Trust Indenture

EXHIBIT 10.11


____________________________________________________________


CHESTER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY


and


CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION


TRUST INDENTURE


Dated as of August 1, 2000


____________________


CHESTER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
INDUSTRIAL DEVELOPMENT
REVENUE BONDS, 2000 SERIES A
(INNOVATIVE SOLUTIONS AND SUPPORT, LLC PROJECT)


____________________________________________________________


BOND COUNSEL AUTHORITY SOLICITOR ------------ ------------------- Stevens & Lee Conrad O'Brien Gellman & Rohn, P.C. 111 North Sixth Street 17 West Gay Street, Suite 100 Reading, Pennsylvania 19601 West Chester, Pennsylvania 19380-3090


ARTICLE I


DEFINITIONS


SECTION 1.01 Definitions........................................................................................ 3 SECTION 1.02 Interpretation; Time of Day........................................................................ 12 SECTION 1.03 Captions, Headings and Table of Contents........................................................... 13


ARTICLE II


AUTHORIZATION AND TERMS OF BONDS


SECTION 2.01 Amount, Form and Issuance of Bonds................................................................. 14 SECTION 2.02 Designation, Denominations, Maturity, Dated Dates, Interest Accrual and Tender..................... 14 SECTION 2.03 Weekly Rate........................................................................................ 15 SECTION 2.04 Term Rate.......................................................................................... 16 SECTION 2.05 Conversion at Option of Borrower................................................................... 17 SECTION 2.06 Execution and Authentication of Bonds.............................................................. 18 SECTION 2.07 Source of Payment of Bonds......................................................................... 18 SECTION 2.08 Payment and Ownership of Bonds..................................................................... 18 SECTION 2.09 Registration, Transfer and Exchange of Bonds....................................................... 19 SECTION 2.10 Mutilated, Lost, Wrongfully Taken or Destroyed Bonds............................................... 20 SECTION 2.11 Cancellation of Bonds.............................................................................. 21 SECTION 2.12 Special Agreement with Holders..................................................................... 21 SECTION 2.13 Book Entry System for the Bonds.................................................................... 22


ARTICLE III


REDEMPTION OF BONDS


SECTION 3.01 Terms of Redemption................................................................................ 25 SECTION 3.02 Partial Redemption................................................................................. 28 SECTION 3.03 Issuer's Election to Redeem........................................................................ 28 SECTION 3.04 Notice of Redemption............................................................................... 28 SECTION 3.05 Payment of Redeemed Bonds.......................................................................... 30


ARTICLE IV


PURCHASE AND REMARKETING OF BONDS


SECTION 4.01 Purchase on Demand of Holder During Weekly Mode.................................................... 31 SECTION 4.02 Mandatory Purchase on Conversion Date and at End of Term Rate Period; Upon Expiration of Letter
of Credit; Upon Issuance of Alternate Letter of Credit; and at Direction of Bank................. 33 SECTION 4.03 Remarketing........................................................................................ 35 SECTION 4.04 Drawings on Letter of Credit for Purchase of Bonds................................................. 36 SECTION 4.05 Bonds Purchased with Proceeds of Letter of Credit.................................................. 37


(i)


SECTION 4.06 Borrower Bonds.................................................................................... 38 SECTION 4.07 No Purchases After Acceleration; Inadequate Funds for Purchases................................... 38


ARTICLE V


FUNDS AND LETTER OF CREDIT


SECTION 5.01 Creation of Project Fund.......................................................................... 40 SECTION 5.02 Disbursements from and Records of Project Fund.................................................... 40 SECTION 5.03 Disposition of Excess Bond Proceeds............................................................... 40 SECTION 5.04 Bond Fund......................................................................................... 40 SECTION 5.05 Investment of Bond Fund, Project Fund and Rebate Fund............................................. 42 SECTION 5.06 Bond Fund Moneys to be Held in Trust.............................................................. 44 SECTION 5.07 Nonpresentment of Bonds........................................................................... 44 SECTION 5.08 Creation of Rebate Fund........................................................................... 44 SECTION 5.09 Letter of Credit.................................................................................. 46


ARTICLE VI


COVENANTS AND REPRESENTATIONS OF ISSUER


SECTION 6.01 Corporate Existence; Compliance with Laws......................................................... 50 SECTION 6.02 Payment of Bond Service........................................................................... 50 SECTION 6.03 No Further Assignment of Revenues................................................................. 50 SECTION 6.04 Filings........................................................................................... 50 SECTION 6.05 Rights and Enforcement of Financing Agreement..................................................... 50 SECTION 6.06 Further Assurances................................................................................ 51 SECTION 6.07 Issuer Not to Adversely Affect Tax-Exempt Status.................................................. 51 SECTION 6.08 Bonds Not to Become Arbitrage Bonds............................................................... 51 SECTION 6.09 Observance and Performance Agreements............................................................. 51 SECTION 6.10 Representations and Warranties.................................................................... 51


ARTICLE VII


DEFAULT AND REMEDIES


SECTION 7.01 Defaults; Events of Default....................................................................... 52 SECTION 7.02 Notice of Default................................................................................. 53 SECTION 7.03 Acceleration 53 SECTION 7.04 Other Remedies; Rights of Holders................................................................. 54 SECTION 7.05 Right of Holders to Direct Proceedings............................................................ 55 SECTION 7.06 Application of Moneys............................................................................. 56 SECTION 7.07 Remedies Vested in Trustee........................................................................ 57 SECTION 7.08 Rights and Remedies of Holders.................................................................... 57 SECTION 7.09 Termination of Proceedings........................................................................ 58 SECTION 7.10 Waivers of Events of Default...................................................................... 58 SECTION 7.11 Trustee's Right to Appointment of Receiver........................................................ 59 SECTION 7.12 Trustee and Holders Entitled to All Benefits Under Act............................................ 59


(ii)


SECTION 7.13 Trustee's Obligation to Bank Upon Payment of All Amounts Due Holders.............................. 59


ARTICLE VIII


TRUSTEE AND REMARKETING AGENT


SECTION 8.01 Trustee's Acceptance and Responsibilities......................................................... 60 SECTION 8.02 Certain Rights and Obligations of Trustee......................................................... 61 SECTION 8.03 Fees, Charges and Expenses of Trustee............................................................. 64 SECTION 8.04 Intervention by Trustee........................................................................... 65 SECTION 8.05 Successor Trustee................................................................................. 65 SECTION 8.06 Resignation by Trustee............................................................................ 65 SECTION 8.07 Removal of Trustee................................................................................ 66 SECTION 8.08 Appointment of Successor Trustee.................................................................. 66 SECTION 8.09 Adoption of Authentication........................................................................ 67 SECTION 8.10 Designation and Succession of Authenticating Agent, Bond Registrar, Transfer Agent, Tnder Agent
and Paying Agent..................................................................... 67 SECTION 8.11 Dealing in Bonds.................................................................................. 68 SECTION 8.12 Representations, Agreements and Covenants of Trustee.............................................. 68 SECTION 8.13 Appointment of Remarketing Agent.................................................................. 69 SECTION 8.14 Qualifications of Remarketing Agent............................................................... 69 SECTION 8.15 Compensation and Expenses of Remarketing Agent.................................................... 70


ARTICLE IX


SUPPLEMENTS AND AMENDMENTS


SECTION 9.01 Supplemental Indentures Not Requiring Consent of Holders.......................................... 71 SECTION 9.02 Supplemental Indentures Requiring Consent of Holders.............................................. 72 SECTION 9.03 Consent of Borrower............................................................................... 72 SECTION 9.04 Authorization to Trustee; Effect of Supplement.................................................... 72 SECTION 9.05 Modification by Unanimous Consent................................................................. 73 SECTION 9.06 Amendment of Financing Agreement.................................................................. 73 SECTION 9.07 Amendment of Letter of Credit..................................................................... 73 SECTION 9.08 Trustee Authorized to Join in Supplements and Amendments; Reliance on Counsel..................... 73 SECTION 9.09 Consent of Bank................................................................................... 74 SECTION 9.10 Notice to Rating Service.......................................................................... 74


ARTICLE X


DEFEASANCE


SECTION 10.01 Defeasance....................................................................................... 75 SECTION 10.02 Provision for Payment............................................................................ 75 SECTION 10.03 Deposit of Funds for Payment of Bonds............................................................ 76 SECTION 10.04 Survival of Certain Provisions................................................................... 77


(iii)


ARTICLE XI


MISCELLANEOUS


SECTION 11.01 Limitation of Rights; No Personal Recourse....................................................... 78 SECTION 11.02 Severability..................................................................................... 78 SECTION 11.03 Notices.......................................................................................... 78 SECTION 11.04 Suspension of Mail............................................................................... 79 SECTION 11.05 Payments Due on Saturdays, Sundays and Holidays.................................................. 80 SECTION 11.06 Instruments of Holders........................................................................... 80 SECTION 11.07 Binding Effect................................................................................... 81 SECTION 11.08 Counterparts..................................................................................... 81 SECTION 11.09 Governing Law.................................................................................... 81 SECTION 11.10 Certain References to Bank....................................................................... 81


(iv)


TRUST INDENTURE


THIS TRUST INDENTURE, dated as of August 1, 2000 between CHESTER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, a public instrumentality and body corporate and politic of the Commonwealth of Pennsylvania, and CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and validly existing under the laws of the United States of America, as Trustee (the capitalized terms used in the recitals and granting clauses hereof being used therein as defined in Article I of this Trust Indenture),


WITNESSETH THAT:


A. Pursuant to the Act, the Issuer has authorized and approved the Project and the financing thereof through the issuance of the Bonds and the use of the proceeds thereof pursuant to the Financing Agreement to finance costs of the Project;


B. The Bonds will be issued under and secured by this Indenture, and the Issuer is empowered and authorized to execute and deliver this Indenture and the Financing Agreement and to do or cause to be done all acts provided or required herein or therein to be performed on its part;


C. All acts and conditions required to happen, exist and be performed precedent to and in the issuance of the Bonds and the execution and delivery of this Indenture have happened, exist and have been performed (i) to make the Bonds, when issued, delivered and authenticated, valid and binding legal obligations of the Issuer and (ii) to make this Indenture a valid, binding and legal trust agreement for the security of the Bonds; and


D. The Trustee has accepted the trusts created by this Indenture, and in evidence thereof has joined in the execution hereof.


NOW, THEREFORE, the Issuer, intending to be legally bound, in consideration of the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the Holders, and of the sum of One Dollar, lawful money of the United States of America, to it duly paid by the Trustee at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to secure, in the following order of priority, first, the payment of the
----- principal of, premium, if any, on and interest on the Bonds according to their tenor and effect and the performance and observance by the Issuer of all the covenants expressed or implied herein and in the Bonds, and, second, the payment
------ to the Bank and performance of the reimbursement and other obligations of the Borrower under the Reimbursement Agreement, does hereby assign, transfer and pledge to the Trustee and its successors in trust and its and their assigns forever and grant to the Trustee and its successors in trust and its and their assigns a security interest in:


a. All right, title and interest (but not the obligations) of the
Issuer under and pursuant to the terms of the Financing Agreement, all Loan
Payments (i.e., all loan payments required to be paid by the Borrower
pursuant to Section 4.2 of the Financing Agreement) and all other payments,
revenues and receipts receivable by the Issuer under the Financing
Agreement (except for the Unassigned Issuer's Rights); and


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b. All of the right, title and interest of the Issuer in and to all
Funds (other than the Rebate Fund) and Accounts established under this
Indenture and all moneys and investments now or hereafter held therein and
all present and future Revenues.


TO HAVE AND TO HOLD, the Financing Agreement, Funds, Accounts, Revenues and the other right, title and interest hereby assigned, transferred and pledged or agreed or intended so to be (collectively the "Trust Estate") to the Trustee and its successors in said trust and to its and their assigns forever;


IN TRUST NEVERTHELESS, upon the terms herein set forth, first, for the
----- equal and proportionate benefit, security and protection of all present and future Holders of the Bonds issued under and secured by this Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any other of the Bonds except as provided herein, and, second, for
------ the benefit and security of the Bank with respect to the Borrower's obligations under the Reimbursement Agreement;


PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of the Bonds and the interest and premium, if any, due or to become due thereon, at the times and in the manner mentioned in the Bonds according to the true intent and meaning thereof, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by the Issuer, and shall pay or cause to be paid to the Trustee all sums due or to become due to it in accordance with the terms and provisions hereof, and if the Borrower shall pay and perform or cause to be paid and performed all of its reimbursement and other obligations under the Reimbursement Agreement, then, upon such final payments and subject to the provisions of Article X, this Indenture and the rights hereby granted shall cease, determine and be void, and the Trustee shall forthwith release, surrender and otherwise cancel any interest it may have in the Trust Estate; otherwise this Indenture shall be and remain in full force and effect.


THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered and the Trust Estate, including all said payments, revenues and receipts hereby pledged, is to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Issuer has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective Holders, from time to time, of the Bonds, or any part thereof, as follows:


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ARTICLE I


DEFINITIONS


SECTION 1.01 Definitions. In this Indenture, the following terms
----------- shall have the meanings specified in this Article, unless the context otherwise requires:


"Act" means the Pennsylvania Economic Development Financing Law (Act No. 102, approved August 23, 1967, P.L. 251, as amended, including the amendments effected by Act No. 48, approved July 10, 1987, P.L. 273 and Act No 74, approved December 17, 1993, P.L. 490). The Act is codified at 73 P.S.ss. 371 et seq. -- ---


"Affiliate" means any Person directly or indirectly controlling, controlled by or under common control with the Borrower as certified to the Trustee and the Remarketing Agent by an Authorized Representative of the Borrower. In addition, the term "Affiliate" shall also include (i) any General Partner and (ii) any Person who has guaranteed the payment of the Borrower's obligations under the Financing Agreement or the Reimbursement Agreement.


"Alternate Letter of Credit" means an irrevocable letter of credit authorizing drawings thereunder by the Trustee, issued by a national banking association, a bank, a trust company or other financial institution as the Bank, and satisfying the requirements of Section 5.09.


"Authorized Representative" shall have the meaning assigned to such term in the Financing Agreement.


"Available Moneys" means (i) proceeds of a drawing under the Letter of Credit and (ii) any moneys paid to the Trustee and with respect to which the Trustee has received an opinion of nationally recognized counsel experienced in bankruptcy matters and acceptable to the Trustee and the Rating Service to the effect that the use of such moneys to pay principal of, premium (if any) on or interest on the Bonds, as applicable, will not constitute an avoidable transfer under Section 547 of the United States Bankruptcy Code in the event of a bankruptcy case under the United States Bankruptcy Code by the Issuer or by or against the Borrower or any Affiliate, as debtor; provided that when used with respect to payment of amounts due in respect of any Pledged Bonds or Borrower Bonds or any payments due at any time when a Letter of Credit is not held by the Trustee, "Available Moneys" means any moneys held by the Trustee and available for such payment pursuant to the terms of this Indenture except for moneys drawn under the Letter of Credit.


"Bank" means, initially, PNC Bank, National Association, a national banking association, as issuer of the Letter of Credit, and its successors and assigns in that capacity and, in the event an Alternate Letter of Credit is outstanding, the issuer of the Alternate Letter of Credit.


"Bond Counsel" shall mean an attorney-at-law or a firm of attorneys of nationally recognized standing in matters pertaining to bonds (including the tax status of interest thereon) issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America.


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"Bond Fund" means the fund so designated and established pursuant to Section 5.04.


"Bond Service" means, for any period or payable at any time, the principal of, premium, if any, on and interest on the Bonds for that period or payable at that time whether due on an Interest Payment Date, at maturity or upon acceleration or redemption.


"Bond Year" means, while Bonds remain outstanding, the annual period provided for the computation of Excess Earnings under Section 148(f) of the Code.


"Bondholder Tender Notice" means a written notice meeting the requirements of Section 4.01.


"Bonds" means the $4,335,000 Industrial Development Revenue Bonds, 2000 Series A (Innovative Solutions and Support, LLC Project) of the Issuer issued, authenticated and delivered pursuant to Section 2.01.


"Borrower" means Innovative Solutions and Support, LLC, a limited liability company duly organized and validly existing under the laws of the Commonwealth of Pennsylvania, and its successors and assigns.


"Borrower Bonds" means any Bonds of which ownership is registered in the name of the Borrower or any Affiliate, other than Pledged Bonds.


"Borrower Purchase Account" means the special trust account so designated and established by the Trustee pursuant to Section 4.04.


"Business Day" means any day other than a Saturday or Sunday or a day on which banks located in Pittsburgh, Pennsylvania, New York, New York or any other city in which the Designated Office or Payment Office of the Trustee or the office of the Bank at which drawing documents are required to be presented under the Letter of Credit is located are required or authorized to close or on which The New York Stock Exchange is closed.


"Code" means the Internal Revenue Code of 1986, as amended from time to time. References to the Code and Sections of the Code include the relevant regulations, temporary regulations and proposed regulations thereunder and under the Internal Revenue Code of 1954, as amended, and any successor provisions to those Sections, regulations, temporary regulations or proposed regulations.


"Conversion Date" means any Interest Payment Date on which the Rate Mode of the Bonds is converted to another Rate Mode pursuant to Section 2.05.


"Determination of Taxability" means (1) the receipt by the Trustee of notice of the enactment of legislation or the adoption of final regulations or a final decision, ruling or technical advice by any federal judicial or administrative authority which, in the opinion of Bond Counsel, has the effect of requiring interest on the Bonds to be included in the gross income of the Holders for federal income tax purposes (other than a Holder who is a "substantial user" of the Project or a "related person" as those terms are used in Section 147(a) of the Code) or (2) the receipt by the Trustee of an opinion of Bond Counsel furnished by the Borrower to the effect that


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interest on the Bonds is to be included in the gross income of the Holders for federal income tax purposes (other than a Holder who is a "substantial user" of the Project or a "related person" as those terms are used in Section 147(a) of the Code) or (3) the delivery to the Trustee of a written statement signed by an Authorized Representative of the Borrower to the effect tha ...