W&S Draft 9/19/22
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ACCOUNTS AGREEMENT
dated as of [●], 2023
made by and among
ANAHEIM PUBLIC FINANCING AUTHORITY,
as the Authority,
CITY OF ANAHEIM,
as the City
ANAHEIM ARENA MANAGEMENT, LLC
as the Manager,
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
and
PACIFIC PREMIER BANK,
as Accounts Bank
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ............................................................................................................2
1.1 Defined Terms .........................................................................................................2
1.2 UCC Terms............................................................................................................20
1.3 Interpretation..........................................................................................................20 ARTICLE II APPOINTMENT OF ACCOUNTS BANK; CREATION OF ACCOUNTS..........20
2.1 Appointment of Accounts Bank ............................................................................20
2.2 Procedures Governing Pledged Accounts .............................................................21
2.3 Creation of Pledged Accounts ...............................................................................22
2.4 Deposit Accounts...................................................................................................22
2.5 Pledged Accounts as Collateral .............................................................................23
2.6 Control; Precedence of Instructions.......................................................................23
2.7 Subordination of Lien; Waiver of Set-Off.............................................................24
2.8 Other Representations and Covenants of Accounts Bank .....................................24 ARTICLE III [RESERVED] .........................................................................................................26 ARTICLE IV ACCOUNTS...........................................................................................................26
4.1 Disbursement Directions .......................................................................................26
4.2 [Reserved]..............................................................................................................26
4.3 Operating Account.................................................................................................26
4.4 Advance Deposits Account....................................................................................29
4.5 Third Party Funds Accounts ..................................................................................29
4.6 Series 2023A Work Stoppage Reserve Account ...................................................29
4.7 Series 2023B Work Stoppage Reserve Account ...................................................30
4.8 Reserves Account ..................................................................................................30 ARTICLE V ACCOUNT INFORMATION AND BALANCES .................................................31
5.1 Information to Accompany Amounts Delivered to the Accounts Bank; Deposits Irrevocable; Payment Direction..............................................................31
5.2 Statements of Account...........................................................................................32
5.3 Account Balance Statements .................................................................................32 ARTICLE VI INVESTMENTS AND VALUATION ..................................................................33
6.1 Investments ............................................................................................................33 - ii -
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6.2 Income or Gain ......................................................................................................34
6.3 Value......................................................................................................................34
6.4 Taxes......................................................................................................................34
6.5 Security Advice Waiver.........................................................................................34 ARTICLE VII APPOINTMENT AND DUTIES OF THE ACCOUNTS BANK ........................34
7.1 Powers, Immunities and Standard of Care ............................................................34
7.2 Reliance; Discretionary Matters ............................................................................35
7.3 Compensation; Indemnification.............................................................................37 ARTICLE VIII RIGHTS OF TRUSTEE ......................................................................................38
8.1 Rights of Trustee....................................................................................................38
8.2 Knowledge of Event of Default.............................................................................39 ARTICLE IX EXERCISE OF RIGHTS UNDER COLLATERAL DOCUMENTS....................39
9.1 Actions Upon an Event of Default.........................................................................39
9.2 Application of Proceeds After Acceleration..........................................................39 ARTICLE X MISCELLANEOUS ................................................................................................40
10.1 Remedies Cumulative............................................................................................40
10.2 Continuing Assignment and Security Interest .......................................................40
10.3 Termination of Security Interest............................................................................40
10.4 Severability ............................................................................................................41
10.5 Survival of Provisions............................................................................................41
10.6 Successors and Assigns .........................................................................................41
10.7 Headings ................................................................................................................41
10.8 Entire Agreement...................................................................................................41
10.9 Counterparts...........................................................................................................41
10.10 APPLICABLE LAW .............................................................................................41
10.11 CONSENT TO JURISDICTION ..........................................................................42
10.12 WAIVER OF JURY TRIAL, WAIVER OF VENUE, ETC .................................42
10.13 Notices ...................................................................................................................43
10.14 Amendment; Waiver..............................................................................................43
10.15 Incumbency Certificates; Authorized Persons.......................................................43
10.16 Termination............................................................................................................44
10.17 Paramountcy ..........................................................................................................44
10.18 Force Majeure........................................................................................................44 - iii -
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10.19 USA PATRIOT Act...............................................................................................44
10.20 Resignation of Accounts Bank ..............................................................................44
10.21 Indenture ................................................................................................................45
10.22 Expiration of Certain Financing Documents .........................................................45
EXHIBITS
Exhibit A Account Names and Numbers
Exhibit B Form of Disbursement Directions
Exhibit C Notice Information
Exhibit D Distribution Conditions Certificate
Schedule I Investments
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This ACCOUNTS AGREEMENT, dated as of [●], 2023, is made and entered into by and among ANAHEIM PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), 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”), ANAHEIM ARENA MANAGEMENT, LLC, a limited liability company duly organized and existing under the laws of the State of California (the “Manager”), 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 (“USB”), not in its individual capacity but solely in its capacity as trustee for each of the Bondholders (together with its successors and assigns in such capacity, the “Trustee”), and PACIFIC PREMIER BANK, a California state-chartered banking corporation (“PPB”), not in its individual capacity but solely in its capacity as accounts bank and Securities Intermediary (solely in such capacity, the “Accounts Bank”). The Authority, the City, the Manager, the Trustee, and the Accounts Bank are sometimes collectively referred to as the “Parties” and each individually as a “Party”. Capitalized terms used herein and not otherwise defined shall be defined as provided in Article I.
RECITALS
WHEREAS, pursuant to a Master Indenture, dated as of [_______ 1], 2023 (the “Master Indenture”), by and among the Authority, the City, and the Trustee, the Authority is authorized to issue, from to time, one or more series of its Lease Revenue Bonds (Anaheim Arena Improvement Project); WHEREAS, pursuant to a ________ Supplemental Indenture, dated as of [●], 2023 (the “________ Supplemental Indenture”), by and among the Authority, the City, and the Trustee, the Authority will issue $[●] aggregate principal amount of the Authority’s Taxable Lease Revenue Bonds (Anaheim Arena Improvement Project) 2023 Series [__] (the “Series 2023[_] Bonds”); WHEREAS, pursuant to a Purchase Contract dated [●], 2023 (as amended, amended and restated, waived, supplemented, or otherwise modified from time to time, the “Series 2023[_] Purchase Contract”), by and among the Authority, the City, and J.P. Morgan Securities, LLC, as underwriter (the “Underwriter”), the Underwriter has agreed to purchase the Authority’s Series 2023[_] Bonds;
WHEREAS, pursuant to (i) a ________ Supplemental Indenture, dated as of [●], 2023 (the “________ Supplemental Indenture” and together with the ________ Supplemental Indenture and any additional Supplemental Indentures thereto, the “Indenture”), by and among the Authority, the City, and the Trustee, the Authority will issue $[●] aggregate principal amount of the Authority’s Taxable Lease Revenue Bonds (Anaheim Arena Improvement Project) 2023 Series [__] (the “Series 2023[_] Bonds”), and (ii) a Revolving Bond Purchase Agreement dated as of [●], 2023 (as amended, restated, amended and restated, waived, extended, refinanced, renewed, replaced, supplemented or otherwise modified from time to time, the “Series 2023[__] Bond Purchase Agreement”), 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 the Series 2023[_] Purchasers’ Representative (as defined below), the purchasers have agreed, severally and not jointly, to purchase the Authority’s Series 2023[_] Bonds;
WHEREAS, pursuant to an Amended and Restated Facilities Management Agreement dated as of [●], 2023 (as amended, restated, amended and restated, waived, extended, refinanced, renewed, - 2 -
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replaced, supplemented or otherwise modified from time to time, the “Management Agreement”), between the Manager and the City, the Manager has been authorized by the City to operate and manage the Property;
WHEREAS, the Parties hereto desire to enter into this Agreement (a) to set forth the conditions to the issuance of the Bonds, (b) to appoint PPB as Accounts Bank hereunder, (c) to authorize the Trustee to hold and/or control certain Collateral, and (d) to set forth certain procedures for the deposit, investment and disbursement of (i) the proceeds of the Series 2023[_] Bonds and Series 2023[__] Bonds issued pursuant to the Purchase Agreement and the Series 2023[_] Bond Purchase Agreement, respectively, (ii) all Gross Revenues, and (iii) all proceeds of the foregoing; WHEREAS, it is a condition precedent to the effectiveness of the Indenture, the Series 2023[_] Purchase Contract and the Series 2023[_] Bond Purchase Agreement that the Parties shall have entered into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the agreements, provisions and covenants herein contained, and to induce (i) the Underwriter to enter into the Series 2023[_] Purchase Contract and purchase the Series 2023[_] Bonds and (ii) JPM and other institutional investors to enter into the Series 2023[_] Bond Purchase Agreement and purchase the Series 2023[_] Bonds, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used in this Agreement the following terms have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa). All capitalized terms not otherwise defined herein shall have the meanings attributed to them in the Indenture. All references in this Agreement to Schedules, Sections and Exhibits are to Schedules, Sections and Exhibits in or to this Agreement unless otherwise specified. “Acceptable Bank” means any major domestic commercial bank or trust company organized under the laws of the United States or of a political subdivision thereof, or a U.S. branch office of a foreign bank, in any case that at the time any applicable Third Party Funds Account is opened has outstanding senior unsecured long-term debt rated at least A3 / A- (or an equivalent rating) by a nationally recognized statistical rating organization and otherwise reasonably acceptable to the Required Bondholders. For the avoidance of doubt and notwithstanding the definition above, each of USB and PPB is an Acceptable Bank.
“Account Collateral” has the meaning assigned to such term in Section 2.5. “Accounting Date” has the meaning assigned to such term in the Management Agreement. “Accounts Bank” has the meaning assigned to such term in the first paragraph of this Agreement.
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“ACH” has the meaning assigned to such term in Section 2.7. “Additional Bonds” means Bonds (other than the Series 2023A Bonds issued under the Master Indenture, as supplemented by the ____ Supplemental Indenture, and the Series 2023B Bonds being issued concurrently with the Series 2023A Bonds pursuant to the Master Indenture, as supplemented by the _______ Supplemental Indenture) issued in accordance with the provisions of the Indenture.
“Additions” means any of the following (a) an addition to the major equipment and components of the Property, (b) a change in the physical structure of the interior or exterior of the Arena that results in a material change to the uses, purposes or operations of all or any part of the Arena, (c) a replacement or addition to the scoreboard or audio or video capabilities of the Arena, or (d) any single Capital Expenditure.
“Adjusted Net Revenues” means, for any period, the positive number, if any, determined by computing: (i) Net Revenues for such period, plus (ii) earnings on Permitted Investments, minus (iii) the aggregate amounts paid pursuant to Sections 5.2(b)(v) through 5.2(b)(vi) of the Management Agreement, for such period (other than principal amounts of Operating Loans that were initially made in an Operating Year for which there were positive Net Revenues as of the end of such Operating Year).
“Advance Deposits” means all refundable deposits and advances and proceeds of advance ticket sales accepted by Manager from third parties (including from suite holders, club seat holders and season ticket holders, to the extent received by Manager, as opposed to a third party) in connection with future bookings.
“Advance Deposits Account” has the meaning assigned to such term in Section 2.3(a)(i). “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. For purposes of this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise; and the terms “Controlling” and “Controlled” have meanings correlative thereto. “Agreement” means this Accounts Agreement, as the same may be further amended, amended and restated, restated, modified or supplemented from time to time. “Annual Operating Budget” means the budget prepared by Manager and provided to the City for its review and approval, which shall be comprised of a proposed business plan, rate schedule, necessary Reserves, operating budget and five-year capital improvement plan for the Property during the Operating Year which commenced on the prior July 1 and will end on the following June 30, containing projections of estimated income and expenses and estimated Arena profit on a monthly and yearly basis.
“Architect” means [_____________].
“Architect Agreement” means [______________], dated as of [___________] between the [__________] and the Architect.
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“Arena” means the approximate 19,000 seat arena and the Beneficial Interests currently known as the Honda Center located at 2695 East Katella Avenue, Anaheim, California and situated on the Land.
“Assignment Agreement” means the Assignment Agreement, dated as of [●], 2023, by and between the Authority and the Trustee.
“Authority” has the meaning assigned to that term in the first paragraph of this Agreement. “Base Rental Payment” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Interests” means collectively: (a) the 2022 Parking Easement; (b) the Loading Dock Easement Agreement; and (c) each other easement or other agreement recorded in the Official Records of The Orange County Clerk-Recorder’s Office, the provisions of which are intended to benefit the Land.
“Bondholders” means, collectively, the Series 2023A Bondholders and the Series 2023B Bondholders.
“Bonds” means, collectively, the Series 2023A Bonds, the Series 2023B Bonds, and any Additional Bonds.
“Book-Entry Security” means a security maintained in the form of entries (including the Security Entitlements in, and the financial assets based on, such security) in the commercial book-entry system of the Federal Reserve System.
“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.
“Capital Expenditures” means expenditures for property, components, systems and structures with a useful life of not less than three (3) years or which extend the life of the structure or improvement into which incorporated by not less than three (3) years, having a unit cost of not less than $10,000. “Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person. “Cash” means money, currency or a credit balance in any demand or Deposit Account. “Closing Date” means [●], 2023.
“Collateral” means, collectively, all tangible and intangible property, real and personal, of the Authority, the City and the Manager that is used in connection with the operation of the Property and is or purports to be the subject of a Lien granted to the Trustee (for the benefit of the Bondholders) to secure the whole or any part of the Secured 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. - 5 -
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“Collateral Documents” means, collectively, (a) the Indenture (including any Supplemental Indenture thereto), (b) the Assignment Agreement, (c) this Agreement, (d) the Lease Agreement, (e) the Security Agreement, (f) the Consents to Collateral Assignment, (g) the Non- Relocation Agreement, (h) the Recognition and Acknowledgment Agreement, [(i) the Landlord Estoppel Certificate (Site Lease),] [(j) the Landlord Estoppel Certificate (Ground Lease),] [(k) the Landlord Estoppel Certificate (Lease Agreement),] and (l) 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 this Agreement or any of the other Financing Documents.
“Commitments” has the meaning given to such term in the Series 2023[_] Bond Purchase Agreement.
“Consents to Collateral Assignment” means [●].
“Construction Budget” means the comprehensive budget for Project Costs relating to the Project, which separately identifies all Project Costs (including contingencies) and a drawdown schedule by cost category, and which, for the avoidance of doubt, shall include all Project Costs. “Construction Disbursement Agreement” means the Construction Disbursement Agreement dated as of __________, 2023, by and among the Manager, the Construction Monitor, the Trustee [and JPM, in its capacity as the Series 2023[_] Purchasers’ Representative]. “Construction Manager” means [●], or any successor thereto or replacement thereof appointed by the Manager.
“Construction Monitor” means [BTY Group], or any other independent engineering firm selected by JPM and approved by the Manager, such approval not to be unreasonably withheld, conditioned or delayed.
“Covenant Agreement” means the Covenant Agreement, dated as of [●], 2023, by and between the Manager and the Trustee.
“Debt” of any Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property, (d) all obligations of such Person as lessee under capital leases, (e) all obligations of such Person to purchase securities (or other assets) that arise out of or in connection with the sale of the same or substantially similar securities or assets, (f) all obligations of such Person to reimburse any bank or any other Person in respect of amounts paid under a letter of credit or any other similar instrument, (g) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, and (h) all Guarantees by such Person of Debt of other Persons. “Debt Service” means:
(a) with respect to the Historical Debt Service Coverage Ratio, with respect to any Historical Test Period, the sum of:
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(i) Interest Expense due or actually paid during such Historical Test Period (calculated at the interest rate paid on such Indebtedness (excluding Funded Interest (as defined in the Indenture) in respect of the Bonds); plus
(ii) the aggregate amount of scheduled principal payments due or actually made (in all cases, excluding any prepayments actually made pursuant to the terms of the Financing Documents for the Bonds) during such Historical Test Period in respect of any Indebtedness; plus
(iii) the payment of any commitment fees payable pursuant to the Series 2023[_] Bond Purchase Agreement; and
(b) with respect to the Pro-Forma Debt Service Coverage Ratio, with respect to any Prospective Test Period, the sum of:
(i) projected Interest Expense payable during such Prospective Test Period (calculated, with respect to (1) Interest Expense payable on the Series 2023[_] Bonds at the interest rate payable on the Series 2023[_] Bonds during such period, (2) Interest Expense payable on the Series 2023[_] Bonds at a rate equal to the sum of (I) the sum of the benchmark rate then in effect plus the applicable margin then in effect plus (II) 1.00%, (3) Interest Expense payable on any Additional Bonds having a floating interest rate, at a rate equal to the sum of (I) the sum of the benchmark rate then in effect plus the applicable margin then in effect plus (II) 1.00%, and (4) Interest Expense payable on any Additional Bonds having a fixed interest rate at the interest rate payable on such Additional Bonds during such period) (determined, in the case of this clause (i), based on good faith estimates and assumptions made by the Manager); plus
(ii) the aggregate amount of scheduled principal payments, if any, to be made during such Prospective Test Period (in all cases, excluding any prepayments to be made pursuant to the terms of the Financing Documents for the Bonds) (determined, in the case of this clause (ii), based on good faith estimates and assumptions made by the Manager); plus (iii) the payment of any commitment fees payable pursuant to the Series 2023[_] Bond Purchase Agreement (determined, in the case of this clause (iii), based on good faith estimates and assumptions made by the Manager).
“Debt Service Loans” means an unsecured loan made by the Manager, its Affiliates or a third party lending institution, the proceeds of which are used to pay Debt Service, provided that any such loan made by the Manager or an Affiliate shall not bear interest at an annual rate in excess of Prime plus one percent (1%).
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. “Deposit Account” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.
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“Development” means the design, development, construction, installation and equipping of the Project pursuant to the Specifications.
“Development Agreement” means Development Agreement No. __ dated [●], 2022 between the City and Anaheim Real Estate Partners, LLC (an Affiliate of the Manager). “Development Documents” means, collectively, (a) the Development Agreement, (b) the Architect Agreement, (c) [Performance Bonds], and (d) [●]. “Disbursement Directions” has the meaning assigned to such term in Section 4.1. “Discretionary Matter” has the meaning assigned to such term in Section 7.2(c). “Disqualified Equity Interests” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise; (b) is redeemable at the option of the holder thereof (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), in whole or in part; (c) provides for the scheduled payments of dividends in cash; or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the maturity date of the Bonds. “Distribution Conditions” means, at any time of determination with respect to any distribution of Adjusted Net Revenues to the Manager pursuant to priority ninth of Section 4.3(b), (a) no Default or Event of Default shall have occurred and be continuing or would result from or be caused thereby; (b) the representations and warranties of the Manager set forth in the Financing Documents shall be true and correct in all material respects, except in the case any such representation and warranty was given as of a certain date or is already qualified by materiality, in which case such representation or warranty shall not be applicable or shall be true and correct in all respects; (c) each of the Series 2023[_] Debt Service Reserve Account, the Series 2023[_] Debt Service Reserve Account, the Series 2023[_] Work Stoppage Reserve Account and the Series 2023[_] Work Stoppage Reserve Account shall have been fully funded to their required amounts in accordance with this Agreement and the Indenture; (d) (i) the Historical Debt Service Coverage Ratio as of the last day of the most recently ended Historical Test Period shall not be less than 1.50:1.00 (but only so long as the unaudited financial statements as described in Section 4.1(a) of the Covenant Agreement (Quarterly Statements) or the audited financial statements as described in Section 4.1(b) (Annual Statements) of the Covenant Agreement for such most recently ended Historical Test Period have been delivered to the Trustee), and (ii) the Pro-Forma Debt Service Coverage Ratio for the Prospective Test Period commencing as of the first day of the Fiscal Quarter in which any distribution of Adjusted Net Revenues to the Manager pursuant to priority ninth of Section 4.3(b) is to be made shall not be less than 1.50:1.00; and (e) none of the Bond proceeds shall be used to make any distribution to the Manager, and, in each case, the Manager shall have delivered, or caused to be delivered, to the Trustee a Distribution Conditions Certificate certifying that the conditions contained in the foregoing clauses (a), (b), (c) and (d) of this definition have been satisfied (including reasonably detailed calculations with respect to the conditions set forth in clause (d) of this definition).
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“Distribution Date” means, with respect to any Operating Year, the date which is ten (10) days following the Accounting Date for such Operating Year. “District” means that portion of the mixed-used development commonly known as ocV!BE, as depicted on Schedule 3 of the Management Agreement.
“District Sign Agreement” means the agreement dated July 1, 2022, between the City and the Manager with respect to the future allocation of the District Sign Revenues between such parties. “District Sign Revenues” means collectively, on a cash basis, for any period, any and all revenues derived by Manager or any Affiliate of Manager from the District Signs as a result of the display of advertising and sponsorship rights to and on the District Signs net of the costs of sale of such advertising and sponsorship rights with the exception of any payments received in return for naming rights, identity or wayfinding with respect to the District or any building or area of the District (with the exception of the Arena itself) minus the cost of operation and maintenance and the funding of maintenance and replacement reserves with respect to the District Signs. “District Signs” are the seven (7) static signs and two (2) “Spectacular” LED Displays as depicted on Schedule 2 of the Management Agreement.
“District Sponsorship Revenues” means, collectively, any and all revenues derived by Manager or any Affiliate from District-related sponsorship revenues other than District Sign Revenues, Marquee Replacement Sign Revenues and other revenues derived as a result of the sale of rights at or with respect to the Arena (consistent with past practice) and otherwise includable in Gross Revenues. “Entitlement Holder” means a Person that (a) is an “entitlement holder” as defined in Section 8102(a)(7) of the UCC (except in respect of a Book-Entry Security) and (b) in respect of any Book-Entry Security, is an “entitlement holder” as defined in 31 C.F.R. Section 357.2 (or, as applicable to such Book-Entry Security, the corresponding Federal Book-Entry Regulations governing such Book-Entry Security) which, to the extent required or permitted by the Federal Book-Entry Regulations, is also an “entitlement holder” as defined in Section 8102(a)(7) of the UCC. “Entitlement Orders” has the meaning given such term in Section 8102(a)(8) of the UCC. “Environmental Laws” means all rules, regulations, codes, ordinances, judgments, orders, decrees, directives and other laws, and all injunctions, notices or binding agreements, issued, promulgated or entered into by or with any Governmental Authority and relating in any way to the environment, to preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Materials, or to related health or safety matters. “Equity Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests, membership interests, beneficial interests in trusts, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“Event of Default” means any event or circumstance specified in Section 7.01 of the Indenture. “Federal Book-Entry Regulations” means (a) the federal regulations contained in Subpart B (“Treasury/Reserve Automated Debt Entry System (TRADES)”) governing Book-Entry Securities - 9 -
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consisting of U.S. Treasury bills, notes and bonds and Subpart D (“Additional Provisions”) of 31 C.F.R. Part 357, 31 C.F.R. § 357.2, § 357.10 through § 357.15 and § 357.40 through § 357.45 and (b) to the extent substantially identical to the federal regulations referred to in clause (a) above (as in effect from time to time), the federal regulations governing other Book-Entry Securities. “Fee Letter” means the fee letter, dated as of __________, 2023, by and between the Manager and JPM, pursuant to which the Manager agrees to pay (a) the actual costs of the Construction Monitor (which may, at the request of the JPM, be paid to JPM as a reimbursement for amounts paid by JPM to the Construction Monitor), and (b) a fee to cover the costs of the JPM’s commercial real estate loan administration division, in an amount not to exceed $[_______] payable on the Closing Date, plus $[_____] for each month that construction of any portion of the Project shall remain outstanding after [Month, Year].
“Financial Officer” means, with respect to any Person, the chief financial officer, principal accounting officer, treasurer, controller, vice president of finance of such Person or any other individual handling the responsibilities of such Person; provided that, when such term is used in reference to any document executed by, or a certification of, a Financial Officer, an officer of such Person shall have delivered an incumbency certificate to the Trustee and/or the Accounts Bank, as applicable, as to the authority of such individual.
“Financing Documents” means, collectively, the Series 2023[_] Purchase Contract, the Series 2023[_] Bond Purchase Agreement, the Series 2023[_] Bonds, the Series 2023[_] Bonds, 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 “Food and Beverage Services” means all necessary and appropriate food and beverage services at the Arena.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. “Gross Revenues” means, collectively, on a cash basis, for any period, any and all payments, fees and deposits of every nature received by the Manager or the City (including, except as expressly set forth to the contrary in the Management Agreement, from any revenue streams not presently contemplated by the Management Agreement) for use of the Arena or services at or in respect of rights granted by the Manager or the City, including revenues derived under the Food and Beverage Concessions Contract or the provision of Food and Beverage Services by the Manager (including as a result of the sale of beer, wine and spirits if permissible under applicable law); Advance Deposits if and when deposited into the Operating Account in accordance with Section 5.1 (b) of the Management Agreement; amounts transferred to the Operating Account pursuant to Section 5.1 of the Management Agreement or from the Third Party Funds Account pursuant to Section 5.1(b)(ii) of the Management Agreement; District Sign Revenues (subject to the District Sign Agreement and only if not included in Severable Improvement Revenues and only until such time as the Secured Obligations are repaid in full); NHL Team Supplemental Revenues (subject to the NHL Team Agreement and if not included in Severable Improvement - 10 -
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Revenues); District Sponsorship Revenues (but only if not included in Severable Improvement Revenues and only until such time as the Secured Obligations are repaid in full); promotion revenues; rent; advertising revenues; ticket agent rebates; signage revenues (including the Marquee Replacement Sign Revenue); payments (if any) from the Insurance and Condemnation Account to the Operating Account; Severable Improvement Revenues; parking fees or revenues of any kind and however described; facility fees or taxes of any kind (except, in the case of both parking fees and facility fees, if and to the extent classified as Severable Improvement Revenues); ticket fees or taxes of any kind; vendor refunds; membership fees; sponsorship, licensing fees premium seating fees, proceeds from the sale of programs, novelties; proceeds of insurance policies (other than amounts received following casualty or destruction, if any); amounts awarded in connection with a Temporary Taking (net of costs to obtain the award); all funds received from any other source in connection with events held at the Arena including rebates or rights fees paid by third parties to the extent attributable to operations at the Arena directly or indirectly and allocated in a manner which equitably compensates the Arena for its proportionate contribution to such rebates or rights fees; and all funds expressly identified in the Management Agreement as Gross Revenues; but specifically excluding (i) amounts properly held or to be deposited in the Third Party Funds Account; (ii) amounts properly paid to third parties from the Third Party Funds Account in accordance with Section 5.1(b)(ii) of the Management Agreement; (iii) proceeds of Operating Loans, Debt Service Loans and Other Debt; (iv) Severable Improvement Revenues; and (v) earnings on Permitted Investments.
“Ground Lease” means the Ground Lease, dated as of [●], 2023, by and between the City, as landlord, and the Authority, as tenant.
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. “Hague Convention” means the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held With an Intermediary, as ratified by the United States of America on December 15, 2016, and in effect from time to time in the United States of America. “Hazardous Materials” means all explosive, radioactive, hazardous or toxic substances, materials, wastes or other pollutants, including petroleum or petroleum distillates or byproducts, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances, materials or wastes of any nature regulated pursuant to any Environmental Law.
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“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction, or any option or similar agreement, involving, or settled by reference to, one or more rates, currencies, commodities, prices of equity or debt securities or instruments, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, or any similar transaction or combination of the foregoing transactions; provided, that no option, phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, managers, employees or consultants of the Manager shall be a Hedging Agreement. “Historical Debt Service Coverage Ratio” means, with respect to any Historical Test Period, the ratio of (a) Net Revenues for such Historical Test Period to (b) Debt Service for such Historical Test Period.
“Historical Test Period” means, on any date of determination, the most recent period of four (4) consecutive fiscal quarters of the Manager (or, if four (4) fiscal quarters have not yet ended since the Closing Date, such lesser number of fiscal quarters that have so ended since the fiscal quarter in which the Closing Date occurs).
“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money and, to the extent required to be shown as debt on a balance sheet of such Person prepared in accordance with GAAP, all obligations with respect to deposits or advances of any kind; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such Person upon which interest charges are customarily paid; (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person; (e) all obligations of such Person in respect of the deferred purchase price of property or services; (f) all obligations of such Person as lessee under Capital Leases; (g) the maximum aggregate amount of all letters of credit and letters of guaranty in respect of which such Person is an account party; (h) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances; (i) all Disqualified Equity Interests in such Person, valued, as of the date of determination, at the greater of (i) the maximum aggregate amount that would be payable upon maturity, redemption, repayment or repurchase thereof (or of Disqualified Equity Interests or Indebtedness into which such Disqualified Equity Interests are convertible or exchangeable) and (ii) the maximum liquidation preference of such Disqualified Equity Interests; (j) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed by such Person; (k) all Guarantees by such Person of Indebtedness of others; and (l) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including under any Hedging Agreement, whether entered into for hedging or speculative purposes or otherwise.
The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such other Person, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. “Indemnitee” has the meaning assigned to such term in Section 7.3(c). “Interest Expense” means, for any period, total interest expense (excluding that portion attributable to (i) Funded Interest (as defined in the Indenture) in respect of the Series 2023[_] Bonds and (ii) any Financing Costs Purchase made in respect of the Series 2023[_] Bonds) with respect to the outstanding Indebtedness related to the Bonds and any Additional Bonds and any Ordinary Course - 12 -
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Settlement Payments with respect to any Hedge Agreements, including net costs under Hedge Agreements, but excluding, however, any amount not payable in Cash. “Interest Account” means the account by that name established in accordance with Section
5.02 of the Indenture.
“JPM” means JPMorgan Chase Bank, National Association, a national banking association, and its successors and assigns.
“Land” has the meaning set forth in the Lease Agreement. [“Landlord Estoppel Certificate (Ground Lease)” means the Landlord Estoppel Certificate (Ground Lease), dated as of ___________, 2023, by and between the City and the Trustee, relating to the Ground Lease.]
[“Landlord Estoppel Certificate (Lease Agreement)” means the Landlord Estoppel Certificate (Lease Agreement), dated as of ___________, 2023, by and between the Authority and the Trustee, relating to the Lease Agreement.]
[“Landlord Estoppel Certificate (Site Lease)” means the Landlord Estoppel Certificate (Site Lease), dated as of ___________, 2023, by and between TS Anaheim, LLC and the Trustee, relating to the Site Lease.]
“Lease Agreement” means the Lease Agreement, dated as of [●], 2023, by and between the Authority, as sublandlord, and the City, as subtenant.
“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or capital lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements). “Loading Dock Easement Agreement” means that certain agreement dated January 31, 2019 recorded in the Official Records of The Orange County Clerk-Recorder’s Office as Document 2019000032504 on January 31, 2019.
“Maintenance and Repairs” means those necessary, ordinary, day-to-day maintenance, repairs to the Arena and the Parking Areas, and restoration and replacement of Arena assets, not otherwise constituting Capital Expenditures or Additions, in accordance with usual and customary arena industry practices consistent with those of other major sports and entertainment facilities of similar age, size and facilities.
“Management Agreement” has the meaning set forth in the Recitals. “Manager” has the meaning assigned to such term in the first paragraph of this Agreement. “Marquee Replacement Sign” means the display intended to replace the former Katella and 57 Freeway Marquees pursuant to the Prior Agreement (as defined in the Management Agreement) - 13 -
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and depicted on Schedule 2 of the Management Agreement as the Honda Center Replacement Marquee.
“Marquee Replacement Sign Revenue” means collectively, on a cash basis, for any period, any and all revenues derived by the City, the Manager or any Affiliate of the Manager from the Marquee Replacement Sign as a result of the display of advertising and sponsorship rights to and on the Marquee Replacement Sign net of the costs of sale of such advertising and sponsorship rights Marquee Replacement Sign with the exception of any payments received in return for naming rights, identity or wayfinding with respect to the District or any building or area of the District (with the exception of the Arena itself).
“Net Revenues” means, for any period, the positive number, if any, determined by computing Gross Revenues for such period minus Operating Expenses for such period. “NHL CBA” means an effective collective bargaining agreement (which may take the form of a binding letter of intent or memorandum of understanding) between the NHL and the Players Association, as in effect from time to time.
“NHL Team Agreement” means the amended and restated letter agreement, dated as of [●], 2023, by and between the Manager and TeamCo.
“Non-Relocation Agreement” means the Non-Relocation Agreement, dated as of [●], 2023, by and between TeamCo and the Trustee.
“Notice of Exclusive Control” has the meaning assigned to such term in Section 2.6(b). “Notice of Suspension of Exclusive Control” has the meaning assigned to such term in Section 2.6(b).
“Operating Account” has the meaning assigned to such term in Section 2.3(a)(v). “Operating Expenses” has the meaning assigned to such term in the Management Agreement. “Operating Loans” means an unsecured loan made by the Manager, an Affiliate of the Manager or a third party lending institution, the proceeds of which are used to pay Operating Expenses or interest or principal due under another Operating Loan; provided that any such loan made by Manager or its Affiliates shall not bear interest at an annual rate in excess of Prime plus one percent (1%).
“Operating Year” means the period from July 1 of each calendar year to June 30 of the following calendar year, except that the final Operating Year shall terminate on the last day of [the Term] / [the term of the Management Agreement].
“Ordinary Course Settlement Payments” means all payments due by the Manager under any Hedging Agreement from time to time entered into in connection with the management of the Property, calculated in accordance with the respective terms of such Hedging Agreement, but excluding, as applicable, any “Early Termination Amounts” or “Close-out Amounts” (as such terms are used in the 2002 ISDA Master Agreement), any “Settlement Amounts” (as such term is defined in the 1992 ISDA Master Agreement) or any Termination Payments due and payable under such Hedging Agreement. - 14 -
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“Original Indenture” has the meaning assigned to such term in the recitals to this Agreement. “Outstanding” when used as of any particular time with reference to the Bonds, means (subject to the provisions of Section 11.09 of the Indenture) 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 of the Indenture; 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 2.09 of the Indenture.
“Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books (as defined in the Indenture) in accordance with the Indenture. “Parking Areas” means the real property designated as the servient estate in the 2021 Parking Easement and the “Parking Areas” referred to therein.
“Party” and “Parties” have the meaning assigned to such terms in the first paragraph of this Agreement.
“Permitted Investments” means (i) direct obligations of the United States of America and agencies guaranteed by the United States government having a final maturity of one year or less from date of purchase thereof; (ii) certificates of deposit (including those offered in conjunction with the Certificate of Deposit Account Registry Services (CDARS®)) which are fully insured by the Federal Deposit Insurance Corporation and having a final maturity of one year or less from the date of purchase thereof; (iii) certificates of deposit issued by, or bankers’ acceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing business under the laws of the United States of America or one of the states thereof having combined capital and surplus and retained earnings as of its last report of condition of at least $500,000,000 and having a short-term deposit debt rating of “A1” by S&P or “P1” by Moody’s (or, if neither such organization shall rate such short-term deposits at any time, a rating equal to the highest ratings assigned by any nationally recognized rating organization in the United States of America) and having a final maturity of one year or less from date of purchase thereof; (iv) commercial paper of any holding company of a bank, trust company or national banking association described in clause (iii) and commercial paper of any corporation or finance company incorporated or doing business under the laws of the United States of America or any state thereof having a rating assigned to such commercial paper of “A1” by S&P or “P1” by Moody’s (or, if neither such organization shall rate such commercial paper at any time, a rating equal to the highest ratings assigned by any nationally recognized rating organization in the United States of America) and having a final maturity of two hundred (270) days or less from the date of purchase thereof; (v) demand deposit accounts that are fully insured by the Federal Deposit Insurance Corporation, provided that except for investments described in clause (i) and (ii), no more than the greater of $10,000,000 or fifty percent (50%) of amounts invested under this Agreement (excluding earned interest) may be invested as “Permitted Investments” in any one corporation, bank holding company, bank, trust company or national banking association at any given time, (vi) money market funds rated in one of the two highest rating categories by Moody’s or S&P; and (vii) bank money market accounts or mutual funds that invest exclusively in any one or more of the foregoing. - 15 -
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“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. “Players Association” means the National Hockey League Players’ Association or any other successor collective bargaining organization for NHL players. “Pledged Accounts” means all of the accounts established pursuant to Section 2.3(a) hereof but excluding any Advance Deposits Account and Third Party Funds Account. “PPB” has the meaning assigned to such term in the first paragraph of this Agreement. “Prime” means the prime rate listed from time to time in the Wall Street Journal, which listing appears as of the date hereof under the caption “Money Rates”. “Principal Account” has the meaning assigned to such term in the Indenture. “Pro-Forma Debt Service Coverage Ratio” means, on any date with respect to any Prospective Test Period, the ratio of (a) Net Revenues for such Prospective Test Period to (b) Debt Service for such Prospective Test Period.
“Project” means the acquisition, construction and/or installation of the improvements, facilities and equipment described in Exhibit F (Description of Project) to the Indenture, and such other capital facilities that may be financed from proceeds of Additional Bonds as set forth in a Supplemental Indenture.
“Project Costs” means, collectively, without duplication, all hard and soft costs of acquiring, developing, designing, engineering, renovating, constructing, equipping and completing the Project, whether incurred or paid prior to or after the Closing Date, together with all contingencies, fees, costs and expenses relating thereto and all pre-development costs related to all such Project development efforts, whether undertaken by the Manager, the direct or indirect holders of equity interests in the Manager, or any Affiliates of the foregoing, including: (i) site preparation costs, including all surveys, title insurance, testing, environmental abatement, demolition and remediation costs; (ii) all amounts payable under all design, development, and construction agreements (including each Development Document) and all project and pre-development agreements; (iii) all permit, entitlements and approval costs, licensing fees, and costs of insurance; (iv) furniture, fixtures and equipment expenses and costs of materials; (v) development and pre-development costs, fees and related salary expenses; (vi) construction management expenses; (vii) contingencies and working capital costs; (viii) payments under any agreements relating to construction (including the costs of the Construction Monitor); (ix) start-up and opening costs; (x) financing, consulting and legal costs and other professional costs and fees; (xi) taxes, insurance and any other fees, costs, expenses and funding requirements associated with the Project or the incurrence of the Indebtedness under the Financing Documents; and (xii) all other costs described in the Construction Budget.
“Property” has the meaning set forth in the Lease Agreement. “Prospective Test Period” means, on any date of determination, the four (4) consecutive fiscal quarter periods of the Manager immediately succeeding the most recent fiscal quarter. - 16 -
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“Recognition and Acknowledgment Agreement” means the Recognition and Acknowledgment Agreement, dated as of ___________, 2023, from the City, as acknowledged and agreed to by the Trustee and the Manager, relating to the Management Agreement. “Related Party” means, with respect to any specified Person, such Person’s Affiliates and the directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives, and advisors of such Person and of such Person’s Affiliates. “Release” means any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture. “Required Bondholders” means at any time (a) the Series 2023[_] Bondholder(s), and (b) the Owners of at least 50.1% in aggregate principal amount of all other Bonds then Outstanding. [As of the Closing Date, JPM is a Series 2023[_] Bondholder.]
“Reserves” means amounts set aside in the Reserve Account as reserves for the payment of Maintenance and Repairs, Capital Expenditures or Operating Expenses. “Reserves Account” has the meaning assigned to such term in Section 2.3(a)(iii). “Resignation Effective Date” has the meaning assigned to such term in Section 10.20(a). “Returned Items” has the meaning assigned to such term in Section 2.7. “Secured Obligations” means, collectively, all obligations of every nature of the Authority, the City, the Manager and TeamCo, from time to time owed to the Bondholders and the Trustee under the Indenture or any other Financing Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to the Authority, the City, the Manager and/or TeamCo, would have accrued on any Secured Obligation, whether or not a claim is allowed against the Authority, the City, the Manager and/or TeamCo for such interest in the related bankruptcy proceeding), any make-whole amount and break funding costs, if any, with respect to any Bonds, fees, indemnification and reimbursement payments, costs and expenses (including all reasonable, out-of- pocket fees and expenses of counsel to the Bondholders incurred pursuant to the Indenture or any other Financing Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising under the Indenture or any other Financing Document. “Securities Intermediary” means a Person that (a) is a “securities intermediary” as defined in Section 8102(a)(14) of the UCC and (b) in respect of any Book-Entry Security, is also a “securities intermediary” as defined in 31 C.F.R. Section 357.2 (or, as applicable to such Book-Entry Security, the corresponding Federal Book-Entry Regulations governing such Book-Entry Security). “Security Agreement” means the Pledge and Security Agreement, dated as of [●], 2023, by and between the Manager and the Trustee.
“Security Entitlement” means (a) “security entitlement” as defined in Section 8102(a)(17) of the UCC (except in respect of a Book-Entry Security) and (b) in respect of any Book-Entry Security, a “security entitlement” as defined in 31 C.F.R. Section 357.2 (or, as applicable to such Book-Entry Security, the corresponding Federal Book-Entry Regulations governing such Book-Entry Security) - 17 -
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which, to the extent required or permitted by the Federal Book-Entry Regulations, is also a “security entitlement” as defined in Section 8102(a)(17) of the UCC. “Series 2023 Bonds” means, collectively, the Series 2023A Bonds and the Series 2023B Bonds.
“Series 2023A Bondholders” means the Owners of the Series 2023A Bonds from time to time. “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 2023[__] Purchase Contract” has the meaning assigned to such term in the recitals to this Agreement.
“Series 2023A Required Holders” means the Owners of more than 50% of the Series 2023A Bonds then Outstanding.
“Series 2023A Work Stoppage Reserve Account” has the meaning assigned to such term in Section 2.3(a)(iv).
“Series 2023A Work Stoppage Reserve Requirement” means [________]. “Series 2023[__] Bond Purchase Agreement” has the meaning assigned to such term in the recitals to this Agreement.
“Series 2023[_] Bond Purchaser(s)” means JPM and other institutional investors and their respective successors and assigns, and upon the receipt from time to time by the Trustee and the Authority of a notice described in Section 11.12 of the Series 2023__ Bond Purchase Agreement from time to time means the Person designated in such notice as the Transferee, as more fully provided in Section 11.12 of the Series 2023__ Bond Purchase Agreement. “Series 2023[_] Purchasers’ Representative” means [JPM] and its successors and assigns. “Series 2023B Debt Service Reserve Account” means the account of that name established pursuant to the ________ Supplemental Indenture.
“Series 2023B Debt Service Reserve Account” has the meaning assigned to such term in 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.] - 18 -
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“Series 2023B Required Holders” means the Owners of more than 50% of the Series 2023B Bonds then Outstanding.
“Series 2023B Work Stoppage Reserve Account” has the meaning assigned to such term in Section 2.3(a)(v).
“Series 2023B Work Stoppage Reserve Requirement” means [________]. “Severable Improvement Debt” means debt incurred in order to finance Severable Improvements.
“Severable Improvement Revenues” means the identifiable revenue stream derived from a Severable Improvement acquired in a transaction described in Section 12 of the Management Agreement.
“Severable Improvements” means severable improvements to or for the benefit of the Arena and its patrons and whether on the property of the City, the Manager or an Affiliate of Manager. “Site Lease” means the Site Lease, dated as of __________, 2023, by and between TS Anaheim, LLC, as landlord, and the City, as tenant, relating to the Additional Project Property. “Specifications” means the drawings, plans and specifications for the Development which have been supplied to the Series 2023[_] Bond Purchasers and the Construction Monitor as a condition precedent under Series 2023[_] Bond Purchase Agreement, as they may be amended in accordance therewith.
“Standing Financing Costs Purchase Request” means a standing required by the Authority for Financing Costs Purchases in accordance with Section 2.01(c) (Financing Costs Purchases) of the Series 2023[__] Bond Purchase Agreement, which shall be in the form of Exhibit B (Form of Standing Financing Costs Purchase Request), or any other form approved by the Series 2023[_] Purchasers’ Representative.
“Supplemental Indenture” means any supplemental indenture amendatory of or supplemental to the Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized thereunder.
“Taking” means the taking by any Governmental Authority acting under its power of eminent domain or the threat of exercise of the power of eminent domain. “Team” means the NHL franchise known as the Anaheim Ducks. “TeamCo” means Anaheim Ducks Hockey Club, LLC.
“Temporary Taking” means a Taking of all or any part of the Property for less than one (1) year.
“Termination Date” means the date on which all Commitments have terminated and all Secured Obligations (excluding contingent obligations for indemnification, expense reimbursement, or yield protection as to which no claim has been made by the Person entitled thereto) under the Financing Documents have been paid in full in cash (or, in the case of any letters of credit issued under - 19 -
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and pursuant to the terms of the Financing Documents, cash collateralized as permitted under, and in accordance with, the terms of the Financing Documents). “Termination Payments” means an amount due from the Manager in connection with any unwinding, breach, cash settlement or termination of any transactions under a Hedging Agreement, all as calculated pursuant to such Hedging Agreement; provided, that for the avoidance of doubt, “Termination Payments” shall not include any Ordinary Course Settlement Payments due under any such Hedging Agreement.
“Third Party Funds” means funds required to be paid to a third party that are deposited with the Manager pending disbursement of such funds to such third party, including, without limitation, the portion of prepaid tickets and parking charges due to such third party under the applicable governing agreement.
“Third Party Funds Account” has the meaning assigned to such term in Section 4.5. “Transfer Date” has the meaning assigned to such term in Section 4.4(a). “Trustee” has the meaning assigned to such term in the first paragraph of this Agreement. “2021 Parking Easement” means the Parking and Access Easement Agreement dated [●], 2021 and entered into by [●] collectively as “Grantor” and the City as “Grantee”. “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in effect from time to time in the State of California; provided, that if, by reason of mandatory provisions of law, the validity, perfection, priority and/or enforcement of any security interest granted or intended to be granted under any Financing Document is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of California, then, as to the validity, perfection, priority and/or enforcement (as applicable) of such security interest, “Uniform Commercial Code” and “UCC” means the Uniform Commercial Code in effect in such other jurisdiction. “USB” has the meaning assigned to such term in the first paragraph of this Agreement. “Waterfall Date” means the [15th] day of each calendar month (or, if such [15th] day is not a Business Day, the immediately succeeding Business Day). “Work Stoppage” means any strike, lockout, work stoppage, suspension, cancellation or other labor disruption relating to a labor dispute between the NHL and the Players Association that prevents the Team from playing any regular season game or postseason game, in each case as and when scheduled.
“Work Stoppage Reserve Account” is defined on Exhibit A. “Work Stoppage Reserve Commencement Date” means the earliest of: (a) the date which is six (6) months prior to the expiration of the then-current NHL CBA, and (b) the date on which a Work Stoppage occurs.
“Work Stoppage Reserve Release” has the meaning assigned to such term in Section 4.6(c). - 20 -
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“Work Stoppage Reserve Release Date” has the meaning assigned to such term in Section
4.6(c).
“Work Stoppage Reserve Required Amount” means, during the period beginning on any Work Stoppage Reserve Commencement Date and concluding on the following applicable Work Stoppage Risk Conclusion Date, an amount equal to the maximum amount of debt service on the Series 2023[_] Bonds and the Series 2023[_] Bonds to be paid in any twelve-month period. “Work Stoppage Risk Conclusion Date” means, as applicable, (i) with respect to any Work Stoppage Reserve Required Amount triggered by clause (a) of the definition of “Work Stoppage Reserve Commencement Date”, (1) the then-current NHL CBA is extended or a new NHL CBA becomes legally effective, in each case with a later expiration date and (2) a Work Stoppage ceases to be (or is not) in effect; or (ii) with respect to any Work Stoppage Reserve Required Amount triggered by clause (b) of the definition of “Work Stoppage Reserve Commencement Date”, (1) the then-current or a new NHL CBA is legally effective and (2) a Work Stoppage ceases to be in effect.
1.2 UCC Terms. All terms defined in the UCC shall have the respective meanings given to those terms in the UCC, except where (a) otherwise defined in this Agreement or (b) the context requires otherwise.
1.3 Interpretation. For all purposes of this Agreement, except as otherwise expressly provided, the rules of interpretation set forth in Article XI of the Indenture are hereby incorporated by reference, mutatis mutandis, as if fully set forth herein.
ARTICLE II
APPOINTMENT OF ACCOUNTS BANK; CREATION OF ACCOUNTS
2.1 Appointment of Accounts Bank. As of the date of this Agreement, PPB is hereby appointed by the Manager and the Trustee (on behalf of the Bondholders) to act as the Accounts Bank with respect to the Pledged Accounts as set forth in Exhibit A and the other applicable Account Collateral, with such powers as are expressly delegated to the Accounts Bank by the terms of this Agreement, and the Accounts Bank hereby accepts such appointment. The Parties hereby acknowledge (i) that the Accounts Bank shall act as a Securities Intermediary with respect to all financial assets and financial entitlements (each as defined in the UCC) credited to the Pledged Accounts held at the Accounts Bank and (ii) that the Accounts Bank shall act as a bank (as defined in UCC Section 9102(a)(8)) with respect to cash credited to such Pledged Accounts, in each case, pursuant to this Agreement. The Accounts Bank agrees to accept and hold, in accordance with the terms of this Agreement, the applicable Pledged Accounts and all funds, instruments, securities, financial assets, and other assets delivered to the Accounts Bank pursuant to the terms of this Agreement.
2.2 Procedures Governing Pledged Accounts.
(a) The Accounts Bank hereby agrees to promptly deposit all amounts delivered to or held by the Accounts Bank pursuant to the terms of this Agreement into the applicable Pledged Accounts established hereunder. The Accounts Bank shall hold the Pledged Accounts maintained at the Accounts Bank during the term of this Agreement and shall treat the amounts, and all rights related thereto, now or hereafter deposited in or credited to such Pledged Accounts as cash or financial assets, - 21 -
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as applicable, pledged by the Manager to the Trustee (for the benefit of the Bondholders), to be held by the Accounts Bank acting as a Securities Intermediary with respect to financial assets and as a bank with respect to cash.
(b) Each Pledged Account shall bear a name and account number as set forth in Exhibit A, which, notwithstanding Section 10.14 of this Agreement, may be amended from time to time by the Trustee to reflect updated, revised, supplemental or new information of the Accounts Bank.
Each of the Manager and the Trustee agree that they shall not direct the Accounts Bank to invest any funds on deposit in any Pledged Account in any security represented by a security certificate. All cash held in the Pledged Accounts (other than revenues excluded from the definition of Gross Revenues, if any) shall constitute a part of the Account Collateral and shall not constitute payment of any of the Secured Obligations until applied as hereinafter provided. (c) All moneys, investments and securities and other property on deposit in or credited to any of the Pledged Accounts shall at all times be under the dominion and control of the Trustee and shall constitute Account Collateral in accordance with the terms hereof to be controlled by the Trustee for the purposes and on the terms set forth in this Agreement and the other Financing Documents. The Manager agrees that its rights to amounts on deposit in or credited to the Pledged Accounts are subject to and controlled by the terms of this Agreement. (d) The Pledged Accounts shall be subject to applicable law, including such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or Governmental Authority having jurisdiction over the Pledged Accounts, as may now or hereafter be in effect, together with the provisions of the Uniform Commercial Code, the deposit account agreements between the Accounts Bank and the Manager and the Accounts Bank’s related rules and regulations with respect thereto and any cash management or treasury management services agreements between the Accounts Bank and the Manager. (e) The Accounts Bank is hereby authorized to obey and comply with all writs, orders, judgments, subpoenas, summons or decrees issued by any court or administrative agency of competent jurisdiction affecting the applicable Pledged Accounts or any money, financial assets, documents or other items held by the Accounts Bank pursuant to this Agreement. The Accounts Bank shall not be liable to the Trustee, the City, the Authority, the Manager or any other Person, or its or their respective successors and assigns, by reason of the Accounts Bank’s compliance with such writs, orders, judgments or decrees, notwithstanding that such writ, order, judgment or decree is later reversed, modified, set aside or vacated.
2.3 Creation of Pledged Accounts.
(a) The Accounts Bank hereby confirms that it has established the following segregated accounts in the name of the Manager for the benefit of the City, each of which (other than the Advance Deposits Account) shall constitute a Pledged Account (as further described in Exhibit A and including any subaccounts established thereunder, including each of those referenced on Exhibit A):
(i) an account identified as the “Advance Deposits Account” (the “Advance Deposits Account”);
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(ii) an account identified as the “Operating Account” (the “Operating Account”);
(iii) an account identified as the “Reserves Account” (the “Reserves Account”);
(iv) an account identified as the “Series 2023[_] Work Stoppage Reserve Account” (the “Series 2023A Work Stoppage Reserve Account”); (v) an account identified as the “Series 2023[_] Work Stoppage Reserve Account” (the “Series 2023B Work Stoppage Reserve Account”). (b) The Parties hereto acknowledge and agree that (i) each Pledged Account is and shall be maintained as a “securities account” (as such term is defined in Section 8501(a) of the UCC and the Hague Convention) with respect to all financial assets and financial entitlements in respect of which the Accounts Bank is and shall be a “securities intermediary” (within the meaning of Section 8102(a)(14) of the UCC) and an “intermediary” (as defined in the Hague Convention), (ii) each Pledged Account is and shall be maintained as a “deposit account” with respect to cash deposited in such Pledged Account, (iii) the Trustee is the sole Entitlement Holder with respect to each Pledged Account (and all cash, Security Entitlements and financial assets from time to time maintained or carried therein), (iv) the Accounts Bank has not entered into any agreement (other than this Agreement) under which the Accounts Bank has agreed to comply with Entitlement Orders originated by any Person other than the Trustee with respect to any Pledged Account maintained at the Accounts Bank or any cash, securities or other property deposited therein or credited thereto, and (v) the Pledged Accounts shall be maintained at all times in accordance with Section 2.2(a) until the Termination Date. (c) The Accounts Bank shall cause each Pledged Account maintained at the Accounts Bank to be, and each Pledged Account shall be, separate from all other accounts held by or under the control and dominion of the Accounts Bank. The Accounts Bank will not change the name or account number of any applicable Pledged Account from that set forth in Exhibit A without the prior written consent of the Trustee and the Manager, other than any changes of account numbers due to internal system changes (upon which the Accounts Bank shall provide prompt written notice thereof to the Trustee and the Manager).
2.4 Deposit Accounts. To the extent that, notwithstanding the Parties’ intent that the Pledged Accounts constitute securities accounts with respect to all financial assets on deposit therein, all or any portion of any such Pledged Account is determined to be a “deposit account” within the meaning of Section 9102(a)(29) of the UCC, (a) such Pledged Account shall be deemed to be a “deposit account” (as defined in Section 9102(a)(29) of the UCC), which the Parties hereto shall maintain with the Accounts Bank acting not as a securities intermediary but as a “bank” (within the meaning of Section 9102(a)(8) of the UCC) pursuant to Section 2.2(b), (b) such “bank’s jurisdiction” (within the meaning of Section 9304 of the UCC) is and shall continue to be the State of California, (c) the Manager shall be the Accounts Bank’s “customer” (within the meaning of Article 4 of the UCC) with respect to such deposit account and (d) all references in this Agreement to “Entitlement Orders” shall be deemed to include instructions directing the disposition of funds in such deposit account.
2.5 Pledged Accounts as Collateral. To secure the payment of the Secured Obligations, the City, pursuant to the Lease Agreement, has irrevocably granted a first lien on and security interest in, and has pledged, to the Authority, all of the right, title and interest of the City which it now possesses - 23 -
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or may hereafter obtain, in, to and under, inter alia, each of the Pledged Accounts held by the Manager at the Accounts Bank, including, in each case, (a) all Net Revenues and all other monies, investments and other instruments held in such Pledged Accounts, (b) all other funds of the City held by the Manager at the Accounts Bank under this Agreement, if any, and (c) all of the proceeds of the foregoing (collectively, the “Account Collateral”); provided that Account Collateral excludes (i) Advance Deposits and such Advance Deposits shall be deposited in the Advance Deposits Account in accordance with Section 4.4 hereof, and (ii) Third Party Funds and such Third Party Funds shall be deposited in one or more Third Party Funds Accounts in accordance with Section 4.5 hereof. Pursuant to the Assignment Agreement, the Authority has assigned the lien and pledge of the Account Collateral to the Trustee (for the benefit of the Bondholders).
2.6 Control; Precedence of Instructions.
(a) Until the Termination Date, the Trustee shall have “control” (within the meaning of Section 8106(d)(2) or Section 9104(a) (as applicable) of the UCC) of the Pledged Accounts and the Manager’s “security entitlements” (within the meaning of Section 8102(a)(17) of the UCC) with respect to the financial assets credited to the Pledged Accounts. The City, the Manager and the Trustee hereby irrevocably direct, and the Accounts Bank (in its capacity as a bank or Securities Intermediary, as applicable) hereby agrees, that the Accounts Bank will comply with all instructions and orders (including, as applicable, Entitlement Orders within the meaning of Section 8102(a)(8) of the UCC) regarding each Pledged Account maintained at the Accounts Bank and any financial asset therein originated by the Trustee, without the further consent of the City, the Manager or any other Person; provided, however, that so long as the Trustee shall not have provided a Notice of Exclusive Control (as defined in Section 2.6(b) below), the Accounts Bank shall comply with all written instructions by or on behalf of the Manager in respect of each of the Pledged Accounts held at the Accounts Bank, in each case to the extent expressly permitted herein without the further consent of the Trustee or any other Person. In the case of a conflict between any instruction or order originated by the Trustee and any instruction or order originated by the Manager or any other Person other than an order of a court of competent jurisdiction directed to the Accounts Bank, the instruction or order originated by the Trustee shall prevail. The Trustee hereby agrees that, so long as the Trustee (acting at the written direction of the Required Bondholders) shall not have delivered to the Accounts Bank written notice in accordance with Section 2.6(b) that (A) an Event of Default has occurred and is continuing and (B) the Trustee is exercising its right of exclusive control with respect to the Pledged Accounts, the Trustee shall not deliver any notices or instructions to the Accounts Bank with respect to transfers to or from the Pledged Accounts except as expressly permitted or required under this Agreement.
(b) On and after any date on which any applicable Accounts Bank receives written notice from the Trustee that an Event of Default has occurred and is continuing and the Trustee is exercising its right of exclusive control with respect to the Pledged Accounts (a “Notice of Exclusive Control”), notwithstanding anything herein to the contrary, the Accounts Bank shall thereafter accept all notices and instructions required or permitted to be given to the Accounts Bank pursuant to the terms of this Agreement only from (or delivered by) the Trustee, and not from the City, the Manager or any other Person. Following receipt of a Notice of Exclusive Control, the Accounts Bank shall not withdraw, transfer, pay or otherwise disburse any amounts in any of the Pledged Accounts except pursuant to such notices and instructions from the Trustee (acting at the written direction of (x) other than with respect to the Series 2023[_] Debt Service Reserve Account and Series 2023[_] Debt Service Reserve Account, the Required Bondholders, (y) in the case of the Series 2023[_] Debt Service Reserve Account, the Series 2023[_] Required Holders, and (z) in the case of the Series 2023[_] Debt Service - 24 -
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Reserve Account, the Series 2023[_] Required Holders), until the Accounts Bank has received written notice from the Trustee (acting at the written direction of the party or parties (as applicable) that directed the Trustee to deliver the corresponding Notice of Exclusive Control) that such Event of Default no longer exists and the Trustee is no longer exercising its right of exclusive control with respect to the Pledged Accounts (a “Notice of Suspension of Exclusive Control”), in which event the terms of this Section 2.6(b) shall thereafter be inapplicable to such Notice of Exclusive Control.
Notwithstanding anything to the contrary set forth in this Agreement, the Accounts Bank shall not be required to act upon a Notice of Exclusive Control or Notice of Suspension of Exclusive Control until the passage of a reasonable time to act thereon, which shall not exceed one (1) Business Day following its receipt of such notice.
2.7 Subordination of Lien; Waiver of Set-Off. If Accounts Bank has or subsequently obtains by agreement, operation of law or otherwise a Lien on any Pledged Account or in any Account Collateral, the Accounts Bank agrees that such Lien shall (except to the extent provided in the next sentence) be subordinate to any Lien of the Trustee. The financial assets or funds standing to the credit of the Pledged Accounts will not be subject to deduction, set-off, counter-claim, banker’s lien or any other right in favor of the Accounts Bank or any Person other than, in the case of the Pledged Accounts, the Trustee, except to the extent of returned items and charge-backs either for uncollected checks, wire transfer of funds, Automated Clearing House (“ACH”) entry or other items of payment and transfers previously deposited or credited to one or more of such Pledged Accounts, and which is returned unpaid or is otherwise determined by the Accounts Bank to be uncollectible and without regard to the timeliness of the return or notice of non-payment (the “Returned Items”), and the Manager and the Trustee hereby authorize the Accounts Bank to debit the applicable Pledged Accounts for such amounts. If at any time the amount of the available funds in the Pledged Accounts is insufficient to pay any Returned Items or fees and expenses payable to the Accounts Bank in respect of the maintenance of the Pledged Accounts, the Manager shall reimburse the Accounts Bank in immediately available funds within thirty (30) days of written request for any such insufficiency.
2.8 Other Representations and Covenants of Accounts Bank. The Accounts Bank hereby represents, warrants, covenants and agrees as follows:
(a) the Accounts Bank in its capacity as Securities Intermediary with respect to financial assets (i) is a Securities Intermediary on the date of this Agreement, and, so long as this Agreement remains in effect, shall remain a Securities Intermediary, and shall act as such with respect to the Trustee and the Pledged Accounts maintained at the Accounts Bank and all of the Security Entitlements and financial assets transferred, credited or deposited to, or maintained or carried in, the Pledged Accounts from time to time, (ii) shall comply with any and all Entitlement Orders received by it from the Trustee in respect of the Pledged Accounts, in each case, without further consent of the Manager or any other Person in accordance with the terms of this Agreement and (iii) shall not comply with the Entitlement Orders of any other Person other than as set forth in this Agreement; (b) notwithstanding any other provision of this Agreement or any other agreement governing any Pledged Account to the contrary, for the purposes of the UCC and the Hague Convention the “securities intermediary’s jurisdiction” (including within the meaning of Sections 8110(e) or 9301 and 9305 (as applicable) of the UCC) of the Accounts Bank acting as Securities Intermediary and the “bank’s jurisdiction” (within the meaning of Section 9304 of the UCC) of the Accounts Bank acting as a “bank” (within the meaning of Section 9102(a)(8) of the UCC), as applicable, is and shall continue to be the State of California (it being acknowledged and agreed that, to the extent that any agreements between the Accounts Bank and the City or the Manager governing the Pledged Accounts do not - 25 -
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provide that the laws of the State of California shall govern all of the issues specified in Article 2(1) of the Hague Convention, the City, the Manager, and the Accounts Bank agree that each such agreement is hereby amended to provide that the law applicable to all of the issues specified in Article 2(1) of the Hague Convention shall be the laws of the State of California); (c) until the Accounts Bank’s obligations hereunder shall terminate in accordance with Section 10.3 or Section 10.20, the records of the Accounts Bank with respect to each of the Pledged Accounts shall recognize and reflect the security interest in favor of the Trustee (for the benefit of the Secured Parties), at all times until the Termination Date, and the Trustee (on behalf of the Secured Parties) shall have exclusive control and, other than as described in Section 2.6(a), sole right of withdrawal over all Pledged Accounts and shall have “control” (within the meaning of Section 8106(d)(2) or 9104(a) (as applicable) of the UCC) of all amounts on deposit in or credited to each Pledged Account;
(d) in furtherance of clause (c) above, the Accounts Bank shall credit such assets, property and items to the appropriate Pledged Accounts in accordance with this Agreement; (e) with respect to all Pledged Accounts, to the maximum extent permitted by applicable law, all funds and other assets, of any nature whatsoever, from time to time carried in such Pledged Accounts shall constitute financial assets, and the Accounts Bank shall treat all such assets, property and items as financial assets;
(f) except as provided in this Agreement, (i) the Accounts Bank has not received written notice of any right or claim to or interest in the Account Collateral (including any “adverse claim” within the meaning of Section 8102(a)(1) of the UCC) by any Person other than the City or the Manager, as applicable, and the Trustee (on behalf of the Bondholders) and (ii) the Accounts Bank has not entered into nor will it enter into any agreement with any other Person (A) relating to any Pledged Account and/or any financial assets or cash from time to time credited thereto, or Securities Entitlements carried therein, pursuant to which it has agreed to comply or will agree to comply with Entitlement Orders of such Person or any other Person, (B) purporting to limit or condition the obligation of the Accounts Bank to comply with Entitlement Orders originated by the Trustee or (C) that is otherwise inconsistent with this Agreement; and (g) except as set forth in Section 2.7, the Accounts Bank hereby (i) waives and releases any Lien, encumbrance, claim, right of set-off or other right it may have against the Pledged Accounts or any financial asset carried in the Pledged Accounts or any credit balance in the Pledged Accounts or Securities Entitlements carried therein and (ii) agrees that it shall not assert any such Lien, encumbrance, claim or right against the Pledged Accounts or any financial asset carried in the Pledged Accounts or any credit balance in the Pledged Accounts or Securities Entitlements carried therein.
ARTICLE III
[RESERVED]
ARTICLE IV
ACCOUNTS
4.1 Disbursement Directions. The Parties agree to use the form of Disbursement - 26 -
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Directions attached hereto at Exhibit B when instructing or directing the transfer of amounts to or from Pledged Accounts and between accounts or subaccounts. Disbursement Directions must be received by the Accounts Bank by 1:00 p.m., Pacific time, two (2) Business Days prior to the requested disbursement date and must specify (i) the amount to be disbursed, (ii) the date of disbursement, (iii) the recipient of the disbursement, and (iv) the manner of disbursement and delivery instructions (any direction given in accordance therewith, “Disbursement Directions”), and the Accounts Bank agrees to comply with Disbursement Directions delivered in accordance with this Section 4.1. For the avoidance of doubt, the Accounts Bank agrees that Disbursement Directions may include directions that amounts be transferred to a Pledged Account maintained at the Accounts Bank for further credit to subsequent Pledged Accounts maintained at the Accounts Bank on the same Business Day, and the Accounts Bank shall endeavor to comply with any such directions on such Business Day (and shall make such disbursement no later than the following Business Day). If and to the extent the Accounts Bank receives incomplete instructions, the Accounts Bank will endeavor to return such incomplete instructions to the Manager, or the Trustee, as applicable, on such date (and shall do so no later than the first Business Day immediately following such date), together with an appropriately detailed request for complete instructions.
4.2 [Reserved].
4.3 Operating Account.
(a) The Operating Account shall be funded from all funds (including all Gross Revenues) received by the Manager under the Management Agreement (other than Advance Deposits and Reserves), which shall be deposited into the Operating Account either directly by wire transfer by any obligor or within one (1) Business Day of receipt by the Manager. (b) Except as provided in Section 4.3(c) and Section 4.3(d), as and when due the Manager shall pay the following amounts from and to the extent of cash available in the Operating Account and, as applicable, in the Reserves Account and/or the Insurance and Condemnation Account and, to the extent necessary, from the proceeds of Operating Loans and/or Debt Service Loans as required pursuant to the Management Agreement, for the following purposes and in the following order of priority:
(i) first, to the payment by the Manager of Operating Expenses; (ii) second, to the payment by the Manager of items not treated as Operating Expenses in the Annual Operating Budget for such Operating Year or which are not described in any other provision of this Section 4.3(b) or which are otherwise specifically approved by the City in writing pursuant to any other provision of this Agreement, including Reserves if not treated as an Operating Expense;
(iii) third, (x) to the Series 2023[_] Bonds Subaccount or the Series 2023[_] Bonds Subaccount of the Interest Account, as applicable, (A) the amount necessary so that the balance in the Interest Account, after giving effect to such transfer, will be no less than, (I) in the case of the Series 2023[__] Bonds, 1/6th of the interest component of Debt Service (calculated at the interest rate payable on the date of calculation) on the Series 2023[_] Bonds or (II) in the case of the Series 2023[__] Bonds, [___] of the interest component of Debt Service (calculated at the interest rate payable on the date of calculation) on the Series 2023[__] Bonds, as applicable, required to be paid by the Manager prior to the next Waterfall Date (excluding, for the avoidance of doubt, any prepayments of interest - 27 -
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pursuant to (1) Section 4.01 of the Series 2023[__] Purchase Contract, (2) Sections 2.03, 2.04 or 2.05 of the Series 2023[__] Bond Purchase Agreement, (3) any prepayments pursuant to any provisions of any Additional Bonds that are comparable to those in Section 4.01 of the Series 2023[__] Purchase Contract or Section 2.03, 2.04 or 2.05 of the Series 2023[__] Bond Purchase Agreement), and (4) any amounts not previously paid on a prior Waterfall Date pursuant to this clause third, less (B) the proceeds of any Debt Service Loans made for purposes of paying any such amounts; and (y) to the Principal Account (A) the amount necessary so that the balance in the Principal Account, after giving effect to such transfer, will be no less than, (I) in the case of the Series 2023[__] Bonds, 1/12th of the principal component of Debt Service on the Series 2023[__] Bonds and (II) in the case of the Series 2023[__] Bonds, that portion of the principal component of Debt Service on the Series 2023[__] Bonds required to be paid by the Manager prior to the next Waterfall Date (excluding, for the avoidance of doubt, any prepayments of principal pursuant to (1) Section 4.01 of the Series 2023[__] Purchase Contract, (2) Sections 2.03, 2.04 or 2.05 of the Series 2023[_] Bond Purchase Agreement, (3) principal payable on the maturity date of the Bonds, and (4) any prepayments pursuant to any provisions of any Additional Bonds that are comparable to those in Section 4.01 of the Series 2023[_] Purchase Contract or Section 2.03, 2.04 or 2.05 of the Series 2023[_] Bond Purchase Agreement), less (B) the proceeds of any Debt Service Loans made for purposes of paying any such amounts; (iv) fourth, pro rata to each of (x) the Series 2023[_] Debt Service Reserve Account, if and to the extent that any amount is required by Section 5.05 of the Indenture to be transferred to the Series 2023[_] Debt Service Reserve Account at such time, the amount so required less the proceeds of any Debt Service Loans deposited in the Series 2023[_] Debt Service Reserve Account for purposes of paying any such amounts and (y) the Series 2023[_] Debt Service Reserve Account, if and to the extent that any amount is required by 3.02 of the First Supplemental Indenture, the amount so required less the proceeds of any Debt Service Loans deposited in the Series 2023[_] Debt Service Reserve Account for purposes of paying any such amounts; (v) fifth, pro rata to each of (x) the Series 2023[_] Work Stoppage Reserve Account, if and to the extent that any amount is required by Section 5.06 of the Indenture to be transferred to the Series 2023[_] Work Stoppage Reserve Account at such time, the amount so required less the proceeds of any Debt Service Loans deposited in the Series 2023[_] Work Stoppage Reserve Account for purposes of paying any such amounts and (y) the Series 2023[_] Work Stoppage Reserve Account, if and to the extent that any amount is required by 3.02 of the First Supplemental Indenture, the amount so required less the proceeds of any Debt Service Loans deposited in the Series 2023[_] Work Stoppage Reserve Account for purposes of paying any such amounts; (vi) sixth, to (x) the payment of any debt service due and payable on any Other Debt required to be paid by the Manager prior to the next Waterfall Date (excluding, for the avoidance of doubt, any prepayments required with respect to such Other Debt and principal payable on the maturity date of such Other Debt), less (y) the proceeds of any Debt Service Loans made for purposes of paying any such amounts;
(vii) seventh, on each Distribution Date or at the Manager’s election on any date after the Accounting Date and before the Distribution Date) so long as the Distribution Conditions are satisfied by the Manager, to the payment of any debt service due and payable on any Operating Loans required to be paid by the Manager prior to the next Waterfall Date (excluding, for the avoidance of doubt, any prepayments required with respect to such Operating Loans and any principal payable on the maturity date of such Operating Loans);
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(viii) eighth, on each Distribution Date or at the Manager’s election on any date after the Accounting Date and before the Distribution Date) so long as the Distribution Conditions are satisfied by the Manager, to the payment of any debt service due and payable on any Debt Service Loans required to be paid by the Manager prior to the next Waterfall Date (excluding, for the avoidance of doubt, any prepayments required with respect to such Debt Service Loans and any principal payable on the maturity date of such Debt Service Loans); and
(ix) ninth, on each Distribution Date or at the Manager’s election on any date after the Accounting Date and before the Distribution Date) so long as the Distribution Conditions are satisfied by the Manager, to such account(s) or Person(s) as the Manager may direct. (c) Notwithstanding the foregoing, (i) if the aggregate amount on deposit in the Operating Account is not sufficient on any Waterfall Date to make any transfers in full in a priority level specified in Section 4.3(b) above, then (x) unless otherwise expressly provided herein, the available amount shall be applied on a pro rata basis to all transfers provided for in such priority level to the extent applicable, (y) the Manager or the Trustee, as applicable, shall not instruct the Accounts Bank to transfer amounts subsequently deposited to the Operating Account to Pledged Accounts lower in priority pursuant to such Section 4.3(b), as applicable, until any such insufficiency has been satisfied or eliminated, and (z) on the next applicable Waterfall Date, the Manager or the Trustee, as applicable, shall instruct the Accounts Bank to transfer from the Operating Account to any such insufficiently funded Pledged Accounts (in the order of priority in which such Pledged Accounts appear in such Section 4.3(b)) an amount equal to any such insufficiency then remaining (in addition to any amount otherwise required to be so transferred to such Pledged Accounts on such Waterfall Date pursuant to Section 4.3(b)).
(d) After the Accounts Bank receives a Notice of Exclusive Control from the Trustee and until the Accounts Bank receives a Notice of Suspension of Exclusive Control from the Trustee, and upon the Disbursement Directions of the Trustee (acting at the written direction of the Required Bondholders), all amounts held in the Operating Account may be (i) distributed for payment of the Secured Obligations; (ii) transferred to any other Pledged Account as the Trustee (acting at the written direction of the Required Bondholders) shall so direct; or (iii) applied to any other use permitted pursuant to the Financing Documents.
4.4 Advance Deposits Account.
(a) All amounts received by the Manager and constituting Advance Deposits shall be deposited within one (1) Business Day of receipt by the Manager into the Advance Deposits Account. Subject to subsection (b) below, all Advance Deposits that are deposited in the Advance Deposits Account shall be held in such account until the calendar month in which such amounts are recognized by the Manager as earned income (as determined by the Manager in accordance with generally accepted accounting principles, the “Transfer Date”). (b) No later than two (2) Business Days prior to the Transfer Date, the Manager shall deliver Disbursement Directions to the Accounts Bank to transfer all applicable amounts from the Advance Deposits Account to the Operating Account on such Transfer Date to be further distributed in accordance with Section 4.3(b) above.
4.5 Third Party Funds Accounts. The Manager may open from time to time with one or more Acceptable Banks additional deposit accounts (each, a “Third Party Funds Account”) for - 29 -
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the deposit of Third Party Funds, none of which Third Party Funds Account shall constitute a Pledged Account. The Parties acknowledge and agree that Exhibit C may set forth from time to time the location and/or disbursement procedures for each Third Party Funds Account. For the avoidance of doubt, without the prior written consent of the Accounts Bank, the Accounts Bank shall not have any duties or obligations with respect to any Third Party Funds Account.
4.6 Series 2023A Work Stoppage Reserve Account.
(a) The Series 2023A Work Stoppage Reserve Account shall be funded pursuant to priority fifth of Section 4.3(b).
(b) On any date occurring after the Work Stoppage Reserve Commencement Date when the amounts available at priority third of Section 4.3(b), after giving effect to any previous transfers made from the Series 2023A Debt Service Reserve Account, are insufficient to pay Debt Service in respect of the Series 2023A Bonds (a “Series 2023A Debt Service Shortfall”), so long as the Accounts Bank has not received a Notice of Exclusive Control from the Trustee, or, if such Notice of Exclusive Control has been received, following delivery of a Notice of Suspension of Exclusive Control by the Trustee to the Accounts Bank, the Manager shall by Disbursement Directions (a copy of which the Manager shall also deliver (or cause to be delivered) to the Trustee) instruct the Accounts Bank to transfer the amounts necessary from the Series 2023A Work Stoppage Reserve Account to pay to the Series 2023A Bondholders the amount of such Series 2023A Debt Service Shortfall then due and payable, which funds shall be transferred by the Accounts Bank and applied by the Accounts Bank as set forth in the Disbursement Directions; provided, however, if the Manager does not deliver any such directive to the Accounts Bank or the Trustee on any applicable date, then the Trustee shall also be authorized to accept directions from the Series 2023A Required Holders directing the Trustee to deliver such Disbursement Directions in accordance with the foregoing. (c) On any date on or following the occurrence of a Work Stoppage Risk Conclusion Date (a “Work Stoppage Reserve Release Date”), so long as the Accounts Bank has not received a Notice of Exclusive Control from the Trustee, or, if such Notice of Exclusive Control has been received, following delivery of a Notice of Suspension of Exclusive Control by the Trustee to the Accounts Bank, the Manager shall by Disbursement Directions (a copy of which the Manager shall also deliver (or caused to be delivered) to the Trustee), so long as each of the Distribution Conditions have been satisfied and no Default or Event of Default would occur as a result of giving effect to such transfer, direct the Accounts Bank in writing to, and upon receipt of such Disbursement Directions the Accounts Bank shall, as directed therein, transfer all or a portion of the funds on deposit in or standing to the credit of the Work Stoppage Reserve Account to the Manager (each, a “Work Stoppage Reserve Release”).
4.7 Series 2023B Work Stoppage Reserve Account.
(a) The Series 2023B Work Stoppage Reserve Account shall be funded pursuant to priority fifth of Section 4.3(b).
(b) On any date occurring after the Work Stoppage Reserve Commencement Date when the amounts available at priority third of Section 4.3(b), after giving effect to any previous transfers made from the Series 2023B Debt Service Reserve Account, are insufficient to pay the Debt Service in respect of the Series 2023B Bonds (a “Series 2023B Debt Service Shortfall”), so long as the Accounts Bank has not received a Notice of Exclusive Control from the Trustee, or, if such Notice - 30 -
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of Exclusive Control has been received, following delivery of a Notice of Suspension of Exclusive Control by the Trustee to the Accounts Bank, the Manager shall by Disbursement Directions (a copy of which the Manager shall also deliver (or cause to be delivered) to the Trustee) instruct the Accounts Bank to transfer the amounts necessary from the Series 2023B Work Stoppage Reserve Account to pay to the Series 2023B Bondholders the amount of such Series 2023B Debt Service Shortfall then due and payable, which funds shall be transferred by the Accounts Bank and applied by the Accounts Bank as set forth in the Disbursement Directions; provided, however, if the Manager does not deliver any such directive to the Accounts Bank or the Trustee on any applicable date, then the Trustee shall also be authorized to accept directions from the Series 2023B Required Holders directing the Trustee to deliver such Disbursement Directions in accordance with the foregoing. (c) On any date on or following the occurrence of a Work Stoppage Reserve Release Date, so long as the Accounts Bank has not received a Notice of Exclusive Control from the Trustee, or, if such Notice of Exclusive Control has been received, following delivery of a Notice of Suspension of Exclusive Control by the Trustee to the Accounts Bank, the Manager shall by Disbursement Directions (a copy of which the Manager shall also deliver (or caused to be delivered) to the Trustee), so long as each of the Distribution Conditions have been satisfied and no Default or Event of Default would occur as a result of giving effect to such transfer, direct the Accounts Bank in writing to, and upon receipt of such Disbursement Directions the Accounts Bank shall, as directed therein, make a Work Stoppage Reserve Release to the Manager.
4.8 Reserves Account.
(a) The Manager may deposit in the Reserves Account any Reserves set aside by the Manager pursuant to the Management Agreement; and
(b) On any Business Day, if the Accounts Bank has not received a Notice of Exclusive Control from the Trustee, or, if such Notice of Exclusive Control has been received, following delivery of a Notice of Suspension of Exclusive Control by the Trustee to the Accounts Bank, the Manager may by Disbursement Directions instruct the Accounts Bank to transfer funds from the Reserves Account as specified in the Disbursement Directions, including without limitation amounts owing to the City under the Lease Agreement.
ARTICLE V
ACCOUNT INFORMATION AND BALANCES
5.1 Information to Accompany Amounts Delivered to the Accounts Bank; Deposits Irrevocable; Payment Direction.
(a) If requested by the Accounts Bank, the Manager or the Trustee, as applicable per the terms of this Agreement (including the provisions of Section 2.6), shall provide a written instruction to the Accounts Bank specifying the Pledged Account or Pledged Accounts (including the account number of such Pledged Account or Pledged Accounts) into which any amounts transferred to the Accounts Bank are to be deposited, unless such amounts are wired directly into a Pledged Account by an obligor.
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(b) All amounts transferred to the Accounts Bank hereunder shall be made by federal wire transfer or ACH or SWIFT entry to the Accounts Bank for the applicable Pledged Account as more fully set forth in Exhibit A.
(c) Any deposit made into any Pledged Account shall be irrevocable (unless the Manager and the Trustee (acting at the written direction of the Required Bondholders) otherwise expressly agree in writing) and the amount of such deposit plus any investment earnings thereon shall be held by the Accounts Bank and applied, invested and transferred solely as provided herein. (d) The Accounts Bank may seek confirmation of instructions by telephone call- back to an authorized representative and the Accounts Bank may rely upon the confirmations of anyone purporting to be the authorized representative so designated. The Accounts Bank and the beneficiary’s bank with respect to any funds transfer will rely solely upon any account numbers or similar identifying numbers provided by the Manager or the Trustee, as applicable, to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary bank. The Accounts Bank may apply any of the funds for any payment order it executes using any such identifying number, even when its use may unintentionally result in a Person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an intermediary bank designated. The Manager and the Trustee acknowledge that such security procedures are commercially reasonable. (e) Without assuming any responsibility to make any such determination, if the Accounts Bank determines that any withholding applies to any fund transfer based on the withholding certificates (or lack thereof) or other information that the Accounts Bank obtains or has in its possession, the Accounts Bank shall withhold the taxes as applicable and remit such withholding taxes to the appropriate Governmental Authority, and shall not be obligated to increase any amount transferred or otherwise compensate the transfer’s recipient for any amounts withheld. (f) (i) The Accounts Bank has no interest in the Account Collateral deposited hereunder but is serving as depository holder only (for any such Account Collateral deposited with the Accounts Bank) and having only possession thereof. The Manager will pay or reimburse the Accounts Bank upon request for any transfer taxes or other taxes relating to the applicable Account Collateral incurred in connection herewith and will indemnify and hold harmless the Accounts Bank from any amounts that it is obligated to pay in the way of such taxes. Any payments from the Pledged Accounts will be subject to withholding regulations then in force with respect to United States taxes. Due to the requirement that all accounts have Taxpayer Identification Numbers documented by appropriate W-8 or W-9 forms, the Manager agrees to provide the appropriate form to the Accounts Bank, duly completed and signed by its authorized representative. The Manager acknowledges that failure to provide such forms may prevent or delay disbursement of the Account Collateral hereunder. The Manager agrees to submit new Forms W-8 or W-9 (as the case may be) if a change in circumstances makes the applicable Form W-8 or W-9 incorrect during the term of this Agreement. (ii) Additionally, if the Manager directs the Accounts Bank to make a payment to any other party, including a foreign financial institution (as defined in section 1471(d)(4) of the Code) or a non-financial institution (as defined in section 1472(d) of the Code), then such direction constitutes a certification by the Manager that it has obtained valid documentation sufficient to determine the Chapter 3 and Chapter 4 (FATCA) status of the payee and that any payment to the payee is not subject to Chapter 3 and Chapter 4 (FATCA) withholding. - 32 -
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(g) If the Accounts Bank does not receive either a Form W-8 or Form W-9 required by subparagraph (f)(i) from the Manager or a certification required by subparagraph (f)(ii) regarding the beneficiary of any payment made hereunder, then the Accounts Bank will request the Form W-8, Form W-9 or certification (as applicable) from the Manager or Trustee. If the Manager does not provide the duly completed and executed Form W-8, Form W-9 or certification (as applicable), the Accounts Bank shall treat the recipient as a foreign financial institution (as defined in section 1471(d)(4) of the Code).
5.2 Statements of Account. The Accounts Bank shall maintain account statements on a cash basis and record therein all deposits into and transfers to, from and between its respective Pledged Accounts and all investment transactions effected by the Accounts Bank, pursuant to Article IV hereof.
The Accounts Bank shall make such account statements available during normal business hours for inspection and audit by the Trustee (at the written request of any Bondholder), the City, JPM, and the Manager and their respective representatives upon reasonable prior written notice.
5.3 Account Balance Statements. The Accounts Bank shall, on a monthly basis and at such other times as the Manager may from time to time reasonably request, provide to the Manager fund balance statements in respect of each of the Pledged Accounts and subaccounts maintained at the Accounts Bank. Additionally, to the extent requested by the Trustee (acting at the written request of any Bondholder), the City or JPM, the Accounts Bank shall, on a monthly basis and at such other times as the Trustee (at the written request of any Bondholder) may from time to time reasonably request, provide to the Trustee and the Manager (which the Manager shall deliver, or cause to be delivered, to the Bondholder or Bondholders requesting such information) fund balance statements in respect of each of the Pledged Accounts and subaccounts maintained at the Accounts Bank. Such balance statements under this Section 4.3 shall also include deposits, withdrawals and transfers from and to any such Pledged Account and subaccounts and the net investment income or gain received and collected in such Pledged Account and subaccounts. The Accounts Bank will furnish (i) the Authority and (ii) to the extent requested by the Trustee (acting at the written request of any Bondholder), the Trustee and the Authority (which the Authority shall deliver, or cause to be delivered, to the Bondholder or Bondholders requesting such information) periodic cash transaction statements which include detail for all investment transactions effected by the Accounts Bank. Upon the Trustee’s (at the written request of any Bondholder) or the Manager’s election, as applicable, such statements will be delivered via the Accounts Bank’s online service, and, upon electing such service, paper statements will be provided only upon request. The Accounts Bank shall retain records of all receipts, disbursements and investments of funds with respect to the Pledged Accounts maintained at the Accounts Bank until the second (2nd) anniversary of the Termination Date. Within thirty (30) days after the end of each calendar year, the Accounts Bank shall furnish to (i) the Manager and (ii) to the extent requested by the Trustee (acting at the written request of any Bondholder), the City, JPM, the Trustee and the Manager (which the Trustee shall deliver, or cause to be delivered to the Bondholder or Bondholders requesting such information) a written statement setting forth in reasonable detail the account balance, receipts, disbursements, transfers and investment transactions with respect to each of the Pledged Accounts and subaccounts maintained at the Accounts Bank during such calendar year. - 33 -
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ARTICLE VI
INVESTMENTS AND VALUATION
6.1 Investments.
(a) All amounts held in the Pledged Accounts by the Accounts Bank shall, until disbursed in accordance with the terms of this Agreement, constitute the property of the City, subject to the security interests in favor of the Trustee referred to in Section 2.5. (b) Prior to the receipt by the Accounts Bank of a Notice of Exclusive Control, any amounts held by the Accounts Bank in any of its Pledged Accounts shall be invested and reinvested by the Accounts Bank from time to time at the written instructions of the Manager (or, so long as a Notice of Exclusive Control has been delivered and until a Notice of Suspension of Exclusive Control has been delivered, as Trustee (acting at the written direction of the Required Bondholders) may instruct), at the risk and expense of the Manager in a specific investment vehicle permitted pursuant to the Management Agreement. The Manager shall select investments having such maturities as shall cause each Pledged Account to have a sufficient cash balance as of any day to cover the transfers necessary to be made from such Pledged Account on such day in accordance with this Agreement. (c) In the event that the cash balance in any Pledged Account as of any day is or will be insufficient to cover the transfers to be made from such Pledged Account on such day, the Accounts Bank is authorized to sell investments held in such Pledged Account (without regard to the maturity date of such) one (1) Business Day prior to the requested disbursement date, or may do so earlier if the Accounts Bank determines that any such sale more than one (1) Business Day prior to the disbursement date is necessary in order to assure the availability of funds on the requested disbursement date and to pay any expenses and charges incurred in connection with effecting any such sale or liquidation, which expenses and charges the Accounts Bank shall be authorized to pay with cash on deposit in any Pledged Account maintained at the Accounts Bank. (d) Any investment made pursuant to this Section 6.1 may be changed by delivery to the Accounts Bank of a written instruction from the Manager (or, so long as a Notice of Exclusive Control has been delivered and until a Notice of Suspension of Exclusive Control has been delivered, from the Trustee (acting at the written direction of the Required Bondholders)) in a different specific investment vehicle permitted pursuant to the Management Agreement. Upon receipt of such request, the Accounts Bank will reinvest the amounts in the indicated investment within two (2) Business Days or such additional time as may be required due to circumstances beyond the Accounts Bank’s control.
The Accounts Bank will not have any obligation to cause the applicable Account Collateral or any funds in the applicable Pledged Accounts to be invested on the day of deposit if the Account Collateral, other funds or instructions are not delivered to the Accounts Bank within a reasonable amount of time prior to the applicable cut-off time for any permitted investment. (e) In the absence of investment instructions in accordance with this Section 5.1, amounts held in the Pledged Accounts shall be held as cash and remain uninvested, with no liability for any interest accrued thereon.
(f) During the term of this Agreement, the Manager or the Trustee (acting at the written direction of the Required Bondholders) directing the investment of the Account Collateral and funds in the Pledged Accounts will bear and retain the sole responsibility for the selection and - 34 -
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liquidation of the investments and the Manager will bear all risks from such investments. For the avoidance of doubt, neither the Trustee nor the Accounts Bank shall bear any risk for such investments, and shall not be held liable for any losses incurred in connection therewith.
6.2 Income or Gain. Any interest, investment income or gain realized as a result of any investments or reinvestments pursuant to Section 5.1 (net of the expenses incurred in connection with making such investments) in the Pledged Accounts shall be deposited, as soon as practicable (and reinvested as provided herein), into the Operating Account. Any losses incurred on such investment and reinvestment will be reflected in the value of the applicable Pledged Account from time to time.
The Accounts Bank shall not have any liability for any loss resulting from any investment, reinvestment or liquidation made in accordance with this Agreement, including whether from any sale or liquidation of such investment, or for any other loss, fee, tax or other charge in connection with such investment or reinvestment or liquidation hereunder other than by reason of its bad faith, willful misconduct or gross negligence, as determined by a court of competent jurisdiction by a final and non- appealable judgment.
6.3 Value. Cash and securities on deposit from time to time in the Pledged Accounts shall be valued at the face amount thereof.
6.4 Taxes. It is acknowledged by the Parties hereto that all interest and other investment income earned on amounts on deposit in the Pledged Accounts for Federal, state and local income tax purposes shall be attributed to the City.
6.5 Security Advice Waiver. The Parties acknowledge that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant them the right to receive brokerage confirmations for certain security transactions as they occur, the Parties specifically waive receipt of such confirmations to the extent permitted by law. The Parties further understand that the trade confirmations for securities transactions effected by the Accounts Bank will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. The Accounts Bank will furnish the Parties statements that include detail for all investment transactions made by the Accounts Bank pursuant to Section 4.3.
ARTICLE VII
APPOINTMENT AND DUTIES OF THE ACCOUNTS BANK
7.1 Powers, Immunities and Standard of Care.
(a) The Accounts Bank shall not have any duties or responsibilities except those expressly set forth in this Agreement, and no implied covenants, functions or responsibilities shall be read into this Agreement or otherwise exist against the Accounts Bank. Notwithstanding anything to the contrary contained herein, the Accounts Bank shall not be required to take any action which is contrary to this Agreement or any law or which exposes the Accounts Bank to any liability. The Accounts Bank shall not be responsible to any Person for (i) the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document referred to or provided for herein or (ii) any failure by the Manager or any other Party to perform its obligations hereunder. The Accounts Bank may employ agents, designees and attorneys-in-fact, and shall not be responsible for the negligence or misconduct, as determined by a court of competent jurisdiction by a final and non-appealable judgment, of any such agents or attorneys-in-fact selected by it with - 35 -
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reasonable care. In no event shall the Accounts Bank have any duty, liability or obligation with respect to (i) any actions or omissions of any other Accounts Bank, (ii) any obligations or covenants of any other Accounts Bank or (iii) any Pledged Accounts or Account Collateral held by any other Accounts Bank.
(b) Neither the Accounts Bank nor any director, officer, employee, agent or sub- agent acting on behalf of the Accounts Bank, shall be responsible for any action taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own bad faith, gross negligence or willful misconduct as determined by a court of competent jurisdiction by a final and non- appealable judgment. Without limiting the generality of the foregoing, (i) the Accounts Bank may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants or experts, (ii) the Accounts Bank makes no warranty or representation to any Person for any statements, warranties or representations made in or in connection with this Agreement or any other Financing Document (other than as expressly set forth in this Agreement) or in any certificate or other document provided for herein or received by the Accounts Bank under this Agreement and no act by the Accounts Bank hereinafter taken shall be deemed to constitute any representation or warranty by the Accounts Bank to any Person, and (iii) the Accounts Bank shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Financing Document on the part of any party thereto, to inspect the property (including the books and records) of the Manager or any other Person or to ascertain or determine whether a Default or Event of Default exists or is continuing. (c) The Accounts Bank shall use the same care with respect to the safekeeping and handling of property with respect to the Pledged Accounts maintained at the Accounts Bank as the Accounts Bank uses in respect of property held for other customers in similar transactions in the ordinary course of business.
7.2 Reliance; Discretionary Matters.
(a) The Accounts Bank shall be entitled to conclusively rely upon any certificate, notice or other document (including any facsimile or electronic transmission in “pdf” format) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons. The Accounts Bank shall in all cases (including when any action by the Accounts Bank alone is authorized hereunder, if the Accounts Bank elects to obtain instructions from the Trustee) be fully protected in acting or in refraining from acting hereunder in accordance with the instructions of the Trustee or, where expressly provided, the Manager, and such instructions of the Trustee or the Manager, where applicable, and any action taken or failure to act pursuant thereto shall be binding on all of the Bondholders.
(b) The permissive rights of the Accounts Bank enumerated herein shall not be construed as duties. No provision of this Agreement shall require the Accounts Bank to expend or risk its own funds in performance of any of its duties hereunder. (c) Notwithstanding any provision in this Agreement providing for any action in Accounts Bank’s reasonable determination or at Accounts Bank’s reasonable request or for approval of any action or matter (any of the foregoing, a “Discretionary Matter”), the Accounts Bank may solicit confirmatory instructions from the Trustee in respect of any Discretionary Matter and, if the - 36 -
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Accounts Bank solicits such instructions, it shall have no duty to act on any Discretionary Matter until it receives such instructions (which shall not be unreasonably delayed). (d) The Accounts Bank will not have any duty to solicit delivery of any funds to the Pledged Accounts, nor shall the Accounts Bank have any obligation or liability to determine when or in what amounts funds should be transferred to, among or from any Pledged Accounts (or for the sources or payees of such funds). Without limiting the generality of the foregoing, the Accounts Bank shall not have any obligation or liability to confirm that any conditions to the transfer or disbursement of funds have been satisfied, including with respect to applicable dates for such transfers or disbursements.
(e) The duties and obligations of the Accounts Bank will be determined solely by the express provisions of this Agreement, and the Accounts Bank will not be liable except for the performance of such duties and obligations. Except for this Agreement, the Accounts Bank is not a party to, bound by, or required to comply with, any agreement or other document out of which this Agreement may arise (including, without limitation, the other Financing Documents). The Accounts Bank will not be required to inquire as to the performance or arrangements between the Manager and any other party. The Accounts Bank will not be under any liability to any Person by reason of any failure on the part of the City, the Authority, the Manager, or any maker, guarantor, endorser or other signatory of any document or any other third party to perform such party’s obligations under any such document. The Accounts Bank will not be obliged to recognize or be chargeable with knowledge of any of the terms or conditions of any agreement between the Manager, the Trustee or any other party, notwithstanding that references thereto may be made herein and whether or not it has knowledge thereof. The Accounts Bank will not be liable for the accuracy of any calculations or the sufficiency of any funds for any purpose. In no event shall the Accounts Bank be responsible for calculating the amount or determining the movement of any transfer or disbursement. In no event will the Accounts Bank be liable (i) for acting in accordance with or relying upon any instructions on which it is authorized to rely pursuant to the provisions hereof, or (ii) for any indirect, consequential, punitive or special damages.
(f) Notwithstanding any other provision of this Agreement, the Accounts Bank may at any time seek the direction of the Trustee, shall be entitled to fully rely on such direction and shall incur no liability for failing to act absent receipt of such direction. In the event of any ambiguity or uncertainty hereunder or in any notice or other communication received by the Accounts Bank hereunder, the Accounts Bank is hereby authorized to refrain from taking any action other than to retain possession of the applicable Pledged Accounts, unless the Accounts Bank receives written instructions from the Trustee which eliminate such ambiguity or uncertainty. (g) In the event of any dispute or conflicting claim with respect to the payment, ownership or right of possession of the applicable Pledged Accounts or any funds therein, the Accounts Bank will be entitled to refuse to comply with any and all claims, demands, or instructions. The Accounts Bank is authorized and directed to retain in its possession, without liability to anyone, all or any part of the Account Collateral until such dispute will have been settled either by mutual agreement of the parties concerned or by final order, decree or judgment of a court or other tribunal of competent jurisdiction in the United States of America (as notified to the Accounts Bank in writing by the parties to the dispute and setting forth the resolution of the dispute). The Accounts Bank will not be under any duty whatsoever to institute, defend or partake in such proceedings. The rights of the Accounts Bank under this paragraph are in addition to all other rights which it may have by law or otherwise including, without limitation, the right to file an action in interpleader. - 37 -
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(h) The Accounts Bank shall not be deemed to have actual, constructive, direct or indirect knowledge or notice of the occurrence of any Default or Event of Default and shall have no duty or obligation with respect to any such Default or Event of Default absent a direction of the Trustee. (i) This Agreement will not be deemed to create a fiduciary relationship among the Parties hereto (or in favor of any other Person) under state or federal law or otherwise. (j) The Accounts Bank shall be entitled to rely on any direction, instruction, request, notice or other communication (including any Disbursement Directions) from the Trustee without inquiring into whether the Trustee is authorized to give such communication by the terms of any agreement.
7.3 Compensation; Indemnification.
(a) The Manager shall pay such compensation to the Accounts Bank as separately agreed by the Manager and the Accounts Bank.
(b) The Manager agrees to pay or reimburse the Accounts Bank on demand for all losses, liabilities, damages, disbursements, advances, costs and out-of-pocket expenses paid or incurred by the Accounts Bank in the administration of its duties under this Agreement (including the reasonable and documented fees, charges and disbursements of one firm of outside counsel for the Accounts Bank (as notified by the Accounts Bank to the Manager in advance) and, if reasonably necessary, one local counsel in any relevant jurisdiction (as notified by the Accounts Bank to the Manager in advance)) unless arising by reason of the Accounts Bank’s bad faith, willful misconduct or gross negligence, as determined by a court of competent jurisdiction by a final and non-appealable judgment, including without limitation in connection with (i) the custody or preservation of, or the sale of, collection from or other realization upon any of the Account Collateral or (ii) the exercise or enforcement of any of the rights of the Accounts Bank hereunder. Without limiting the foregoing, the Manager agrees to pay, and to hold the Accounts Bank harmless from, and to indemnify the Accounts Bank against, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Account Collateral or in connection with any of the transactions contemplated by this Agreement. (c) In addition to the payment of amounts pursuant to the foregoing clauses (a) and (b), whether or not the transactions contemplated hereby shall be consummated, the Manager agrees to indemnify the Accounts Bank (and any sub-agent thereof) and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, judgments, costs, fees and expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Manager) other than such Indemnitee and its Related Parties, arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by the Manager or any other Person, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and non-appealable judgment to have - 38 -
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resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from claims of any Indemnitee solely against one or more other Indemnitees (other than claims against the Accounts Bank in its capacity as such) that have not resulted from the action, inaction, participation or contribution of the Manager or any of its respective Affiliates. (d) Any amounts payable by the Manager as provided in this Section 6.3 shall be paid within thirty (30) days after written demand therefor and shall, to the extent owing to a Bondholder or a Related Party thereof, constitute additional Secured Obligations. (e) To the fullest extent permitted by applicable law, the Manager shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Financing Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby. No Indemnitee referred to in subsection (c) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such party by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Financing Documents or the transactions contemplated hereby or thereby. (f) The agreements in this Section 7.3 shall survive the Termination Date, the transfer or disbursement of all Account Collateral and the resignation or removal of the Accounts Bank.
ARTICLE VIII
RIGHTS OF TRUSTEE
8.1 Rights of Trustee.
(a) In entering into this Agreement, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Trustee shall be protected by and shall enjoy all of the rights, immunities, protections and indemnities granted to it under the Indenture and the other Financing Documents.
(b) The parties hereto acknowledge that the rights and responsibilities of the Trustee under this Agreement with respect to any action taken or omitted by the Trustee or the exercise or non-exercise by the Trustee of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Trustee and the Bondholders, be governed by the Indenture.
(c) Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Trustee or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of rights or remedies to be made (or not to be made) by the Trustee, it is understood that in all cases the Trustee shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same) as directed in accordance with the Indenture, the Collateral Documents or the other Financing Documents. This provision is intended solely for the benefit of the Trustee and its successors and permitted assigns and is not intended to and will not entitle the other - 39 -
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parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.
8.2 Knowledge of Event of Default. The Trustee shall not be deemed to have actual constructive, direct or indirect knowledge or notice of the occurrence of any Default or Event of Default unless and until the Trustee has received, in its capacity as Trustee, from a Bondholder or the Manager a written notice or a certificate referring to the Indenture and stating that a Default or an Event of Default has occurred. The Trustee shall have no obligation whatsoever either prior to or after receiving such notice or certificate to inquire whether a Default or Event of Default has in fact occurred and shall be entitled to rely conclusively, and shall be fully protected in so relying, on any notice or certificate so furnished to it. No provision of this Agreement 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. In the event that the Trustee receives such a notice of the occurrence of any Default or Event of Default, the Trustee shall, at the expense of the Manager, give a copy of such notice to the Trustee and the Bondholders. The Trustee shall take such action with respect to an Event of Default as so directed pursuant to Section 8.1 hereof.
ARTICLE IX
EXERCISE OF RIGHTS UNDER COLLATERAL DOCUMENTS
9.1 Actions Upon an Event of Default. Upon the occurrence and during the continuance of an Event of Default and at the written direction of the Required Bondholders, the Trustee shall be permitted and is hereby authorized, subject to Sections 8.1 and 8.2, to take any and all actions and to exercise any and all rights, remedies and options relating to the Account Collateral which it may have hereunder and under the other Collateral Documents (including all remedies available at law or in equity). Without limiting the foregoing and except as otherwise expressly set forth herein, during the continuation of an Event of Default, the Trustee (acting at the written direction of the Required Bondholders) shall, by Disbursement Directions to the Accounts Bank, be permitted to apply all funds in the Pledged Accounts to the payment of the Secured Obligations.
9.2 Application of Proceeds After Acceleration. If any Event of Default shall have occurred and be continuing, and if the Required Bondholders shall have instructed the Trustee to do so, all Collateral in the Pledged Accounts controlled and/or held by the Trustee and the proceeds of any sale, disposition or other realization by the Trustee or by any Bondholder upon such collateral (or any portion thereof) pursuant to the Collateral Documents shall be distributed in whole or in part by the Trustee pursuant to the terms of Section 7.09 of the Indenture.
ARTICLE X
MISCELLANEOUS
10.1 Remedies Cumulative. No right, power or remedy herein conferred upon or reserved to the Trustee hereunder is intended to be exclusive of any other right, power or remedy, and every such right, power and remedy shall, to the extent permitted by applicable law, be cumulative and in addition to every other right, power and remedy given hereunder or under any other Financing Document now or hereafter existing at law or in equity or otherwise. 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. Resort to any or all security now or hereafter held by the - 40 -
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Trustee or any other Bondholder may be taken concurrently or successively and in one or several consolidated or independent judicial actions or lawfully taken non-judicial proceedings, or both. No delay on the part of any Bondholder in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial waiver by such Bondholder of any right, power or remedy preclude any further exercise thereof, or the exercise of any other right, power or remedy. If the Trustee may, under applicable law, proceed to realize its benefits under this Agreement or any other Financing Document giving the Trustee a lien upon any Account Collateral, whether owned by the Manager or by any other Person, either by judicial foreclosure or by non-judicial sale or enforcement, the Trustee may determine which of its remedies or rights it may pursue without affecting any of the rights and remedies of the Trustee under this Agreement.
10.2 Continuing Assignment and Security Interest. This Agreement shall create a continuing pledge and assignment of and security interest in the Account Collateral and shall (a) remain in full force and effect until the Termination Date, (b) be binding upon the City and the Manager and each such Party’s respective successors and assigns, and (c) inure, together with the rights and remedies of the Trustee, to the benefit of the Trustee (on its behalf and on behalf of the Bondholders and their respective successors, transferees and assigns). The release of the security interest in any or all of the Account Collateral, the taking or acceptance of additional security, or the resort by the Trustee to any security it may have in any order it may deem appropriate, shall not affect the liability of any Person on the Debt secured hereby.
10.3 Termination of Security Interest. Upon the Termination Date, this Agreement and the security interest and all other rights granted hereby shall terminate and all rights to the Account Collateral shall revert to the City; provided, that this Agreement and the security interest and other rights granted hereby shall continue to be effective or be reinstated, as the case may be, if at any time any amount owed to the Trustee and the Bondholders in respect of the Secured Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Manager or upon the appointment of any intervener or conservator of, or trustee or similar official for, the Manager or any substantial part of its property, or otherwise, all as though such payments had not been made. In addition to the foregoing, the lien created hereunder shall automatically terminate with respect to any Account Collateral (but, for certainty, only such Account Collateral) that is permitted to be disposed of by the Manager acting in accordance with the Financing Documents upon any such disposition. Upon its receipt of a written certification from the Manager of the Termination Date or the disposal of Account Collateral permitted under the Financing Documents, the Trustee shall, at the Manager’s expense, and upon the Manager’s written direction, execute and deliver to the Manager such documents (including UCC-3 financing statements) as the Manager shall reasonably request to evidence such termination and to return such Account Collateral to the Manager.
10.4 Severability. In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
10.5 Survival of Provisions. All covenants, agreements, representations and warranties made by any Party in this Agreement and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Trustee and the Bondholders and shall survive the execution and delivery of the Collateral Documents or any Hedging Transaction, respectively, regardless of any investigation made by such Persons or on their behalf, and shall continue in full force and effect until the Termination Date shall have occurred. - 41 -
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10.6 Successors and Assigns. This Agreement shall not be assigned by a party hereto without the prior express written consent of the other Parties and any purported assignment in violation of this provision shall be void. Notwithstanding the foregoing, any organization or entity resulting from any merger, conversion or consolidation to which the Accounts Bank shall be a party and any organization or entity succeeding to all or substantially all of the custody business of the Accounts Bank shall be a successor Accounts Bank to the Accounts Bank hereunder without the execution or filing of any paper or any further act of any of the parties hereto.
10.7 Headings. Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
10.8 Entire Agreement. This Agreement, the Indenture, and the other Financing Documents constitute the entire contract between the Parties relative to the subject matter hereof. Any previous agreement among or representations from the Parties or their affiliates with respect to the subject matter hereof is superseded by this Agreement, the Indenture, and the other Financing Documents. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto and thereto, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
10.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Delivery of an executed counterpart to this Agreement by facsimile transmission or electronic transmission in “pdf” format shall be as effective as delivery of a manually signed original.
10.10 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIMS, CONTROVERSY,
DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICT OF LAW).
10.11 CONSENT TO JURISDICTION. EACH OF THE PARTIES PARTY
HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
ANY CALIFORNIA STATE OR FEDERAL COURT SITTING IN ORANGE COUNTY,
CALIFORNIA, OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS RELATING HERETO. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES PARTY HERETO
AGREES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT A - 42 -
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FINAL JUDGMENT IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE
REFERRED TO IN THIS SECTION BROUGHT IN ANY SUCH COURT SHALL BE
CONCLUSIVE AND BINDING UPON IT SUBJECT TO RIGHTS OF APPEAL, AS THE
CASE MAY BE, AND MAY BE ENFORCED IN THE COURTS OF THE UNITED STATES
OF AMERICA OR THE STATE OF CALIFORNIA (OR ANY OTHER COURTS TO THE
JURISDICTION OF WHICH IT OR ANY OF ITS ASSETS IS OR MAY BE SUBJECT) BY A SUIT UPON SUCH JUDGMENT. NOTWITHSTANDING THE FOREGOING, NOTHING IN
THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE TRUSTEE OR ANY
OTHER BONDHOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE MANAGER OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
10.12 WAIVER OF JURY TRIAL, WAIVER OF VENUE, ETC.
(a) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER
OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.12 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. (b) EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE REQUIREMENTS OF LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN SECTION 10.11. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS
OF LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
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(c) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.13.
NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW.
10.13 Notices. All notices or other communications hereunder shall be given in the manner set forth in the Indenture to the Authority, the City, the Manager, the Trustee and the Accounts Bank at the applicable addresses specified in Exhibit C, or as to any party at such other address as shall be designated by such party in a written notice to each other party hereto.
10.14 Amendment; Waiver. Except as otherwise expressly provided for in this Agreement, no amendment or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the Authority and the other Parties hereto, subject to any consent required in accordance with Section [XX] of the Covenant Agreement, and in each case any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that the Accounts Bank may rely on any instruction of the Trustee in executing any amendment or waiver of this Agreement regarding the satisfaction of any such conditions set forth above. Notwithstanding the foregoing, the Trustee (acting at the written direction of the Required Bondholders), the Authority, the City, the Manager, and the Accounts Bank, and if in connection with the creation of any additional accounts not held at Accounts Bank, the applicable Accounts Bank, may amend or waive any provision hereof to add additional Pledged Accounts or permit the Authority or the Manager, as applicable, to open other accounts, in each case as may be necessary to effectuate the intent of this Agreement or otherwise allow for the flow of funds as may be necessary for ease of administering Gross Revenues or the Secured Obligations, in each case, so long as such additional accounts are subject to the requirements of the Indenture (as determined solely by the Authority, the Manager, and the Trustee); provided that, the Authority and the Manager, as applicable, shall deliver (or caused to be delivered) a copy of any such amendment and/or supplement to the Trustee and the Bondholders within five (5) Business Days of the entry thereof. To the extent Accounts Bank is a Bondholder, the Manager agrees that the Indenture and the other Financing Documents shall not be amended or waived to modify or change in an adverse manner the rights of the Accounts Bank as a Bondholder or its rights to priority of payment without the consent of the Accounts Bank.
10.15 Incumbency Certificates; Authorized Persons. Upon request of the Accounts Bank, the Authority, the City, the Manager, and the Trustee shall furnish to the Accounts Bank from time to time as may be necessary, duly executed incumbency certificates showing the names, titles and specimen signatures of the persons authorized on behalf of such Party to take the actions and give Disbursement Directions, notifications, approvals, other directions, and instructions required or permitted by this Agreement.
10.16 Termination. This Agreement shall remain in full force and effect until the applicable Termination Date as set forth in Section 10.3.
10.17 Paramountcy. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any other Financing Document, the provisions of this Agreement shall prevail and be paramount.
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indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God; it being understood that the Accounts Bank shall use reasonable efforts to resume performance as soon as possible under the circumstances.
10.19 USA PATRIOT Act. The Parties hereto acknowledge that in accordance with the PATRIOT Act, the Accounts Bank, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Accounts Bank.
The Parties to this Agreement agree that they will provide the Accounts Bank with such information as it may request in order for the Accounts Bank to satisfy the requirements of the PATRIOT Act.
10.20 Resignation of Accounts Bank.
(a) The Accounts Bank may at any time give notice of its resignation to the Trustee (for distribution to the Bondholders), the City and the Manager. Upon receipt of any such notice of resignation, the Trustee (acting at the written direction of the Required Bondholders) shall have the right, with the consent of the Manager (which consent shall not be unreasonably withheld, conditioned or delayed), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States and shall have commercial banking operations with total assets of at least $100,000,000. If no such successor shall have been so appointed by the Trustee (at the written direction of the Required Bondholders) and shall have accepted such appointment within thirty (30) days after the retiring Accounts Bank gives notice of its resignation (or such earlier day as shall be agreed by the Trustee (acting at the written direction of the Required Bondholders)) (the “Resignation Effective Date”), then the retiring Accounts Bank may (but shall not be obligated to) on behalf of the Bondholders appoint a successor Accounts Bank to act in the capacity of such retiring Accounts Bank so long as such successor meets the qualifications set forth above. If the retiring Accounts Bank fails to appoint a successor Accounts Bank to act in the capacity of the retiring Accounts Bank or if a successor Accounts Bank does not take office within thirty (30) days after the Resignation Effective Date, the retiring Accounts Bank or the Trustee (at the written direction of the Required Bondholders or, absent such written direction, the City or JPM), in each case, at the Manager’s expense, may petition any court of competent jurisdiction for the appointment of a successor Accounts Bank to act in the capacity of the retiring Accounts Bank. (b) With effect from the date on which the successor Accounts Bank has been appointed as the Accounts Bank and has received all collateral security held on behalf of the Bondholders, the retiring Accounts Bank shall be discharged from its duties and obligations hereunder.
Upon the acceptance of a successor’s appointment as the Accounts Bank hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Accounts Bank (other than any rights to indemnity payments or other amounts owed to the retiring Accounts Bank as of the Resignation Effective Date), and the retiring Accounts Bank shall be discharged from all of its duties and obligations hereunder (if not already discharged therefrom as provided above in this Section). After the retiring Accounts Bank’s resignation hereunder, the provisions of this Section 10.20 and Article VI shall continue in effect for the benefit of such retiring Accounts Bank, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them solely on behalf of Accounts Bank while the retiring Accounts Bank was acting as the Accounts Bank.
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10.21 Indenture. Notwithstanding anything herein to the contrary, the Liens granted to the Trustee (for the benefit of the Bondholders) pursuant to this Agreement and the other Collateral Documents and the exercise of any right or remedy by the Trustee or any other Bondholder hereunder or thereunder are subject to the provisions of the Indenture. In the event of any conflict or inconsistency between the provisions of the Indenture and the provisions of this Agreement or any other Collateral Document regarding the Liens granted hereunder or the exercise of any right or remedy by the Trustee or any other Bondholder with respect to the Collateral, the provisions of the Indenture shall control.
10.22 Expiration of Certain Financing Documents.
(a) From and after the date on which all of the Commitments under the Series 2023[_] Bond Purchase Agreement have expired or been terminated and all of the Secured Obligations have been paid and satisfied in full in cash (excluding Secured Obligations in the nature of contingent obligations for indemnification, expense reimbursement, tax gross-up or other yield protection as to which no claim has been made by the Person entitled thereto), all references in this Agreement and in each of the other Collateral Documents to the Bondholders, the Secured Obligations, the Series 2023[_] Purchase Contract, the Series 2023[_] Bond Purchase Agreement, the Bonds and the other Financing Documents, and all definitions in and provisions of this Agreement and each of the other Collateral Documents that relate exclusively to the Bondholders, the Secured Obligations, the Series 2023[_] Purchase Contract, the Series 2023[_] Bond Purchase Agreement, the Bonds or the other Financing Documents, shall, for all purposes, be ineffective (other than, for the avoidance of doubt, any terms which expressly survive the repayment in full of the Secured Obligations). (b) From and after the date on which the Commitments under the Series 2023[_] Bond Purchase Agreement have expired or been terminated and all of the Secured Obligations have been paid and satisfied in full in cash or cash collateralized as permitted under, and in accordance with, the Financing Documents (other than Secured Obligations in the nature of contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made by the Person entitled thereto), all references in this Agreement and in each of the other Collateral Documents to the Bondholders, the Secured Obligations, the Series 2023[_] Purchase Contract, the Series 2023[_] Bond Purchase Agreement, the Bonds and the other Financing Documents, and all definitions in and provisions of this Agreement and each of the other Collateral Documents that relate exclusively to the Bondholders, the Secured Obligations, the Series 2023[_] Purchase Contract, the Series 2023[_] Bond Purchase Agreement, the Bonds and the other Financing Documents, shall, for all purposes, be ineffective (other than, for the avoidance of doubt, any terms which expressly survive the repayment in full of the Secured Obligations). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.] [Signature Page to Accounts Agreement]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all as of the date first above written.
ANAHEIM PUBLIC FINANCING AUTHORITY
By:___________________________
Name:
Title:
CITY OF ANAHEIM
By:___________________________
Name:
Title:
[Signature Page to Accounts Agreement]
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ANAHEIM ARENA MANAGEMENT, LLC
By:___________________________
Name:
Title:
[Signature Page to Accounts Agreement]
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U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:___________________________
Name:
[Signature Page to Accounts Agreement]
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PACIFIC PREMIER BANK,
not in its individual capacity but solely as Accounts
Bank
By:___________________________
Name:
Title:
Exhibit A – Accounts Agreement
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EXHIBIT A
TO ACCOUNTS AGREEMENT
ACCOUNT NAMES AND NUMBERS
Accounts Bank Account
Number
Account Name
Pacific Premier Bank [●] Advance Deposits Account
Pacific Premier Bank [●] Operating Account
Pacific Premier Bank [●] Reserves Account
Pacific Premier Bank [●] Series 2023A Work Stoppage
Reserve Account
Pacific Premier Bank [●] Series 2023B Work Stoppage
Reserve Account
Exhibit B – Accounts Agreement
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EXHIBIT B
TO ACCOUNTS AGREEMENT
FORM OF DISBURSEMENT DIRECTIONS
[__________ __, 20__]
[Premier Pacific Bank, as Accounts Bank
[Address]
Attn:
Fax:
Email:
DISBURSEMENT DIRECTIONS
Ladies and Gentlemen:
We refer you to that certain Accounts Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), dated as of [____________ 1], 2023, among ANAHEIM PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), 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”), ANAHEIM ARENA MANAGEMENT, LLC, a limited liability company duly organized and existing under the laws of the State of California (the “Manager”), 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 (“USB”), not in its individual capacity but solely in its capacity as trustee for each of the Bondholders (together with its successors and assigns in such capacity, the “Trustee”), and PACIFIC PREMIER BANK, a California state-chartered banking corporation (“PPB”), not in its individual capacity but solely in its capacity as accounts bank and Securities Intermediary (solely in such capacity, the “Accounts Bank”). Capitalized terms used but not defined in this letter shall have the meanings given them in the Agreement.
The Waterfall Date shall be [______ __], 20[__].]
Pursuant to Section [___] of the Agreement, you are hereby directed to disburse funds held in the [specify account] Account as follows:
(i) [the amount to be disbursed],
(ii) [the date of disbursement],
(iii) [the recipient of the disbursement, and]
(iv) [the manner of disbursement and delivery instructions (including wiring instructions if applicable). City, state and country for each beneficiary should be included in all wiring instructions] AmericasActive:17056785.8
Very truly yours,
[ANAHEIM ARENA MANAGEMENT, LLC, as the Manager]1
By:
Name:
Title:
[U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee]
By:
Name:
Title:
1 To include signature blocks for each required Party, as appropriate.
Exhibit C – Accounts Agreement
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EXHIBIT C
TO ACCOUNTS AGREEMENT
NOTICE INFORMATION
If to the Authority:
[●]
If to the City:
[●]
If to the Accounts Bank:
[●]
If to the Manager:
[●]
If to the Trustee:
[●]
Exhibit E – Accounts Agreement
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EXHIBIT D
TO ACCOUNTS AGREEMENT
FORM OF DISTRIBUTION CONDITIONS CERTIFICATE