in the Administrative Expense Account; (iii) An amount equal to the Reserve Requirement shall be deposited in the Reserve Account; and (iv) The balance shall be deposited in the Escrow Fund for the refunding of the 1991 Bonds. -7- Section 2.03. Further Actions Re ag rding the Bonds. (a) The County hereby authorizes the preparation and distribution of an official statement, in preliminary and final form as approved by the Director of Finance, in connection with the offering of the Bonds. The Director of Finance is hereby authorized to execute the official statement, in final form, for distribution in connection with such offering. The Director of Finance is hereby further authorized to negotiate and execute a purchase contract for the Bonds with First Albany Corporation, as underwriter; provided that the aggregate purchase price payable for the Bonds by such underwriter shall be not less that % of the aggregate principal amount of the Bonds (net of original issue discount, if applicable), plus accrued interest. (b) All actions heretofore taken by the officers and agents of the County with respect to the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the Mayor of the County, the Director of Finance and any and all other officers of the County are hereby authorized and directed, for and in the name and on behalf of the County, to do any and all things and- take any and all actions relating to the execution and delivery of any and all certificates, requisitions, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with this Ordinance. ARTICLE III Form and Terms of Bonds Section 3.01. General. The Bonds shall be substantially in the form attached hereto as Exhibit B, which form is hereby approved and adopted as the form of the Bonds. The Bonds shall be issued in fully registered form in denominations of $5,000 or any multiple thereof and shall be numbered as determined by the County. The Bonds shall be designated as the "COUNTY OF HAWAII IMPROVEMENT DISTRICT NO. 17, KALOKO SUBDIVISION, 2001 SPECIAL ASSESSMENT REFUNDING BONDS." The Bonds shall mature on such date or dates, bear interest at such rate or rates, be subject to redemption upon such terms and bear such other terms as shall be set forth in the Issuance Certificate, subject to the limitations provided in Section 2.02 hereof. Section 3.02. Execution and Authentication. (a) Execution. The Bonds shall be signed on behalf of the County by the facsimile signature of the Mayor of the County and the seal of the County (or a facsimile -8- thereofl shall be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the facsimile signature of the Director of Finance of the County. In case any one or more of the officers whose signature shall appear on the Bonds shall cease to be such officer before the Bonds have been authenticated and delivered by the County (including new Bonds delivered pursuant to the provisions hereof concerning the transfer and exchange of Bonds or the replacement of lost, stolen, destroyed or mutilated Bonds), such Bonds may, nevertheless, be authenticated and delivered as herein provided, and maybe issued as if the persons whose signature shall appear on the Bonds had not ceased to hold such offices. (b) Authentication. The Bonds shall bear thereon a certificate of authentication, in the form set forth in Exhibit B hereto. No Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Bond Registrar. Section 3.03. Security for Bonds, Nature of Obligations. (a) Securityfor Bonds. Pursuant to the Act and this Ordinance, the Bonds shall be equally and ratably secured by and payable from the Special Assessments and the Funds and Accounts established pursuant to this Ordinance (other than the Administrative Expense Account and the Rebate Fund), without preference or priority of any one Bond over any others, except as otherwise expressly provided herein. The Funds and Accounts established hereunder (other than the Administrative Expense Account and the Rebate Fund), including all moneys on deposit therein and all income from the investment thereof, shall be held in trust, and are hereby made subject to an express lien and pledge, for the equal and ratable benefit and security of the Bondowners, except as otherwise expressly provided herein. (b) Nature of Obligations. The Bonds are and shall be special obligations of the County and shall be payable as to the principal or redemption price thereof and interest thereon solely from the Special Assessments and the Funds and Accounts subject to the lien and pledge created hereunder. The principal or redemption price of and interest on the Bonds are not payable from the general fund of the County. Except with respect to the Special Assessments and the Funds and Accounts subject to the lien and pledge created hereunder, neither the credit nor the taxing power of the County is pledged for the payment of the Bonds or their interest, and no Owner of the Bonds may compel the exercise of the taxing power by the County or the forfeiture of any of its property. The principal or redemption price of and interest on the Bonds are not a debt of the County nor a legal or equitable pledge, charge, lien, or encumbrance, upon any of -9- its property, or upon any of its income, receipts, or revenues, except the Special Assessments and the Funds and Accounts subject to the lien and pledge created hereunder. (c) Refunding Bonds and Parity Bonds Permitted. Nothing in this Ordinance shall preclude: (i) the payment or redemption of any Bonds from proceeds of refunding bonds issued under the Act or any other law of the State of Hawaii; or (ii) subject to the applicable conditions and limitations set forth herein (including, but not limited to, the limitations specified in Section 5.02 hereof), the issuance of Parity Bonds which shall be payable from the Special Assessments and the Funds and Accounts subject to the lien and pledge created hereunder. In the event that any Parity Bonds are so issued, such Parity Bonds shall be equally and ratably secured, together with the Bonds, by the Special Assessments and such Funds and Accounts. Section 3.04. Registration, Transfer and Exchange of Bonds. (a) Registration of Ownership. Ownership of the Bonds shall be recorded in the Bond Register to be maintained by the Bond Registrar on behalf of the County and shall contain such information as maybe necessary for the proper discharge of the duties of the Bond Registrar and Paying Agent hereunder. The County, the Bond Registrar and the Paying Agent may treat the Owner of a Bond whose name appears on the Bond Register as the absolute Owner of the Bond for any and all purposes, and the County, the Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary. The County, the Bond Registrar and the Paying Agent may rely on the address of a Bondowner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Bondowner to give written notice to the Bond Registrar of any change in the Bondowner's address so that the Bond Register maybe revised accordingly. (b) Registration of Exchange or Transfer. The registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation at the principal corporate trust office of the Bond Registrar in Honolulu, Hawaii, accompanied by delivery of a written instrument of transfer in a form approved by the Bond Registrar and duly executed by the Bondowner or his or her duly authorized attorney. Bonds maybe exchanged at the principal corporate trust office of the Bond Registrar for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Bond Registrar will not charge the Bondowner for any new Bond issued upon any exchange, but may require the Bondowner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. Whenever any Bond or Bonds shall -10- be surrendered for registration of transfer or exchange, the County shall execute and the Bond Registrar shall authenticate and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount; provided that the Bond Registrar shall not be required to register transfers or make exchanges of (i) Bonds for a period of 15 days next preceding any date selected for redemption of Bonds, or (ii) any Bonds or portions thereof chosen for redemption. Section 3.05. Payments of Principal, Redemption Price and Interest. The principal or redemption price of and interest on Bonds shall be payable in lawful money of the United States of America. Such payments shall be made by the Paying Agent, from funds provided to the Paying Agent for such payments hereunder, in accordance with the following: (a) Subject to such agreements with the Securities Depository as may be in effect at the time in question: (i) the principal or redemption price of each Bond shall be payable, upon presentation thereof at the office of the Paying Agent, to the Bondowner in whose name the ownership of such bond is registered on the Bond Register as of the date of payment; and (ii) the interest on each Bond shall be payable on each Interest Payment Date by check or draft mailed to the Bondowner in whose name the ownership of such Bond is registered on the Bond Register, at the owner's registered address appearing on such Bond Register, as of the immediately preceding Record Date. (b) Interest on the Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. Interest on any Bond, as so calculated, shall be payable from the Interest Payment Date next preceding the date of authentication of that Bond, unless (i) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication, or (iii) the date of authentication is prior to the first Interest Payment Date, in which event interest shall be payable from the date of the Bonds; provided, however, that if at the time of authentication of any Bond, interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment. Interest on any Bond shall cease to accrue on the maturity date or redemption date (if applicable) thereof if funds are available for the payment or redemption thereof in full accordance with the terms of this Ordinance. -11- Section 3.06. RedemWption of Bonds. The Bonds shall be subject to redemption prior to maturity upon such terms as shall be set forth in the Issuance Certificate. In the event of any such redemption: (a) Notice of Redemption. Notice of redemption shall be given by the Bond Registrar, at least 30 days but no more than 60 days prior to the redemption date, by first class mail, postage prepaid, to the respective Owners of the Bonds to be redeemed at their addresses appearing on the Bond Register. Such notice shall: (i) identify the Bonds selected for redemption; (ii) state the date fixed for redemption and the redemption price payable on such redemption date; (iii) state the place or places where the Bonds are to be redeemed; (iv) in the case of Bonds to be redeemed only in part, state the portion of the Bond which is to be redeemed; and (v) state that the applicable redemption price of each Bond or portion thereof called for redemption, together with interest accrued to the redemption date, shall be payable on the date fixed for redemption and, if funds have been provided for such payment in full, that interest on each Bond or portion thereof to be redeemed shall thereupon cease to accrue. In the case of any optional redemption of the Bonds (if applicable), if sufficient moneys to redeem the Bonds have not been deposited with the Paying Agent as of the date of mailing of the notice of redemption, such notice shall further state that it is subject to the deposit of sufficient moneys for the redemption as of the opening of business on the redemption date and shall be of no effect unless such moneys are so deposited. The actual receipt by the Owner of any Bond of notice of such redemption shall not be a condition precedent thereto, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date. (b) Selection of Bonds for Redemption. If less than all of the outstanding Bonds are to be redeemed, the County shall select the Bonds to be redeemed in inverse order of maturity and by lot within a single maturity; provided, however, that the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and that, in selecting portions of such Bonds for redemption, the County shall treat each such Bond as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000. (c) Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the County shall execute and the Bond Registrar shall authenticate and deliver to the Bondowner, at the expense of the County, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bond surrendered, with the same interest rate and the same maturity. -12- (d) Effect of Notice; Availability of Redemption Money. Notice of redemption having been duly given, as provided herein, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption: (i) the Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Ordinance, anything in this Ordinance or in the Bonds to the contrary notwithstanding; (ii) upon presentation and surrender thereof at the office of the Paying Agent, such Bonds shall be redeemed at the said redemption price; (iii) from and after the redemption date the Bonds or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or portions thereof shall cease to bear further interest; and (iv) from and after the date fixed for redemption no Owner of any of the Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of this Ordinance, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available. Section 3.07. Mutilated, Lost Destroyed or Stolen Bonds. If any Bond shall become mutilated, the County shall execute, and the Bond Registrar shall authenticate and deliver, a new Bond of like tenor and maturity in exchange and substitution for the Bond so mutilated, but only upon surrender to the Bond Registrar of the Bond so mutilated. Every mutilated Bond so surrendered to the Bond Registrar shall be canceled and destroyed and a certificate of destruction shall be delivered to the County. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Bond Registrar and, if such evidence is satisfactory to the County and, if an indemnity satisfactory to the Bond Registrar and the County shall be given, the County, at the expense of the Bondowner, shall execute, and the Bond Registrar shall authenticate and deliver, a new Bond of like tenor and maturity, numbered and dated as the Bond Registrar shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. Any Bond so issued in lieu of any Bond alleged to be lost, destroyed or stolen, shall be equally and proportionately entitled to the benefit hereof with all other Bonds secured hereby. The Bond Registrar and the County shall not treat both the original Bond and any duplicate Bond as being Outstanding for the purpose of determining the principal amount of Bonds which any be executed, authenticated and delivered hereunder or for the pure®se of determining any percentage of Bonds outstanding hereunder. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond for a Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the County may make payment with respect to such Bond upon receipt of an indemnity satisfactory to the County. -13- Section 3.08. Temporary Bonds. Any Bonds issued under this Ordinance maybe initially issued in temporary form exchangeable for definitive bonds. The temporary bonds maybe printed, lithographed or typewritten, shall be of such denominations as may be determined by the County and may contain such reference to any of the provisions of this Ordinance as maybe appropriate. Every temporary Bond shall be executed and sealed by the County and authenticated by the Bond Registrar in substantially the same manner as provided in Section 3.02 hereof. If the County issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds may be surrendered for cancellation at the principal corporate trust office of the Bond Registrar, and the County shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of the same interest rates and maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Ordinance as definitive Bonds issued hereunder. Section 3.09. Book-Entry Only System. Any provision hereof to the contrary notwithstanding, the Bonds are being issued initially as "book entry only" securities under the book entry registration and transfer system of The Depository Trust Company, New York, New York ("DTC°'), as Securities Depository, subject to the following provisions: (a) The Bonds shall initially be issued in the form of one fully-registered bond for the aggregate principal amount of the Bonds of each maturity, which Bonds shall be registered in the name of Cede & Co., as nominee of DTC. Except as hereinafter provided, all of the Bonds shall be registered on the Bond Register in the name of Cede & Co., as nominee of DTC; provided that if DTC -shall request that the Bonds be registered in the name of a different nominee, the Bond Registrar shall exchange all or any portion of the Bonds for an equal aggregate principal amount of Bonds registered in the name of such nominee or nominees of DTC. No person other than DTC or its nominee shall be entitled to receive from the County, the Bond Registrar or the Paying Agent either a Bond or any other evidence of ownership of the Bonds, or any right to receive any payment in respect thereof unless DTC or its nominee shall transfer record ownership of all or any portion of the Bonds on the Bond Register maintained by the Bond Registrar, in connection with the discontinuation of the book entry system as provided below or otherwise. (b) So long as the Bonds or any portion thereof are registered in the name of DTC or any nominee thereof, all payments of the principal or redemption price of or interest on such Bonds shall be made to DTC or its nominee in same day funds on the dates provided for such payments under this Ordinance. Each such payment to DTC or its nominee shall be valid and effective to fully discharge all liability of the County or the -14- Paying Agent with respect to the principal or redemption price of or interest on the Bonds to the extent of the sum or sums so paid. In the event of the redemption of less than all of the Bonds Outstanding of any maturity, the Paying Agent shall not require surrender by DTC or its nominee of the Bonds so redeemed, but DTC (or its nominee) may retain such Bonds and make an appropriate notation on the Bond certificate as to the amount of such partial redemption; provided that DTC shall deliver to the Paying Agent, upon request, a written confirmation of such partial redemption and thereafter the records maintained by the Paying Agent shall be conclusive as to the amount of the Bonds of such maturity which have been redeemed. (c) The County, the Bond Registrar and the Paying Agent may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal or redemption price of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Bondowners under this Ordinance, registering the transfer of Bonds, obtaining any consent or other action to be taken by Bondowners and for all other purposes whatsoever; and the County, the Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary. The County, the Bond Registrar and the Paying Agent shall have no responsibility or obligation to any participant in DTC, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any such participant, or any other person which is not shown on the Bond Register as being a Bondowner, with respect to: (i) the Bonds; or (ii) the accuracy of any records maintained by DTC or any such participant; or (iii) the payment by DTC or any such participant of any amount in respect of the principal or redemption price of or interest on the Bonds; or (iv) any notice which is permitted or required to be given to Bondowners under this Ordinance; or (v) the selection by DTC or any such participant of any person to receive payment in the event of a partial redemption of the Bonds; or (vi) any consent given or other action taken by DTC as Bondowner. (d) In connection with any notice or other communication to be provided to Bondowners pursuant to this Ordinance by the County, the Bond Registrar or the Paying Agent with respect to any consent or other action to be taken by Bondowners, DTC shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action, provided that the County, the Bond Registrar or the Paying Agent may establish a special record date for such consent or other action. The County, the Bond Registrar or the Paying Agent, as applicable, shall give DTC notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible. -15- (e) The book-entry system for registration of the ownership of the Bonds may be discontinued at any time if either: (i) DTC determines to resign as Securities Depository for the Bonds; or (ii) the County determines that continuation of the system of book-entry transfers through DTC (or through a successor Securities Depository) is not in the best interests of the County. In either of such events (unless in the case described in clause (ii) above, the County appoints a successor Securities Depository), the Bonds shall be delivered in registered certificate form to such persons, and in such maturities and principal amounts, as maybe designated by DTC, but without any liability on the part of the County, the Bond Registrar or the Paying Agent for the accuracy of such designation. Whenever DTC requests the County, the Bond Registrar and the Paying Agent to do so, such parties shall cooperate with DTC in taking appropriate action after reasonable notice to arrange for another Securities Depository to maintain custody of certificates evidencing the Bonds. ARTICLE IV Funds and Accounts Section 4.01. Establishment of Funds and Accounts. The County shall establish and maintain the following Funds and Accounts, which shall be held and administered in accordance with the provisions of this Article IV: (a) The Special Assessment Account, Administrative Expense Account and Reserve Account, which shall be held by the County within the Special Assessment Fund; (b) The Rebate Fund, which shall be held by the County outside the Special Assessment Fund; and (c) The Bond Payment Fund, which shall be held by the Paying Agent on behalf of the County. Each such Fund or Account shall be held separate and apart from, and shall not be commingled with any other funds or accounts of the County or the Paying Agent. Subject to the further provisions of Section 4.07 hereof, all such Funds and Accounts (excepting only the Administrative Expense Account and the Rebate Fund) shall be held in trust, subject to an express lien and pledge hereunder, for the equal and ratable benefit and security of the Bonds and any Parity Bonds (if issued). Section 4.02. Special Assessment Account. Upon issuance of the Bonds, an amount equal to the accrued interest on the Bonds shall be deposited in the Special -16- Assessment Account as provided in Article II hereof. Thereafter, the County shall, on each date on which the Special Assessments have been collected, deposit the Special Assessments in the Special Assessment Account. The amounts so deposited in the Special Assessment Account shall be transferred, in the amounts and at the times hereinafter provided, to the following funds in the following order of priority: (1) to the Bond Payment Fund; (2) to the Reserve Account; (3) to the Administrative Expense Account; and (4) to the Rebate Fund. The County shall provide to any Bondowner, upon the Bondowner's written request, a balance statement for the month then ended of moneys on deposit in the Special Assessment Account. Any surplus funds remaining in the Special Assessment Account after payment of the Bonds chargeable against such Account shall be applied in such manner as prescribed by Section 12-49 of the Act. Section 4.03. Bond Payment Fund. The Bond Payment Fund shall be held by the Paying Agent on behalf of the County, subject to the lien and pledge created hereunder. Deposits into and payments from such Fund shall be made as follows: (a) On or before the third day prior to an Interest Payment Date (or any redemption date, if other than an Interest Payment Date), the County shall withdraw from the Special Assessment Account and deposit in the Bond Payment Fund an amount equal to all of the principal or redemption price and all of the interest then becoming due and payable, or which is due and unpaid, on the Bonds and Parity Bonds, less amounts on hand in the Bond Payment Fund and available to pay such principal or redemption price and interest. Notwithstanding the foregoing, if the County determines, with due regard to the investments of moneys in the Special Assessment Account, that it is desirable to delay the making of such withdrawal and deposit beyond such third day (but not later than the opening of business on the applicable Interest Payment Date or other redemption date), the County shall notify the Paying Agent of such determination and shall be permitted to make such withdrawal and deposit at or before the opening of business on the applicable Interest Payment Date or other redemption date. (b) Moneys so deposited in the Bond Payment Fund shall be applied by the Paying Agent, on each Interest Payment Date and on each redemption date (if other than -17- an Interest Payment Date), to pay the principal or redemption price of and interest on the Bonds and Parity Bonds coming due on such date. If after all of the Bonds and Parity Bonds have been redeemed and canceled or paid and canceled there are moneys remaining in the Bond Payment Fund, said moneys shall be transferred to the Special Assessment Account; provided that if said moneys are part of the proceeds of refunding bonds, such moneys shall be applied as otherwise provided in accordance with the terms upon which such refunding bonds are issued. Section 4.04. Reserve Account. The Reserve Account shall be held by the County within the Special Assessment Fund, subject to the lien and pledge created hereunder. Deposits into and withdrawals from the Reserve Account shall be made as follows: (a) Upon the issuance of the Bonds, an amount representing the Reserve Requirement, as specified in the Issuance Certificate, shall be deposited into the Reserve Account. In addition, in the event that moneys are withdrawn from the Reserve Account to cure a deficiency in the Bond Payment Fund (as hereinafter provided), Special Assessments thereafter deposited in the Special Assessment Account shall be transferred to the Reserve Account to the extent necessary to restore the Reserve Account to the Reserve Requirement. (b) If moneys in the Bond Payment Fund are insufficient to pay the principal or redemption price (upon mandatory sinking fund redemption, if applicable) of and interest on the Bonds and any Parity Bonds on any Interest Payment Date (after taking into account the moneys in the Special Assessment Account available for transfer to the Bond Payment Fund) ,the County shall withdraw from the Reserve Account and deposit in the Bond Payment Fund moneys necessary to cure the deficiency. In addition, on of each Fiscal Year, commencing on , 2002, the County shall determine the value (on the basis of the lesser of market value or historical cost) of the investments in the Reserve Account and moneys in the Reserve Account in excess of the Reserve Requirement shall be withdrawn from the Reserve Account by the County and thereafter deposited in the Special Assessment Account. Moneys in the Reserve Account may also be used to pay the principal of and interest on the last outstanding maturity of the Bonds or any Parity Bonds. Section 4.05. Administrative Expense Account. The Administrative Expense Account shall be held by the County within the Special Assessment Fund, but outside the lien and pledge created hereunder. Upon the issuance of the Bonds, an amount representing the estimated costs of issuance of the Bonds, as specified in the Issuance Certificate, shall be deposited into the Administrative Expense Account and used to pay -18- such costs. Thereafter, on of each Fiscal Year, commencing on , 2002, the County shall withdraw from the Special Assessment Account and deposit in the Administrative Expense Account an amount necessary to pay or reimburse the County for all Administrative Expenses for the then current Fiscal Year, and shall be used for such purpose at such times and in such amounts as shall be determined by the County. All income from the investment of moneys in the Administrative Expense Account shall be retained in such Account and applied to the foregoing payments therefrom. Section 4.06. Rebate Fund. The Rebate Fund shall be established and maintained by the County outside the lien and pledge created hereunder. The County shall deposit into the Rebate Fund such amounts (if any) of excess investment income, as calculated pursuant to Section 5.03 hereof, as are required to be rebated to the United States Treasury in accordance with Section 148 of the Code. The County shall apply the amounts so deposited in the Rebate Fund, together with the investment income thereon (which shall be retained therein), to make the required rebate payments at the times and in the manner required by Section 148 of the Code. The County agrees to keep and maintain all records required to be maintained by it with respect to such rebate requirements as and to the extent required by the Code. Section 4.07. Moneys to Be Held for All Bondholders, With Certain Exceptions. Until applied as herein provided, moneys and investments held in all Funds and Accounts established hereunder shall be held in trust for the benefit of the holders of all Outstanding Bonds, except that: (a) on and after the date on which the interest on or principal or redemption price of any particular Bond or Parity Bond is due and payable from the Bond Payment Fund, the unexpended balance of the amount deposited or reserved therein for the making of such payments shall, to the extent necessary therefor, be held for the benefit of the Bondowner entitled thereto; (b) any special redemption fund established in connection with the issuance of any refunding bonds shall be held for the benefit of the holders of Bonds or Parity Bonds being refunded or, in the event of any surplus, shall be applied as otherwise provided in accordance with the terms upon which such refunding bonds are issued; and (c) the Administrative Expense Account and the Rebate Fund shall be held outside the lien and pledge created hereunder. Section 4.08. Additional Accounts and Subaccounts. In addition to the Funds and Accounts specifically required to be established hereunder, additional Funds and Accounts maybe established at the direction of the Director of Finance if such officer determines that the establishment of such additional Funds and Accounts is reasonably necessary, whether in connection with the issuance of any series of Parity Bonds or otherwise, to facilitate the administration of deposits, withdrawals or investments of funds hereunder; provided that, except as otherwise provided in Section 4.07 hereof, all -19- such additional Funds and Accounts shall be held in trust for the equal and ratable benefit and security of all Bonds and Parity Bonds. Section 4.09. Investments. Moneys on deposit in any Fund or Account hereunder shall be invested in Authorized Investments; provided Authorized Investments in the Rebate Fund shall be limited to direct obligations of, or obligations fully and unconditionally guaranteed by the United States of America. The Authorized Investments in each Fund or Account shall mature or be subject to redemption, repurchase or withdrawal, without penalty, at the option of the holder, on or before the dates on which the amounts invested are reasonably expected to be needed for the purposes of the Fund or Account in question. Such Authorized Investments in each Fund or Account shall be deemed to be part of such Fund or Account and, for the purpose of determining at any given time the balance in any such Fund or Account, any such investments constituting a part of such funds and accounts shall be valued at the lesser of their market value or cost. Except as otherwise provided herein, all investment earnings on moneys held under this Ordinance shall be deposited into the Special Assessment Account. ARTICLE V Certain Covenants Section 5.01. Covenants Regarding Payment of Bonds. So long as any of the Bonds issued hereunder are outstanding and unpaid, the County makes the following covenants with the Bondowners under the provisions of the Act and this Ordinance (to be performed by the County or its proper officers, agents or employees), which covenants are necessary, convenient and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the County to expend any funds or moneys other than the Special Assessments. (a) Punctual Payment. The County covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium thereon, if any be payable, on the date, at the place and in the manner mentioned in the Bonds and in accordance with this Ordinance to the extent Special Assessments are available therefor, and that the payments into the Bond Payment Fund and the Reserve Account will be made, all in strict conformity with the terms of the Bonds and this Ordinance, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Ordinance and all ordinances supplemental hereto and of the Bonds issued hereunder, and that time of such payment and performance is of the essence of the County's contract with the Bondowners. -20- (b) Levy of Special Assessments. The County Council of the County shall levy Special Assessments to pay principal, interest and Administrative Expenses of the Bonds and any Parity Bonds and to replace moneys withdrawn from the Reserve Account in order to maintain the Reserve Account at the Reserve Requirement subject to the terms and conditions of the Ordinance. (c) Foreclosure Proceedings. The County covenants for the benefit of the Owners of the Bonds that it will commence appropriate foreclosure proceedings as authorized by the Act within 120 days after failure to receive payment of a Special Assessment installment, or portion thereof, when due. Section 5.02. Limits on Parity Debt. The County covenants that, except for bonds issued for refunding purposes, no additional Parity Bonds shall be authorized or delivered unless the following conditions are satisfied: (a) The County is not in default under the terms of this Ordinance. (b) The County obtains the appraisal of a qualified appraiser showing that the fair market value of the Improvement District is sufficient so that the total principal of and interest on the Outstanding Bonds and Parity Bonds, including proposed Parity Bonds is not more than twenty-five percent (25%) of the total value of the land within the boundaries of the Improvement District. (c) An opinion of Bond Counsel to the effect that the issuance of such Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or the exemption from State of Hawaii personal income taxation of interest on the Bonds. (d) Principal will mature and interest will be paid with respect to such Parity Bonds on the same dates as the Bonds. Section 5.03. Tax Covenants. The County hereby covenants that it will make no use of the proceeds of the Bonds or take or fail to take any action which would cause the Bonds to become "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code. To that end, the County shall comply with all applicable requirements of said Section 148 and all regulations of the United States Depar~nent of the Treasury issued thereunder, to the extent imposed as a condition for continued exclusion from gross income of interest on the Bonds. Without limiting the generality of the foregoing, the County shall calculate (or cause to be calculated), annually or as otherwise required by Section 148 of the Code, such amounts of excess investment -21- income as are required to be rebated to the United States Treasury pursuant to Section 148 of the Code and shall deposit such amounts, if any, into the Rebate Fund and make payments to the United States Treasury from such Fund in accordance with the provisions of Section 4.06 hereof. ARTICLE VI Paying Agent and Bond Registrar Section 6.01. Pa~nn~ Agent and Bond Re igestrar. (a) Appointment and Acceptance. The County hereby appoints Bank of Hawaii, acting through its Pacific Century Trust division, as Bond Registrar and Paying Agent for the Bonds hereunder. The Bond Registrar and Paying Agent shall accept such appointment in writing prior to the initial delivery of the Bonds. (b) Removal. The Paying Agent and Bond Registrar initially appointed, and any successor thereto, maybe removed by the County and a successor or successors may be appointed; provided that such successor or successors shall be a bank or a trust company doing business in and having an office in the city where the predecessor did business and had an office. The County shall compensate the Paying Agent and Bond Registrar for the performance of their services hereunder and such compensation shall be an Administrative Expense and be payable only from the Administrative Expense Account. (c) Resignation. The Paying Agent and/or Bond Registrar appointed hereunder may resign at any time upon 90 days' written notice and after appointment of a successor. If the County does not appoint a successor Paying Agent and/or Bond Registrar within ninety (90) days following the giving of any notice of removal or receipt of any notice of resignation, the removed or resigning Paying Agent and/or Bond Registrar may petition at the expense of the County any appropriate court having jurisdiction to appoint a successor Paying Agent and/or Bond Registrar. (d) Merger Consolidation or Reorganization. Subject to the foregoing provisions regarding the removal or resignation of the Bond Registrar and Paying Agent, upon merger, consolidation, or reorganization of the Bond Registrar and/or Paying Agent, the surviving corporation upon such merger or the corporation resulting from such consolidation or reorganization shall succeed to the duties and responsibilities of the Bond Registrar and/or Paying Agent hereunder. -22- ARTICLE VII Supplemental Ordinances Section 7.01. Supplemental Ordinances or Orders Without Bondowners' Consent. The County may from time to time, and at any time, without notice to or consent of any of the Bondowners, adopt ordinances or orders supplemental hereto for any of the following purposes: (a) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising under this Ordinance or in any additional ordinance or order, provided that such action shall not adversely affect the interests of the Bondowners; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the County contained in this Ordinance, other covenants, agreements, limitations and restrictions to be observed by the County which are not contrary to or inconsistent with this Ordinance as theretofore in effect; (c) to provide for the issuance of Parity Bonds hereunder and, in connection therewith, to modify or supplement the provisions hereof as reasonably necessary or desirable to provide for the proper administration of such Parity Bonds and to secure the same hereunder on an equal and ratable basis with the Bonds; and (d) to modify, alter, amend or supplement this Ordinance in any other respect which is not adverse to the interests of the Bondowners. Section 7.02. Supplemental Ordinances or Qrders Reduiri~ Bondholders' Consent. (a) Except as provided in Section 7.01 hereof, the Owners of not less than 60% in aggregate principal amount of the Bonds then Outstanding shall have the right to consent to and approve the adoption by the County of such ordinances or orders supplemental hereto as shall be deemed necessary or desirable by the County for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Ordinance; provided, however, that the consent and approval of the Owners of 100% in aggregate principal amount of the Bonds then Outstanding shall be required for (i) any extension of the maturity date of the principal of, or the payment date of interest on, any Bond, (ii) any reduction in the principal amount of, or redemption premium on, any Bond or the rate of interest thereon, (iii) any preference or priority of any Bond or Bonds over any other Bond or Bonds, (iv) any reduction in the aggregate principal amount of the Bonds the Owners of which are required to consent to such ordinance or -23- order, without the consent of the Owners of all Bonds then outstanding, or (v) the creation of a pledge of or lien or charge upon the Special Assessments superior to the pledge of Special Assessments pursuant to Section 3.03 hereof. (b) If at any time the County shall desire to adopt a ordinance or order supplemental requiring the consent of Bondowners, the County shall so notify the Bond Registrar and shall deliver to the Bond Registrar a copy of the proposed ordinance or order. The Bond Registrar shall, at the expense of the County, cause notice of the proposed ordinance or order to be mailed, postage prepaid, to all Bondowners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed ordinance or order and shall state that a copy thereof is on file at the office of the Bond Registrar for inspection by all Bondowners. The failure of any Bondowner to receive such notice shall not affect the validity of such ordinance or order when consented to and approved by the requisite percentage of Bondowners. Whenever at any time within one year after the date of the first mailing of such notice, the Bond Registrar shall receive an instrument or instruments purporting to be executed by the Owners of the requisite percentage of Outstanding Bonds, which instrument or instruments shall refer to the proposed ordinance or order described in such notice, and shall specifically consent to and approve the adoption thereof by the County, such proposed ordinance or order, when duly adopted by the County, shall be deemed effective for all purposes hereunder. In determining whether the requisite consents have been obtained, Bonds which are owned by the County or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the County as certif ed by the County, upon which the Bond Registrar may rely, shall be disregarded and shall be treated as though they were not outstanding for the purpose of any such determination. (c) Upon the adoption of any ordinance or order supplemental hereto and the receipt of all requisite consents of Bondowners, this Ordinance shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Ordinance of the County and all Owners of Bonds then outstanding shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. ARTICLE VIII Defeasance Section 8.01. Defeasance. If all outstanding Bonds shall be paid and discharged in any one or more of the following ways: -24- (a) by paying or causing to be paid the principal of and interest with respect to all Bonds outstanding, as and when the same become due and payable; (b) by depositing with the Paying Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the Bond Payment Fund, is fully sufficient to pay the principal of and interest on all Bonds outstanding as and when the same shall become due and payable; or (c) by depositing with the Paying Agent, in trust, direct obligations of, or obligations guaranteed by, the United States of America, in which the County may lawfully invest its money, in such amount as a firm of certified public accountants selected by the County shall determine, at the expense of the County, will, together with the interest to accrue thereon and moneys then on deposit in the Bond Payment Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge the principal of and interest on all Bonds outstanding as and when the same shall become due and payable; then, at the election of the County, and notwithstanding that any Bonds shall not have been surrendered for payment, all obligations of the County under this Ordinance with respect to all outstanding Bonds shall cease and terminate, except for the obligation of the Paying Agent to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid, all sums due thereon. Notice of such election shall be filed with the Paying Agent. Any funds held by the Paying Agent, at the time of receipt of such notice from the County, which are not required for the purpose above mentioned, shall be paid over to the Special Assessment Account. Section 8.02. Cancellation of Bonds. All Bonds surrendered to the Paying Agent for payment upon maturity or for redemption shall upon payment thereof be stamped "canceled" immediately and such canceled Bonds shall be kept in the possession of the Paying Agent. Any Bond purchased by the County as authorized herein shall be delivered to the Paying Agent and canceled forthwith and shall not be reissued. ARTICLE IX Events of Defaults and Remedies Section 9.01. Events of Default. Any one or more of the following events shall constitute an "event of default": (a) Default in the due and punctual payment of the principal or redemption price of any Bond when and as the same shall become due and payable, whether at or prior to maturity; -25- (b) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (c) Default shall be made by the County in the observance of any of the agreements, conditions or covenants on its part contained in this Ordinance or in the Bonds, and such default shall have continued for a period of thirty (30} days. Section 9.02. Remedies of Owners. Following the occurrence of an event of default (as defined in Section 9.01 hereof), any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: (a) By mandamus or other suit or proceeding at law or in equity to enforce his rights against the County and any of the members, officers and employees of the County, and to compel the County or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Ordinance; (b) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (c) By suit in equity to require the County and its members, officers and employees to account as the trustee of an express trust. Section 9.03. Effect of Waiver, Delay or Omission. No waiver of any default or breach of duty or contract by any Owner shall affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner 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 an acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this Section maybe enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. Section 9.04. Remedies Non-Exclusive and Cumulative. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. 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 or otherwise, and maybe exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. -26- Section 9.05. Application of Moneys upon Payment Default. If a default in payment has occurred under Section 9.01(a) or (b) hereof and a Bondowner prevails in an action, suit or proceeding brought or taken to enforce payment of the defaulted sum, payment of the defaulted sum (together with reasonable costs, fees and expenses payable as provided in Section 9.06 hereof) shall be made solely from the Special Assessments and the Funds and Accounts subj ect to the lien and pledge created hereunder. If such Special Assessments and Funds and Accounts are insufficient to make such payment in full, then all available amounts shall first be applied to the costs, fees and expenses, and then be applied to the payment of the defaulted sums without preference or priority of any defaulted payment of principal, redemption price or interest over any other defaulted payment. Section 9.06. Costs of Enforcement. If a Bondowner shall prevail in any suit, action or proceeding to enforce any right or exercise any remedy brought or taken hereunder, such Bondowner shall be entitled to receive, but solely from the Special Assessments and the Funds and Accounts subject to the lien and pledge created hereunder, reimbursement for reasonable costs, fees and expenses (including reasonable attorneys' fees) incurred in connection with the suit, action or proceeding in question. Section 9.07. Abandonment of Proceedings. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the County and the Owners shall be restored to their former positions, y-ights and remedies as if such suit, action or proceeding had not been brought or taken. ARTICLE X Miscellaneous Provisions Section 10.01. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Ordinance to be signed or executed by Bondowners maybe in any number of concurrent instruments of similar tenor, and maybe signed or executed by such owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by any bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for the purposes of this Ordinance (except as otherwise herein provided), if made in the following manner: (a) The fact and date of the execution by any Owner or his attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee of any bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or -27- association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority. (b) As to any Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute Owner thereof for all purposes, and payment of or on account of the principal of any such Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond and the interest thereon to the extent of the sum or sums so paid. The Paying Agent and Bond Registrar shall not be affected by any notice to the contrary. (c) Nothing contained in this Ordinance shall be construed as limiting the Paying Agent and Bond Registrar to such proof, it being intended that the Paying Agent and Bond Registrar may accept any other evidence of the matters herein stated which the Paying Agent and Bond Registrar may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Paying Agent and Bond Registrar in pursuance of such request or consent. Section 10.02. Provisions Constitute Contract. The provisions of this Ordinance and the Bonds shall constitute a contract between the County and the Bondowners and the provisions hereof and thereof shall be enforceable by any Bondowner for the equal benefit and protection of all Bondowners similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of Hawaii in any court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the State of Hawaii. Section 10.03. Unclaimed Funds. Notwithstanding anyprovisions ofthisOrdinance, subject to applicable state escheat laws, any moneys held by the County or Paying Agent in trust for the payment of the principal or premium, if any, or interest on, any Bonds and remaining unclaimed for six years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by declaration as provided in this Ordinance), if such moneys were so held at such date, or six years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the County free from the lien created by this Ordinance, and all liability of the Paying Agent with respect to such moneys shall thereupon cease and the Bondowners shall upon such payment look only to the County for payment; provided, however, that before the repayment of such moneys to the County as aforesaid, the Paying Agent may (at the cost of the County) first publish at least once in a financial newspaper or j ournal a notice, in such form as may be deemed appropriate by the Paying Agent, with -28- respect to the provisions relating to the repayment to the County of the moneys held for the payment thereof. Section 10.04. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Ordinance, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Ordinance and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Ordinance and the bonds issued pursuant hereto shall remain valid and the ~ondowners shall retain all valid rights and benefits accorded to them under this Ordinance and the Constitution and Laws of the State of Hawaii. Section 10.05. General Authorization. The Mayor and the Director of Finance are hereby each respectively authorized to do and perform from time to time any and all acts and things consistent with this Ordinance necessary or appropriate to carry the same into effect. Section 10.06. Effective Date. This Ordinance shall take effect upon approval. Introduced by: Council Member, County of Ha ai`i Hilo, Hawaii Date of Introduction: Date of Adoption: Effective Date: -29- EXHIBIT A Assessment Roll A-1 . EXHIBIT B Form of Bond No. ~ UNITED STATES OF AMERICA STATE OF HAWAII COUNTY OF HAWAII COUNTY OF HAWAII IMPROVEMENT DISTRICT NO. 17, KALOKO SUBDIVISION, 2001 SPECIAL ASSESSMENT REFUNDING BOND INTEREST MATURITY DATED CUSIP NO. RATE DATE DATE REGISTERED OWNER: PRINCIPAL AMOUNT: COUNTY OF HAWAII IMPROVEMENT DISTRICT NO. 17, KALOKO SUBDIVISION (the "District") situated in the County of Hawaii, State of Hawaii (the "County"), FOR VALUE RECEIVED, hereby promises to pay, solely from Special Assessments (as hereinafter defined), to the registered owner named above, or registered assigns, on the maturity dated set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the above dated date or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on and of each year, commencing , 2002, at the interest rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of and premium, if any, on this Bond are payable to the registered owner hereof i.n lawful money of the United States of America upon presentation and surrender of this Bond at the principal corporate trust office of Bank of Hawaii, acting through its Pacific Century Trust division, Honolulu, Hawaii, as B-1 paying agent and bond registrar (in such capacities, the "Paying Agent" and the "Bond Registrar"). Interest on this Bond shall be paid by check or draft of the Paying Agent mailed by first class mail to the registered owner hereof as of the close of business on the 15t" day of the month preceding the interest payment date (the "Record Date") at such registered owner's address as it appears on the registration books maintained by the Band Registrar. Interest shall be calculated on the basis of a 360-day year of 12 thirty-day months. This Bond is one of the duly authorized issue of "County of Hawaii, Improvement District No. 17, Kaloko Subdivision, 2001 Special Assessment Refunding Bonds" (the "Bonds") issued in the aggregate principal amount of $ pursuant to Chapter 12 of the Hawaii County Code (1983), as amended, (the "Act") for the purpose of refunding a certain prior series of special assessment bonds issued by the County for the District. The issuance of the Bonds and the terms .and conditions thereof are provided for by an Ordinance adopted by the County Council of the County on , 2001 (the "Ordinance"), and this reference incorporates the Ordinance herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Ordinance is adopted under, this Bond is issued under, and both are to be construed in accordance with the laws of the State of Hawaii. Pursuant to the Act and the Ordinance, the principal of, premium, if any, and interest on this Bond are payable solely from, and shall be secured by a pledge, charge and lien upon (a) the annual special assessments authorized under the Act to be levied and collected within the District, and the proceeds of any sale of property upon foreclosure pursuant to the Ordinance (the "Special Assessments") and (b) certain funds and accounts established pursuant to the Ordinance. Any assessment for the payment hereof shall be limited to the Special Assessments. The Bonds do not constitute obligations of the County or the District for which the County or the District is obligated to levy or pledge, or has levied or pledged, general or special taxation or assessments other than as described hereinabove. The County has covenanted for the benefit of the owners of the Bonds that it will commence appropriate foreclosure proceedings as authorized by the Act within 120 days in the event of delinquencies of any Special Assessments levied for payment of principal and interest on the Bonds. [REDEMPTION PROVISIONS TO BE INSERTED] Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Ordinance. B-2 This Bond shall be registered in the name of the owner hereof, as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Bond Registrar in books kept by it for that purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon. No transfer hereof shall be valid for any purpose unless made by the registered owner or his legal agent, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such owner's order. Interest on this Bond shall be payable to the person whose name appears upon the registration books as the registered owner hereof as of the close of business on the 15th day of the month preceding the interest payment date, or to such person's order. The Bond Registrar shall require the Bond owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. Additional Bonds may be issued, subj ect to the limitations set forth in the Ordinance, which rank on a parity with the Bonds. This Bond shall not become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been dated and signed by the Bond Registrar. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any debt limit prescribed by the laws or Constitution of the State of Hawaii. B-3 IN WITNESS WHEREOF, the County of Hawaii, Hawaii, has caused this Bond to be signed by the Mayor of the County by facsimile signature and attested by the Director of Finance of the County. COUNTY OF HAWAII, HAWAII Mayor, County of Hawaii ATTEST: Director of Finance, County of I-Iawai`i (SEAL) B-4 FORM OF CERTIFICATE OF AUTHENTICATION This Bond is one of the County of Hawaii, Improvement District No. 17, Kaloko Subdivision, 2001 Special Assessment Refunding Bonds described in the within-mentioned Ordinance. Dated: as Bond Registrar By: Authorized Signatory B-5 FORM OF ASSIGNMENT For value received, the undersigned does hereby sell, assign and transfer unto (PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE) (Please print or typewrite name and address including postal zip code of assignee) the within mentioned Bond, and hereby irrevocable constitute(s) and appoint(s) Attorney, to transfer said Bond on the books of , as Bond Registrar, with full power of substitution in the premise. Dated: NOTICE: The signature on this Assignment must correspond with the name (s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed: NOTE: Signature (s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. B-6