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1994-06-21 Minutes
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1994-06-21 Minutes
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Modes of Operation of Bonds <br />• General. <br />The Bonds may operate in one or more of three Modes of operation, being the Weekly Mode, the <br />Adjustable Long Mode and the Fixed Mode. While any single Bond may operate in only one Mode at any given <br />time, other Bonds may operate in different Modes at the same time; provided, however, that consent of the Initial <br />Credit Facility Issuer is required for a conversion of fewer than all Bonds to a Fixed Mode. <br />Generally, the Modes have different operating features. Except as otherwise described below, once a Mode <br />is designated for any particular Bond, such Bond shall remain in that Mode until the Remarketing Agent designates <br />a new Mode for such Bond; provided, however, that Bonds converted to bear interest at the Fixed Rate shall remain <br />in the Fixed Mode until Maturity or redemption thereof prior to Maturity. The Remarketing Agent shall select such <br />a principal amount of Bonds for conversion from one Mode to another as will allow Bonds after conversion to be <br />sold in the minimum Authorized Denominations applicable to such Mode. <br />All Bonds in the Weekly Mode shall bear interest at the same interest rate. Bonds operating in the <br />Adjustable Long Mode may bear interest at different rates for different Rate Periods. Owners of Bonds in the <br />Weekly Mode will be entitled to demand the purchase of their Bonds. As described below, Bonds are subject to <br />mandatory purchase on an Adjustment Date: Bonds operating in an Adjustable Long Mode are also subject to <br />mandatory purchase on each Rate Change Date (other than the Rate Change Date which is the first day of such <br />Adjustable Long Mode). Bonds bearing interest at a Fixed Rate shall not be supported by the Credit Facility and <br />are not subject to optional or mandatory tender for purchase. <br />Designation of Weekly and Adjustable Long Modes. <br />• The Bonds will be initially issued in the Weekly Mode. Thereafter, except in the instances where a Bond <br />is in the Fixed Mode, the Remarketing Agent may designate a subsequent Mode for each Bond to commence on <br />an Adjustment Date. The Remarketing Agent may designate an Adjustment Date to occur with respect to any Bond <br />during a Weekly Mode on any Business Day, and with respect to any Bond during an Adjustable Long Mode on <br />any Rate Change Date. An Adjustment Date for any Bond in a particular Mode will be a mandatory purchase date <br />for such Bond. <br />The Remarketing Agent may select such subsequent Adjustment Periods and, within an Adjustable Long <br />Mode, Rate Periods as will, in the judgment of the Remarketing Agent, result in the lowest aggregate cost payable <br />by the Authority with respect to the Bonds, taking into account interest and any other determinable fees and <br />expenses. The Remarketing Agent may establish different Adjustment Periods and, within an Adjustable Long <br />Mode, different Rate Periods for Bonds on the same Adjustment Date in order to achieve an average duration of <br />Adjustment Periods and/or Rate Periods that, in the judgment of the Remarketing Agent, is most likely to achieve <br />the lowest total aggregate cost payable by the Authority with respect to the Bonds, taking into account interest and <br />any other determinable fees and expenses. The Remarketing Agent's determination shall be based upon the market <br />for and the relative yields of the Bonds and other securities that bear interest at a variable rate or at fixed rates -that, <br />in the judgment of the Remarketing Agent, are otherwise comparable to the Bonds, or any fact or circumstance <br />relating to the Bonds or affecting the market for the Bonds or affecting such other comparable securities in a manner <br />that, in the judgment of the Remarketing Agent, will affect the market for the Bonds. The Remarketing Agent, in <br />.its discretion, may consider such information and resources as it deems appropriate in making the determinations <br />described above, but the Remarketing Agent's determination shall be based solely upon the Remarketing Agent's <br />judgment, and the Remarketing Agent's determination shall be conclusive and binding upon all parties. <br />If the Authority designates a Mode for any Bond different from that then in effect with respect to such Bond <br />or designate an Adjustment Period which is an Adjustable Long Mode that succeeds an Adjustable Long Mode <br />where the Adjustable Long Mode or the Rate Periods therein change from a duration of 366 days or less to a <br />duration of more than 366 days, or vice versa, the Authority shall cause to be delivered to the Trustee, the Tender <br />Agent, the Remarketing Agent and the Credit Facility Issuer, and no such designation of an Adjustment Period, Rate <br />',, ._>- ' <br />-7- <br />
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