CHAPMAN DRAFT
MARCH 25, 2024
4275640
FEE AGREEMENT
DATED ___ [__], 2024
Reference is hereby made to that certain (i) Reimbursement Agreement dated as of _____, 2024 (as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms, the “Agreement”), between Bank of America, N.A. (the “Bank”), and City of Anaheim, a municipal corporation created and existing pursuant to the laws of the State of California (the “City”), relating to the Anaheim Housing and Public Improvements Authority Revenue Bonds, Series 2024-A (Water System Project) (Variable Rate Demand Bonds) (Second Lien Qualified Obligation) (the “Bonds”), and (ii) Irrevocable Direct Draw Letter of Credit dated ___ [__], 2024 (as amended, restated, supplemented, or otherwise modified from time to time, the “Letter of Credit”), issued pursuant to the Agreement, supporting the Bonds. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.
The purpose of this Fee Agreement (this “Fee Agreement”) is to confirm the agreement between the Bank and the City with respect to the Facility Fee (as defined below) and certain other fees payable by the City to the Bank. This Fee Agreement is the Fee Agreement referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement.
ARTICLE I. FEES.
Section 1.1. Facility Fee. The City hereby agrees to pay or cause to be paid to the Bank on July 1, 2024, for the period commencing on the Effective Date and ending on June 30, 2024, and in arrears on the first Business Day of each July, October, January, and April (each, a “Quarterly Payment Date”) occurring thereafter to the Stated Expiration Date, and on the Stated Expiration Date, a non-refundable facility fee (the “Facility Fee”) with respect to the commitment of the Bank under the Agreement in an amount equal to the rate per annum (the “Facility Fee Rate”) specified below of the Available Amount (without taking into account any temporary reductions thereto in effect on such date):
LEVEL
MOODY’S
RATING S&P RATING FITCH RATING
FACILITY FEE
RATE
Level 1 Aa1 AA+ AA+ 0.34%
Level 2 Aa2 AA AA 0.49%
Level 3 Aa3 AA- AA- 0.64%
Level 4 A1 A+ A+ 0.79%
Level 5 A2 A A 0.94%
Level 6 A3 A- A- 1.09%
Level 7 Baa1 BBB+ BBB+ 1.24%
Level 8 Baa2 BBB BBB 1.39%
Level 9 Baa3 BBB- BBB- 1.44%
The term “Rating” means, with respect to any Rating Agency, and at any given time, the lowest long-term unenhanced credit rating assigned by such Rating Agency to the City’s Parity -2-
Debt. In the event of a split in the ratings on the Parity Debt (i.e., one or more of the Rating Agency’s ratings on the Parity Debt is at a different Level than any other rating by either of the other Rating Agencies), the Facility Fee Rate shall be based upon the Level in which the lowest such Rating appears. For the avoidance of doubt, Level 9 is the Level with the lowest Ratings, and Level 1 is the Level with the highest Ratings for purposes of the above pricing matrix. Any change in the Facility Fee Rate resulting from a change in a Rating shall be and become effective as of and on the date of the public announcement of the change in such Rating. References to the ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system by any such Rating Agency, including, without limitation, any recalibration of the applicable rating in connection with the adoption of a “global” rating scale, the rating from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. The City acknowledges that as of the date hereof the Facility Fee Rate is that specified above for Level 1. Anything herein to the contrary notwithstanding, in the event that a Rating is suspended, withdrawn or otherwise unavailable from any Rating Agency or reduced below “Baa3” (or its equivalent) by Moody’s or “BBB-” (or its equivalent) by S&P or “BBB-” (or its equivalent) by Fitch, or upon the occurrence and during the continuance of an Event of Default, the Facility Fee Rate shall immediately, automatically and without notice increase by 1.50% above the Facility Fee Rate otherwise in effect for Level 9. The Facility Fees shall accrue interest at the Default Rate from the date payment is due until such Facility Fees are paid in full, such interest to be payable by the City on demand. All computations of fees payable under this Fee Agreement shall be made on the basis of a 360-day year and actual days elapsed.
Section 1.2. Amendment and Transfer Fees. The City shall pay to the Bank a fee equal to $2,500 in connection with each amendment to, or waiver or consent to, any Related Document and upon each appointment of a successor trustee plus, in each case, all reasonable costs or expenses (including, without limitation, reasonable attorney’s fees and expenses) which the Bank may incur by reason of or in connection with said change or transfer.
Section 1.3. Letter of Credit Drawing. The City agrees to pay or cause to be paid to the Bank a fee in an amount equal to $300 for each Drawing under the Letter of Credit on the date of such draw.
Section 1.4. Legal Fees. The City shall pay, or caused to be paid, in connection with the negotiation, execution and delivery of this Fee Agreement, the Agreement and the other Related Documents, the legal fees of legal counsel to the Bank, Chapman and Cutler LLP, in the amount not to exceed $50,000.
ARTICLE II. MISCELLANEOUS.
Section 2.1. Out-of-Pocket Expenses; Administration. The City hereby agrees to pay all of the Bank’s out-of-pocket expenses (including, without limitation, reasonable fees and disbursements of counsel for the Bank and any local counsel retained by the Bank) arising in connection with the administration and enforcement of, preservation of rights in connection with -3-
a workout, restructuring or default under or amendment or waiver with respect to, the Agreement, this Fee Agreement, the Bonds and the other Related Documents.
Section 2.2. Amendments. No amendment to this Fee Agreement shall become effective without the prior written consent of the City and the Bank.
Section 2.3. Governing Law. This Fee Agreement shall be governed by, and construed in accordance with, the laws of the State of California.
Section 2.4. Counterparts. This Fee Agreement may be executed in two or more counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument.
Section 2.5. Severability. Any provision of this Fee Agreement which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.
Section 2.6. No Disclosure. Unless required by law, the City shall not deliver or permit, authorize or consent to the delivery of this Fee Agreement to any Person for delivery to the Municipal Securities Rulemaking Board unless the Bank provides its prior written consent.
Section 2.7. Confidentiality. This Fee Agreement is delivered to the City on the understanding that neither this Fee Agreement nor any of its terms shall be disclosed, directly or indirectly, to any other Person except (a) to the City’s officers, directors, employees, accountants, attorneys, agents and advisors who are directly involved in the consideration of this matter on a confidential and need-to-know basis and for whose breach of this confidentiality undertaking the City shall be responsible or (b) under compulsion of law (whether by interrogatory, subpoena, civil investigative demand, open records request or otherwise) or by order of any court or governmental or regulatory body.
Section 2.8. Representation by Legal Counsel; Joint Preparation. The parties hereto have participated jointly in the negotiation and drafting of this Fee Agreement, and each of the parties was represented by its legal counsel during the negotiation and execution of this Fee Agreement.
In the event an ambiguity or question of intent or interpretation arises, this Fee Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Fee Agreement.
[SIGNATURE PAGE TO FEE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Fee Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
CITY OF ANAHEIM
By:____________________________________
Name: _____________________________
Title: _____________________________
(SEAL)
Attest:
By:_________________________________
Name: __________________________
Title: __________________________
[SIGNATURE PAGE TO FEE AGREEMENT]
BANK OF AMERICA, N.A.
By:____________________________________
Name: _______________________________
Title: ________________________________