HomeMy WebLinkAboutRES 343 Draft 01 1988-1992t
COUNTY OF HA ¢~~' ATE OF HAWAII
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RESOLUTION No. ~'~
RESOLUTION OF THE COUNTY COUNCIL
OF THE COUNTY OF HAWAII
PROVIDING FOR THE ISSUANCE OF BONDS
OF COUNTY OF HAWAII IMPROVEMENT DISTRICT N0. 17,
KALOKO SUBDIVISION
IN THE AMOUNT OF
$14,000,000
Adopted July 9, 1991
95001.3.3019.01:8
TABLE OF CONTENTS
Section
Paae
1 Findings 1
2 Definitions 1
3 Equality of Bonds, Pledge of Net
Assessments 6
4 Amount, Issuance, Purpose and Nature
of Bonds 7
5 No General Liability 7
6 Description of Bonds; Interest Rates 7
7 Purchase Agreement 8
8 Medium and Payment 8
9 Form of Bonds and Certificate of
Authentication 8
10 Execution and Authentication 8
11 Registration of Exchange or Transfer 9
12 Book-Entry Only System 9
13 Redemption of Bonds .12
14 Accounts .15
15 Disposition of Bond Proceeds .16
16 Special Assessment Account , .16
17 Bond Service Account .16
18 Administrative Expense Account .17
19 Reserve Account .17
20 Construction Account .18
21 Investments .19
22 Covenants .19
23 Rebate of Excess Investment Earnings
to the United States .22
24 Rebate Fund .26
25 Mutilated, Lost, Destroyed or Stolen
Bonds .27
26 Temporary Bonds .27
27 Defeasance .28
28 Cancellation of Bonds .28
29 Approval of Official Statement .28
30 Supplemental Resolutions or Orders .29
31 Paying Agent and Bond Registrar .31
32 Bond Register .31
33 Execution of Documents and Proof of
Ownership .32
34 Events of Default .33
35 Remedies of Owners .33
36 Provisions Constitute Contract .34
37 Unclaimed Funds .35
38 Severability .36
39 General Authorization .36
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TABLE OF CONTENTS, Continued
Section
Paae
40 Effective Date .36
Execution .29
Exhibit A Maturity Schedule, Mandatory Sinking
Fund Redemption Schedule
Exhibit B Form of Bond
Exhibit C Payment Request Form
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RESOLUTION OF THE COUNTY COUNCIL OI' THE COUNTY
OF HAWAII PROVIDING FOR THE ISSUANCE OF BONDS OF
IMPROVEMENT DISTRICT NO. 17, KALOKO SUBDIVISION
IN THE AMOUNT OF $14,000,000
WHEREAS, on December 19, 1986, TSA International, Limited,
a Hawaii corporation (the "Petitioner") filed a petition (the
"Petition") with the County Council of the County of Hawaii (the
"County Council") requesting the establishment of an improvement dis-
trict for the construction and erection of a roadway, street lighting
and electrical system, a water transmission system, a water storage
and booster pumping system, and certain other appurtenant facilities;
WHEREAS, the County Council, conducting all required pro-
ceedings pursuant to Chapter 12 of the Hawaii County Code (1983), as
amended, (the "Act") by Resolution No. 249-90, adopted on
November 21, 1990, authorized the establishment of Improvement
District No. 17, Kaloko Subdivision (the "Improvement District") and
the construction of the special improvements therein as proposed and
as set forth in the Petition;
WHEREAS, the entire cost of the improvements within the
Improvement District shall be provided by assessment on assessable
lands within the limits of the Improvement District and the County of
Hawaii shall bear none of the cost of the improvements; and
WHEREAS, the County Council has determined that it is nec-
essary and desirable that bonds of the Improvement District be issued
in the amount hereinafter specified;
NOW, THEREFORE, THE COUNTY COUNCIL OF THE COUNTY OF HAWAII
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Findings. The County Council finds that (i)
the preceding recitals are true; and (ii) the sale of the Bonds at
private sale, without advertising for bids will result in a lower
overall cost.
Section 2. Definitions. The following terms shall have
the following meanings:
"Administrative Expenses" means costs related to Bonds
for which the Special Assessments may be levied in accordance with
the Act.
"Act" means Chapter 12 of the Hawaii County Code (1983), as
amended.
95001.3.3019.01:8
"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, (ii) the principal amount of Outstanding
Bonds falling due by their terms in such Bond Year, and (iii) the
aggregate principal amount of 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 indebt-
edness (including United States Treasury Obligations -- State and
Local Government Series ("BEGS")) 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 federal agencies or United States government-sponsored enter-
prises; and any other investment in which funds of the County may be
legally invested.
"Authorizing Resolution" means Resolution 249-90 adopted
by the County Council of the County of Hawaii, Hawaii on November 21,
1990 authorizing the establishment of Improvement District No. 17,
Kaloko Subdivision.
"Bond Register" means the books which the County shall
keep or cause to be kept on which the registration and transfer of
the Bonds shall be recorded.
"Bondowner" or "Owner" or "holder" means the person or
persons in whose name or names any Bond is registered.
"Bonds" means the 1991 Special Assessment Bonds of
Improvement District No. 17, Kaloko Subdivision, County of Hawaii,
Hawaii, authorized by this Resolution.
"Bond Registrar" means Hawaiian Trust Company Limited,
Honolulu, Hawaii and its successor or successors.
"Bond Year" means the period of twelve (12) consecutive
months ending on July 1 in any year during which Bonds are or will be
Outstanding; provided, however, the final Bond Year shall end on the
date on which the Bonds are fully paid or redeemed.
"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.
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95001.3.3019.01:8
amended.
"Code" means the Internal Revenue Code of 1986, as
"Completion Date" means the earlier of (i) the date on
which the Project is substantially completed or abandoned, or (ii)
the date on which an amount equal to the Bond proceeds allocable to
the Project have been expended.
"County" means the County of Hawaii, Hawaii.
"County Council" means the County Council of the County.
"Director of Finance" means the Director of Finance of the
County of Hawaii, Hawaii.
"Fiscal Year" means the period beginning on July 1 and
ending on the next following June 30.
"Gross Proceeds of the Bonds" has the meaning given such
term in Section 148(f)(6)(B) of the Code.
"Gross Assessments" means the amount of all Special
Assessments and proceeds from the sale of property collected pursuant
to the foreclosure provisions of this Resolution for the delinquency
of such Special Assessments.
"Improvement District" means County of Hawaii Improvement
District No. 17, Kaloko Subdivision, located in the County of Hawaii,
Hawaii.
"Interest Payment Date" means each January 1 and July 1,
commencing January 1, 1992.
"Maximum Annual Debt Service" shall be the maximum sum
obtained for any Bond Year prior to the final maturity on Bonds or
Parity Bonds by totaling the following for each Bond Year:
(1) The principal amount of all Outstanding Bonds and any
Outstanding Parity Bonds payable in such Bond Year;
(2) The principal amount of any Outstanding Bonds and
Parity Bonds request to be called and redeemed in such Bond Year,
together with the premium thereon, if any; and
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95001.3.3019.01:8
(3) The interest payable on the aggregate principal amount
of Bonds and any Parity Bonds outstanding in such Bond Year assuming
the Bonds and Parity Bonds are retired as scheduled.
"Net Assessments" means the amount of all Gross
Assessments minus Administrative Expenses.
"Nonpurpose Investments" has the meaning given such term
in Section 148(f)(6)(A) of the Code.
"Outstanding," when used with reference to the Bonds,
means all Bonds theretofore or thereupon being authenticated and
delivered by the County under this Resolution except:
(1) Bonds theretofore cancelled by the County or surren-
dered to the County for cancellation;
(2) Bonds for the transfer or exchange of or in lieu of or
in substitution for which other Bonds shall have been authenticated
and delivered by the County pursuant to this Resolution; and
(3) Bonds deemed to have been paid as provided in
Section 27 hereof.
"Ordinance" means County of Hawaii Ordinance No. _,
adopted June 19, 1991.
"Payment Period" means the period commencing on the date
of the delivery of the Bonds to the Underwriter and ending on the
365th day thereafter and each successive 12-month period thereafter.
"Paying Agent" means Hawaiian Trust Limited and its suc-
cessor or successors.
"Parity Bonds" means all bonds, notes or other similar
evidences of indebtedness authorized hereunder and hereafter issued,
payable out of the Net Assessments and which, as provided in this
Resolution or any Subsequent Resolution, rank on a parity with the
Bonds.
"Project" means, collectively, the financing and construc-
tion or acquisition of certain public facilities within and without
the boundaries and for the benefit of the Improvement District, as
more particularly described in proceedings taken pursuant to the
Authorizing Resolution.
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95001.3.3019.01:8
"Project Costs" means the costs of acquisition and
construction of the Project and all costs related thereto, including
but not limited to the costs of preliminary engineering work, sur-
veys, maps, plans, drawings as well as the payment of interest on the
Bonds during the construction of the Project, and all costs related
to the issuance of the Bonds, including but not limited to printing
costs, initial fees and charges of the Paying Agent and Bond
Registrar (including legal fees), financing discounts, legal fees,
and financial and other professional consultant fees.
"Purchase Agreement" means the Purchase Agreement offered
by the Underwriter to the County at the meeting at which this
Resolution is adopted relating to the sale and purchase of the
Bonds.
"Record Date" means the close of business on the fifteenth
day of the month immediately preceding any Interest Payment Date,
whether or not such day is a Business Day.
"Reserve Requirement" means on any date in any single Bond
Year the lesser of (i) lo% of the proceeds of the Bonds and any
Parity Bonds issued pursuant to this Resolution or any resolution
supplemental hereto or (ii) Maximum Annual Debt Service for the Bonds
and Parity Bonds as of such Bond Year.
"Resolution" means this Resolution, as amended or supple-
mented pursuant to the terms hereof.
"Securities Depository" means a recognized securities
depository selected by the County to maintain a book-entry system in
respect to the Bonds, and shall include any substitute for or succes-
sor to the securities depository initially acting as Securities
Depository.
"Securities Depository Nominee" means , a s t o a n y
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 cer-
tificates 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 Assessments"
rized to be levied pursuant tc
District by the County Council
Resolution and the ordinance.
means the special
the Act on behalf
and as described
assessments autho-
of the Improvement
in the Authorizing
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95001.3.3019.01:8
"Subsequent Resolution" means any resolution authorizing
the issuance of any Parity Bonds subsequent to the issuance of the
Bonds.
the Code.
"Underwriter" means Shearson Lehman Brothers Inc.
"Yield" has the meaning given such term in Section 148 of
Section 3. Equality of Bonds, Pledae of Net Assessments.
Pursuant to the Act and this Resolution, the Bonds shall be equally
payable from the Net Assessments and all money in the funds and
accounts provided for in this Resolution (other than amounts on
deposit in the Administrative Expense Account and Excess Investment
Earnings on deposit in the Rebate Fund established pursuant to
Section 23 hereof), without priority for number, date of Bonds, date
of sale, date of execution, or date of delivery, and the payment of
the interest on and principal of the Bonds and any premiums upon the
redemption thereof shall be exclusively paid from the Net Assessments
and all money in the funds and accounts provided for in this
Resolution (other than amounts on deposit in the Administrative
Expense Account and Excess Investment Earnings on deposit in the
Rebate Fund established pursuant to Section 23 hereof) and all of the
Net Assessments and such money in the funds and accounts, exclusive
of amounts on deposit in the Administrative Expense Account and
Excess Investment Earnings, established pursuant to this Resolution,
are hereby set aside for the payment of the Bonds, and such Net
Assessments and such money in the funds and accounts, exclusive of
amounts on deposit in the Administrative Expense Account and Excess
Investment Earnings, established pursuant to this Resolution, and any
interest earned thereon shall constitute a trust fund for the payment
of the interest on and principal of the Bonds, and so long as any of
the Bonds or interest thereon are unpaid said Net Assessments and
such money in the funds and accounts, exclusive of amounts on deposit
in the Administrative Expense Account and Excess Investment Earnings,
established pursuant to this Resolution, and interest thereon shall
not be used for any other purpose, except as permitted or directed by
this Resolution or any Subsequent Resolution, and shall be held in
trust for the benefit of the Bondowners and shall be applied pursuant
to this Resolution, or to this Resolution as modified pursuant to
provisions herein, and any Subsequent Resolution.
Nothing in this Resolution or in any Subsequent Resolution
shall preclude: (a) the redemption prior to maturity of any Bonds
subject to call and redemption and payment of said Bonds from pro-
ceeds of refunding bonds issued under the Act as the same now exists
or as may be hereafter amended, or under any other law of the State
of Hawaii; or (b) the issuance, subject to the limitations contained
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95001.3.3019.01:8
herein, of Parity Bonds which shall be payable from the Net
Assessments.
Section 4. Amount, Issuance, Purpose and Nature of Bonds.
Under and pursuant to the Act, the Bonds in the amount of $14,000,000
shall be issued for the purposes of constructing, acquiring and com-
pleting the Project. The Bonds shall be and are special obligations
of the County and shall be payable as to the principal thereof and
interest thereon and any premiums upon the redemption thereof solely
from the proceeds thereof and from the Net Assessments, and the Net
Assessments are hereby set aside for the payment of the Bonds.
Section 5. No General Liability. The Bonds and interest
thereon are not payable from the general fund of the County. Except
with respect to the Special Assessments, 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 of and interest on the Bonds and premiums
upon the redemption of any thereof are not a debt of the County nor a
legal or equitable pledge, charge, lien, or encumbrance, upon any of
its property, or upon any of its income, receipts, or revenues,
except the Net Assessments which are, under the terms of this
Resolution and the Act, set aside for the payment of the Bonds and
interest thereon.
Section 6. Description of Bonds; Interest Rates. 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 COUNTY OF HAWAII
IMPROVEMENT DISTRICT NO. 17, KALOKO SUBDIVISION 1991 BONDS." The
Bonds shall bear an original issue date of July 1, 1991 and mature
and be payable on July 1 in the years in the aggregate principal
amounts and shall bear interest at the rates set forth in Exhibit A
attached hereto. Interest shall be payable on each Interest Payment
Date until the principal sum of each Bond has been paid; provided,
however, that if at the maturity date of any Bond (or if the same is
redeemable and shall be duly called for redemption, then at the date
fixed for redemption) funds are available for the payment or redemp-
tion thereof, in full accordance with the terms of this Resolution,
such Bond shall then cease to bear interest. Interest shall be cal-
culated on the basis of a 360-day year comprised of twelve 30-day
months.
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95001.3.3019.01:8
Section 7. Purchase Aareement. The Purchase Agreement
in the form attached hereto between the County and Shearson Lehman
Brothers Inc. (the "Underwriter") providing for the sale of the Bonds
to the Underwriter is hereby approved, and the Director of Finance is
hereby authorized and directed, for and in the name of the County, to
execute such Purchase Agreement on behalf of the County.
Section 8. Medium and Payment. The Bonds shall be pay-
able both as to principal and interest, and as to any premiums upon
the redemption thereof, in lawful money of the United States of
America. The principal of the Bonds and any premiums due upon the
redemption thereof shall be payable upon presentation thereof at the
office of the Paying Agent. Interest on any Bond shall be payable
from the Interest Payment Date next preceding the date of authentica-
tion 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 authentica-
tion, or (iii) the date of authentication is prior to the first
Record Date in which event interest shall be payable from July 1,
1991; 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 be
paid to the person whose name shall appear in the Bond Register as
the Owner of such Bond as of the Record Date. For so long as the
Securities Depository Nominee is the registered owner of Bonds, pay-
ment of semiannual interest on any Bond shall be made in New York
Clearing House or equivalent next day funds to the account of the
Securities Depository Nominee on the Interest Payment Dates for the
Bonds. In the event the book-entry only system is discontinued with
respect to the Bonds, interest on the Bonds shall be paid by check or
draft of the Paying Agent mailed by first class mail to the Bondowner
at his or her address as it appears on the Bond Register.
Section 9. Form of Bonds and Certificate of
Authentication. 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 and of the certificate of
authentication.
Section 10. Execution and Authentication. T h e B o n d s
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
thereof) 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
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95001.3.3019.01:8
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 provi-
sions hereof with reference to the transfer and exchange of Bonds or
to lost, stolen, destroyed or mutilated Bonds), such Bonds may, nev-
ertheless, be authenticated and delivered as herein provided, and may
be issued as if the persons whose signature shall appear on the Bonds
had not ceased to hold such offices.
The Bonds shall bear thereon a certificate of authentica-
tion, in the form set forth in Exhibit B hereto. Only such Bonds as
shall bear thereon such certificate of authentication shall be enti-
tled to any right or benefit under this Resolution, and 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 11. Registration of Exchange or Transfer. The
registration of any Bond may, in accordance with its terms, be trans-
ferred upon the Bond Register by the person in whose name it is reg-
istered, 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 forn approved by
the Bond Registrar and duly executed by the Bondowner or his or her
duly authorized attorney. Bonds may be 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 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 12. Book-Entry Only System. 1. Except as pro-
vided in subsections 2 and 3 of this Section 12, the registered
holder of all Bonds shall be, and the Bonds shall be registered in
the name of, Cede & Co. ("Cede"), as nominee of The Depository Trust
Company, New York, New York (together with any substitute securities
depository appointed pursuant to subsection 3(c) of this Section 12,
"DTC"). Payment of interest for any Bond, as applicable, shall be
made in accordance with the provisions of this Resolution to the
account of Cede on the Interest Payment Date for the Bonds at the
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95001.3.3019.01:8
address indicated for Cede in the registration books kept by the Bond
Registrar.
2. The Bonds shall be initially issued in the form of a
separate single fully registered Bond in the amount of each separate
stated maturity of the Bonds. Upon initial issuance, the ownership
of each such Bond shall be registered in the registration books kept
by the Bond Registrar, in the name of Cede, as nominee of DTC. With
respect to Bonds so registered in the name of Cede, the County, the
Bond Registrar and the Paying Agent shall have no responsibility or
obligation to any DTC participant or to any beneficial owner of any
of such Bonds. Without limiting the immediately preceding sentence,
the County, the Bond Registrar and any Paying Agent shall have no
responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede or any DTC participant with respect to any bene-
ficial ownership interest in the Bonds, (ii) the delivery to any DTC
participant, beneficial owner or other person, other than DTC, of any
notice with respect to the Bonds, including any notice of redemption,
or (iii) the payment to any DTC participant, beneficial owner or
other person, other than DTC, of any amount with respect to the prin-
cipal or redemption price of, or interest on, any of the Bonds. The
County, the Bond Registrar and any Paying Agent may treat DTC as, and
deem DTC to be, the absolute owner of each Bond for all purposes
whatsoever, including (but not limited to) (a) payment of the princi-
pal or redemption price of, and interest on, each such Bond,
(b) giving notices of redemption and other matters with respect to
such Bonds and (c) registering transfers with respect to such Bonds.
The Paying Agent shall pay the principal or redemption price of, and
interest on, all Bonds only to or upon the order of DTC, and all such
payments shall be valid and effective to satisfy fully and discharge
the County's obligations with respect to such principal or redemption
price and interest, to the extent of the sum or sums so paid. Except
as provided in subsection 3 of this Section 12, no person other than
DTC shall receive a Bond evidencing the obligation of the County to
make payments of principal or redemption price of, and interest on,
any such Bond pursuant to the Resolution. Upon delivery by DTC to
the County and the Bond Registrar of written notice to the effect
that DTC has determined to substitute a new nominee in place of Cede,
and subject to the transfer provisions of the Resolution, the word
"Cede" in this Fifth Supplemental Resolution shall refer to such new
nominee of DTC.
Except as provided in subsection 3(c) of this Section 12,
and notwithstanding any other provisions of the Resolution or this
Resolution, the Bonds may be transferred, in whole but not in part,
only to a nominee of DTC, or by a nominee of DTC to DTC or another
nominee of DTC, or by DTC or a nominee of DTC to any successor
securities depository appointed pursuant to this Section 12 or any
nominee thereof.
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95001.3.3019.01:8
3. (a) DTC may determine to discontinue providing its ser-
vices with respect to the Bonds at any time by giving written notice
to the County, the Bond Registrar and the Paying Agent, which notice
shall certify that DTC has discharged its responsibilities with
respect to the Bonds under applicable law.
(b) The County, in its sole discretion and without the
consent of any other person, may terminate the services of DTC with
respect to the Bonds if the County determines that the continuation
of the system of book-entry only transfers through DTC is not in the
best interests of the beneficial owners of the Bonds or the County;
and the County shall, terminate the services of DTC with respect to
the Bonds upon receipt by the County, the Bond Registrar, and the
Paying Agent of written notice from DTC to the effect that DTC has
received written notice from DTC participants having interests, as
shown in the records of DTC, in an aggregate principal amount of not
less than fifty percent (50%) of the aggregate principal amount of
the then Outstanding Bonds to the effect that: (i) DTC is unable to
discharge its responsibilities with respect to the Bonds; or (ii) a
continuation of the requirement that all of the Outstanding Bonds be
registered in the registration books kept by Bond Registrar, in the
name of Cede, as nominee of DTC, is not in the best interests of the
beneficial owners of the Bonds.
(c) Upon the termination of the services of DTC with
respect to the Bonds pursuant to subsection 3(b)(ii) hereof, or upon
the discontinuance or termination of the services of DTC with respect
to the Bonds pursuant to subsection 3(a) or subsection 3(b)(i)
hereof, the County may within 90 days thereafter appoint a substitute
Securities Depository which, in the opinion of the County, is willing
and able to undertake the functions of DTC hereunder upon reasonable
and customary terms. If no such successor can be found within such
period, the Bonds shall no longer be restricted to being registered
in the registration books kept by the Bond Registrar, in the name of
Cede, as nominee of DTC. In such event, the County shall execute and
the Bond Registrar shall authenticate Bond certificates as requested
by DTC of like principal amount and, maturity, in authorized denomi-
nations and the Bond Registrar shall deliver such certificates at its
corporate trust office to the beneficial owners identified in writing
by the Securities Depository in replacement of such beneficial
owners' beneficial interests in the Bonds.
(d) Notwithstanding any other provision of the Resolution
to the contrary, so long as any Bond is registered in the name of
Cede, as nominee of DTC, all payments with respect to the principal
or Redemption Price of, and interest on, such Bond and all notices
with respect to such Bond shall be made and given, respectively, to
DTC as provided in the representation letter of the County and the
Bond Registrar addressed to DTC with respect to the Bonds.
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95001.3.3019.01:8
(e) In connection with any notice or other communication
to be provided to Holders of Bonds registered in the name of Cede
pursuant to the Resolution by the County with respect to any consent
or other action to be taken by such Holders, the County shall estab-
lish a record date for such consent or other action by such Holders
and give DTC notice of such record date not less than fifteen (15)
calendar days in advance of such record date to the extent possible.
Section 13. Redemption of Bonds.
(a) Optional Redemption. The Bonds maturing on or after
July 1, may be redeemed prior to maturity, in whole or in part,
at the option of the County, on July 1, , or on any Interest
Payment Date thereafter at the following redemption prices, expressed
as a percentage of the principal amount of each Bond to be redeemed,
together with accrued interest to the date of redemption:
Redemption
Price Redemption Date
In the event the County shall elect to redeem Bonds as pro-
vided in subsection (a) of this Section 13, the County shall give
written notice to the Bond Registrar of its election to so redeem,
the redemption date and the principal amount of the Bonds to be
redeemed. Such notice shall be given by the County to the Bond
Registrar at least 60 but no more than 90 days prior to the redemp-
tion date or such shorter period as shall be acceptable to the Bond
Registrar.
(b) Mandatory Redemption. On and/or such
later Interest Payment Date as may be established pursuant to Section
20 hereof, Bonds shall be called before maturity and redeemed from
moneys set aside therefor in the Redemption Account, in an amount
equal to the amounts transferred from the Construction Account to the
Redemption Account rounded down to the closest multiple of $5,000.
The Bonds so called for redemption shall be redeemed at a redemption
price equal to the principal amount thereof, plus accrued interest to
the redemption date, without premium.
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95001.3.3019.01:8
(c) Mandatorv Sinkina Fund Redemotion. T h e B o n d s
maturing on July 1, are subject to mandatory sinking fund
redemption by lot commencing on July 1, of the years and in the
amounts set forth in Exhibit A attached hereto, at a redemption price
equal to the principal amount thereof, without premium, together with
accrued interest to the date of redemption. In the event that part
of the Bonds maturing on July 1, shall be redeemed pursuant to
subsection (a) or (b) of this Section 13, the amount of such Bonds to
be redeemed on August 1 of each of the years as set forth in Exhibit
A attached hereto shall be reduced proportionately, as nearly as pos-
sible, in inverse order of the sinking fund payments to be made.
(d) 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.
(e) Notice of Redemption. when the Bond Registrar shall
receive notice from the County of its election to redeem Bonds or
when Bonds are to be redeemed pursuant to this Section 13, the Bond
Registrar shall give notice of the redemption of such Bonds. Such
notice of redemption shall (a) specify the numbers of the Bonds
selected for redemption, except that where all the Bonds are subject
to redemption, or all the Bonds of one maturity are to be redeemed,
the numbers thereof need not be specified; (b) state the date fixed
for redemption; (c) state the redemption price; (d) state the place
or places where the Bonds are to be redeemed; and (e) in the case of
Bonds to be redeemed only in part, state the portion of the Bond
which is to be redeemed. Such notice shall further state that on the
date fixed for redemption there shall become due and payable on each
Bond, or portion thereof called for redemption, the principal there-
of, together with any premium, and interest accrued to the redemption
date, and that from and after such date, interest thereon shall cease
to accrue and be payable. At least 25 days but no more than 90 days
prior to the redemption date, the Bond Registrar shall mail by first
class mail, a copy of such notice, postage prepaid, to the respective
Owners of the Bonds to be redeemed at their addresses appearing on
the Bond Register. 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. A certificate by the Bond
Registrar, that notice of such redemption has been given as herein
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provided shall be conclusive as against all parties, and it shall not
be open to any Bondowner to show that he or she failed to receive
notice or such redemption.
(f) 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 denomi-
nations equal in aggregate principal amount to the unredeemed portion
of the Bond surrendered, with the same interest rate and the same
maturity.
(g) Effect of Notice; Availability of Redemption Monev.
Notice of redemption having been duly given, as provided in this
Section 13, 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:
(1) 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
Resolution, anything in this Resolution or in the Bonds to the con-
trary notwithstanding;
(2) Upon presentation and surrender thereof at the
office of the Paying Agent, such Bonds shall be redeemed at the said
redemption price;
(3) 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
(4) 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
Resolution, 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.
(h) Redemption Account Prior to the first redemption date
referred to in Sections 13a and b hereof there shall be established
by the County a redemption account to be described or known as,
County of Hawaii Improvement District No. 17, Kaloko Subdivision 1991
Bonds Redemption Account (herein sometimes referred to as the
"Redemption Account"). Prior to each redemption date, the County
shall deposit in the Redemption Account moneys available for the
purpose and sufficient to redeem, in the principal amounts and at the
premiums payable as provided in this Resolution, the Bonds designated
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95001.3.3019.01:8
in the notice of redemption. Said moneys must be set aside in said
account solely for that purpose and shall be held in trust for the
Owners of the Bonds to be so redeemed. The County shall pay out of
the Redemption Account to the Paying Aqent on or before the redemp-
tion date for the payment of principal of and premium on the Bonds to
be redeemed upon presentation and surrender of such Bonds. If, after
all of the Bonds have been redeemed and cancelled or paid and can-
celled, there are moneys remaining in the Redemption Account, said
moneys shall be transferred to the Special Assessment Account; pro-
vided, that if said moneys are part of the proceeds of refunding
bonds said moneys shall be transferred to the fund or account created
for the payment of principal of and interest on such refunding
bonds.
Notwithstanding anything herein to the contrary, moneys
transferred to the Redemption Account from the Construction Account
shall be held in a separate account within the Redemption Account and
moneys in such separate account shall not be invested at a yield in
excess of the yield on the Bonds, unless in the opinion of nationally
recognized bond counsel such restriction on the investment of such
moneys will not be required to preserve the exemption of interest on
any of the Bonds from Federal income taxation, and shall be applied
to redeem Bonds pursuant to subsection (b) of this Section 13.
Section 14. Accounts. The following accounts are hereby
created and established within the Special Assessment Fund and shall
be maintained by the County, for the administration and control of
the proceeds of the sale of the Bonds and the Special Assessments:
(1) 1991 Bonds of the County of Hawaii, Improvement
District No. 17, Kaloko Subdivision 1991 Bonds Construction Account
(hereinafter sometimes referred to as the "Construction Account");
(2) 1991 Bonds of the County of Hawaii, Improvement
District No. 17, Kaloko Subdivision 1991 Bonds Reserve Account
(hereinafter sometimes referred to as the "Reserve Account");
(3) 1991 Bonds of the County of Hawaii, Improvement
District No. 17, Kaloko Subdivision 1991 Bonds Revolving Fund
(hereinafter sometimes referred to as the "Improvement District
Revolving Fund")
(4) 1991 Bonds of the County of Hawaii, Improvement
District No. 17, Kaloko Subdivision 1991 Bonds Administrative Expense
Account (hereinafter sometimes referred to as the "Administrative
Expense Account") and
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95001.3.3019.01:8
(5) 1991 Bond of the County of Hawaii Improvement
District No. 17, Kaloko Subdivision 1991 Bonds Special Assessment
Account (hereinafter sometimes referred to as the "Special Assessment
Fund");
Section 15. Disposition of Bond Proceeds. The proceeds
of the sale of the Bonds shall be received by the County and depos-
ited as follows:
(1) An amount representing the accrued interest and capi-
talized interest on the Bonds shall be placed in the Special
Assessment Account;
(2) The amount of $
Reserve Account; and
Account.
shall be placed in the
(3) The balance shall be placed in the Construction
Section 16. Special Assessment Account. T h e C o u n t y
shall, on each date on which the Gross Assessments have been col-
lected, deposit the Gross Assessments in the Special Assessment
Account. Such Gross Assessments are to be held in trust and trans-
ferred in the amounts and priority set forth in the following sec-
tions of this Resolution.
All moneys in the Special Assessment Account shall be used
only to pay principal of and interest on the Bonds and Administrative
Expenses as provided in Section 18 hereof until the Bonds have been
paid. Any surplus funds remaining in the Special Assessment Account
after payment of the Bonds chargeable against such Account shall be
as permitted by a law deposited in the Improvement District Revolving
Account and applied in such manner as prescribed by Section 12-49 of
the Act.
Section 17. Bond Service Account. The The County shall
establish and maintain with the Paying Agent a separate trust account
designated as "1991 Bonds of Improvement District No. 17, Kaloko
Subdivision Bond Service Account". On or before the third day prior
to an Interest Payment Date, the County shall withdraw from the
Special Assessment Account and place in the Bond Service Account an
amount equal to all of the principal (including mandatory redemption
payments required by Section 13c hereof) and all of the interest due
and payable on all of the Bonds and Parity Bonds on the Interest
Payment Date, less amounts on hand in the Bond Service Account and
available to pay principal or interest, or both, on the Bonds.
Any moneys required to be placed in the Bond Service
Account may be prepaid in whole or in part by being earlier placed in
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95001.3.3019.01:8
the Bond Service Account, and in that event the transfer which has
been so prepaid need not be made at the time appointed therefor. In
any event, on each date for the payment of interest on or principal
of, or both, of the Bonds and Parity Bonds, all amounts required for
the payment thereof must be in the Bond Service Account.
If after all of the Bonds and Parity Bonds have been
redeemed and cancelled or paid and cancelled there are moneys remain-
ing in the Bond Service Account, said moneys shall be transferred to
the Special Assessment Account; provided that if said moneys are part
of the proceeds of refunding bonds, said moneys shall be transferred
to the fund or account created for the payment of the principal of
and interest on such refunding bonds.
Notwithstanding the preceding provisions of this Section 17
to the contrary, if the County determines that the investment earn-
ings on the moneys in the Special Assessment Account can be increased
by delaying the withdrawal therefrom of the amount specified above
beyond the third day prior to an Interest Payment Date without jeop-
ardizing its ability to pay the interest on, and if any principal is
due on said Interest Payment Date, the principal of, the Bonds and
Parity Bonds on the Interest Payment Date, the County may delay the
withdrawal of said amount from the Special Assessment Account and the
placement of said amount in the Bond Service Account beyond the tenth
day preceding the Interest Payment Date; provided, however, that the
necessary amount for the payment of interest on, and if any principal
is due on the Interest Payment Date, the principal of, the Bonds and
Parity Bonds shall be on deposit in the Bond Service Account on such
Interest Payment Date.
Section 18. Administrative Expense Account. On July 5
of each year, commencing on July 5, 1992, the County shall withdraw
from the moneys remaining in the Special Assessment Account and place
in the Administrative Expense Account an amount necessary to pay or
reimburse all Administrative Expenses for the then current Fiscal
Year. Moneys in the Administrative Expense Account may be invested
in any Authorized Investments, provided that the maturity or maturi-
ties thereof shall not be later than the date or dates on which
moneys must be available to meet scheduled Administrative Expenses.
Section 19. Reserve Account. Subject to Sections 23 and
24 hereof and the provisions of the following paragraph, moneys in
the Reserve Account shall be used solely for the purpose of paying
the principal of and interest on the Bonds and any Parity Bonds in
the event that the moneys in the Bond Service Account as any Interest
Payment Date are insufficient therefor, and for that purpose the
County shall withdraw from the Reserve Account, for deposit in the
Bond Service Account, moneys necessary for such purpose.
Notwithstanding anything herein to the contrary, whenever moneys are
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95001.3.3019.01:8
withdrawn from the Reserve Account in order to make up any deficiency
in the Bond Service Account, an equal amount of moneys shall be
deposited in the Reserve Account by transfers from the first avail-
able moneys in the Special Assessment Account.
on each July 2, 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 (i) prior to the date of completion
of the Project be deposited in the Construction Account for the pay-
ment of Project Costs and (ii) thereafter deposited in the Special
Assessment Account. Moneys in the Reserve Account may be used to pay
the principal of and interest on the last outstanding maturity of the
Bonds or any Parity Bonds.
Any amount of the Gross Assessments received by the County
in any Fiscal Year to replace moneys withdrawn from the Reserve
Account to pay principal of or interest, or both, on the Bonds, and
so designated, shall notwithstanding any provision of this Resolution
to the contrary, be deposited in the Reserve Account.
Section 20. Construction Account.
(a) Except as provided herein, the moneys in the
Construction Account shall be applied exclusively to pay the Project
Costs.
(b) Upon the earlier of payment or reimbursement of all of
the Project Costs or the Completion Date, the County shall transfer
moneys on deposit in the Construction Account, to the extent such
moneys are not needed for Project Costs, to the Redemption Account
for redemption of the Bonds as provided in Section 13(b) hereof; pro-
vided, however, that such transfer to the Redemption Account need not
be made to the extent as to all or a part of such amounts if the
County shall determine to leave a specified amount in the
Construction Account until a specified date and describing the pro-
posed uses of such amounts, and (2) an opinion of nationally recog-
nized bond counsel to the effect that such uses will not adversely
affect the exclusion from gross income of interest on the Bonds for
federal income tax purposes. Any amounts remaining in the
Construction Account on the specified date shall be transferred as
provided above to the Redemption Account for redemption of the Bonds
on the earliest practicable Interest Payment Date for which redemp-
tion can occur.
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95001.3.3019.01:8
Section 21. Investments. Obligations purchased as
investments of moneys in any of the funds and accounts in which
investments are authorized shall be deemed at all times to be a part
of such funds and accounts. Except as provided in Section 19 hereof
with respect to the Reserve Account and Section 24 with respect to
Excess Investment Earnings deposited into the Rebate Fund, all
investment earnings on moneys held under this Resolution shall be
deposited into the Special Assessment Account. Excess Investment
Earnings shall be transferred in accordance with Section 23 hereof.
Subject to the restrictions set forth herein, moneys in said funds
and accounts may from time to time be invested by the County at the
written direction of the Director of Finance, or if no such written
direction is given, in tax-exempt bonds as described in Section
148(b) (2) of the Code which are Authorized Investments, provided
that:
(a) Moneys in the Construction Account shall be invested
in obligations which will by their terms mature as close as practica-
ble to the date the County estimates the moneys represented by the
particular investment will be needed for withdrawal from such fund;
(b) Moneys in the Special Assessment Account shall be
invested upon written direction of the Director of Finance only in
obligations which will by their terms mature on such dates so as to
ensure the payment of principal of and interest on the Bonds as the
same become due; and the County shall sell at the best price obtain-
able or present for redemption any obligations so purchased whenever
it may be necessary to do so in order to provide moneys to meet any
payment or transfer for such funds and accounts or from such funds
and accounts. For the purpose of determining at any given time the
balance in any such funds or accounts, any such investments consti-
tuting a part of such funds and accounts shall be valued at the
lesser of their market value or cost.
Section 22. Covenants. 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 Resolution (to be performed by the County or its proper
officers, agents or employees), which covenants are necessary, con-
venient 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 Gross
Assessments.
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95001.3.3019.01:8
Covenant 1. 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 pre-
mium thereon, if any be payable, on the date, at the place and in the
manner mentioned in the Bonds and in accordance with this Resolution
to the extent Gross Assessments are available therefor, and that the
payments into the Bond Service Account and the Reserve Account will
be made, all in strict conformity with the terms of the Bonds and
this Resolution, and that it will faithfully observe and perform all
of the conditions, covenants and requirements of this Resolution and
all resolutions supplemental hereto and of the Bonds issued hereun-
der, and that time of such payment and performance is of the essence
of the County's contract with the Bondowners.
Covenant 2. 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 Resolution.
(b) The County obtains the appraisal of a qualified
appraiser showing that the fair market value of the District is suf-
ficient 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 (250) 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 inter-
est 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 date as the Bonds.
Covenant 3. Levy of Special Assessments . T h e C o u n t y
Council of the County shall levy Special Assessments to pay princi-
pal, interest and Administrative Expenses of the Bonds and any Parity
Bonds and any amounts required 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. The initial levy of Special Assessments shall be reduced
by the amount of funded interest and accrued interest deposited in
the Bond Service Account.
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95001.3.3019.01:8
Covenant 4. Commence 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 12o days from receipt of Special Assessments in an
amount which is less than the Special Assessments levied, in the
event any installment of Special Assessments becomes delinquent.
Covenant 5. Covenants to Comply with Cade. 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 Sections 103 and 148 of the Code. To that end, the County
shall comply with all requirements of said Section 148 and all regu-
lations of the United States Department of the Treasury issued there-
under, to the extent that such requirements are, at the time, appli-
cable and in effect. In order to maintain the exclusion from gross
income for purposes of federal income taxation of interest on the
Bonds, and for no other purpose, the County further covenants to
comply with each applicable requirement of the Code, and any techni-
cal corrections made thereto having the same effective date as such
requirements. As a condition for continued exclusion from gross
income of interest on the Bonds, the Code imposes certain continuing
restrictions on the investment of moneys derived from, or otherwise
related to, the Bonds. In addition to the provisions of Sections 23
and 24 hereof, which are designed to comply with these restrictions,
the County hereby agrees to comply with the Letter of Instructions
(the "Letter") provided to the County by bond counsel on the date of
issuance and delivery of the Bonds, as such Letter may be amended
from time to time, as a source of guidance for compliance with
Section 148(f) of the Code, relating to rebate to the United States
of America.
Covenant 6. Additional Tax Covenants. Notwithstanding
any other provision of this Resolution, except as provided below, the
payment of principal of and interest on the Bonds shall not be
directly or indirectly guaranteed (in whole or in part) by the United
States (or any agency or instrumentality thereof) and no portion of
the moneys contained in any of the funds or accounts created herein
shall be (i) used in making loans guaranteed by the United States (or
any agency or instrumentality thereof); (ii) invested directly or
indirectly in deposits or accounts insured by the Federal Deposit
Insurance Corporation, Federal Savings and Loan Insurance
Corporation, National Credit Union Administration or any other simi-
lar federally chartered corporation; (iii) otherwise invested
directly or indirectly in obligations guaranteed (in whole or in
part) by the United States (or any agency or instrumentality
thereof); except (a) during the applicable initial temporary periods
following issuance of the Bonds or the completion of the Project, (b)
amounts held in the Reserve Fund or other reserve funds satisfying
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95001.3.3019.01:8
Section 149(b)(3)(B) of the Code, (c) amounts held in the Bond
Service Account and other bona fide debt service funds, (d) invest-
ments in obligations issued by the United States Treasury, (e)
investments in obligations guaranteed by the Federal National
Mortgage Association, Government National Mortgage Association,
Federal Housing Administration, Veteran's Administration, or Federal
Home Loan Mortgage Corporation, or (f) investments permitted under
regulations issued pursuant to Section 149(b)(3)(B)(v) of the Code;
(iv) used directly or indirectly to make or finance loans (other than
loans that enable the borrower to finance any governmental tax or
assessment of general application for an essential governmental func-
tion or that are used to acquire or carry Nonpurpose Investments) to
persons who are not governmental units so as to cause the issue to be
deemed a private loan bond within the meaning of Section 141(c) of
the Code or successor provisions thereto and any regulations of the
United States Department of the Treasury issued thereunder; or (v)
such other investments as, in the opinion of nationally recognized
bond counsel, would jeopardize the tax exempt status of interest on
the Bonds.
Section 23. Rebate of Excess Investment Earnings to the
United States.
(a) The County shall calculate or cause to be calculated
Excess Investment Earnings in accordance with subsection (b) of this
Section and shall pay or cause to be paid Excess Investment Earnings
to the United States in accordance with subsection (c) hereof. The
County shall cause all such calculations to be verified by a certi-
fied public accountant or other qualified expert having experience in
calculating the amount to be rebated to the United States pursuant to
the requirements of the Code. The term "Excess Investment Earnings"
means an amount equal to the sum of:
(i) the excess of
(A) the aggregate amount earned from the date
of execution hereof on all Nonpurpose Investments in which
Gross Proceeds of the Bonds are invested (other than
amounts attributable to an excess described in this para-
graph (i)), over
(B) the amount that would have been earned if
such Nonpurpose Investments (other than amounts attribut-
able to an excess described in this paragraph (i)) had been
invested at a rate equal to the Yield on the Bonds, plus
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95001.3.3019.01:8
(ii) any income attributable to the excess described
in paragraph (i).
(b) Prior to the first Payment Period, the County shall
calculate the Excess Investment Earnings referenced in paragraph (i)
of subsection (a). Thereafter, prior to each subsequent Payment
Period and on or before the day on which the last of the Bonds is
paid, whether at maturity or by prior redemption, the County shall
calculate the amount of Excess Investment Earnings referenced in
paragraphs (i) and (ii) of subsection (a).
(1) Except as provided in clause (2) below in deter-
mining the amount described in paragraph (i) (A) of subsection (a),
the aggregate amount earned on Nonpurpose Investments shall mean (i)
all income realized under federal income tax accounting principles
(whether or not the person earning such income is subject to federal
income tax) with respect to such Nonpurpose Investments and with
respect to the reinvestment of the transaction costs incurred in
acquiring, carrying, selling or redeeming such Nonpurpose
Investments, including, but not limited to, gain or loss realized on
the disposition of such Nonpurpose Investments (without regard to
when such gains are taken into account under Section 453 of the Code
relating to taxable year of inclusion of gross income), and income
under Section 1272 of the Code (relating to original issue discount)
and (ii) any unrealized gain or loss as of the day on which the last
of the Bonds is paid, whether at maturity or by prior redemption, in
the event that any Nonpurpose Investment is retained after such
date.
(2) In determining the amount described in paragraph
(i) (A) of subsection (a), an obligation or security shall be treated
as acquired for its fair market value at the time it becomes a
Nonpurpose Investment, so that gain or loss on the disposition of
such obligation or security shall be computed with reference to such
fair market value as its adjusted basis.
(3) In determining the amount described in paragraph
(i) (B) of subsection (a), the Yield on the Bonds shall be determined
based on the actual Yield on the Bonds during the period between
19 _, and the date the computation is made (with adjust-
ments for discount or premium).
(4) In determining the amount described in paragraph
(ii) of subsection (a), all income attributable to the excess
described in paragraph (i) of subsection (a) must be taken into
account, whether or not that income exceeds the Yield on the Bonds
and no amount may be treated as "negative arbitrage."
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95001.3.3019.01:8
(5) In determining the amount described in
subsection (a), there shall be excluded any amount earned on any fund
or account which is used primarily to achieve a proper matching of
revenues and debt service (as such terms are defined in the Code)
within each Payment Period and which is depleted at least once a year
except for a reasonable carryover amount not in excess of the greater
of one year's earnings on such fund or account or one-twelfth of
annual debt service as well as amounts earned on said earnings if the
gross earnings on all such funds and accounts for the Payment Period
is less than $100,000.
(c) The County shall pay Excess Investment Earnings from
moneys on deposit in the Excess Earnings Account to the United States
in installments with the first payment to be made not later than
thirty (30) days after the end of the fifth Payment Period and with
subsequent payments to be made not later than five (5) years after
the preceding payment was due. The County shall assure that each
such installment is in an amount equal to at least ninety percent
(90%) of the Excess Investment Earnings with respect to the Bonds as
of the close of the computation period. Not later than sixty (60)
days after the day on which the last maturity of the Bonds is
redeemed, the County shall pay 100 percent (100$) of the theretofore
unpaid Excess Investment Earnings to the United States. The County
shall remit such payments to the United States at the address pre-
scribed by the applicable regulations of the United States Department
of the Treasury, as the same may be from time to time in effect, with
such reports and statements as may be prescribed by such
regulations.
(d) In order to ensure that Excess Investment Earnings are
paid to the United States rather than to a third party, the County
shall invest moneys on deposit in the Excess Earnings Account estab-
lished pursuant to Section 24 hereof in U. S. Treasury Notes -
State and Local Government Series ("BEGS"), certificates of deposit
or in investment contracts in accordance with the applicable regula-
tions of the United States Department of Treasury, as from time to
time in effect.
(e) The County shall keep, and retain for a period of six
(6) years following the final payment of the Bonds, records of the
determinations made pursuant to this Section 23. Such books of
record and account shall specify the account or fund to which each
investment (or portion thereof) is to be allocated and shall set
forth, in the case of each investment (i) its purchase price, (ii)
identifying information, including par amount, coupon rate and pay-
ment dates, (iii) the amount received at maturity or its sale price,
as the case may be, (iv) the amounts and dates of any payments made
with respect thereto and (v) such documentation as is required to be
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95001.3.3019.O1:S
obtained by the County as evidence to establish that the following
requirements have been met:
(A) Certificate of deposit. With respect to
the purchase or sale of a certificate of deposit issued by
a commercial bank, the price at which it is purchased or
sold, as the case may be, shall be the bona fide bid price
quoted by a dealer who maintains an active secondary market
in such certificates of deposit. If there is no active
secondary market in such certificates of deposit, the pur-
chase or sale price of a certificate of deposit must
produce a yield thereon (1) as high or higher than the
yield on comparable obligations traded on an active second-
ary market, as certified by a dealer who maintains such a
market, and (2) as high or higher than the yield available
on comparable obligations offered by the U. S. Treasury
Department. The certification described in the preceding
sentence must be executed by a dealer who maintains an
active secondary market in comparable certificates of
deposit and must be based on actual trades adjusted to
reflect the size and term of that certificate of deposit
and the stability and reputation of an entity issuing the
certificate of deposit.
(B) Investment contracts. With respect to
investment contracts (e.g., any agreement to deposit pro-
ceeds of the Bonds with a particular bank, with the depos-
its to bear interest at an agreed rate) the County must
obtain (1) at least 3 bids on the investment contract from
persons other than those with an interest in the issue
(e.g., underwriters), (2) a certification by the person
whose bid is accepted stating that, based on that person's
expectations on the date that the contract is entered into,
investments will not be purchased pursuant to the invest-
ment contract at a price in excess of their fair market
value or sold pursuant to the investment contract at a
price less than their fair market value, (3) evidence that
the yield on the investment contract is at least equal to
the yield offered under the highest bid received from
non-interested parties, and (4) evidence that the yield on
the investment contract is at least equal to the yield
offered on similar obligations under similar investment
contracts (e.g., the yield on investment contracts entered
into by issuers of qualified mortgage bonds).
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95001.3.3019.01:8
(C) Other investments that are traded in
established markets. With respect to Authorized
Investments other than those described in (A) or (B) above,
which are traded in an established market, the purchase or
disposition price thereof shall be that price achieved in
an arm's-length transaction between the purchaser and the
seller. Any evidence of such price shall be retained. For
United States Treasury obligations purchased directly from
the Treasury, however, proof of the price paid therefor
shall be sufficient evidence.
Section 24. Rebate Fund.
(a) The County shall establish a special fund designated
as the "Rebate Fund." The Rebate Fund shall not be subject to any
pledge or lien under this Resolution. The County shall establish and
maintain within the Rebate Fund an "Excess Earnings Account" and an
"Investment Account."
(b) Notwithstanding anything contained in this Resolution
to the contrary, there shall be deposited in the Excess Earnings
Account of the Rebate Fund all Excess Investment Earnings determined
from time to time pursuant to Section 23 hereof and all amounts
deposited by the County into the Rebate Fund. All income or other
gain from the investment of amounts in the Rebate Fund shall be
deposited in the Investment Account of the Rebate Fund.
(c) The County shall apply moneys on deposit in the Rebate
Fund to the extent required to make payments to the United States of
America in respect of the Bonds, at the times and in the manner
required by Section 23 hereof.
(d) In the event that as of the end of any Payment Period
the amount required to be deposited in the Rebate Fund for rebate to
the United States exceeds the amount then available therefor, the
County shall promptly remit an amount sufficient to make up the defi-
ciency and immediately deposit in the Excess Earnings Account of the
Rebate Fund all such amounts.
(e) The County agrees to keep and maintain all records
required to be maintained by it pursuant to, and as and to the extent
required by, the Code. This covenant shall not survive the payment
of the Bonds.
-26-
95001.3.3019.01:8
Section 25. 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 muti-
lated, but only upon surrender to the Bond Registrar of the Bond so
mutilated. Every mutilated Bond so surrendered to the Bond Registrar
shall be cancelled 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 satisfac-
tory 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 authen-
ticate 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
issued under the provisions of this Section 25 in lieu of any Bond
alleged to be lost, destroyed or stolen, shall be equally and propor-
tionately 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 may be
executed, authenticated and delivered hereunder or for the purpose of
determining any percentage of Bonds outstanding hereunder.
Notwithstanding any other provision of this Section, in lieu of
delivering a new 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.
Section 26. Temporary Bonds. Any Bonds issued under
this Resolution may be initially issued in temporary form exchange-
able for definitive bonds. The temporary bonds may be 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 Resolution as may be 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 l0 hereof. If the County issues temporary Bonds it will exe-
cute 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 prin-
cipal amount of definitive Bonds of the same interest rates and
maturities. Until so exchanged, the temporary Bonds shall be enti-
tled to the same benefits under this Resolution as definitive Bonds
issued hereunder.
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95001.3.3019.01:8
Section 27. Defeasance. If all outstanding Bonds shall
be paid and discharged in any one or more of the following ways:
(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 Service Account, 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 Service Account 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 obli-
gations of the County under this Resolution with respect to all out-
standing 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 28. Cancellation of Bonds. All Bonds surren-
dered to the Paying Agent for payment upon maturity or for redemption
shall upon payment thereof be stamped "cancelled" immediately and
such cancelled 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 cancelled forthwith and shall
not be reissued.
Section 29. Approval of Official Statement. The
Preliminary Official Statement relating to the Bonds is hereby
approved with such changes thereto as may be approved by the County
Council and Bond Counsel, and the distribution of such Preliminary
Official Statement in connection with the sale of the Bonds is hereby
approved. The execution and delivery of a final Official Statement
by the Mayor and the Director of Finance of the County, in
substantially the form of the Preliminary Official Statement, is
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95001.3.3019.01:8
hereby authorized with such changes as the officers executing the
same shall approve; such approval to be conclusively evidenced by
execution and delivery thereof.
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 the Bond
Purchase Agreement, and this Resolution.
Section 30. Supplemental Resolutions or Orders. The
County may from time to time, and at any time, without notice to or
consent of any of the Bondowners, adopt resolutions or orders supple-
mental 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 Resolution or in any additional resolu-
tion 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 lim-
itations and the restrictions upon the County contained in this
Resolution, other covenants, agreements, limitations and restrictions
to be observed by the County which are not contrary to or inconsis-
tent with this Resolution as theretofore in effect; and
(c) to modify, alter, amend or supplement this Resolution
in any other respect which is not adverse to the interests of the
Bondowners.
Exclusive of the resolutions or orders supplemental hereto
provided for in the preceding provisions of this Section 30, 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 resolutions 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 con-
tained in this Resolution; provided, however, that nothing herein
shall permit, or be construed as permitting, (a) an extension of the
maturity date of the principal of, or the payment date of interest
-29-
95001.3.3019.01:8
on, any Bond, (b) a reduction in the principal amount of, or
redemption premium on, any Bond or the rate of interest thereon, (c)
a preference or priority of any Bond or Bonds over any other Bond or
Bonds, (d) a reduction in the aggregate principal amount of the Bonds
the Owners of which are required to consent to such resolution or
order, without the consent of the Owners of all Bonds then outstand-
ing, or (e) creation of a pledge of or lien or charge upon the
Special Assessments superior to the pledge of Net Assessments pro-
vided for in Section 3 hereof.
If at any time the County shall desire to adopt a resolu-
tion or order supplemental hereto, which pursuant to the terms of
this Section 30 shall require the consent of the Bondowners, the
County shall so notify the Bond Registrar and shall deliver to the
Bond Registrar a copy of the proposed resolution or order. The Bond
Registrar shall, at the expense of the County, cause notice of the
proposed resolution 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 reso-
lution 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 resolution or order when consented to and approved
as in this Section 30 provided. 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 not less than 60o in aggregate principal
amount of the Bonds then outstanding, which instrument or instruments
shall refer to the proposed resolution or order described in such
notice, and shall specifically consent to and approve the adoption
thereof by the County substantially in the form of the copy thereof
referred to in such notice as on file with the Bond Registrar, such
proposed resolution or order, when duly adopted by the County, shall
thereafter become a part of the proceedings for the issuance of the
Bonds as referred to in Section 36 hereof. In determining whether
the Owners of 600 of the aggregate principal amount of the Bonds have
consented to the adoption of any supplemental resolution or order,
Bonds which are owned by the County or by any person directly or
indirectly controlling or controlled by or under the direct or indi-
rect common control with the County as certified 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.
Upon the adoption of any resolution or order supplemental
hereto and the receipt of consent to any such resolution or order
from the Owners of the appropriate aggregate principal amount of
Bonds in instances where such consent is required pursuant to the
provisions of this Section 30, this Resolution shall be, and shall be
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95001.3.3019.01:8
deemed to be, modified and amended in accordance therewith, and the
respective rights, duties and obligations under this Resolution 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.
Section 31. Paying Agent and Bond Registrar. The
Paying Agent is hereby authorized to and shall mail interest payments
to the Bondowners, and shall maintain the Bond Service Account. The
Paying Agent is hereby authorized to pay the principal of and premi-
um, if any, on the Bonds when the same are duly presented to it for
payment at maturity or on call and redemption. The Bond Registrar is
hereby authorized to maintain the Bond Register to provide for the
registration of transfer and exchange of Bonds presented to it for
such purposes, to provide for the cancellation of Bonds, all as pro-
vided in this Resolution, and to provide for the authentication of
Bonds, and shall perform all other duties assigned to or imposed on
it as provided in this Resolution. The Paying Agent shall keep accu-
rate records of all funds administered by it and all Bonds paid and
discharged by it. The Paying Agent and Bond Registrar initially
appointed, and any successor thereto, may be 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.
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 succes-
sor Paying Agent and/or Bond Registrar within ninety (90) days fol-
lowing 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. Upon merger, consolidation, or reorganization of
Paying Agent and/or Bond Registrar, the County will appoint a new
Paying Agent and/or Bond Registrar, which may be the corporation
resulting from such merger, consolidation or reorganization.
Section 32. Bond Register. The Bond Registrar will keep
or cause to be kept, at its principal corporate trust office, suffi-
cient books for the registration and transfer of the Bonds which
shall at all times be open to inspection by the County, and, upon
presentation for such purpose, the Bond Registrar shall, under such
reasonable regulations as it may prescribe, register or transfer or
-31-
95001.3.3019.01:8
cause to be registered or transferred on said Bond Register, Bonds as
herein provided.
The County and the Bond Registrar 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 and the Bond
Registrar shall not be affected by any notice to the contrary. The
County and the Bond Registrar 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 may be revised accordingly.
Section 33. Execution of Documents and Proof of Ownership.
Any request, direction, consent, revocation of consent, or other
instrument in writing required or permitted by this Resolution to be
signed or executed by Bondowners may be in any number of concurrent
instruments of similar tenor, and may be 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
Resolution (except as otherwise herein provided), if made in the fol-
lowing 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 associ-
ation or a member of a partnership on behalf of such corporation,
association or partnership, such signature guarantee shall also con-
stitute sufficient proof of his authority; and
(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.
Nothing contained in this Resolution 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
-32-
95001.3.3019.01:8
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 34. 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 princi-
pal of or redemption premium, if any, on any Bond when and as the
same shall become due and payable, whether at maturity as therein
expressed, by declaration or otherwise;
(b) Default in the due and punctual payment of the inter-
est 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 con-
tained in this Resolution or in the Bonds, and such default shall
have continued for a period of thirty (30) days.
Section 35. Remedies of Owners. Following the occur-
rence of an event of default, 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 mem-
bers, 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 Resolution;
(b) By suit in equity to enjoin any actions or things
which are unlawful or violate the rights of the Owners; or
(c) Upon the happening of an event of default (as defined
in Section 34), by a suit in equity to require the County and its
members, officers and employees to account as the trustee of an
express trust.
Nothing in this Section or in any other provision of this
Resolution, or in the Bonds, shall affect or impair the obligation of
the County, which is absolute and unconditional, to pay the interest
on and principal of the Bonds to the respective Owners of the Bonds
at the respective dates of maturity, as herein provided, out of the
Net Assessments pledged for such payment, or affect or impair the
right of action, which is also absolute and unconditional, of such
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95001.3.3019.01:8
Owners to institute suit to enforce such payment by virtue of the
contract embodied in the Bonds and in this Resolution.
A waiver of any default or breach of duty or contract by
any Owner shall not 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 may be enforced and exer-
cised from time to time and as often as shall be deemed expedient by
the Owners.
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, rights and remedies as if such suit, action or proceeding
had not been brought or taken.
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 may be exercised without exhausting and
without regard to any other remedy conferred by the Act or any other
law.
In case the moneys held by the Paying Agent and the County
pursuant to this Resolution after an event of default pursuant to
Section 34 (a) or (b) shall be insufficient to pay in full the whole
amount so owing and unpaid upon the Bonds, then all available amounts
shall first be applied to the fees and expenses, and then be applied
to the payment of such principal and interest without preference or
priority of principal over interest, or interest over principal, or
of any installment of interest over any other installment of inter-
est, ratably to the aggregate of such principal and interest.
Section 36. Provisions Constitute Contract. The provi-
sions of this Resolution 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 pro-
ceeding at law or in equity that is now or may hereafter be autho-
rized 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.
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95001.3.3019.01:8
No remedy conferred hereby upon any Bondowner is intended
to be exclusive of any other remedy, but each such remedy is cumula-
tive and in addition to every other remedy and may be exercised with-
out exhausting and without regard to any other remedy conferred by
the Act or any other law of the State of Hawaii. No waiver of any
default or breach of duty or contract by any Bondowner shall affect
any subsequent default or breach of duty or contract or shall impair
any rights or remedies on said subsequent default or breach. No
delay or omission of any Bondowner to exercise any right or power
accruing upon any default shall impair any such right or power or
shall be construed as a waiver of any such default or acquiescence
therein. Every substantive right and every remedy conferred upon the
Bondowners may be enforced and exercised as often as may be deemed
expedient. In case any suit, action or proceeding to enforce any
right or exercise any remedy shall be brought or taken and the
Bondowner shall prevail, said Bondowner shall be entitled to receive
from the Special Assessments reimbursement for reasonable costs,
expenses, outlays and attorney's fees and should said suit, action or
proceeding be abandoned, or be determined adversely to the Bondowners
then, and in every such case, the County and the Bondowners shall be
restored to their former positions, rights and remedies as if such
suit, action or proceeding had not been brought or taken.
After the issuance and delivery of the Bonds this
Resolution shall be irrepealable, but shall be subject to modifica-
tion to the extent and in the manner provided in this Resolution, but
to no greater extent and in no other manner.
Section 37. Unclaimed Funds. Notwithstanding any provi-
sions of this Resolution, subject to applicable state escheat laws,
any moneys held by the County or Paying Agent in trust for the pay-
ment 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
Resolution), 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 Resolution, and all liabil-
ity 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 news-
paper or journal a notice, in such form as may be deemed appropriate
by the Paying Agent, with respect to the provisions relating to the
repayment to the County of the moneys held for the payment thereof.
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95001.3.3019.01:8
Section 38. Severability. If any covenant, agreement or
provision, or any portion thereof, contained in this Resolution, or
the application thereof to any person or circumstance, is held to be
unconstitutional, invalid or unenforceable, the remainder of this
Resolution 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
Resolution and the bonds issued pursuant hereto shall remain valid
and the Bondowners shall retain all valid rights and benefits
accorded to them under this Resolution and the Constitution and Laws
of the State of Hawaii.
Section 39. 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 Resolution necessary or appropriate to carry the same into
effect.
Section 40. Effective Date. This Resolution shall take
effect upon adoption.
Dated at Hilo, Hawaii, the 9th day of July, 1991.
Introduced by:
Counc Member, County
Ha ii
COUNTY COUNCIL
County of Hawaii
Hilo, Hawaii
I hereby certify that the foregoing RESOLUTION was by
the vote indicated to the right hereof gdopted by the COUNCIL
of the County of Hawaii on :-_
ATTEST:
COUNTY CLERK CHAIRMAN & PRESIDING OFFICER
ROLL CALL VOTE
AYES NOES ABS EX
ARAKAKI
DE LIMA
DOMINGO
HALE
KOKUBUN
LAI
MAKUAKANE
RUDDLE
SCHUTTE
Reference
RESOLUTION NO. ~~ .~Y
STATE OF HAWAII )
ss.
COUNTY OF HAWAII )
I, , County Clerk of the County of Hawaii,
Hawaii, DO HEREBY CERTIFY that the above and foregoing is a full,
true and correct copy of Resolution No. and that the same has
not been amended or repealed.
DATED: 1991.
(SEAL)
County Clerk of the County of
Hawaii, Hawaii
95001.3.3019.01:8
EXHIBIT A
MATURITY SCHEDULE
Year
(August 1)_
Principal Interest
Amount Rate
MANDATORY SINKING FUND REDEMPTION SCHEDULE
Bonds Maturing on
Year
(August 1~
Principal
Amount
A-1
95001.3.3019.01:8
EXHIBIT B
Form of Bond
AS PROVIDED IN THE RESOLUTION REFERRED TO HEREIN, UNTIL THE
TERMINATION OF THE SYSTEM OF BOOK-ENTRY ONLY TRANSFERS
THROUGH THE DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK
(TOGETHER WITH ANY SUCCESSOR SECURITIES DEPOSITORY
APPOINTED PURSUANT TO THE RESOLUTION, ^DTC^), AND NOTWITH-
STANDING ANY OTHER PROVISION OF THE RESOLUTION TO THE CON-
TRARY, THIS BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN
PART, ONLY TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO
DTC OR A NOMINEE OF DTC, OR BY DTC OR A NOMINEE OF DTC TO
ANY SUCCESSOR SECURITIES DEPOSITORY OR ANY NOMINEE THEREOF.
No.
UNITED STATES OF AMERICA
STATE OF HAWAII
COUNTY OF HAWAII
COUNTY OF HAWAII IMPROVEMENT DISTRICT NO. 17,
KALOKO SUBDIVISION, 1991 BOND, COUNTY OF HAWAII, HAWAII
INTEREST MATURITY ORIGINAL CUSIP NO.
RATE DATE ISSUE DATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
COUNTY OF HAWAII IMPROVEMENT DISTRICT N0. 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 reg-
istered owner named above, or registered assigns, on the maturity
date set forth above, unless redeemed prior thereto as hereinafter
provided, the principal amount set forth above, and to pay interest
B-1
95001.3.3019.01:8
on such principal amount from 1991 or from the most
recent interest payment date to which interest has been paid or duly
provided for, semiannually on January 1 and July 1 of each year, com-
mencing January 1, 1992, 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 in lawful money of the United States of
America upon presentation and surrender of this Bend at the principal
corporate trust office of (the "Paying Agent and 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 15th day of the month
preceding the interest payment date (the "Record Date") at such reg-
istered owner's address as it appears on the registration books main-
tained by the Bond Registrar.
This Bond is one of the duly authorized issue of
"Improvement District No. 17, Kaloko Subdivision, 1991 Bonds, County
of Hawaii, Hawaii" (the "Bonds") issued in the aggregate principal
amount of $ pursuant to Chapter 12 of the Hawaii County
Code (1985), as amended, (the "Act") for the purpose of financing
certain improvements in the District (the "Project"). The issuance
of the Bonds and the terms and conditions thereof are provided for by
a Resolution adopted by the County Council of the County on
1991 (the "Resolution"), and this reference incorporates
the Resolution herein, and by acceptance hereof the owner of this
Bond assents to said terms and conditions. The Resolution is adopted
under, this Bond is issued under, and both are to be construed in
accordance with the laws of the State of Hawaii.
[Bonds issued pursuant to a book-entry only system shall
contain the following paragraph: "The Bonds are being issued by
means of a book-entry only system, with no physical distribution of
bond certificates to be made except as provided in the Resolution.
One bond certificate, registered in the name of the Securities
Depository Nominee, is being issued for deposit with the Securities
Depository and immobilized in its custody. The book-entry only
system will evidence positions held in the Bonds by the Securities
Depository's participants; beneficial ownership of the Bonds, in the
principal amount of $5,000 or any integral multiple thereof, shall be
evidenced in the records of such participants. Transfers of owner-
ship shall be effected on the records of the Securities Depository
and its participants pursuant to rules and procedures established by
the Securities Depository and its participants. The County, the Bond
Registrar and the Paying Agent will recognize the Securities
Depository Nominee, while the registered owner of this bond, as the
owner of this bond for all purposes, including payments of principal
of, and redemption price and interest on, this bond, notices and
voting. Transfers of principal, interest and any redemption price
B-2
95001.3.3019.01:8
payments to partic:.ipants of the Securities Depository will be the
responsibility of the Securities Depository, and transfers of princi-
pal, interest and any redemption price payments to beneficial owners
of the Bonds by participants of the Securities Depository will be the
responsibility of such participants and other nominees of such bene-
ficial owners. Neither the County, the Bond Registrar nor the Paying
Agent will be responsible or liable for such transfers or payments or
for maintaining, supervising or reviewing the records maintained by
the Securities Depository, the Securities Depository Nominee, its
participants or persons acting through such participants. While the
Securities Depository Nominee is the owner of this bond, notwith-
standing any provisions herein contained to the contrary, payments of
principal of, redemption price and interest on this bond shall be
made in accordance with existing arrangements among the County, the
Paying Agent and the Securities Depository."]
Pursuant to the Act and the Resolution, 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 the annual
special assessments authorized under the Act to be levied and col-
lected within the District (the "Special Assessments") and certain
funds and accounts established pursuant to the Resolution.
Interest on this Bond shall be payable from the interest
payment date next preceding the date of authentication hereof, unless
such date of authentication is after a Record Date but on or prior to
the immediately succeeding interest payment date, in which event
interest will be payable from such interest payment date, or unless
such date of authentication is prior to the first Record Date, in
which event interest will be payable from July 1, 1991. Interest
shall be calculated on the basis of a 360-day year of 12 thirty-day
months.
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 Council of the County has covenanted for the benefit of
the owners of the Bonds that it will commence within 120 days after
notification from the Director of Finance and diligently pursue to
completion appropriate foreclosure proceedings as authorized by the
Act in the event of delinquencies of any Special Assessments levied
for payment of principal and interest on the Bonds.
The Bonds maturing on or before July 1, may be
redeemed prior to maturity, in whole or in part, at the option of the
County on July 1, or on any interest payment date thereafter,
upon at least 25 nays', but not more than 90 days', prior written
B-3
95001.3.3019.O1:S
notice mailed to the registered owners at the addresses appearing on
the bond registration books, at the following redemption prices,
expressed as a percentage of the principal amount of a bond, together
with accrued interest to the date of redemption:
The Bonds maturing on July 1, are subject to mandatory
sinking fund redemption by lot on August of each year after at
a redemption price equal to the principal amount thereof, without
premium, together with accrued interest to the date of redemption, as
follows:
Redemption Date
(August 1)
Principal Amount of Bonds
to be Redeemed
S
(maturity)
The Bonds may be subject to mandatory redemption on July 1,
or such later Interest Payment Date as may be established in
the manner provided in the Resolution from proceeds of the Bonds
which remain unexpended on 1, 19 or such later date as
the County may establish as provided in the Resolution.
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
Resolution.
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 certifi-
cate 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 pro-
vided, 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.
B-4
95001.3.3019.01:8
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, subject to the limitations
set forth in the Resolution, which rank on a parity with the Bonds.
This Bond shall not become valid or obligatory for any pur-
pose 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 per-
formed 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 pre-
scribed by the laws or Constitution of the State of Hawaii.
IN WITNESS WHEREOF, the County of Hawaii, Hawaii, has
caused this Bond to be dated as of the first day of July, and to be
signed by the Mayor of the County by facsimile signature and attested
by the County Clerk of the County.
COUNTY OF HAWAII, HAWAII
Mayor of the County of Hawaii
for County of Hawaii
ATTEST:
rector of Finance of the
County of Hawaii
(SEAL)
B-5
95001.3.3019.01:8
FORM OF CERTIFICATE
OF AUTHEDITICATION
This is one of the Bonds described in the within defined Resolution.
Dated:
as Bond Registrar
By:
Authorized Signatory
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 irrevocably
constitute(s) and appoint(s)
Attorney, to transfer said Bond on the books of ,
as Bond Registrar, with full power of substitution in the premises.
B-6
95001.3.3019.01:8
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-7
95001.3.3019.O1:S
~--
Lorraine R. Inouce
- Sta . ~,r
J~,• o. Fr '' W ill iam Takaba
Department of Finance ~r~.~.
~'..
--.ems- 25 Aupuni Street, Room 118 Hilo, Hawau 96720 • 18081961-8234 • Fax i808~ 961-8248
..~M;.~
July 2, 1991
The Honorable Russell
and Members of the
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
Kokubun, Chairman,
Hawaii County Council
Dear Chairman Kokubun and Members of the County Council:
SUBJECT: Improvement District No. 17, Kaloko Subdivision
uP elution Authorizing the Sale of Bonds
Attached is a resolution authorizing the sale of $14,000,000
principal amount of Improvement District Bonds of the County of
Hawaii for the purpose of paying the cost of the authorized
improvements for Improvement District No. 17, Kaloko Subdivision.
Please place this resolution on the agenda of the special council
meeting set for July 9, 1991, the date of the bond sale. At the
meeting, we will have the information available about the terms and
interest rates on the bonds.
The county's assessment lien on the four parcels of land in the
improvement district attached on Friday, June 28, 1991, the date the
assessment ordinance was published. For your information, attached
is a copy of the Notice of Assessment mailed to TSA International,
Limited and to be published in accordance with the requirements of
Section 12-31, Hawaii County Code. A Certificate of Assessment Lien
and the fully ezecuted Industrial Bank of Japan subordination
agreement will be recorded at the Bureau of Conveyances, State of
Hawaii, on July 3, 1991. By that same date we are hoping to have
the eaecuted Kumagai Properties, Inc. subordination agreement in
hand.
265y
COMM. NO. ~-•------...~...----
To: Council
~ _,
Lorraine R. Inoue e
pia,
°J~ " K'il liam Takaba
Department of Finance L:re,,,r
~~
~•~~% 25 Aupuni Street, Room 118 • Hilo, Hawaii 96720 • 18081 961-8234 Fax 18081 961-82}8
.:w~c
July 1, 1991
CERTIFIED MAIL: P 762 216 618
Return Receipt Requested
Mr. Hideki Hayashi
Executive Vice President
TSA International, Limited
1585 Kapiolani Boulevard
Suite 1800
Honolulu, HI 96814
Re: Notice of Assessment
County of Hawaii Improvement District No. 17
Kaloko Subdivision
Pursuant to Section 12-31, Hawaii County Code, you are hereby
notified that the County of Hawaii has created and attached
assessment liens against all of the assessed lots in the
amounts as shown on the enclosed Notice of Assessment.
You have made an election in writing to pay the assessments in
installments with interest for all lots assessed.
The amount of monthly payments to be made shall be set by
amortizing assessment principal and interest over a period of
228 months so as to yield approzimately the same monthly
payment in each month, starting twelve months after the last
publication of the assessment ordinance. The interest rate on
the installments will be equal to the average interest rate on
the bonds issued for this improvement district. The maximum
bond interest to be authorized will be twelve percent per
annum. Since the County Council has not yet authorized sale of
the bonds, we cannot provide a fiaed installment amount, but
such amounts will be provided upon acceptance of the bond sale
by the County Council.
NOTICE OF ASSESSMENT
COUNTY OF HAWAII IMPROVEMENT DISTRICT NO. 17
(KAI,OKO SUBDIVISION)
Notice is hereby given pursuant to Section 12-31, Hawaii
County Code, that assessment liens have been created and have
attached against the lots described below, all of which are
located in County of Hawaii Improvement District No. 17 (Kaloko
Subdivision).
Assess. Lot Property Final
No. Area Description AsG men
1 9,719,884 sq. ft. Lot 7-A $1,076,600
2 15,528,617 sq. ft. Lot 7-B 7,963,200
3 24,658,358 sq. ft. Lot 7-C 2,730,000
4 7,143,840 sq. ft. Lot 7-D 2,230,200
Said assessment liens were created by Ordinance No. 91-55,
pursuant to Chapter 12, Hawaii County Code 1983, as amended,
and Chapter 46, Hawaii Revised Statutes. The respective
assessments and land subject thereto is as described in said
Ordinance and on the final Assessment Map filed in the office
of the County Clerk.
Pursuant to said Ordinance, the owner of the assessed lots
has elected in writing to make payments in monthly
installments, together with interest thereon. All payments
shall be made to the Treasurer of the County of Hawaii,
25 Aupuni Street, Hilo, Hawaii 96720.
Monthly installment payments shall begin on June 28, 1992,
and end on May 28, 2011. Monthly assessment installment
payments shall be set by amortizing assessment principal and
interest over a period of 228 months so as to yield
approximately the same monthly payment each month, starting
twelve months after the last publication of the assessment
ordinance. The interest rate on the installment payments shall
be equal to the average interest rate on the bonds issued for
this Improvement District.
Assessments are a lien against the property assessed until
paid. Section 12-38 of Chapter 12, Hawaii County Code 1983, as
amended, provides that failure to pay any installment, whether
of principal or interest, when due, shall cause the whole of
the unpaid principal to become due and payable immediately, and
the delinquent installment or installments shall thereafter
bear penalty at the rate of two percent per month or fraction
of a month from the date of delinquency until the day of sale
~~
-- -- -
June 20, 1991
Mr. William Takaba
Director of Finance
County of Hawaii
25 Aupuni Street
Hilo, HI 96720
RE: Raloko improvement District No. 17-- Election to Pay
Assessments by Installments
Pursuant to section 12-33, Hawaii County Code, TSA International,
Limited, the owner of Lots 7A, 7B, 7C, and 7D, hereby elects to pay
the assessments imposed in the referenced Improvement District #17
in 228 installments of principal and interest commencing 12 months
after first publication of the assessment ordinance.
Yours truly,
Hi~eki Hayashi
Vice resident
cc: Steve Menezes, Esq.
RECEIVED
,;UN 26 1991
?~4enezes Tsukazaki Yeh & Moore
ATTORNEYS AT LAW
100 Pauahi Srreet Swte 203 Hilo, Hawaii %720
Telephone: (BOtl) %7-0055 FAX (BOB) %9-1131
June 21, 1991
VIA FAX TRANSMISSION
1-521-0287
Michael A. Pietsch
Title Guaranty of Hawaii, Inc.
P.O. Box 3084
Honolulu, Hawaii 96802
Re: TSA International, Limited - County of Hawaii
Improvement District No. 17
Dear Mr. Pietsch:
r_ .,
This firm represents TSA International, Limited, the owner
of four parcels of real property located at North Kona, Hawaii,
identified as TMK:(3)7-3-009:17, 25 & 26 and 7-3-051:01. The
four parcels total approximately 1,340 acres.
TSA has petitioned the County of Hawaii for, and the County
has approved, the creation of Improvement District No. 17 for the
purpose of financing the construction of roadway and water
facilities improvements on the TSA property. Improvement
district special assessment bonds in the amount of ;14,000,000.
will be sold by the County on July 9, 1991 to finance the
construction of the improvements. Each of the four parcels has
been assessed a portion of the ;14,000,000. bond issue, based on
the ratio that the appraised value of each parcel bears to the
total appraised value of all of the parcels. An appraisal by The
Hallstrom Appraisal Group, Inc., dated May 1, 1991, determined
the fair market value of all of the parcels, assuming the
improvements are in place, to be ;66,400,000.
Each of the parcels is subject to an assessment lien in
favor of the County equal to the amount of the assessment on the
parcel. To provide notice of the County's assessment liens, a
Certificate of Assessment Lien will be recorded at the Bureau of
Conveyances.
One of the parcels (Lot 7-D) is encumbered by mortgages in
favor of Kumagai Properties, Inc. and The Industrial Bank of
Japan, Ltd. in the total original principal amount of
;54,040,000. Kumagai and IBJ will execute agreements
subordinating their mortgages to the County's assessment lien,
which will be recorded at the same time as the recordation of the
Certificate of Assessment Lien.
1
`~."."e~ ",i.
=; ~`' Department of Finance
I~:~~
` ~-'^''--` ~ 25 Aupuni Street, Room 118 • Hilo, Hawaii 96720 1808) 96t-8234 Faz 18081 961-8248
June 21, 1991
Hawaiian Trust Company, Ltd.
P. 0. Box 3170
Honolulu, HI 96802-3170
Attention: Jerelyn Brown
Lorraine R. Inouce
dv:^r
K'illiam Takaba
Director
The County of Hawaii appoints Hawaiian Trust Company, Ltd.
as Registrar and Paying Aqent, upon the terms and
conditions set forth in our agreement dated June 1, 1990,
on the County of Hawaii's $14,000,000 Improvement District
No. 17 Bond issue scheduled for closing on July 9, 1991.
Please accept in writing this appointment. Please contact
Frank Manalili at 961-8351 should you have any questions.
~~
~(~~~~.
WILLIAM T. TAKABA
Director of Finance
FM:gs
Enc.
cc: Frank Manalili, Treasurer