Stradling Yocca Carlson & Rauth
Draft of 9/19/22
4882-1289-7292v10/022363-0037
MASTER INDENTURE
by and among
ANAHEIM PUBLIC FINANCING AUTHORITY
and
CITY OF ANAHEIM
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of __________ 1, 2023
Relating to
$________
ANAHEIM PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS
(ANAHEIM ARENA IMPROVEMENT PROJECT)
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions ..................................................................................................................2 Section 1.02 Equal Security ..........................................................................................................12
ARTICLE II
THE BONDS
Section 2.01 Authorization of Bonds ............................................................................................13 Section 2.02 Transfer and Exchange of Bonds .............................................................................13 Section 2.03 Registration Books ...................................................................................................13 Section 2.04 Execution of Bonds ..................................................................................................14 Section 2.05 Authentication of Bonds...........................................................................................14 Section 2.06 Temporary Bonds .....................................................................................................14 Section 2.07 Bonds Mutilated, Lost, Destroyed or Stolen ............................................................14 Section 2.08 Book-Entry Bonds ....................................................................................................15
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Bonds.....................................................................................................17 Section 3.02 Costs of Issuance Account........................................................................................17 Section 3.03 Construction Account...............................................................................................17 Section 3.04 Conditions for the Issuance of Additional Bonds.....................................................17 Section 3.05 Procedure for the Issuance of Additional Bonds......................................................19 Section 3.06 Additional Bonds......................................................................................................20
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01 Redemption of Bonds ...............................................................................................20 Section 4.02 Notice of Redemption...............................................................................................20 Section 4.03 Selection of Bonds for Redemption .........................................................................21 Section 4.04 Partial Redemption of Bonds....................................................................................21 Section 4.05 Effect of Notice of Redemption ...............................................................................21
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations......................................................................................22 Section 5.02 Flow of Funds...........................................................................................................22 Section 5.03 Application of Insurance and Condemnation Proceeds............................................23 Section 5.04 Rebate Account ........................................................................................................24 Section 5.05 Investment of Moneys ..............................................................................................24
ARTICLE VI
COVENANTS
Section 6.01 Compliance with Indenture ......................................................................................25 Section 6.02 Compliance with Financing Documents ..................................................................25
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(continued)
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Section 6.03 Observance of Laws and Regulations ......................................................................25 Section 6.04 Other Liens ...............................................................................................................26 Section 6.05 Prosecution and Defense of Suits .............................................................................26 Section 6.06 Accounting Records and Statements ........................................................................26 Section 6.07 Recordation and Filing .............................................................................................26 Section 6.08 Enforcement of Management Agreement ................................................................26 Section 6.09 Continuing Disclosure ..............................................................................................26 Section 6.10 Certain Notices .........................................................................................................26 Section 6.11 Further Assurances ...................................................................................................27
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Events of Default......................................................................................................27 Section 7.02 Action on Default .....................................................................................................28 Section 7.03 Other Remedies of the Trustee .................................................................................29 Section 7.04 Non-Waiver ..............................................................................................................29 Section 7.05 Remedies Not Exclusive...........................................................................................29 Section 7.06 No Liability by the Authority to the Owners............................................................30 Section 7.07 No Liability by the City to the Owners ....................................................................30 Section 7.08 No Liability of the Trustee to the Owners................................................................30 Section 7.09 Application of Amounts After Default.....................................................................30 Section 7.10 Trustee May Enforce Claims Without Possession of Bonds....................................31 Section 7.11 Required Bond Owners’ Direction of Proceedings. .................................................31 Section 7.12 Limitation on Owner Suits .......................................................................................31
ARTICLE VIII
THE TRUSTEE
Section 8.01 Employment of the Trustee ......................................................................................31 Section 8.02 Duties, Removal and Resignation of the Trustee .....................................................32 Section 8.03 Compensation of the Trustee....................................................................................33 Section 8.04 Protection of the Trustee ..........................................................................................33
ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted ..............................................................36 Section 9.02 Effect of Supplemental Indenture.............................................................................37 Section 9.03 Endorsement of Bonds; Preparation of New Bonds.................................................38 Section 9.04 Amendment of Particular Bonds ..............................................................................38 Section 9.05 Execution of Supplemental Indentures.....................................................................38
ARTICLE X
DEFEASANCE
Section 10.01 Discharge of Indenture .............................................................................................38 Section 10.02 Bonds Deemed To Have Been Paid .........................................................................39 Section 10.03 Payment of Bonds After Discharge of Indenture .....................................................40
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(continued)
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ARTICLE XI
MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties ..................................................................40 Section 11.02 Successor Deemed Included in all References to Predecessor.................................40 Section 11.03 Execution of Documents by Owners........................................................................40 Section 11.04 Waiver of Personal Liability ....................................................................................41 Section 11.05 Destruction of Bonds................................................................................................41 Section 11.06 Funds and Accounts .................................................................................................41 Section 11.07 Article and Section Headings Gender and References.............................................41 Section 11.08 Partial Invalidity .......................................................................................................41 Section 11.09 Disqualified Bonds ...................................................................................................42 Section 11.10 Money Held for Particular Bonds.............................................................................42 Section 11.11 Payment on Non-Business Days ..............................................................................42 Section 11.12 California Law..........................................................................................................42 Section 11.13 Notices......................................................................................................................42 Section 11.14 Execution in Counterparts ........................................................................................43 Signatures .................................................................................................................................S-1 4882-1289-7292v10/022363-0037
MASTER INDENTURE
THIS MASTER INDENTURE (this “Master Indenture”), executed and entered into as of __________ 1, 2023, is by and among the ANAHEIM PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), the CITY OF ANAHEIM, a municipal corporation and charter city duly organized and existing under and by virtue of its charter and the Constitution and laws of the State of California (the “City”) and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States, as Trustee (the “Trustee”). (Capitalized terms used in the Whereas clauses and not defined therein shall have the meanings provided in Section 1.01 hereof.);
WITNESSETH:
WHEREAS, the City and the Authority desire to finance the costs of the acquisition, design, construction, installation and/or equipping of certain capital improvement projects of the City; WHEREAS, in order to finance the Project, the City will lease the Property to the Authority pursuant to the Ground Lease, and the City will sublease the Property back from the Authority pursuant to the Lease Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to finance the Project through the issuance by the Authority of the Bonds payable from the Base Rental Payments to be made by the City to the Authority under the Lease Agreement;
WHEREAS, all rights to receive the Base Rental Payments and other Lease Revenues have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement;
WHEREAS, the Authority and the City desire to provide for the issuance by the Authority of the Anaheim Public Financing Authority Taxable Lease Revenue Bonds (Anaheim Arena Improvement Project), 2023 Series A, pursuant to this Master Indenture, as supplemented by the _______ Supplemental Indenture in the aggregate principal amount of $____________, in order to finance certain costs of the Project described in Exhibit B thereto; WHEREAS, [concurrently with the issuance of the Series 2023A Bonds,] the Authority and the City desire to provide for the issuance by the Authority of the Anaheim Public Financing Authority Taxable Lease Revenue Bonds (Anaheim Arena Improvement Project), 2023 Series B pursuant to this Master Indenture, as supplemented by the _______ Supplemental Indenture in the aggregate principal amount not to exceed $_________, in order to finance certain costs of the Project described in Exhibit B thereto;
WHEREAS, the Series 2023A Bonds and the Series 2023B Bonds will be payable equally and ratably from the Base Rental Payments and other Lease Revenues; WHEREAS, the Authority and the City desire to provide for the issuance of Additional Bonds payable from the Base Rental Payments on a parity with the Series 2023A Bonds and the Series 2023B Bonds;
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WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority and the City have authorized the execution and delivery of this Master Indenture; WHEREAS, the Authority and the City have determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Master Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Master Indenture has been in all respects duly authorized; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Master Indenture do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Master Indenture;
NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority and the City do hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein; the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Lease Agreement. “Account Collateral” has the meaning set forth in the Accounts Agreement. “Accounts Agreement” means the Accounts Agreement, dated as of ___________, 2023, by and among the Authority, the City, the Manager, the Trustee, and the Accounts Bank. “Accounts Bank” means Pacific Premier Bank, a California state-chartered banking corporation, and each other Accounts Bank (if any) appointed pursuant to the terms of the Accounts Agreement.
“Act” means the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code.
“Additional Bonds” means Bonds, other than the Series 2023A Bonds issued under this Master Indenture, as supplemented by the ____ Supplemental Indenture, and the Series 2023_ Bonds being issued concurrently with the Series 2023A Bonds pursuant to this Master Indenture, as 3 4882-1289-7292v10/022363-0037
supplemented by the _______ Supplemental Indenture, issued in accordance with the provisions of Sections 3.05 and 3.06 hereof.
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Assignment Agreement” means the Assignment Agreement, dated as of __________ 1, 2023, by and between the Authority and the Trustee.
“Authority” means the Anaheim Public Financing Authority, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California. “Authorized Authority Representative” means the Chair, the Vice-Chair, the Executive Director, the Treasurer or the Secretary of the Authority, or any other person authorized by the Board of Directors of the Authority to act on behalf of the Authority under or with respect to the Indenture. “Authorized City Representative” means the Mayor of the City, the City Manager of the City, the Finance Director of the City, the Deputy Finance Director of the City, or any other person authorized by the City Council of the City to act on behalf of the City under or with respect to the Indenture.
“Authorized Denominations” means, with respect to a Series of Bonds, the authorized denominations provided in the related Supplemental Indenture. “Authorized Officers” has the meaning set forth in Section 8.04(n). “Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Owner” means, whenever used with respect to a Book-Entry Bond, the person whose name is recorded as the beneficial owner of such Book-Entry Bond or a portion of such Book- Entry Bond by a Participant on the records of such Participant or such person’s subrogee. “Bonds” means the Series 2023A Bonds, [the Series 2023B Bonds] and any Additional Bonds issued hereunder.
“Book-Entry Bonds” means the Bonds of a Series registered in the name of DTC or the nominee of DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.08 hereof. “Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday, (b) a day on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order) to close, or (c) a day on which the New York Stock Exchange is closed.
“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to a Series of Book-Entry Bonds.
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“City” means the City of Anaheim, a municipal corporation and charter city duly organized and existing under and by virtue of its charter and the Constitution and laws of the State of California.
“Closing Date” means the date on which a Series of Bonds is delivered to the purchasers thereof.
“Code” means the Internal Revenue Code of 1986, as amended. “Collateral” means, collectively, all tangible and intangible property, real and personal, of the Authority, the City and the Manager that is or purports to be the subject of a Lien granted to the Trustee (for the benefit of the Owners of the Bonds) to secure the whole or any part of the obligations under the Collateral Documents, and shall include, without limitation, to the extent set forth in the Collateral Documents, all casualty insurance proceeds and condemnation awards with respect to any of the foregoing.
“Collateral Documents” means, collectively, (a) the Indenture (including any Supplemental Indenture hereto), (b) the Assignment Agreement, (c) the Accounts Agreement, (d) the Lease Agreement, (e) the Security Agreement, (f) the Consents to Collateral Assignment, (g) the Non- Relocation Agreement, [(h) the Landlord Estoppel Certificate (Ground Lease Agreement(s)),] (i) the Recognition and Acknowledgment Agreement, and (j) all other instruments, documents and agreements (including any deposit account control agreements, blocked account control agreements or securities account control agreements, as applicable) delivered pursuant to any Financing Documents.
“Commitment” has the meaning set forth in the Series 2023_ Bond Purchase Agreement. “Construction Account” means the account of that name established pursuant to Section
3.03 hereof.
“Construction Disbursement Agreement” means the Construction Disbursement Agreement dated as of __________, 2023, by and among the Manager, the Construction Monitor, the Trustee [and JPMorgan Chase Bank, National Association, in its capacity as the Purchasers’ Representative].
“Construction Monitor” has the meaning set forth in the Accounts Agreement. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement executed by the Authority, the City, the Manager and the Trustee in connection with the issuance of a Series of Bonds, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Costs of Issuance” means all the costs of issuing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with the Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement, the Bonds and any preliminary official statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service Bureau charges, market study fees, legal fees and expenses of counsel, fees and expenses of the municipal advisor, the initial fees and expenses of the Trustee and its counsel and other fees and 5 4882-1289-7292v10/022363-0037
expenses incurred in connection with the issuance and delivery of the Bonds, to the extent such fees and expenses are approved by the City.
“Costs of Issuance Account” means the account by that name established in accordance with Section 3.02 hereof.
“DBRS” means DBRS, Inc.
“Disbursement Direction” has the meaning ascribed thereto in the Accounts Agreement. “DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.08 hereof. “Event of Default” means any event or circumstance specified in Section 7.01 hereof. “Federal Securities” means (a) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), and (b) obligations of any agency, department or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America. “Financing Documents” means, collectively, the Series 2023_ Bond Purchase Agreement, the Series 2023A Bonds, the Series 2023B Bonds, the Tax Certificate, the Collateral Documents, the Construction Disbursement Agreement, the Site Lease, the Ground Lease, the Management Agreement, the Covenant Agreement, the NHL Team Agreement, the Fee Letter, and all certificates and other documents related thereto or executed in connection therewith. “_______ Supplemental Indenture” means the _______ Supplemental Indenture, dated as of __________ 1, 2023, by and among the Authority, the City and the Trustee relating to the Series 2023A Bonds.
“_______ Supplemental Indenture” means the _______ Supplemental Indenture, dated as of __________ 1, 2023, by and among the Authority, the City and the Trustee relating to the Series 2023B Bonds.
“Fitch” means Fitch Ratings, Inc., New York, New York, or its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
“Ground Lease” means the Ground Lease, dated as of __________ 1, 2023, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and of the Lease Agreement. “Historical Debt Service Coverage Ratio” has the meaning ascribed thereto in the Accounts Agreement.
“Historical Test Period” has the meaning ascribed thereto in the Accounts Agreement. 6 4882-1289-7292v10/022363-0037
“Indenture” means this Master Indenture, as originally executed and as it may be amended or supplemented from time to time by any Supplemental Indenture. “Information Services” means Municipal Securities Rulemaking Board through the Electronic Municipal Marketplace Access (EMMA) website; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee.
“Insurance and Condemnation Account” means the account by that name established pursuant to Section 5.03(a) hereof.
“Insurance and Condemnation Proceeds” has the meaning ascribed thereto in the Lease Agreement.
“Interest Account” means the account by that name established in accordance with Section 5.02 hereof.
“Interest Payment Date” means, with respect to a Series of Bonds, such dates as set forth in the applicable Supplemental Indenture.
“Lease Agreement” means the Lease Agreement, dated as of __________ 1, 2023, by and between the Authority and the City, as originally executed and as it may be from time to time amended in accordance with the provisions thereof.
“Lease Default Event” means an event of default pursuant to and as described in Section
6.01 of the Lease Agreement.
“Lease Revenues” means all Rental Payments payable by the City pursuant to the Lease Agreement, including any prepayments of Base Rental Payments, any Insurance and Condemnation Proceeds, any proceeds of title insurance policies, and any amounts received by the Authority and/or the Trustee (as its assignee) as a result of or in connection with the Authority’s or the Trustee’s pursuit of remedies under the Lease Agreement upon a Lease Default Event. “Master Indenture” means this Master Indenture, dated as of _________ 1, 2023, by and among the Authority, the City and the Trustee.
“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, or its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
“Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.
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“Opinion of Bond Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority or the City and which written opinion is satisfactory to the Trustee. “Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09 hereof) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under the Indenture except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation;
(b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.01 hereof; and (c) 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 Trustee pursuant to Section 2.07 hereof.
“Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
“Participant” means any entity which is recognized as a participant by DTC in DTC’s book- entry system of maintaining records with respect to Book-Entry Bonds. “Participating Underwriter” means the original underwriter or underwriters of a Series of Bonds required to comply with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, in connection with the offering of such Series of Bonds.
“Permitted Investments” means any of the following to the extent then permitted by the general laws of the State of California:
(1) Direct general obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America);
(2) Obligations of any of the following federal agencies, which obligations represent the full faith and credit of the United States of America, including:
- Export-Import Bank
- Rural Economic Community Development Administration
- U.S. Maritime Administration
- Small Business Administration
- U.S. Department of Housing & Urban Development (PHAs) - Federal Housing Administration
- Federal Financing Bank;
(3) Direct obligations of any of the following federal agencies, which obligations are not fully guaranteed by the full faith and credit of the United States of America:
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- Senior debt obligations issued by the Federal National Mortgage Association (FNMA), Federal Farm Credit Bank (FFCB), or Federal Home Loan Mortgage Corporation (FHLMC) - Obligations of the Resolution Funding Corporation (REFCORP) - Senior debt obligations of the Federal Home Loan Bank System; (4) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks (which may include the Trustee and its affiliates) that have a rating on their short-term certificates of deposit on the date of purchase of “P-1” by Moody’s and “A-1” or “A-1+” by S&P and maturing not more than 360 calendar days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (5) Commercial paper that is rated at the time of purchase in the single highest classification, “P-1” by Moody’s and “A-1+” by S&P and that matures not more than 270 calendar days after the date of purchase;
(6) Investments in a money market fund rated “AAAm” or “AAAm-G” or better by S&P, including a fund for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide investment advisory, transfer agency, custodial or other management services;
(7) Pre-refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state that are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
(a) that are rated, based on an irrevocable escrow account or fund (the “escrow”), in the highest rating category of Moody’s or S&P or any successors thereto; or (b) (i) that are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (1) or (2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate;
(8) Municipal obligations rated “Aa/AA1” or general obligations of states with a rating of “A2/A” or higher by both Moody’s and S&P;
(9) Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “Aa3” by Moody’s and “AA-” by S&P; provided, that, by the terms of the investment agreement:
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(a) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; (b) the investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (c) the Trustee or the City receive the opinion of domestic counsel that such investment agreement is legal, valid and binding and enforceable against the provider in accordance with its terms and of foreign counsel (if applicable); (d) the investment agreement shall provide that if during its term (i) the provider’s rating by either Moody’s or S&P falls below “Aa3” or “AA-,” respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (A) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider’s books) to the Trustee or a holder of the collateral, collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to Moody’s and S&P to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (B) repay the principal of and accrued but unpaid interest, on the investment, and (ii) the provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A3” or “A-,” respectively, the provider must, at the direction of the City or the Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Trustee;
(e) the investment agreement shall state, and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the holder of collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the holder of collateral is in possession); and
(f) the investment agreement must provide that if during its term (i) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the City or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee, and (ii) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee.
The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of such Permitted Investments.
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“Person” means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Principal Account” means the account by that name established in accordance with Section 5.02 hereof.
“Principal Payment Date” means, with respect to a Series of Bonds, such dates as set forth in the applicable Supplemental Indenture.
“Pro-Forma Debt Service Coverage Ratio” has the meaning ascribed thereto in the Accounts Agreement.
“Prospective Test Period” has the meaning ascribed thereto in the Accounts Agreement. “Project” means the acquisition, construction and/or installation of the improvements, facilities and equipment described in Exhibit C hereto, and such other capital facilities that may be financed from proceeds of Additional Bonds as set forth in a Supplemental Indenture. “Property” has the meaning ascribed thereto in the Lease Agreement. “Purchaser(s)” has the meaning ascribed thereto in the Series 2023_ Bond Purchase Agreement.
“Rating Agency” means DBRS, Fitch, Moody’s and Standard & Poor’s, or any one of such entities, as the context requires.
“Rebate Account” means the account by that name established in accordance with Section 5.04 hereof.
“Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate. “Record Date” means the fifteenth day of the month next preceding an Interest Payment Date, whether or not such day is a Business Day.
“Redemption Account” means the account by that name established in accordance with Section 5.02 hereof.
“Redemption Price” means the aggregate amount of principal of and premium, if any, on the Bonds upon the redemption thereof pursuant hereto.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.03 hereof. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the period from the Closing Date through _______ 1, 2023 and, thereafter, the twelve-month period commencing on _________ 1 of each year during the term of the Lease Agreement.
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“Representation Letter” means the Letter of Representations from the Authority to DTC, or any successor securities depository for any Series of Book-Entry Bonds, in which the Authority makes certain representations with respect to issues of its securities for deposit by DTC or such successor depository.
“Required Bond Owners” means at any time (a) the Owner(s) of the Series 2023_ Bonds, and (b) the Owners of at least 50.1% in aggregate principal amount of all other Bonds then Outstanding.
“S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Securities Depositories” means The Depository Trust Company, New York, New York 10041-0099, Fax-(212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee. “Security Agreement” means the Pledge and Security Agreement, dated as of ____________, 2023, by and between the Manager and the Trustee. “Series” means all of the Series 2023A Bonds, the Series 2023B Bonds or the Additional Bonds issued and designated under a Supplemental Indenture as being of the same series, authenticated and delivered in a simultaneous transaction, regardless of variations in maturity, interest rate, redemption and other provisions, and any bonds thereafter authenticated and delivered upon transfer or exchange of or in lieu of or in substitution for (but not to refund) such bonds as herein provided.
“Series 2023A Bonds” means the Anaheim Public Financing Authority Taxable Lease Revenue Bonds (Anaheim Arena Improvement Project), 2023 Series A issued under this Master Indenture, as supplemented by the _______ Supplemental Indenture. “Series 2023A Debt Service Reserve Account” means the account of that name established pursuant to the ________ Supplemental Indenture.
“Series 2023A Debt Service Reserve Requirement” means [an amount equal to the maximum amount of debt service on the Series 2023A Bonds to be paid in any [six/twelve] month period.] / [on and after ________, [2025], an amount equal to the maximum amount of debt service on the Series 2023A Bonds to be paid in any [six/twelve] month period.] “Series 2023A Work Stoppage Reserve Account” means the account of that name established pursuant to the Accounts Agreement.
“Series 2023_ Bond Purchase Agreement” means the Revolving Bond Purchase Agreement dated as of __________, 2023, by and among the Authority, the City, the purchasers from time to time party thereto, and [JPMorgan Chase Bank, National Association,] in its capacity as representative for the Purchasers, relating to the Series 2023_ Bonds. 12 4882-1289-7292v10/022363-0037
“Series 2023_ Bond Purchase Agreement Event of Default” means an Event of Default as such term is defined in Section 9.01 of the Series 2023_ Bond Purchase Agreement. “Series 2023B Bonds” means the Anaheim Public Financing Authority Taxable Lease Revenue Bonds (Anaheim Arena Improvement Project), 2023 Series B issued under this Master Indenture, as supplemented by the _______ Supplemental Indenture. “Series 2023B Debt Service Reserve Account” means the account of that name established pursuant to the _______ Supplemental Indenture.
“Series 2023B Debt Service Reserve Requirement” means [an amount equal to the maximum amount of debt service on the Series 2023B Bonds to be paid in any [six/twelve] month period.] / [on and after ________, [2025], an amount equal to the maximum amount of debt service on the Series 2023B Bonds to be paid in any [six/twelve] month period.] “Series 2023B Work Stoppage Reserve Account” means the account of that name established pursuant to the Accounts Agreement.
“Site Lease” means the Site Lease, dated as of __________ 1, 2023, by and between TS Anaheim, LLC,as landlord, and the City as tenant.
“Supplemental Indenture” means any supplemental indenture amendatory of or supplemental to this Master Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Authority and the City at the time of issuance of a Series of Bonds, the interest on which is excluded from gross income for federal income tax purposes, relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Term Bonds” means any term maturities of an issue of Bonds as specified in a Supplemental Indenture.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, or any successor thereto as Trustee hereunder, appointed as provided herein. “Written Certificate of the Authority” and “Written Request of the Authority” mean, respectively, a written certificate or written request signed in the name of the Authority by an Authorized Authority Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument “Written Certificate of the City” and “Written Request of the City” mean, respectively, a written certificate or written request signed in the name of the City by an Authorized City Representative. Any such certificate or request may, but need, not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.
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Section 1.02 Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, premium, if any, and interest on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.
ARTICLE II
THE BONDS
Section 2.01 Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds under and subject to the terms of this Master Indenture, the Act and other applicable laws of the State of California for the purpose of financing and/or refinancing the Project. The Bonds may consist of one or more Series of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. Each Series of Bonds shall bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds.
Section 2.02 Transfer and Exchange of Bonds.
(a) Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond to the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series in a like aggregate principal amount, in any authorized denomination. The Trustee shall require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. (b) Prior to any transfer of Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Section 6045 of the Code. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. (c) The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series of other authorized denominations. The Trustee shall require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. 14 4882-1289-7292v10/022363-0037
(d) The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.
Section 2.03 Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection during regular business hours and upon reasonable notice by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided.
Section 2.04 Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the manual or facsimile signature of an Authorized Officer of the Authority attested by the manual or facsimile signature of the Secretary of the Authority. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers of the Authority who shall have signed or attested any of the Bonds shall cease to be such officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority.
Section 2.05 Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in a Supplemental Indenture, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Master Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Master Indenture.
Section 2.06 Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Master Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds of a Series it will execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series, may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series in authorized denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Master Indenture as definitive Bonds of such Series authenticated and delivered hereunder.
Section 2.07 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee 15 4882-1289-7292v10/022363-0037
shall thereupon authenticate and deliver, a new Bond of like tenor and Series in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or in accordance with the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Master Indenture with all other Bonds of such Series secured by this Master Indenture.
Section 2.08 Book-Entry Bonds.
(a) Prior to the issuance of a Series of Bonds, the Authority may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds and, in such event, the Bonds of such Series for each maturity shall be in the form of a separate single fully registered Bond (which may be typewritten).
Except as provided in subsection (f) of this Section, the registered Owner of all of the Book-Entry Bonds shall be Cede & Co., as nominee of DTC. Notwithstanding anything to the contrary contained in this Master Indenture, payment of principal of, premium, if any, and interest with respect to any Book-Entry Bond registered as of each Record Date in the name of Cede & Co. shall be made by wire transfer of same-day funds to the account of Cede & Co. on the Interest Payment Date and the Principal Payment Date at the address indicated on the Record Date for Cede & Co. in the Registration Books or as otherwise provided in the Representation Letter. (b) The Trustee, the City and the Authority may treat DTC (or its nominee) as the sole and exclusive Owner of Book-Entry Bonds registered in its name for the purposes of (i) payment of the principal, premium, if any, or interest with respect to Book-Entry Bonds, (ii) selecting Book- Entry Bonds or portions thereof to be redeemed, (iii) giving any notice permitted or required to be given to Owners of Book-Entry Bonds under this Master Indenture, (iv) registering the transfer of Book-Entry Bonds, (v) obtaining any consent or other action to be taken by Owners of Book-Entry Bonds and (vi) for all other purposes whatsoever, and neither the Trustee, the City nor the Authority shall be affected by any notice to the contrary.
(c) Neither the Trustee, the City nor the Authority shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in Book-Entry Bonds under or through DTC or any Participant, or any other person which is not shown on the Registration Books as being an Owner, with respect to (i) the accuracy of any records maintained by DTC or any Participant, (ii) the payment by DTC to any Participant, other than an Owner as shown in the Registration Books, of any amount in respect of the principal, premium, if any, or interest with respect to Book-Entry Bonds, (iii) any notice which is permitted or required to be given to Owners of 16 4882-1289-7292v10/022363-0037
Book-Entry Bonds under this Master Indenture, (iv) the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of Book-Entry Bonds, or (v) any consent given or other action taken by DTC as Owner of Book-Entry Bonds. (d) The Trustee shall pay all principal, premium, if any, and interest with respect to Book-Entry Bonds, only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to the principal, premium, if any, and interest with respect to the Book-Entry Bonds to the extent of the sum or sums so paid. Except under the conditions of subsection (f) of this Section, no person other than DTC shall receive an executed Book-Entry Bond for each separate stated maturity. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to record dates, the term “Cede & Co.” in this Master Indenture shall refer to such new nominee of DTC.
(e) In order to qualify the Book-Entry Bonds for DTC’s book-entry system, the Authority shall execute and deliver to DTC a Representation Letter. The execution and delivery of a Representation Letter shall not in any way impose upon the Authority, the City or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Bonds other than the Owners, as shown on the Registration Books. Such Representation Letter may provide the time, form, content and manner of transmission, of notices to DTC. In addition to the execution and delivery of a Representation Letter by the Authority, the Authority, the City and the Trustee shall take such other actions, not inconsistent with this Master Indenture, as are reasonably necessary to qualify Book-Entry Bonds for DTC’s book-entry program.
(f) In the event (i) DTC, including any successor as securities depository for a Series of Bonds, determines not to continue to act as securities depository for such Series of Bonds, or (ii) the Authority determines that the incumbent securities depository shall no longer so act, and delivers a written certificate to the Trustee to that effect, then the Authority will discontinue the book-entry system with the incumbent securities depository for such Series of Bonds. If the Authority determines to replace the incumbent securities depository for such Series of Bonds with another qualified securities depository, the Authority shall prepare or direct the preparation of a new single, separate fully registered Bond of such Series for the aggregate outstanding principal amount of Bonds of such Series of each maturity, registered in the name of such successor or substitute qualified securities depository, or its nominee, or make such other arrangement acceptable to the Authority, the Trustee and the successor securities depository for the Bonds of such Series as are not inconsistent with the terms of this Master Indenture. If the Authority fails to identify another qualified successor securities depository for such Series of Bonds to replace the incumbent securities depository, then the Bonds of such Series shall no longer be restricted to being registered in the Registration Books in the name of the incumbent securities depository or its nominee, but shall be registered in whatever name or names the incumbent securities depository for such Series of Bonds, or its nominee, shall designate. In such event the Authority shall execute, and deliver to the Trustee, a sufficient quantity of Bonds of such Series to carry out the transfers and exchanges provided in Sections 2.04, 2.08 and 2.09 hereof. All such Bonds of such Series shall be in fully registered form in authorized denominations.
(g) Notwithstanding any other provision of this Master Indenture to the contrary, so long as any Book-Entry Bond is registered in the name of DTC, or its nominee, all payments with respect to the principal, premium, if any, and interest with respect to such Book-Entry Bond and all 17 4882-1289-7292v10/022363-0037
notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Representation Letter.
(h) In connection with any notice or other communication to be provided to Owners of Book-Entry Bonds pursuant to this Master Indenture by the Authority, the City or the Trustee with respect to any consent or other action to be taken by Owners of Book-Entry Bonds, the Authority, the City or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Bonds. The Authority may, at any time, execute a Series of Bonds for issuance hereunder pursuant to a Supplemental Indenture and deliver the same to the Trustee. The Supplemental Indenture for a Series of Bonds shall set forth the terms of such Series of Bonds. The Trustee shall authenticate such Series of Bonds and deliver such Series of Bonds to the original purchaser thereof upon receipt of a Written Request of the Authority and upon receipt of the purchase price therefor.
Section 3.02 Costs of Issuance Account.
(a) The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Account.” There shall be deposited in the Costs of Issuance Account the portion, if any, of the proceeds of the sale of a Series of Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Series of Bonds are issued. (b) The moneys in the Costs of Issuance Account shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the City stating (i) the Person to whom payment is to be made and instructions for such payment, (ii) the amount to be paid, (iii) the purpose for which the obligation was incurred, (iv) that such payment is a proper charge against the Costs of Issuance Account, and (v) that such amounts have not been the subject of a prior disbursement from the Costs of Issuance Account, in each case together with a statement or invoice for each amount requested thereunder. Each such Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the last Business Day that is no later than three months after the Closing Date, amounts in the Costs of Issuance Account not needed to pay Costs of Issuance shall be transferred by the Trustee to the Construction Account (or an account therein) or to the Interest Account or the Principal Account, as set forth in a Written Request of the City.
Section 3.03 Construction Account. The Trustee shall establish, maintain and hold in trust a separate account designated as the “Construction Account” and within the Construction Account, one or more subaccounts as established by the Supplemental Indenture with respect to each Series of Bonds. The moneys in the subaccounts of the Construction Account shall be disbursed by the Trustee as set forth in the Supplemental Indenture with respect to each Series of Bonds.
Investment earnings on amounts on deposit in a subaccount of the Construction Account shall remain 18 4882-1289-7292v10/022363-0037
on deposit in such subaccount for application in accordance with this Section 3.03 and the Supplemental Indenture under which such subaccount is established.
Section 3.04 Conditions for the Issuance of Additional Bonds. The Authority may at any time issue one or more Series of Additional Bonds [(in addition to the Series 2023A Bonds and the Series 2023_ Bonds)] payable from Base Rental Payments as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The issuance of such Additional Bonds shall have been authorized under and pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify the following:
(i) The application of the proceeds of the sale of such Additional Bonds, which proceeds shall be used solely to finance capital improvements to the Project or to refund first, the Series 2023_ Bonds and second, the other Outstanding Bonds; (ii) The principal amount and designation of such Series of Additional Bonds and the denomination or denominations of such Additional Bonds; (iii) The date, the maturity date or dates, the interest payment dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that [(A) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on _______ 1 of each year in which principal falls due, and the Term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on _______ 1, (B) the Additional Bonds shall be payable as to interest semiannually on _______ 1 and _______ 1 of each year], (C) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination, and (D) serial maturities of serial Bonds or mandatory sinking fund redemptions for Term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(iv) The redemption premiums and terms, if any, for such Additional Bonds;
(v) The form of such Additional Bonds; and
(vi) Such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof;
(b) The Manager shall be in compliance with all agreements, conditions, covenants and terms contained in the Management Agreement and the other Financing Documents to which it is a party required to be observed or performed by it;
(c) The Authority shall be in compliance with all agreements, conditions, covenants and terms contained in the Indenture and the other Financing Documents to which it is a party required to be observed or performed by it;
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(d) The City shall be in compliance with all agreements, conditions, covenants and terms contained in the Indenture and the other Financing Documents to which it is a party required to be observed or performed by it;
(e) The Ground Lease and the Lease Agreement shall have been amended, (i) so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the payment of the principal of and interest on such Additional Bonds; and (ii) to include provisions for the prepayment of Base Rental Payments attributable to such Additional Bonds;
(f) Each of (i) the Series 2023A Debt Service Reserve Account and the Series 2023B Debt Service Reserve Account, and (ii) the Series 2023A Work Stoppage Reserve Account and the Series 2023_ Work Stoppage Reserve Account (in each case if applicable), shall be fully funded if and to the extent required by the Accounts Agreement and the Indenture; (g) The Series 2023B Bonds and such Additional Bonds shall each have a credit rating of at least [____] from DBRS (or an equivalent rating by any other Rating Agency) immediately following the incurrence of such Additional Bonds and the Authority shall have delivered a copy of the confirmation letter to the Trustee; and
(h) The Trustee shall have received a certificate of a senior financial officer of the Manager, together with a detailed internal report demonstrating and concluding that, following the incurrence of the contemplated Additional Bonds, for each full fiscal year following the incurrence of such Additional Bonds until the maturity date of the Series 2023A Bonds and the Series 2023_ Bonds:
(i) the Historical Debt Service Coverage Ratio for the Historical Test Period is at least 2.00:1.00; and
(ii) the Pro-Forma Debt Service Coverage Ratio for the Prospective Test Period is at least 2.00:1.00.
Nothing contained herein shall limit the issuance of any bonds or other obligations payable from Base Rental Payments if, after the issuance and delivery of such bonds or other obligations, none of the Bonds theretofore issued hereunder will be Outstanding.
Section 3.05 Procedure for the Issuance of Additional Bonds. At any time after the sale of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the Authority for issuance hereunder and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) Certified copies of the Supplemental Indenture authorizing the issuance of such Additional Bonds, the amendment to the Lease Agreement required by Section 3.04 hereof and the amendment to the Ground Lease, if any, required by Section 3.04 hereof, together with satisfactory evidence that provision has been made for such amendment to the Lease Agreement and such amendment to the Ground Lease, if any, to be recorded in the official records of the appropriate county;
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(b) A Written Request of the Authority as to the delivery of such Additional Bonds;
(c) An opinion of Bond Counsel substantially to the effect that (i) the Indenture (including all Supplemental Indentures), the Lease Agreement (including the amendment thereto required by Section 3.04 hereof) and the Ground Lease (including any amendment thereto required by Section 3.04 hereof) have been duly authorized, executed and delivered by, and constitute the valid and binding obligations of, the Authority and the City, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California), and (ii) such Additional Bonds constitute valid and binding special obligations of the Authority payable solely from Base Rental Payments as provided herein and are enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California);
(d) a Written Certificate of the Authority that the requirements of Section 3.04 hereof have been met;
(e) a Written Certificate of the City that the requirements of Section 3.04 hereof and Sections 5.01 and 5.02 of the Lease Agreement have been met, and a Written Certificate of the City as to the use of proceeds received therefrom; and
(f) Such further documents as are required by the provisions hereof or by the provisions of the Supplemental Indenture authorizing the issuance of such Additional Bonds.
Section 3.06 Additional Bonds. So long as any of the Bonds remain Outstanding, the Authority shall not issue any Additional Bonds or obligations payable from the Base Rental Payments or other Lease Revenues, except pursuant to Sections 3.04 and 3.05 hereof.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01 Redemption of Bonds.
(a) Extraordinary Redemption. The Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, at the option of the Authority, from and to the extent of Insurance and Condemnation Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Account pursuant to Section 5.03 hereof, at a Redemption Price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
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Section 4.02 Notice of Redemption.
(a) Unless otherwise provided in a Supplemental Indenture, notice of redemption shall be given by the Trustee, not less than 20 nor more than 60 days prior to the redemption date (i) as to Bonds not registered in the name of a Securities Depository or its nominee, to the respective Owners of the Bonds designated for redemption at their addresses appearing on the Registration Books, (ii) as to Bonds registered in the name of a Securities Depository or its nominee, to such Securities Depository for such Bonds, and (iii) the Information Services. Notice of redemption to the Owners pursuant to clause (i) above shall be given by mail at their addresses appearing on the Registration Books, or any other method agreed upon by such Owner and the Trustee. Notice of redemption to the Securities Depositories pursuant to clause (ii) above and the Information Services pursuant to clause (iii) above shall be given by electronically secure means, or any other method agreed upon by such entities and the Trustee. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers (if any), the Bond numbers, the Series and the maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Such notice of redemption may state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.
Neither the failure to receive any notice so given, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.
(b) With respect to any notice of optional redemption of the Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys sufficient to pay the principal of, premium if any, and interest on the Bonds to be redeemed and upon other conditions set forth therein and that, if such money shall not have been so received or such other conditions shall not have been satisfied, said notice shall be of no force and effect and the Authority shall not be required to redeem such Bonds.
If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the Authority shall not be required to redeem such Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.
Section 4.03 Selection of Bonds for Redemption.
(a) Whenever provision is made in the Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (i) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority provided to the Trustee at least 30 but no more than 60 days prior to the date of such redemption, (ii) with respect to any redemption pursuant to Section 4.01(a) hereof, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, as directed in a Written Request of the Authority provided to the Trustee at least 30 but no more than 60 days prior to the date of such redemption, and (iii) with respect to any other redemption of Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Bonds are issued.
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Section 4.04 Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.
Section 4.05 Effect of Notice of Redemption.
(a) Notice having been given as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Account, the Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date. (b) If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been given as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon.
(c) All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed.
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations.
(a) Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Base Rental Payments, the other Lease Revenues and any other amounts (including proceeds of the sale of the Bonds) held in the Construction Account, the Insurance and Condemnation Account, the Interest Account, the Principal Account and the Redemption Account are hereby pledged by the Authority to the Trustee (for the benefit of the Owners) to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act.
Said pledge shall constitute a first lien on such assets. (b) All obligations of the Authority under the Indenture and the Bonds shall be special obligations of the Authority, payable solely from Base Rental Payments, the other Lease Revenues and the other assets pledged therefor hereunder and under the Assignment Agreement. All obligations of the Authority and the City hereunder, including any costs to undertake any action to comply with the Indenture shall be payable only from the Account Collateral and the Lease Revenues (including Base Rental Payments) available therefor and not from any other funds or monies of the City. Neither the faith and credit nor the taxing power of the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. The Authority has no taxing power.
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Section 5.02 Flow of Funds.
(a) The Trustee shall establish and maintain separate accounts designated the “Interest Account”, the “Principal Account” and the “Redemption Account”. (b) The City shall pay, or cause to be paid, the Base Rental Payments directly to the Trustee, and if received by the Authority at any time shall be transferred by the Authority to the Trustee within one Business Day after the receipt thereof. All amounts constituting Base Rental Payments received by the Trustee shall be deposited by the Trustee in the Principal Account or the Interest Account, as set forth in the related Disbursement Direction and all other Lease Revenues received by the Trustee shall be deposited by the Trustee in the Redemption Account. (c) The Trustee shall transfer the amounts received constituting Base Rental Payments at the times and in the manner hereinafter provided, to the following respective accounts:
(i) Interest Account. On the 15th Business Day immediately preceding each Interest Payment Date, the Trustee shall deposit to the Interest Account the amount, if any, necessary to cause the amount on deposit in the Interest Account to be equal to the interest due on the Bonds on such Interest Payment Date.
(ii) Principal Account. On the 15th Business Day immediately preceding each Principal Payment Date, the Trustee shall deposit to the Principal Account the amount, if any, necessary to cause the amount on deposit in the Principal Account to be equal to the principal amount of the Bonds due on such Principal Payment Date, either as a result of the maturity thereof or mandatory sinking fund redemption payments required to be made with respect thereto. Moneys in the Principal Account shall be used by the Trustee for the purpose of paying the principal of the Bonds when due and payable at their maturity dates or upon earlier mandatory sinking fund redemption.
(iii) Redemption Account. The Trustee, on the redemption date specified in the Written Request of the City filed with the Trustee at the time that any prepaid Base Rental Payment is paid to the Trustee pursuant to the Lease Agreement, shall deposit in the Redemption Account that amount of moneys representing the portion of the Base Rental Payments designated as prepaid Base Rental Payments. Additionally, the Trustee shall deposit in the Redemption Account any amounts required to be deposited therein pursuant to Section 5.03 hereof. Moneys in the Redemption Account shall be used by the Trustee for the purpose of paying the principal of and interest and premium, if any, on Bonds redeemed pursuant to the provisions of subsection (a) of Section 4.01 hereof and any Bonds redeemed pursuant to the provisions of the Supplemental Indenture pursuant to which such Series of Bonds are issued.
Section 5.03 Application of Insurance and Condemnation Proceeds. (a) The Trustee shall establish and maintain a separate account designated the “Insurance and Condemnation Account.” All amounts constituting Insurance and Condemnation Proceeds received by the Trustee shall be deposited into the Insurance and Condemnation Account. (b) If damage or destruction to any portion of the Property shall occur which materially affects the ability of the City and the Manager to operate such portion of the Property, as determined by [the City] (whether or not caused by events for which insurance is maintained under 24 4882-1289-7292v10/022363-0037
the Management Agreement or the Lease Agreement), the City may, but has no obligation to, cause such portion of the Property to be rebuilt at the City’s sole cost and expense. In the event that the City does not cause such portion of the Property to be rebuilt, any net Insurance and Condemnation Proceeds shall be transferred from the Insurance and Condemnation Account and deposited into the Redemption Account hereunder and applied to redeem the Bonds in accordance with Section 4.01(a) hereof.
(c) In the event of a Total Taking, any net Insurance and Condemnation Proceeds received as a result of such Total Taking shall be transferred from the Insurance and Condemnation Account into the Redemption Account and applied to redeem the Bonds in accordance with Section
4.01(a) hereof.
(d) The City is only required to maintain insurance on the Property as provided in Article V of the Lease Agreement. Nothing herein shall be deemed to require the City to maintain or cause to be maintained any insurance coverage on the Property.
Section 5.04 Rebate Account.
(a) Upon receipt of a Written Request of the Authority, the Trustee shall establish and maintain a special account designated the “Rebate Account.” There shall be deposited in the Rebate Account such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Authority. All money at any time deposited in the Rebate Account shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Bonds pursuant to Article X hereof or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Account shall be governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Authority, and shall have no liability or responsibility to enforce compliance by the Authority with the terms of the Tax Certificate. The Trustee may conclusively rely upon the Authority’s determinations, calculations and certifications required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the Authority’s calculations.
(b) Any funds remaining in the Rebate Account after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall be withdrawn by the Trustee and remitted to the Authority.
Section 5.05 Investment of Moneys.
(a) Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to the Indenture and held by the Trustee shall be invested by the Trustee solely in Permitted Investments, as directed in a Written Request of the Authority filed with the Trustee at least two Business Days in advance of the making of such investments. Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in the Indenture; provided, however, that such Permitted Investments may be redeemed at par so as to be available on each Interest Payment Date and each Principal Payment Date. Absent timely written direction from the Authority, the Trustee shall hold any funds held by it uninvested. The Trustee 25 4882-1289-7292v10/022363-0037
may conclusively rely upon the Authority’s written instructions as to both the suitability and legality of the directed investments and such written direction shall be deemed to be a certification that such directed investments constitute Permitted Investments.
(b) Subject to the provisions of Section 5.04 hereof, all interest, profits and other income received from the investment of moneys in any fund or account established pursuant to the Indenture shall be retained therein.
(c) Permitted Investments acquired as an investment of moneys in any fund or account established under the Indenture shall be credited to such fund or account. For the purpose of determining the amount in any fund or account, all Permitted Investments credited to such fund or account shall be valued by the Trustee at the cost thereof. (d) The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Authority, the Trustee shall sell or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investments are credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder.
(e) The Trustee may make any investments hereunder through the bond or investment department or trust investment department of the entity acting as Trustee hereunder, or those of such entity’s parent or any affiliate, and such entity, or its parent or affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services. (f) The entity acting as Trustee hereunder, or any of its affiliates, may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder and such entity, or its affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.
(g) The Authority and the City acknowledge that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority and the City the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, the Authority and the City specifically waive receipt of such confirmations to the extent permitted by law.
ARTICLE VI
COVENANTS
Section 6.01 Compliance with Indenture. The Trustee will not authenticate or deliver any Bonds in any manner other than in accordance with the provisions hereof, and the Authority and the City will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Indenture and the Assignment Agreement required to be complied with, kept, observed and performed by them.
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Section 6.02 Compliance with Financing Documents. The Authority and the City will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Financing Documents to which they are parties required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Financing Documents against the other parties thereto in accordance with their respective terms.
Section 6.03 Observance of Laws and Regulations. The Authority, the City and the Trustee will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired.
Section 6.04 Other Liens.
(a) So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien created in favor of the Trustee (for the benefit of the Owners) pursuant to this Master Indenture. (b) Neither the Authority nor the Trustee shall encumber the Property other than in accordance with the Ground Lease, the Lease Agreement, this Master Indenture and the Assignment Agreement.
Section 6.05 Prosecution and Defense of Suits. The City will promptly, upon request of the Trustee (which request the Trustee is not required to make unless directed to do so in writing by the Required Bond Owners), take such action from time to time as may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Property or any part thereof, whether now existing or hereafter developing, will prosecute all actions, suits or other proceedings as may be appropriate for such purpose and will indemnify and save the Trustee harmless from all cost, damage, expense or loss, including attorneys’ fees and expenses, which it or the Owners may incur by reason of any such cloud, defect, action, suit or other proceeding.
Section 6.06 Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, deposit and disbursement of the Base Rental Payments and other Lease Revenues, and such accounting records shall be available for inspection by the Authority and the City at reasonable hours and under reasonable conditions.
Section 6.07 Recordation and Filing. The City will record, or cause to be recorded, with the appropriate county recorder, the Lease Agreement, the Ground Lease and the Assignment Agreement, or memoranda thereof.
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Section 6.08 Enforcement of Management Agreement. The City covenants and agrees with the Owners of the Bonds, together with the Trustee, to enforce the Management Agreement against the other party thereto in accordance with its terms.
Section 6.09 Continuing Disclosure. The Authority and the City will comply with and carry out all of the provisions of the Continuing Disclosure Agreement applicable to the Authority and the City, respectively. Notwithstanding any other provision of this Master Indenture, failure of the Authority or the City to comply with the Continuing Disclosure Agreement shall not constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Bonds, and upon being indemnified to its reasonable satisfaction therefor, shall) or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.
Section 6.10 Certain Notices. The City shall furnish to the Trustee the following:
(a) Prompt written notice of the failure by the Manager to perform any of its obligations under the Management Agreement.
(b) Promptly after the receipt or giving thereof, copies of all notices of resignation by or removal of the Manager which are received or given by the City. (c) Promptly after the adoption thereof, copies of any amendments of or supplements to any of the Financing Documents.
Section 6.11 Further Assurances. Whenever and so often as requested to do so by the Trustee, the Authority and the City will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon it hereby or by the Assignment Agreement, the Ground Lease or the Lease Agreement.
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Events of Default. The following events shall be Events of Default hereunder (each an “Event of Default”):
(a) Default in the due and punctual payment of any installment of principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise; or (b) Default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable; or (c) An event of default within the meaning of Article VI of the Lease Agreement shall have occurred; or
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(d) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part contained in the Indenture, in the Bonds and the other Financing Documents to which it is a party, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee, or to the Authority and the Trustee by the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, provided that if, in the reasonable opinion of the Authority, the default stated in the notice can be corrected, but not within such 30 day period, such default (other than a default arising from nonpayment of the Trustee’s fees and expenses, which must be cured within such 30 day period) shall not constitute an Event of Default hereunder if the Authority shall commence to cure such default within said thirty (30) day period and thereafter diligently and in good faith shall cure such default within a reasonable period of time not to exceed ninety days (90 days), or such longer period as is consented to by a majority of the Owners of the Bonds; or
(e) Default by the City in the observance of any of the other covenants, agreements or conditions on its part contained in the Indenture and the other Financing Documents to which it is a party, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City by the Trustee, or to the City and the Trustee by the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, provided that if, in the reasonable opinion of the City, the default stated in the notice can be corrected, but not within such 30 day period, such shall not constitute an Event of Default hereunder if the City shall commence to cure such default within said thirty (30) day period and thereafter diligently and in good faith shall cure such default within a reasonable period of time not to exceed ninety days (90 days), or such longer period as is consented to by a majority of the Owners of the Bonds; or (f) The filing by the Authority or the City of a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Authority or the City, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority or the City or of the whole or any substantial part of their respective property; or
(g) the Authority shall (i) default on the payment of the principal of or interest on the Series 2023_ Bonds beyond the period of grace, if any, provided in the Series 2023_ Bond Purchase Agreement; or (ii) default in the observance or performance of any agreement or condition relating to the Series 2023_ Bonds contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event shall occur or condition exist, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) or cause the Series 2023_ Bonds to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of the Series 2023_ Bonds; or
(h) So long as the Series 2023_ Bond Purchase Agreement has not been terminated in accordance with its terms, the Trustee shall receive written notice from the Purchaser that a Series 2023_ Bond Purchase Agreement Event of Default has occurred and is continuing. 29 4882-1289-7292v10/022363-0037
Section 7.02 Action on Default. The Trustee shall give notice, as assignee of the Authority, of an Event of Default to the City. In each and every case during the continuance of an Event of Default, the Trustee may and, at the written direction of the Required Bond Owners, and upon being indemnified to its reasonable satisfaction therefor, shall, upon notice in writing to the City and the Authority, exercise any of the remedies granted to the Trustee hereunder and (as assignee of the Authority) under the Lease Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by the Indenture or by the Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.03 hereof.
Section 7.03 Other Remedies of the Trustee.
(a) Subject to the provisions of Section 7.02 hereof, the Trustee shall have the right:
(i) by written notice to the Authority and the City, declare the outstanding principal amount of the Bonds to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived, and an action therefor shall immediately accrue; (ii) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority and/or the City or any member, director, officer or employee thereof, and to compel the Authority and/or the City or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein, in the Bonds or in the other Financing Documents; (iii) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee or the Owners; and (iv) by suit in equity upon the happening of any Event of Default hereunder to require the Authority and the City to account as if they were the trustee of an express trust.
(b) Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.
Section 7.04 Non-Waiver.
(a) A waiver of any default or Event of Default or breach of duty or contract by the Trustee 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 of duty or contract. No delay or omission by the Trustee or any Owner to exercise any right or remedy accruing upon any default or Event of 30 4882-1289-7292v10/022363-0037
Default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee or the Owners by law or by the Indenture may be enforced and exercised from time to time and as often the Trustee or the Owners shall deem expedient. (b) If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then, subject to any such adverse determination, the Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.05 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 7.06 No Liability by the Authority to the Owners. Except as expressly provided herein, the Authority shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of the other agreements and covenants required to be performed by it contained in the Lease Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.
Section 7.07 No Liability by the City to the Owners. Except for the payment when due of the Base Rental Payments and the other Lease Revenues and the performance of the other agreements and covenants required to be performed by it contained in the Indenture, the Lease Agreement and the other Financing Documents to which it is a party, the City shall not have any obligation or liability to the Owners with respect to the preparation, execution, delivery or transfer of the Bonds or the disbursement of the Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.
Section 7.08 No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Authority or the City of the other agreements and covenants required to be performed by them contained in the Lease Agreement, the Ground Lease or herein.
Section 7.09 Application of Amounts After Default. Following the occurrence and during the continuance of an Event of Default, all payments and proceeds from each sale of, or other realization upon, all or any part of the Collateral by the Trustee pursuant to Article VI of the Lease Agreement and the other Collateral Documents (including, without limitation, any proceeds received in connection with the sale, assignment or sublease of the Authority’s right, title and interest in the Ground Lease), and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Article VI of the Lease Agreement and the other Collateral Documents, shall be deposited into a special account to be established by the Trustee 31 4882-1289-7292v10/022363-0037
hereunder for such purpose and as soon as practicable thereafter applied, together with all other funds held hereunder (except funds in the Rebate Account):
(a) to the payment of all amounts due the Trustee under Article VIII hereof; (b) to the payment of all amounts then due for interest on the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable; and
(c) to the payment of all amounts then due for principal of the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal of such Bonds due and payable.
Section 7.10 Trustee May Enforce Claims Without Possession of Bonds. All rights of action and claims under the Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust for the benefit and protection of the Owners of such Bonds, subject to the provisions of the Indenture, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners in respect of which such judgment has been recovered.
Section 7.11 Required Bond Owners’ Direction of Proceedings. Anything in this Master Indenture to the contrary notwithstanding, the Required Bond Owners shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided, however, that such direction shall not be otherwise than in accordance with law and the provisions of this Master Indenture, and, provided, further, that the Trustee shall have the right to decline to follow any such direction that in the opinion of the Trustee would be unjustly prejudicial to Owners not parties to such direction.
Section 7.12 Limitation on Owner Suits. No Owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing Event of Default, (b) the Owners of not less than 25% of the aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed or refused to institute any such proceedings, and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of a majority of the aggregate principal amount of Bonds then Outstanding; it being understood and intended that no one or more Owners shall have any right in any manner whatever by 32 4882-1289-7292v10/022363-0037
virtue of, or by availing of, any provision of the Indenture to affect, disturb or prejudice the rights of any other Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under the Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Owners.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Employment of the Trustee. The Authority hereby appoints and employs the Trustee to receive, deposit and disburse the Base Rental Payments and the other Lease Revenues, to authenticate, deliver and transfer the Bonds and to perform the other functions contained herein and in the other Financing Documents to which it is a party, all in the manner provided herein and therein and subject to the conditions and terms hereof and thereof. By executing and delivering the Indenture and the other Financing Documents to which it is a party, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein and in the other Financing Documents to which it is a party, subject to the conditions and terms hereof and thereof. Other than when an Event of Default has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in the Indenture and in the other Financing Documents to which it is a party, and no implied covenants or obligations shall be read into the Indenture against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by the Indenture and the other Financing Documents to which it is a party, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
Section 8.02 Duties, Removal and Resignation of the Trustee. (a) The Authority may, by an instrument in writing, remove the Trustee initially a party hereto with 30-days’ prior notice and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (i) requested to do so by an instrument or concurrent instruments in writing signed by the Required Bond Owners (or their attorneys duly authorized in writing), or (ii) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee and any successor Trustee shall be a banking corporation or association or trust company having (or if such banking corporation or association or trust company is a member of a bank holding company, its bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If such banking corporation or association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such banking corporation, association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
(b) The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an 33 4882-1289-7292v10/022363-0037
instrument in writing; provided, however, that in the event the Authority does not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. (c) Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under the Indenture and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.03 Compensation of the Trustee.
(a) The City shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include “overhead expenses” except as such expenses are included as a component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against the Authority or the City. (b) The City shall, to the extent permitted by law, indemnify and save the Trustee harmless against any liabilities, costs, claims or expenses, including those of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder, under the Lease Agreement, or in connection with any document or transaction contemplated hereunder or thereunder, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its misconduct. The duty of the City to compensate and indemnify the Trustee shall survive the termination and discharge of the Indenture and the earlier removal or resignation of the Trustee.
(c) No provision of the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. (d) Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law.
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Section 8.04 Protection of the Trustee.
(a) The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds.
(b) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Owners of the Bonds pursuant to the Indenture, unless such Owners shall have offered to the Trustee indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee may consult with counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith. (c) The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement, or of the assignment made to it by the Assignment Agreement, or for statements made in any preliminary or final official statement relating to the Bonds, or of the title to the Property.
(d) Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the City or a Written Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. (e) The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto, The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority or the City, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Authority or the City as freely as if it were not the Trustee hereunder.
(f) The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall in a commercially reasonable manner pursue all remedies of the Trustee 35 4882-1289-7292v10/022363-0037
against such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
(g) The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder. (h) The Trustee shall not be deemed to have knowledge of an Event of Default unless it has actual knowledge thereof.
(i) The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal amount of Bonds then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. (j) The Trustee’s rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds.
(k) All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee. (l) The Trustee shall not be accountable for the use or application by the City or the Authority of any of the Bonds or the proceeds thereof or for the use or application of any money paid over by the Trustee in accordance with the provisions of the Indenture or the Financing Documents or for the use and application of money received by any paying agent. (m) In acting or omitting to act pursuant to the Lease Agreement or Ground Lease, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under the Indenture and the Lease Agreement, including, but not limited to, this Article VIII. (n) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to the Indenture and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Authority and City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority and City whenever a person is to be added or deleted from the listing. If the Authority and City elect to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling.
The Authority and City understand and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to 36 4882-1289-7292v10/022363-0037
the Trustee have been sent by such Authorized Officer. The Authority and City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Authority and City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Authority and City. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
The Authority and City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority and City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted.
(a) This Master Indenture and the rights and obligations of the Authority, the City, the Owners of the Bonds and the Trustee may be modified, amended or waived from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into with the written consent of the Required Bond Owners, which shall have been filed with the Trustee. No such modification, amendment or waiver shall (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or the rate of interest thereon, or extend the time of payment, without the written consent of the Owner of each Bond so affected (provided that, with respect to the Series 2023_ Bonds, only the consent of the Purchasers shall be necessary to change the definition of the Default Rate or to waive any obligation of the Authority to pay interest at the Default Rate in all cases other than a payment default); (ii) permit the creation of any lien or security interest on the Base Rental Payments, other Lease Revenues and other Collateral pledged under this Master Indenture and the other Collateral Documents prior to or on a parity with the lien and security interest created by this Master Indenture and the other Collateral Documents or deprive the Owners of the Bonds of the lien and security interest created by this Master Indenture and the other Collateral Documents on such Base Rental Payments, other Lease Revenues and other Collateral (except as expressly provided in this Master Indenture and the other Collateral Documents), without the written consent of the Owners of all the Bonds then Outstanding; (iii) modify or amend this Section 9.01 or the definition of “Required Bond Owners” without the prior written consent of the Owners of all the Bonds then Outstanding; (iv) change any provisions in this Master Indenture or the Accounts Agreement in a manner that would alter the pro rata sharing of payments or the flow of funds provisions required hereunder and thereunder without, in each case, the written consent of the Owners directly affected thereby; (v) release all or substantially all the Collateral from the liens and security interests created by this Master Indenture and the other Collateral Documents without the written consent of the Owners of all the Bonds then Outstanding (other than in connection with any sale of the applicable Collateral permitted by the Collateral Documents, including without limitation, any substitution or release of Additional Project Property in accordance with Section 7.01 of the 37 4882-1289-7292v10/022363-0037
Ground Lease); (vi) with respect to the Series 2023_ Bonds, postpone the scheduled maturity date of any Series 2023_ Bond or any date for the payment of any interest or fees payable under the Series 2023_ Bond Purchase Agreement, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled expiration date of any Commitment, in each case, without the written consent of the Series 2023_ Bond Owner directly affected thereby; or (vii) with respect to the Series 2023_ Bonds, increase the Commitment of any Purchaser under the Series 2023_ Bond Purchase Agreement to purchase Series 2023_ Bonds without the written consent of the Purchaser directly affected thereby.
(b) It shall not be necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof.
(c) This Master Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the consent of any Bond Owners for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Authority or the City in this Master Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority or the City, and which in either case shall not materially adversely affect the interests of the Bond Owners; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Master Indenture, and which in each case shall not materially adversely affect the interests of the Bond Owners;
(iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Article III hereof; (iv) to modify, amend or supplement this Master Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; (v) to modify, amend or supplement this Master Indenture in such manner as to cause interest on the Bonds issued on a tax-exempt basis to be excludable from gross income for purposes of federal income taxation by the United States of America; and (vi) in any other respect whatsoever as the Authority and the City may deem necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners hereunder. (d) Promptly after the execution by the Authority, the City and the Trustee of any Supplemental Indenture pursuant to this Section 9.01, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority), by first class mail postage prepaid, setting 38 4882-1289-7292v10/022363-0037
forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.
(e) No Supplemental Indenture shall modify any of the rights or obligations of the Trustee without its prior written consent.
Section 9.02 Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Master Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Master Indenture of the Authority, the City, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Master Indenture for any and all purposes. The City shall notify the Rating Agencies upon the execution of any Supplemental Indenture.
Section 9.03 Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time of such execution and presentation of his Bonds for the purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same interest rate and maturity.
Section 9.04 Amendment of Particular Bonds. The provisions of this Article shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner.
Section 9.05 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Master Indenture, the Trustee shall be provided, and shall be fully protected in relying upon, an Opinion of Bond Counsel stating that the execution of such Supplemental Indenture is authorized or permitted by this Master Indenture and complies with the terms hereof. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee's own rights, duties or immunities under this Master Indenture or otherwise.
ARTICLE X
DEFEASANCE
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Section 10.01 Discharge of Indenture.
(a) If the Authority shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such Bonds shall cease to be entitled to the pledge of the Base Rental Payments, the Lease Revenues and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City to the Owners of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on such Bonds.
(b) Subject to the provisions of paragraph (a) above, when any of the Bonds shall have been paid and if, at the time of such payment, the Authority and the City shall have kept, performed and observed all of the covenants and promises in such Bonds and in the Indenture required or contemplated to be kept, performed and observed by them on or prior to that time, then the Indenture shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to be entitled to the pledge and lien of the Base Rental Payments, the Lease Revenues and the other assets as provided herein and such pledge and lien and all covenants, agreements and other obligations of the Authority and the City hereunder shall cease, terminate become void and be completely discharged as to such Bonds.
(c) Notwithstanding the satisfaction and discharge of the Indenture or the discharge of the Indenture in respect of any Bonds, those provisions of the Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, and to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due.
Notwithstanding the satisfaction and discharge of the Indenture or the discharge of the Indenture in respect of any Bonds, those provisions of the Indenture relating to the compensation and indemnity of the Trustee shall remain in effect and shall be binding upon the Trustee, the City and the Authority.
Section 10.02 Bonds Deemed To Have Been Paid. If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bonds and the interest thereon to the maturity or redemption date thereof, such Bonds shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01 hereof. Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 hereof if (a) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to give, on a date in accordance with the provisions of Section 4.02 hereof, notice of redemption of such Bonds on said redemption date, said notice to be given in accordance with Section 4.02 hereof, (b) there shall have been deposited with the Trustee either (i) money in an amount which shall be sufficient, or (ii) Federal Securities that are not subject 40 4882-1289-7292v10/022363-0037
to redemption other than at the option of the holder thereof, the interest on and principal of which when paid will provide money which, together with the money, if any deposited with the Trustee at the same time, shall, as verified by an independent certified public accountant, be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bonds, (c) in the event such Bonds are not by their terms subject to redemption within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to give as soon as practicable, a notice to the Owners of such Bonds that the deposit required by clause (b) above has been made with the Trustee and that such Bonds, are deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, and interest on such Bonds; and (d) an Opinion of Bond Counsel, dated the date of such deemed payment and addressed to the Authority, the City and the Trustee, in form and in substance acceptable to the Authority and the City, to the effect that such Bonds have been paid within the meaning and with the effect expressed in the Indenture, the Indenture has been discharged in respect of such Bonds and all agreements, covenants and other obligations of the Authority and the City hereunder as to such Bonds have ceased, terminated, become void and been completely discharged and satisfied.
Section 10.03 Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of the Indenture, to the extent permitted by law, any moneys held by the Trustee in trust for the payment of the principal of, or premium or interest on, any Bonds and remaining unclaimed for two years after the date of deposit of such moneys shall, at the Written Request of the Authority, be repaid by the Trustee to the Authority (without liability for interest) free from the trusts created by the Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall (at the cost of the Authority) first mail, by first class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the Authority, the City, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Authority or the City shall be for the sole and exclusive benefit of the Trustee and the Owners.
Section 11.02 Successor Deemed Included in all References to Predecessor. Whenever the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Authority, the City or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. 41 4882-1289-7292v10/022363-0037
Section 11.03 Execution of Documents by Owners.
(a) Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient.
(b) The ownership of any Bonds and the amount, payment date, number and date of owning the same may be proved by the Registration Books. (c) Any declaration, request or other instrument in writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority, the City or the Trustee in good faith and in accordance therewith.
Section 11.04 Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of any moneys, including without limitation, the principal of or interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of the City or the Authority from the performance of any official duty provided by any applicable provisions of law, by any Financing Document or hereby.
Section 11.05 Destruction of Bonds. Whenever in the Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds.
Section 11.06 Funds and Accounts.
(a) Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at an times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Bonds and the rights of the Owners.
(b) The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to the Indenture. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations hereunder.
Section 11.07 Article and Section Headings Gender and References. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender 42 4882-1289-7292v10/022363-0037
shall include correlative words of the other gender. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to the Indenture as a whole and not to any particular Article, Section, subsection or clause thereof.
Section 11.08 Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Authority, the City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law.
The Authority, the City and the Trustee hereby declare that they would have executed this Master Indenture, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution and delivery of the Bonds pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 11.09 Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under the Indenture, Bonds which are actually known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; except that, in determining whether the Trustee shall be protected in relying upon any such demand, request, direction, consent or waiver of an Owner, only Bonds which the Trustee actually knows to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Authority and the City shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate.
Section 11.10 Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.03 hereof but without any liability for interest thereon.
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Section 11.11 Payment on Non-Business Days. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day with the same effect as if made on such non-Business Day.
Section 11.12 California Law. This Master Indenture shall be construed and governed in accordance with the laws of the State of California.
Section 11.13 Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Anaheim
200 South Anaheim Boulevard
Anaheim, California 92805
Attention: Finance Director/City Treasurer
If to the Authority: Anaheim Public Financing Authority c/o City of Anaheim
200 South Anaheim Boulevard
Anaheim, California 92805
Attention: Executive Director
If to the Trustee: U.S. Bank Trust Company, National Association 633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Department
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answer back or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (d) if given by any other means, upon delivery at the address specified in this Section.
Section 11.14 Execution in Counterparts. This Master Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Authority and the City have caused this Master Indenture to be signed in their respective names by their representative thereunto duly authorized, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Master Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.
ANAHEIM PUBLIC FINANCING AUTHORITY
By:
Executive Director
ATTEST:
Secretary
CITY OF ANAHEIM
By:
City Manager
ATTEST:
City Clerk
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By:
Authorized Officer