85740924.tO
BURBANK WATER AND POWER
WATER REVENUE BOND INDENTURE
by and between the
CITY OF BURBANK, CALIFORNIA
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
Dated as of November l, 2010
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TABLE OF CONTENTS
ARTICLE I
EQUALITY OF SECURITY; DEFINITIONS; CONTENT OF CERTIFICATES AND
OPINIONS
SECTION I.OJ.
SECTION 1.02.
SECTION 1.03.
SECTION 2.01.
SECTION 2.02.
SECTION 2.03.
SECTION 2.04.
SECTION 2.05.
SECTION 2.06.
SECTION 2.07.
SECTION 2.08.
SECTION 2.09.
SECTION 2.10.
SECTION 3.01.
SECTION 3.02.
SECTION 3.03.
SECTION 3.04.
SECTION 3.05.
SECTION 4.01.
SECTION 5.01.
SECTION 5.02.
SECTION 5.03.
SECTION 5.04.
SECTION 5.05.
SECTION 6.01.
SECTION 6.02.
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Equality of Security ................................................................................... 2 Definitions .................................................................................................. 3 Content of Certificates and Opinions ....................................................... 18
ARTICLE II
THE BONDS
Authorization ofBonds ............................................................................ 18 Terms of the Bonds .................................................................................. 19 Form of Bonds ......................................................................................... 19 Execution of Bonds .................................................................................. 19 Transfer of Bonds .................................................................................... 19 Exchange of Bonds .................................................................................. 20 Bond Register ........................................................................................... 20 Temporary Bonds ..................................................................................... 20 Bonds Mutilated, Lost, Destroyed or Stolen ............................................ 20 Use of Depository .................................................................................... 21
ARTICLE III
ISSUANCE OF BONDS
Issuance of Bonds .................................................................................... 23 Proceedings for Issuance of Additional Series of Bonds ......................... 24 Issuance of Refunding Bonds .................................................................. 24 Application of Proceeds ........................................................................... 24 Limitations on the Issuance of Obligations ............................................. 24
ARTICLEN
REDEMPTION OF BONDS
Terms of Redemption .............................................................................. 25
ARTICLEV
WATER NET REVENUES
Pledge of Water Net Revenues; Water Revenue Fund ............................ 26 Pa)'IIlents Into Other Funds ...................................................................... 27 Debt Service Fund .................................................................................... 28 Parity Reserve Fund; Series Reserve Funds ............................................ 30 Investment of Moneys in Funds and Accounts ........................................ 33
ARTICLE VI
COVENANTS
Punctual Pa)'IIlent ..................................................................................... 34 Extension ofPa)'IIlent ofBonds ............................................................... 34 ATTACHMENT 8
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SECTION 6.03.
SECTION 6.04.
SECTION 6.05.
SECTION 6.06.
SECTION 6.07.
SECTION 6.08.
SECTION 6.09.
SECTION 6.10.
SECTION 6.11.
SECTION 6.12.
SECTION 7.01.
SECTION 7.02.
SECTION 7.03.
SECTION 7.04.
SECTION 7.05.
SECTION 7.06.
SECTION 7.07.
SECTION 7.08.
SECTION 7.09.
SECTION 8.01.
SECTION 8.02.
SECTION 8.03.
SECTION 8.04.
SECTION 8.05.
TABLE OF CONTENTS
(continued)
Page
Waiver of Laws ........................................................................................ 34 Further Assurances ................................................................................... 34 Against EncUlilbrances ............................................................................. 35 Accounting Records and Financial Statements ........................................ 35 Rebate Fund ............................................................................................. 35 Tax Covenants ......................................................................................... 36 Rates and Charges .................................................................................... 36 Maintenance and Operation of System; Insurance .................................. 36 Sale of Water System ............................................................................... 36 Continuing Disclosure Agreement ........................................................... 37
ARTICLE VII
EVENTS OF DEF AULT AND REMEDIES OF OWNERS
Events of Default ..................................................................................... 37 Application of Water Net Revenues and Other Funds After Default; Acceleration ............................................................................... 38 Trustee to Represent Owners ................................................................... 39 Owners' Direction of Proceedings ........................................................... 40 Limitation on Owners' Right to Sue ........................................................ 40 Absolute Obligation of the City ............................................................... 40 Termination of Proceedings ..................................................................... 40 Remedies Not Exclusive .......................................................................... 41 No Waiver ofDefault ............................................................................... 41
ARTICLE VIII
THE TRUSTEE
Appointment; Duties, Immunities and Liabilities of Trustee .................. 41 Merger or Consolidation .......................................................................... 43 Liability of Trustee .................................................................................. 43 Right of Trustee to Rely on Documents .................................................. 45 Compensation and Indemnification of Trustee ........................................ 45
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS INDENTURE
SECTION 9.01.
SECTION 9.02.
SECTION 9.03.
SECTION 9.04.
SECTION 10.01.
SECTION 10.02.
SECTION 10.03.
SECTION 10.04.
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Amendments Permitted ............................................................................ 46 Effect of Supplemental Indenture ............................................................ 48 Endorsement of Bonds; Preparation of New Bonds ................................ 48 Amendment of Particular Bonds .............................................................. 48
ARTICLEX
DEFEASANCE
Discharge oflndentwe ............................................................................. 48 Discharge of Liability on Bonds .............................................................. 49 Deposit of Money or Securities with Trustee .......................................... 49 Payment of Bonds After Discharge oflndenture ..................................... 50 ll
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SECTION 11.01.
SECTION 11.02.
SECTION 11.03.
SECTION 11.04.
SECTION 11.05.
SECTION 11.06.
SECTION 11.07.
SECTION 11.08.
SECTION 11.09.
SECTION 11.10.
SECTION 11.11.
SECTION 11.12.
SECTION 11.13.
SECTION 11.14.
SECTION 11.15.
SECTION 11.16.
SECTION 11.17.
85740924.10
TABLE OF CONTENTS
(continued)
ARTICLE XI
MISCELLANEOUS
Page
Liability of City Limited to Water Net Revenues .................................... 50 Successor is Deemed Included in All References to Predecessor ........... 51 Limitation of Rights to City, Trustee and Owners ................................... 51 Waiver ofNotice ...................................................................................... 51 Destruction or Delivery of Cancelled Bonds ........................................... 51 Severability of Invalid Provisions ............................................................ 51 Notice to City and Trustee ....................................................................... 52 Evidence of Rights of Owners ................................................................. 52 Disqualified Bonds ................................................................................... 52 Money Held for Particular Bonds ............................................................ 53 Funds and Accounts; Valuation ............................................................... 53 Article and Section Headings and References ......................................... 53 Waiver of Personal Liability .................................................................... 53 Governing Law ........................................................................................ 53 Business Day ............................................................................................ 53 Effectiveness ............................................................................................ 54 Execution in Counterparts ........................................................................ 54 111
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BURBANK WATER AND POWER
WATER REVENUE BOND INDENTURE
This BURBANK WATER AND POWER WATER REVENUE BOND INDENTURE, dated as of November 1, 2010 (the "Indenture"), by and between the CITY OF BURBANK, CALIFORNIA (the "City"), a municipal corporation and chartered city duly organized and existing under the Constitution and laws of the State of California, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee (the "Trustee");
WITNESS ETH:
WHEREAS, the City is a duly constituted chartered city of the State of California duly authorized to exercise the powers granted by the City Charter of the City (the "Charter"); and WHEREAS, Article 12 of Chapter 4 of Title 2 (formerly Article 12 of Chapter 14) of the City Code provides as follows:
Section 2-4-1201. POWER: The Council, exercising the powers reserved to the City under Sections 3 and 5 (formerly Sections 6 and 8) of Article XI of the Constitution of the State of California and Section 1010 of the Charter of the City, may, when the public interest and necessity require, by resolution or resolutions issue revenue bonds for the following purposes: (a) additions, betterments and extensions to and improvement of the electric energy system of the City, including capacity rights in electrical generation and transmission facilities, and related facilities, and incidental costs and expenses thereto, (b) additions, betterments and extensions to and improvement of the water system of the City and related facilities and incidental costs and expenses related thereto, (c) the acquisition, construction, extension, betterment, or improvement of any other revenue producing system or facility of the City, and (d) to refund obligations issued for any of the foregoing purposes.
Section 2-4-1202. PROCEDURE: The procedure for the issuance of revenue bonds shall be the procedure set forth in the State Revenue Bond Law of 1941 (commencing with Government Code Section 54300), and by this reference, with the exceptions hereafter stated, the provisions of said Law are incorporated herein; provided, however, that no election to authorize the issuance of said bonds shall be held, and the restrictions of Government Code 54310 shall not apply, and to those ends Sections 54380 through 54388 and Section 54310 of said Government Code are not incorporated herein and shall not be applicable to the issuance of said revenue bonds; provided, further, that the resolution authorizing the issuance of said revenue bonds may provide that such bonds shall be payable from the revenues of the Enterprise (as specifically defined in such resolution), which may include combined revenues from electric and water services, from interest earnings on unspent bond proceeds and from such other funds as may be legally available for such purpose; provided, further, that before selling the revenue bonds, or any part thereof, the Council may either negotiate the private sale of the revenue bonds with a responsible purchaser or purchasers, who may be purchasing for their own account or for purposes of resale, or give notice inviting sealed bids pursuant to Government Code Section 54388; and provided, further that the interest rate limitation 85740924.10 1
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and the limit on discount contained in Section 54402(b) and 54418, respectively, of the Government Code shall likewise not be applicable; and
WHEREAS, the City has determined to enter into this Indenture to provide for the authentication and delivery of water system revenue bonds, to establish and declare the terms and conditions llpon which the Bonds shall be issued and secured and to secure the payment of the principal thereof and premium (if any) and interest thereon; WHEREAS, the execution and delivery of this Indenture has in all respects been duly and validly authorized by resolutions duly passed and approved by the City; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Indenture do exist, have happened and have been performed in due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued, authenticated and delivered hereunder and to provide the terms and conditions under which all property, rights and interests hereby assigned and pledged are to be dealt with and disposed of, and to secure the performance and observance of the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and in consideration of the premises and of the material covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the City does hereby agree and covenant with the Trustee for the benefit of the respective Owners, from time to time, of the Bonds, as follows:
ARTICLE I
EQUALITY OF SECURITY; DEFINITIONS;
CONTENT OF CERTIFICATES AND OPINIONS
SECTION 1.01. Equality of Security. In consideration of the acceptance of the Bonds by the Owners thereof from time to time, this Indenture shall be deemed to be and shall constitute a contract between the City, the Trustee and the Owners from time to time of the Bonds and the covenants and agreements herein set forth to be performed by or on behalf of the City or the Trustee shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds, without preference, priority or distinction as to security or othenvise of any of the Bonds over any of the others by reasons of the series, time of issue, sale or negotiation thereof or for any cause whatsoever, except as expressly provided therein or herein. Nothing herein shall prevent additional security being provided to particular Bonds or the creation of a bond reserve fund therefor under any Supplemental Indenture. 85740924.10 2
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SECTION 1.02. Definitions. The terms defined in this Section shall, for all purposes of this Indenture and of any Supplemental Indenture and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined.
Accreted Value
"Accreted Value" means, with respect to any Capital Appreciation Indebtedness, the principal amount thereof plus the interest accrued thereon, compounded at the interest rate thereon on each date as specified therein.
Accrued Aggregate Debt Seivice
"Accrued Aggregate Debt Seivice" means, as of any date of calculation, an amount equal to the sum of the amounts of accrued Debt Seivice with respect to all Series of Bonds, calculating the accrued Debt Seivice with respect to each Series at an amount equal to the sum of (i) interest on the Outstanding Bonds of such Series accrued and unpaid and to accrue to the end of the then current calendar month, and (ii) principal due and unpaid and that portion of the principal for such Series next due which would have accrued if deemed to accrue to the end of such calendar month if such principal were deemed to accrue daily in equal amounts from the next preceding principal payment date for such Series (or, if there shall be no such preceding principal payment date, from a date one (1) year preceding the due date of such principal installment or from the date of issuance of the Bonds of such Series, whichever period is shorter).
Annual Debt Seivice
"Annual Debt Seivice" means, for any Fiscal Year, the aggregate amount of principal and interest on all Bonds and Parity Debt becoming due and payable during such Fiscal Year calculated using the principles and assumptions set forth under the definition of Debt Seivice.
Assumed Debt Seivice
"Assumed Debt Seivice" means for any Fiscal Year the aggregate amount of principal and interest which would be payable on all Bonds and Parity Debt if each Excluded Principal Payment, amortized for a period specified by the City (but no longer than thirty (30) years from the date of the issuance of the Bonds or Parity Debt to which such Excluded Principal Payment relates) on a substantially level debt seivice basis or other amortization basis provided by the City, calculated based on a fixed interest rate equal to the rate at which the City could borrow for such period, as set forth in a certificate of a consultant delivered to the Trustee, who may rely conclusively on such certificate, within thirty (30) days of the date of calculation.
Bond Obligation
"Bond Obligation" means, as of any given date of calculation, (1) with respect to any Outstanding Bond which is Current Interest Indebtedness, the principal amount thereof, and (2) with respect to any Outstanding Bond which is Capital Appreciation Indebtedness, the Accreted Value thereof.
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Bonds: Serial Bonds; Term Bonds
"Bonds" means the Burbank Water and Power Water Revenue Bonds authorized by, and at any time Outstanding pursuant to, this Indenture.
"Serial Bonds" means Bonds, maturing in specified years, for which no mandatory sinking fund payments are provided.
"Term Bonds" means Bonds payable at or before their specified maturity date or dates from mandatory sinking fund payments established for that purpose and calculated to retire such Bonds on or before their specified maturity date or dates.
Business Day
"Business Day" means any day other than (1) a Saturday, Sunday, or a day on which banking institutions in the State or the State of New York are authorized or obligated by law or executive order to be closed, and (2) for purposes of payments and other actions relating to Bonds secured by a letter of credit, a day upon which commercial banks in the city in which is located the office of the issuing bank at which demands for payment under the letter of credit are to be presented are authorized or obligated by law or executive order to be closed.
Capital Appreciation Indebtedness
"Capital Appreciation Indebtedness" means Bonds and Parity Debt on which interest is compounded and paid less frequently than annually.
Certificate. Statement, Request. Written Request, Requisition or Order of the City "Certificate;" "Statement," "Request," "Written Request," "Requisition" or "Order" of the City mean, respectively, a written certificate, statement, request, requisition or order signed in the name of the City by its City Manager or any other person authorized by the City Manager to execute such instruments. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.03 hereof, certificates and opinions shall include the statements provided for in Section 1.03 hereof.
Charter
"Charter" means the City Charter of the City, as amended from time to time. "City" means the City of Burbank, California.
City Code
"City Code" means the Municipal Code of the City, as amended from time to time. 85740924.10 4
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"Code" means the Internal Revenue Code of 1986, and the regulations applicable thereto or issued thereunder.
Continuing Disclosure Agreement
"Continuing Disclosure Agreement" means any Continuing Disclosure Agreement executed and delivered by the City relating to any Series of Bonds.
Corporate Trust Office
"Corporate Trust Office" or "corporate trust office" means the corporate trust office of the Trustee at 707 Wilshire Blvd. 17th Floor, Los Angeles, California 90017 Attention:
Corporate Trust Department, or such other office designated by the Trustee.
Costs of Issuance
"Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the City and related to the authorizatio,n, execution, sale and delivery of the Bonds, including but not limited to advertising and printing costs, costs of preparation and reproduction of documents, filing and recording fees, travel expenses and costs relating to rating agency meetings and other meetings concerning the Bonds, initial fees and charges of the Trustee, legal fees and charges, fees and disbursements of consultants and professionals, financial advisor fees and expenses, rating agency fees, fees and charges for preparation, execution, transportation and safekeeping of Bonds, surety, insurance and credit enhancement costs, and any other cost, charge or fee in connection with the delivery of Bonds.
Council
"Council" means the City Council of the City.
Counterparty
"Counterparty" means an entity which has entered into an Interest Rate Swap Agreement with the City.
Current Interest Indebtedness
"Current Interest Indebtedness" means the Bonds and Parity Debt on which interest is paid at least annually.
Debt Service
"Debt Service" means the amount of principal and interest becoming due and payable on all Bonds and Parity Debt; provided, however, that for the purposes of computing Debt Service:
(a) Excluded Principal Payments (and the interest related thereto, provided such interest is being paid from the same source as the Excluded Principal Payments) 85740924.10 5
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shall be excluded from such calculation and Assumed Debt Service shall be included in such calculation;
(b) if the Bonds or Parity Debt are Variable Rate Indebtedness, the interest rate thereon for which an Interest Rate Swap Agreement is not in-place and the interest on which is excluded or expected to be excluded from gross income for federal income tax purposes for periods when the actual interest rate cannot yet be determined shall be assumed to be equal to the average of the SIFMA Swap Index for the five years preceding such date of calculation;
(c) if the Bonds or Parity Debt are Variable Rate Indebtedness, the interest rate thereon for which an Interest Rate Swap Agreement is not in-place and the interest on which is included or expected to be included in gross income for federal income tax purposes for periods when the actual interest rate cannot yet be detennined shall be calculated at an interest rate equal to 100% of the average One Month USD LIBOR Rate during the five years preceding such date of calculation or such higher rate as shall be specified in a Certificate of the City;
(d) principal and interest payments on Bonds and Parity Debt shall be excluded to the extent such payments are to be paid from amounts on deposit with the Trustee or another fiduciary in escrow specifically therefor and to the extent that such interest payments are to be paid from the proceeds of Bonds or Parity Debt held by the Trustee or another fiduciary as capitalized interest;
(e) in determining the principal amount, payment shall (unless a different subsection of this definition applies for purposes of determining principal maturities or amortization) be assumed to be made in accordance with any amortization schedule established for such debt, including any mandatory sinking fund payments or any scheduled redemption or payment of Bonds or Parity Debt on the basis of Accreted Value, and for such purpose, the redemption payment or payment of Accreted Value shall be deemed a principal payment and interest that is compounded and paid as Accreted Value shall be deemed due on the scheduled redemption or payment date of such Capital Appreciation Indebtedness;
(f) with respect to any Bonds or Parity Debt that are Variable Rate Indebtedness for which an Interest Rate Swap Agreement is in-place providing for a fixed rate of interest to maturity or for a specific term with respect to such Bonds or Parity Debt, the interest rate on such Bonds or Parity Debt shall be assumed to be the synthetic fixed interest rate specified in such Interest Rate Swap Agreement for such term; provided, that if, pursuant to a Certificate of the City filed with the Trustee in connection with the issuance of an additional Series of Bonds or Parity Debt or any calculation of the Reserve Requirement, the sum of (i) interest payable on such Bonds or Parity Debt, plus (ii) amounts payable by the City under such Interest Rate Swap Agreement, less (iii) amounts receivable by the City under such Interest Rate Swap Agreement, is expected to be greater than the interest payable on the Bonds or Parity Debt to which such Interest Rate Swap Agreement relates (i.e., if such Interest Rate Swap Agreement is an "off market" Interest Rate Swap Agreement), then, in such instance, such excess amounts 35740924.10 6
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expected to be payable by the City under such Interest Rate Swap Agreement or in connection with such Bonds or Parity Debt shall be included in the calculation of Debt Service;
(g) with respect to any Bonds or Parity Debt bearing interest, or expected to bear interest, at a fixed interest rate for which an Interest Rate Swap Agreement is in place providing for a net variable interest rate with respect to such Bonds or Parity Debt for a specific tenn, the interest rate on such Bonds or Parity Debt shall be assumed to be equal for such term to the sum of (i) the fixed interest rate or rates to be paid on the Bonds or Parity Debt, minus (ii) the fixed interest rate receivable by the City under such Interest Rate Swap Agreement, plus (iii) the average interest rate of the index on which the Interest Rate Swap Agreement is based, as identified in a Certificate of the City, or, if not based on an identifiable index, then the SIFMA Swap Index, in each case, over the five years preceding the date of calculation or such higher rate as shall be specified in a Certificate of the City in connection with the issuance of an additional Series of Bonds or Parity Debt or any calculation of the Reserve Requirement; (h) if any Bonds or Parity Debt include an option or an obligation to tender all or a portion of such Bonds or Parity Debt to the City, the Trustee or another fiduciary or agent and require that such Bonds or Parity Debt or portion thereof be purchased if properly presented, then for purposes of determining the amounts of principal and interest due, the options or obligations to tender shall be treated as a principal maturity occurring on the first date on which holders or owners thereof may or are required to tender, except that any such option or obligation to tender shall be ignored and not treated as a principal maturity, if(l) such Bonds or Parity Debt are rated in one of the two highest long-term Rating Categories by Moody's, Fitch or Standard & Poor's or such Bonds or Parity Debt are rated in the highest short-tenn note or commercial paper Rating Categories by Moody's, Fitch or Standard & Poor's and (2) funds for the purchase price are to be provided by a letter of credit or standby bond purchase agreement and the obligation of the City with respect to the provider of such letter of credit or standby bond purchase agreement, other than its obligations on such Bonds or Parity Debt, shall be subordinated to the obligation of the City on the Bonds and Parity Debt; and (i) if interest on any Bonds or Parity Debt is reasonably anticipated to be reimbursed to the City by a Subsidy Payment, then at the election of the City to exclude such Subsidy Payment from Water Revenues, interest payments with respect to such Bonds or Parity Debt may be reduced by the amount of interest reasonably anticipated to be paid or reimbursed by the United States of America; provided, however, that if the City elects to include such Subsidy Payment in the definition of Water Revenues then interest payments with respect to such Bonds or Parity Debt shall not be reduced by the amount of interest reasonably anticipated to be paid or reimbursed by the United States of America.
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Debt Service Fund
"Debt Service Fund" means the fund by that name established pursuant to Section 5.03 hereof.
Defeasance Securities
"Defeasance Securities" means any of the following:
(i) any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of the Federal National Mortgage Association, the Government National Mortgage Association, Federal Home Loan Banks and Federal Home Loan Mortgage Corporation to the extent unconditionally guaranteed by the United States of America;
(ii) any certificates, receipts, securities or other obligations evidencing ownership of, or the right. to receive, a specified portion of one or more interest payments or principal payments, or any combination thereof, to be made on any bond, note, or other obligation described above in clause (i) including, but not limited to, REFCORP interest strips; or
(iii) any bonds or other obligations of any state of the United States of America or any political subdivision thereof (a) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described above in clause (i) or (ii) which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the interest payment dates and the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, (c) as to which the principal of and interest on the bonds and obligations of the character described above in clause (i) or (ii) which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay the principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (iii) on the interest payment dates and the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (iii), as appropriate, and (d) which have been rated not lower than their respective ratings on the Bonds by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds).
EMMA
"EMMA" means the Electronic Municipal Market Access System, a facility of the Municipal Securities Rulemaking Board, or its successor. 85740924.10 8
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Event of Default
"Event of Default" means any of the events specified in Section 7 .01 hereof.
Excluded Principal Payments
"Excluded Principal Payments" means each payment of principal (or the principal component of lease or installment purchase payments) of Bonds or Parity Debt which the City determines on a date not later than the date of issuance thereof that the City intends to pay with moneys that are not Water Revenues or Water Net Revenues, but from the proceeds of future debt obligations of the City and the Trustee may rely conclusively on such determination of the City.
Fiscal Year
"Fiscal Year" means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve-month period hereafter selected and designated as the official fiscal year period of the City which designation shall be provided to the Trustee in a Certificate of the City.
"Fitch" means Fitch, Inc., and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency selected by the City.
Generally Accepted Accounting Principles Applicable to Govenunents "Generally Accepted Accounting Principles Applicable to Governments" means generally accepted accounting principles applicable to governments as promulgated by the Governmental Accounting Standards Board or its successor.
Indenture
"Indenture" means this Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010, by and between the City and the Trustee, as originally executed and as it may from time to time be supplemented or amended by any Supplemental Indenture delivered pursuant to the provisions hereof.
Interest Rate Swap Agreement
"Interest Rate Swap Agreement" means an interest rate swap, cap, collar, option, floor, forward, derivative, or other hedging agreement, arrangement or security, however denominated, entered into between the City and a Counterparty, in connection with or incidental to, the issuance or carrying of Bonds, including, without limitation, an interest rate swap, cap, collar, option, floor, forward, derivative, or other hedging agreement, arrangement or security entered 85740924.10 9
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into in advance of the issuance of Bonds and designated by the City in a certificate or Supplemental Indenture as a Parity Debt.
Investment Securities
"Investment Securities" means the following:
(i) any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any of the federal agencies and federally sponsored entities set forth in clause (iii) below to the extent unconditionally guaranteed by the United States of America;
(ii) any certificates, receipts, securities or other obligations evidencing ownership of, or the right to receive, a specified portion of one or more interest payments or principal payments, or any combin!Jtion thereof, to be made on any bond, note, or other obligation described above in clause (i);
(iii) obligations of the Federal National Mortgage Association, the Government National Mortgage Association, Federal Home Loan Banks, and Federal Home Loan Mortgage Corporation;
(iv) obligations of any state, territory or commonwealth of the United States of America or any political subdivision thereof or any agency or department of the foregoing; provided that at the time of their purchase such obligations are rated not lower than their respective ratings on the Bonds by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds);
(v) any bonds or other obligations of any state of the United States of America or any political subdivision thereof (a) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are secured as to principal and interest and redemption premium, if any, ~y a fund consisting only of cash or bonds or other obligations of the character described above in clause (i), (ii) or (iii) which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the interest payment dates and the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, (c) as to which the principal of and interest on the bonds and obligations of the character described above in clause (i), (ii) or (iii) which have been deposited in sucb fund along with any cash on deposit in such fund are sufficient to pay the principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (v) on the interest payment dates and the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (v), as appropriate, and ( d) which have been rated not lower than their respective ratings on the 85740924.10 10
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Bonds by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds); (vi) bonds, notes, debentures or other evidences of indebtedness issued or guaranteed by any corporation which are, at the time of purchase, rated by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds) in their respective highest short tenn Rating Categories, or, ifthe term of such indebtedness is longer than three (3) years, rated not lower than their respective ratings on the Bonds by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds);
(vii) demand or time deposits or certificates of deposit, whether negotiable or nonnegotiable, issued by any bank or trust company organized under the laws of any state of the United States of America or any national banking association (including the Trustee), provided that such certificates of deposit shall be purchased directly from such a bank, trust company or national banking association and shall be either (1) continuously and fully insured by the Federal Deposit Insurance Corporation, or (2) continuously and fully secured by such securities and obligations as are described above in clauses (i) through (iv), inclusive, which shall have a market value (exclusive of accrued interest) at all times at least equal to the principal amount of such certificates of deposit and shall be lodged with the Trustee, as custodian, by the bank, trust company or national banking association issuing such certificates of deposit, and the bank, trust company or national banking association issuing each such certificate of deposit required to be so secured shall furnish the Trustee with an undertaking satisfactory to it that the aggregate market value of all such obligations securing each such certificate of deposit will at all times be an amount equal to the principal amount of each such certificate of deposit and the Trustee shall be entitled to rely on each such undertaking; (viii) taxable commercial paper or tax-exempt commercial paper, rated in their respective highest Rating Categories by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds);
(ix) variable rate obligations required to be redeemed or purchased by the obliger or its agent or designee upon demand of the holder thereof secured as to such redemption or purchase requirement by a liquidity agreement with a corporation and as to the payment of interest and principal either upon maturity or redemption (other than upon demand by the holder thereof) thereof by an unconditional credit facility of a corporation provided that the variable rate obligations themselves are rated in their respective highest Rating Categories for its short-term rating, if any, and not lower than their respective ratings on the Bonds for its long-term rating, if any, by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds), and that the corporations providing the liquidity agreement and credit facility have, at the date of acquisition of the variable rate obligation by the Trustee, an outstanding issue of unsecured, uninsured and unguaranteed debt obligations rated not lower than their respective ratings on the Bonds by Moody's (if 85740924.10 11
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Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds); (x) any repurchase agreement with any bank or trust company organized under the laws of any state of the United States or any national banking association (including the Trustee) having a minimum permanent capital of one hundred million dollars ($100,000,000) and with short-term debt rated by Moody's (if Moody's is tben rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds) in their respective four highest short-tenn rating categories or with government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York, which agreement is secured by any one or more of the securities and obligations described in clauses (i), (ii) or (iii) above, which shall have a market value (exclusive of accrued interest and valued at least monthly) at least equal to the principal amount of such investment and shall be lodged with the Trustee or other fiduciary, as custodian for the Trustee, by the bank, trust company, national banking association or bond dealer executing such repurchase agreement, and the entity executing each such repurchase agreement required to be so secured shall furnish the Trustee with an undertaking satisfactory to it that the aggregate market value of all such obligations securing each such repurchase agreement (as valued at least monthly) will be an amount equal to the principal amount of each such repurchase agreement and the Trustee shall be entitled to rely on each such undertaking;
(xi) any cash sweep or similar account arrangement of or available to the Trustee, the investments of which are limited to investments described in clauses (i), (ii), (iii), (iv) and (x) of this definition of Investment Securities and any money market fund, the entire investments of which are limited to investments described in clauses (i), (ii), (iii), (iv) and (x) of this definition of Investment Securities and which money market fund is rated in their respective highest Rating Categories by Moody's (if Moody's is then rating the Bonds), Fitch (if Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds); provided that as used in this clause (xi) and clause (xii) investments will be deemed to satisfy the requirements of clause (x) if they meet the requirements set forth in clause (x) ending with the words "clauses (i), (ii) or (iii) above" and without regard to the remainder of such clause (x); (xii) investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline fmancial guaranty insurance company, claims paying ability, of the guarantor is rated at least "AA" by Standard & Poor's and "AA" by Fitch; provided, that the terms of the investment agreement shall be approved in writing by each insurer of the Bonds, if any;
(xiii) shares of beneficial interest in diversified management companies investing exclusively in securities and obligations described in clauses (i) through (xii) of this definition of Investment Securities and which companies are rated in their respective highest Rating Categories by Moody's (if Moody's is then rating the Bonds), Fitch (if 85740924.10 12
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Fitch is then rating the Bonds) and Standard & Poor's (if Standard & Poor's is then rating the Bonds) or have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in such securities and obligations and with assets under management in excess of $500,000,000; (xiv) the Local Agency Investment Fund; and
(xv) any investment approved by the Council.
Maximum Annual Debt Service
"Maximum Annual Debt Service" means the greatest amount of principal and interest becoming due and payable on all Bonds and Parity Debt in the Fiscal Year in which the calculation is made or any subsequent Fiscal Year using the principles and assumptions set forth under the definition of Debt Service.
Moody's
"Moody's" means Moody's Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the City.
One Month USD LIBOR Rate
"One Month USD LIBOR Rate" means the rate for deposits in U.S. dollars for a one month maturity that appears on Reuters Screen LIBOROl Page (or such other page as may replace that page on that service, or such other service as may be nominated by the British Bankers Association, for the purpose of displaying London interbank offered rates for U.S. dollar deposits) as of 11:00 a.m., London time, on the date of determination of such rate, except that, if such rate does not appear on such page on such date, the One Month USD LIBOR Rate means a rate determined on the basis of the rates at which deposits in U.S. dollars for a one-month maturity and in a principal amount of at least U.S. $1,000,000 are offered at approximately 11 :00 a.m., London time, on such date, to prime banks in the London interbank market by three major banks in the London interbank market (herein referred to as the "Reference Banks") selected by the Trustee (provided, however, that the Trustee may appoint an agent to identify such Reference Banks). The Trustee or its agent is to request the principal London office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the One Month LIBOR Rate will be the arithmetic mean of such quotations. If fewer than two quotations are provided, the One Month LIBOR Rate will be the arithmetic mean of the rates quoted by three (if three quotations are not provided, two or one, as applicable) major banks in New York City, selected by the Trustee or its agent, at approximately 11 :00 a.m., New York City time, on such date for loans in U.S. dollars to leading European banks in a principal amount of at least U.S. $1,000,000 having a one-month maturity. If none of the banks in New York City selected by the Trustee or its agent is then quoting rates for such loans, then the One Month LIBOR Rate for the ensuing interest period will mean the One Month LIBOR Rate most recently in effect.
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Opinion of Bond Counsel
"Opinion of Bond Counsel" means a written opinion ofa law firm of national standing in the field of public finance selected by the City.
Outstanding
"Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds with respect to which all liability of the City shall have been discharged in accordance with Section 10.02, including Bonds (or portions of Bonds) referred to in Section 11.1 O; and (3) 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 this Indenture.
Owner
"Owner" whenever used herein with respect to a Bond, means the person in whose name such Bond is registered.
Parity Debt
"Parity Debt" means SRF Obligations and any other indebtedness, installment sale obligation, lease obligation or other obligation of the City for borrowed money or Interest Rate Swap Agreement having an equal lien and charge upon the Water Net Revenues, therefore payable on a parity with the Bonds (whether or not any Bonds are Outstanding).
Parity Reserve Fund
"Parity Reserve Fund" means the reserve fund created for Participating Bonds pursuant to Section 5.04 hereof.
Participating Bonds
"Participating Bonds" means all Bonds Outstanding other than Bonds which are designated by the City as Bonds that will not constitute Participating Bonds in accordance with the provisions of Section 3.02 hereof.
Person
"Person" means an association, corporation, firm, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
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Rating Category
"Rating Category" means (i) with respect to any long-term rating category, all ratings designated by a particular letter or combination of letters, without regard to any nwnerical modifier, plus or minus sign or other modifier and (ii) with respect to any short-term or commercial paper rating category, all ratings designated by a particular letter or combination of letters and talcing into account any numerical modifier, but not any plus or minus sign or other modifier.
Rebate Fund
"Rebate Fund" means that fund established under Section 6.07 hereof.
Rebate Requirement
"Rebate Requirement" means the Rebate Requirement defined in a Tax Certificate.
Redemption Price
"Redemption Price" means, with respect to any Bond (or portion thereof) the Bond Obligation of such Bond (or portion thereof) plus the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such Bond and this Indenture.
Reserve Fund Requirement
"Reserve Fund Requirement" means, as of any date of calculation, (i) with respect to the Parity Reserve Fund, an amount equal to one-half of the greatest amount of principal and interest becoming due and payable on all Outstanding Participating Bonds in the then current or any future Fiscal Year, net of any expected Subsidy Payment, and (ii) with respect to any Series Reserve Fund for a Series of Bonds that do not constitute Participating Bonds, the reserve fund requirement (which reserve fund requirement may be zero ($0)), specified for such Series of Bonds in a Supplemental Indenture setting forth the terms of such Bonds, all as computed and determined by the City and specified in writing to the Trustee.
Securities Depository
"Securities Depository" shall have the meaning assigned to such term in Section 2.lO(A) hereof or, in accordance with then-current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other securities depository or depositories, or no such depositories, as the City may designate in a Request of the City delivered to the Trustee. "Series," whenever used herein with respect to Bonds, means all of the Bonds designated as being of the same series, authenticated and delivered in a simultaneous transaction, regardless of variations in maturity, interest rate, redemption and other provisions, and any Bonds thereafter authenticated and delivered upon transfer or exchange or in lieu of or in substitution for (but not to refund) such Bonds as herein provided.
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Series Reserve Fund
"Series Reserve Fund" means a reserve fund created for a Series of Bonds that do not constitute Participating Bonds as specified in a Supplemental Indenture setting forth the terms of such Series of Bonds.
SIFMA Swap Index
"SIFMA Swap Index" means, on any date, a rate determined on the basis of the seven day high grade market index of tax-exempt variable rate demand obligations, as produced by Municipal Market Data and published or made available by the Securities Industry and Financial Markets Association (formerly the Bond Market Association) ("SIFMA") or by any Person acting in cooperation with or under the sponsorship of SIFMA and acceptable to the Trustee and effective from such date.
SRF Obligations
"SRF Obligations" means the loan contract, dated April 1, 1994, between the California State Water Resources Control Board and the City and any similar loan made to the City from the California State Water Resources Control Board payable from Water Net Revenues on a parity with any Bonds and Parity Debt.
Standard & Poor's
''Standard & Poor's" means Standard & Poor's, Rating Services, a division of the McGraw-Hill Companies, Inc., and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Standard & Poor's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. "State" means the State of California.
Subsidy Payment
"Subsidy Payment" means the payment from the United States Treasury to the City (or its designee) that is authorized by the Code and is calculated by reference to the interest due on a Series of Bonds (or portion thereof) on or about each interest payment date therefor based upon the qualification of such Series of Bonds (or portion thereof) as a "qualified bond" under applicable Code requirements, and the City's irrevocable election to treat such Series of Bonds (or portion thereof) as such at the time of their issuance.
Supplemental Indenture
"Supplemental Indenture" means any indenture hereafter duly executed and delivered, supplementing, modifying or amending this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. 85740924.10 16
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Tax Certificate
"Tax Certificate" means a Tax Certificate delivered by the City at the time of the issuance and delivery of any Series of Bonds, as the same may be amended or supplemented in accordance with its terms.
Treasurer
"Treasurer" means the Treasurer of the City.
Trustee
"Trustee" means Wells Fargo Bank, National Association, acting as trustee hereunder, or any successor thereto, as provided in Section 8.01.
Variable Rate Indebtedness
"Variable Rate Indebtedness" means any indebtedness the interest rate on which is not fixed at the time of incurrence of such indebtedness, and has not at some subsequent date been fixed at a single numerical rate for the entire term of the indebtedness.
Water Net Revenues
"Water Net Revenues" means the amount of Water Revenues of the Water System remaining after payment therefrom of the Water Operating Expenses.
Water Operating Expenses
"Water Operating Expenses" means the amount required to pay the expenses of management, repair and other costs necessary to operate, maintain and preserve the Water System in good repair and working order, including but not limited to, the expenses of conducting the Water System, but excluding depreciation.
Water Revenue Fund
"Water Revenue Fund" means the Water Revenue Fund established pursuant to Section 5.01 hereof.
Water Revenues
"Water Revenues" means all the revenues from rates, fees and charges for providing water service to persons and real property and all other fees, rents and charges and other revenues derived by the City from the ownership, operation, use or service of the Water System, including contributions in aid of construction; provided, that the City may by election in a Supplemental Indenture relating to a Series of Bonds or Parity Debt exclude from Water Revenues any Subsidy Payment.
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Water System
"Water System" means the entire system and facilities of the City for the distribution of water as said system now exists and including all additions, extensions and improvements thereto later constructed or acquired.
SECTION 1.03. Content of Certificates and Opinions. Every certificate or opinion provided for in this Indenture with respect to compliance with any provision hereof shall include (1) a statement that the person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (3) a statement that, in the opinion of such person, such person has made or caused to be made such examination or investigation as is necessary to enable such person to express an informed opinion with respect to the subject matter referred to in the instrument to which such person's signature is affixed; and (4) a statement as to whether, in the opinion of such person, such provision has been complied with.
Any such certificate or opinion made or given by an officer of the City may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel, an accountant, a financial advisor, an investment banker or an independent consultant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel, an accountant or an independent consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the City) upon a certificate or opinion of or representation by an officer of the City, unless such counsel, accountant or independent consultant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such person'.s certificate or opinion or representation may be based, as aforesaid, is erroneous. The same officer of the City, or the same counsel or accountant or independent consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel, accountants or independent consultants may certify to different matters, respectively.
ARTICLE II
THE BONDS
SECTION 2.01. Authorization of Bonds. Bonds may be issued hereunder, in book- entry form or otherwise, from time to time as the issuance thereof is approved by the City. The maximum principal amount of Bonds which may be issued hereunder is not limited; subject, however, to the right of the City, which is hereby reserved, to limit the aggregate principal amount of Bonds which may be issued or Outstanding hereunder. The Bonds are designated generally as "City of Burbank, California Burbank Water and Power Water Revenue Bonds"; each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. The Bonds may be issued in such 85740924.10 18
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Series as from time to time shall be established and authorized by the City, subject to the covenants, provisions and conditions herein contained.
SECTION 2.02. Terms of the Bonds. The Bonds of each Series shall bear interest, if any, at such rate or rates or determined in such manner and payable at such intervals as may be determined by the City at the time of issuance thereof pursuant to the Supplemental Indenture under which such Bonds are issued, not to exceed the maximum rate of interest permitted by law and shall mature and become payable on such date or dates and in such year or years as the City may determine by the Supplemental Indenture creating such Series. Principal of, premium, if any, and interest on such Bonds shall be payable in such manner as may be specified in the Supplemental Indenture creating such Series.
The Bonds of any Series may be issued in such denominations as may be authorized by the Supplemental Indenture creating such Series in fully registered form without coupons or in fully registered book-entry form or, for a Series maturing in one year or less, bearer form.
SECTION 2.03. Form of Bonds. The Bonds of any Series shall be in such form or forms as may be specified in the Supplemental Indenture creating such Series.
SECTION 2.04. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the City with the facsimile or manual signature of any of the Mayor, Vice Mayor, the City Manager, the Assistant City Manager, the City Treasurer or the Financial Services Director, under seal attested by the facsimile or manual signature of the City Clerk. Such seal may be in the form of a facsimile of the City's seal and may be reproduced, imprinted or impressed on the Bonds. Unless otherwise provided in any Supplemental Indenture, the Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the City before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the City as though those who signed and attested the same had continued to be such officers of the City, and also any Bond may be signed and attested on behalf of the City by such persons as at the actual date of execution of such Bond shall be the proper officers of the City although at the nominal date of such Bond any such person shall not have been such officer of the City.
Except as may be provided in any Supplemental Indenture, only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form recited in the Supplemental Indenture creating such Series, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of authentication when manually executed by the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
SECTION 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the register required to be kept pursuant to the provisions of Section 2.07 hereof, by the person in whose name it is registered, in person or by his or her duly authorized 85740924.10 19
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attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written inr;;trument of transfer, duly executed in a form acceptable to the Trustee.
Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds, of the same Series, tenor, maturity and interest rate and for a like aggregate principal amount; provided that no registration or transfer may occur during the period established by the Trustee for selection of Bonds for redemption, or of any Bond or portion of a Bond so selected for redemption. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.
SECTION 2.06. Exchange of Bonds. Bonds may be exchanged at the Corporate Trust Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations of the same Series, tenor, maturity and interest rate by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation; provided that, unless otherwise provided in any Supplemental Indenture, no exchange may occur during the period established by the Trustee for selection of Bonds for redemption, or of any Bond or portion of a Bond so selected for redemption. The Trustee shall require the Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange.
SECTION 2.07. Bond Register. The Trustee will keep or cause to be kept, at its Corporate Trust Office sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection during normal business hours by the City upon reasonable prior notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided.
SECTION 2.08. Temporary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds. Any temporary Bond may be printed, lithographed or typewritten, shall be of such denomination as may be determined by the City, shall be in registered form and may contain such reference to any of the provisions of this Indenture as may be appropriate. A temporary Bond may be in the form of a single Bond payable in installments, each on the date, in the amount and at the rate of interest established for the Bonds maturing on such date. Every temporary Bond shall be executed by the City and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds it will execute and deliver definitive Bonds after being requested to do so, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Corporate Trust Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations of the same Series, tenor and maturity or maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.
SECTION 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and 85740924.10 20
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substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or upon the Order of, the City. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and the Trustee and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be given, the City, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of the aforementioned indemnity). The City may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the City and the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. Neither the City nor the Trustee shall be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacetnent Bond shall be treated as one and the same.
SECTION 2.10. Use of Depository.
(A) The Bonds shall be issued in fully registered form, in authorized denominations and shall be initially registered in the name of "Cede & Co.", as nominee of The Depository Trust Company (the "Securities Depository"), and shall be evidenced by one bond maturing on each of the maturity dates as set forth in the applicable Supplemental Indenture in a denomination corresponding to the total principal amount of the Bonds of such maturity. Each Bond may be assigned by the Trustee a distinctive number or letter or letter and number, and a record of the same shall be maintained by the Trustee.
Registered ownership of the Bonds, or any portions thereof, may not thereafter be transferred except:
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(1) To any successor of The Depository Trust Company or its nominee, or to any substitute depository designated pursuant to clause (ii) of this subsection (A) (a "Substitute Depository"); provided that any successor of The Depository Trust Company or Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; (2) To any Substitute Depository not objected to by the Trustee, upon (1) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the City that The Depository Trust Company or its successor (or any Substitute Depository or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be 21 ATTACHMENT 8
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qualified under any applicable laws to provide the services proposed to be provided by it; or
(3) To any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or Substitute Depository or its successor) from its functions as depository; provided, that no Substitute Depository which is not objected to by the Trustee can be obtained, or (2) a determination by the City that it is in the best interests of the City to remove The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its function as depository.
(B) In the case of any transfer pursuant to clause (I) or clause (2) of subsection2.10(A), upon receipt of all Outstanding Bonds by the Trustee, together with a Certificate of the City to the Trustee, a single new bond for each maturity shall be executed and delivered, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Certificate of the City. In the case of any transfer pursuant to clause (3) of subsection 2.lO(A) hereof, upon receipt of all Outstanding Bonds by the Trustee together with a Certificate of the City to the Trustee, new bonds shall be executed and delivered in such denominations and registered in the names of such persons as are requested in such a Certificate of the City, subject to the limitations of Section 2.10 hereof; provided, the Trustee shall not be required to deliver such new bonds within a period less than 60 days from the date of receipt of such a Certificate of the City. (C) In_ the case of partial redemption, cancellation or an advance refunding of any Bonds evidencing all or a portion of the principal maturing in a particular year, The Depository Trust Company shall make an appropriate notation on the Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee. (D) The City and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the Owner thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the City; and the City and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying, or otherwise dealing with any beneficial owners of the Bonds. Neither the City nor the Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party including The Depository Trust Company or its successor (or Substitute Depository or its successor), except to the Owner of any Bond. (E) So long as all Outstanding Bonds are registered in the name of"Cede & Co." or its registered assign, the City and the Trustee shall cooperate with "Cede & Co.," as sole registered Owner, and its registered assigns in effecting payment of the .principal of and redemption premium, if any, and interest on the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due.
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ARTICLE III
ISSUANCE OF BONDS
SECTION 3.01. Issuance of Bonds. The City may by Supplemental Indenture establish one or more Series of Bonds payable from Water Net Revenues and secured by the pledge made under this Indenture equally and ratably with Bonds previously issued, and the City may issue, and the Trustee may authenticate and deliver to the purchasers thereof, Bonds of any Series so established, in such principal amount as shall be determined by the City, but only, with respect to each Series of Bonds, upon compliance by the City with the provisions of Section 3.02 hereof (except the first Series of Bonds may be issued upon compliance by the City with the requirements of Section 3.02(a) and without further condition) and any additional requirements set forth in said Supplemental Indenture and subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such additional Series of Bonds:
(a) no Event of Default shall have occurred and then be continuing; (b) the aggregate principal amount of Bonds issued hereunder shall not exceed any limitation imposed by law or otherwise;
(c) with respect to any additional Series of Bonds that are Participating Bonds, there shall be deposited in the Parity Reserve Fund, an amount of money so as to increase the amount on deposit therein to the Reserve Fund Requirement, and, with respect to any additional Series of Bonds which do not constitute Participating Bonds, there shall be deposited in the Series Reserve Fund, if any, for such Series of Bonds, an amount of money equal to the Reserve Fund Requirement for such Series of Bonds; and (d) the City shall have placed on file with the Trustee a Certificate of the City certifying that the sum of: (!)the Water Net Revenues, plus (2) 90 percent (90%) of the amount by which the City projects Water Net Revenues for any period of twelve (12) consecutive months during the eighteen (18) months immediately preceding the date on which any additional Bonds or Parity Debt will hecome Outstanding would have been increased had increases in rates, fees and charges during such period of twelve (12) months been in effect throughout such period of twelve (12) months; plus (3) 75 percent (75%) of the amount by which the City projects Water Net Revenues will increase during the period of twelve (12) months commencing on the date of issuance of such additional Bonds or Parity Debt due to improvements to the Water System under construction (financed from any source) or to be financed with the proceeds of such additional Series of Bonds or Parity Debt, shall (4) have been at least equal to 1.20 times the amount of Debt Service due within the next consecutive twelve (12) month period on all Bonds and Parity Debt then outstanding and the additional Bonds or Parity Debt then proposed to be issued.
If additional assets or revenues are included within the definition of "Water Net Revenues" by a Supplemental Indenture, such additional assets or revenues shall be included in the calculations in subsection ( d) above, as appropriate, as if such additional assets or revenues had always been included in Water Net Revenues.
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SECTION 3.02. Proceedings for Issuance of Additional Series of Bonds. Whenever the City shall determine to issue a Series of Bonds pursuant to Section 3.01, the City shall authorize the execution of a Supplemental Indenture specifying the principal amount, and prescribing the form or fonns of Bonds of such additional Series and providing the terms, conditions, distinctive designation, denominations, date, maturity date or dates, interest rate or rates (or the manner of determining the same), redemption provisions and place or places of payment of principal or Redemption Price, if any, of and interest on such Bonds, and any other provisions respecting the Bonds of such Series not inconsistent with the terms of this Indenture.
Each additional Series of Bonds shall constitute Participating Bonds unless the Supplemental Indenture authorizing such Series of Bonds provides that such Series of Bonds shall not be Participating Bonds and, if such Series of Bonds shall not be Participating Bonds, provides for the establishment of a Series Reserve Fund for such Series of Bonds, provides for the pledge of amounts on deposit in such Series Reserve Fund to the payment of such Series of Bonds secured thereby, and establishes the Reserve Fund Requirement for such Series Reserve Fund.
Before such additional Series of Bonds shall be issued and delivered, the City shall file the following documents with the Trustee (upon which documents the Trustee may conclusively rely in determining whether the conditions precedent to the issuance of such Series of Bonds have been satisfied):
(a) an executed copy of the Supplemental Indenture authorizing such Series; (b) a Certificate of the City stating that no Event of Default has occurred and is then continuing;
( c) an Opinion of Bond Counsel to the effect that the execution of the Supplemental Indenture has been duly authorized by the City in accordance with this Indenture and that such Series, when duly executed by the City and authenticated and delivered by the Trustee, will be valid and binding limited obligations of the City; and (d) the Certificate of the City required by Section 3.0l(d).
SECTION 3.03. Issuance of Refunding Bonds. Notwithstanding any provisions herein, there shall be no limitation on the ability of the City to issue any Bonds at any time to refund any outstanding Bonds or Parity Debt issued pursuant hereto.
SECTION 3.04. APPiication of Proceeds. Proceeds of each Series of Bonds shall be applied as specified in the Supplemental Indenture pursuant to which such Series of Bonds is created.
SECTION 3.05. Limitations on the Issuance of Obligations. The City will not, so long as any of the Bonds are Outstanding, issue any obligations or securities, howsoever denominated, payable in whole or in part from Water Net Revenues, except the following:
(a) Bonds of any Series authorized pursuant to Sections 3.01 and 3.02; 85740924.10 24
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(b) refunding Bonds authorized pursuant to Section 3.03; (c) Parity Debt payable on a parity with the Bonds and which will have, when issued, an equal lien and charge upon the Water Net Revenues, provided that the following conditions to the issuance of such Parity Debt are satisfied:
(!) such Parity Debt has been duly and legally authorized for any lawful purpose;
(2) no Event of Default shall have occurred and then be continuing, as evidenced in a Certificate of the City filed with the Trustee; (3) unless such Parity Debt is for the refunding purposes specified in Section 3.03, the City shall have obtained and placed on file with the Trustee a Certificate of the City that (on the basis of calculations as of the date of delivery of such Parity Debt) the requirements of Section 3.0l(d) with respect to additional Bonds have been met with respect to such Parity Debt;
(4) the City shall have filed with the Trustee an opinion of counsel to the effect that such Parity Debt has been duly authorized in accordance with law and constitutes a valid and binding obligation of the City payable from Water Net Revenues on a parity with the Bonds; and
( 5) the Trustee shall be designated as paying agent or trustee for such Parity Debt and the City shall deliver to the Trustee a transcript of the proceedings providing for the issuance of such Parity Debt (but the Trustee shall not be responsible for the validity or sufficiency of such proceedings or such Parity Debt); or
(d) Obligations which are junior and subordinate to the payment of the principal, premium, interest and reserve fund requirements for the Bonds and all Parity Debt and which subordinated obligations are payable as to principal, premium, interest and reserve fund requirements, if any, only out of Water Net Revenues, after the prior payment of all amounts then required to be paid hereunder from Water Net Revenues, for principal, premium, interest and reserve fund requirements for the Bonds and all Parity Debt, as the same become due and payable and at the times and in the manner as required in this fudenture.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption. Each Series of Bonds may be made subject to redemption or mandatory or optional tender and purchase prior to their respective stated maturities, as a \Vhole or in part, at such time or times, upon such terms and conditions and upon such notice and with such effect as may be provided in the Supplemental Indenture creating such Series of Bonds.
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Unless otherwise specified in a Supplemental Indenture, each notice of redemption shall be mailed by the Trustee, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, to each Owner and the Securities Depository. Notice of redemption to the Securities Depository shall be given by certified, registered or overnight mail or by such other method as may be requested by the Securities Depository. Each notice of redemption shall state the date of such notice, the date of issue of the Bonds to which such notice relates, the redemption date, the Redemptiou Price, the place or places of redemption (including the name and appropriate address or addresses of the Trustee), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity, the distinctive certificate numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds the Redemption Price thereof or of said specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the date fixed for redemption, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the address or addresses of the Trustee specified in the redemption notice. Neither the City nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Bond or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the City nor the Trustee shall be liable for any inaccuracy in such numbers. Failure by the Trustee to give notice to any Securities Depository or failure of any Owner to receive notice or any defect in any such notice shall not affect the sufficiency of the proceedings for redemption.
Unless otherwise specified in a Supplemental Indenture, the City shall have the right to rescind any notice of redemption by written notice to the Trustee on or prior to the dated fixed for such redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the applicable Bonds then called for redemption, and such cancellation will not constitute an Event of Default. The City and the Trustee shall have no liability to the Owners or any other party related to or arising from such rescission of notice of redemption. The Trustee shall provide notice of rescission of redemption in the same manner as the original notice of redemption was provided.
ARTICLEV
WATER NET REVENUES
SECTION 5.01. Pledge of Water Net Revenues: Water Revenue Fund. {A) The Bouds are revenue obligations of the City and are payable as to both principal and interest, and any premium upon redemption thereof, exclusively from Water Net Revenues and from the other funds pledged hereunder. All Water Net Revenues are hereby pledged to secure the payment of the principal of and redemption premium, if any, and interest on the Bonds and any Parity Debt in accordance with their terms, subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein. There are hereby pledged to secure the payment of the principal of 85740924.10 26
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and redemption premium, if any, and interest on the Bonds in accordance with their terms all amounts (including proceeds of the Bonds) held by the Trustee hereunder (except for amounts held in the Rebate Fund), subject only to the provisions of this Indenture permitting the application thereof for the purposes and ou the terms and conditions set forth herein. Such pledge shall constitute a first lien on the Water Net Revenues and amounts in such funds and shall be valid and binding from and after delivery by the Trustee of the Bonds or Parity Debt, without any physical delivery thereof or further act.
The Water Net Revenues are hereby pledged to the payment of Bonds and Parity Debt without priority or distinction of one over the other and the Water Net Revenues constitute a trust fund for the security and p·ayment of the Bonds and Parity Debt; but nevertheless out of Water Net Revenues, certain amounts may be applied for other purposes as provided herein.
Out of Water Net Revenues, there shall be applied as hereinafter set forth all sums required for the payment of the principal of (including any premiwn thereon) and interest on the Bonds and all Parity Debt, together with any mandatory sinking fund payments of Bonds and Parity Debt and reserve fund requirements with respect thereto. All remaining Water Net Revenues, after making the foregoing allocation, shall be available to the City for all lawful City purposes. The pledge of Water Net Revenues herein made shall be irrevocable until all of the Bonds and all Parity Debt are no longer outstanding.
(B) As long as any Bonds are Outstanding or any Parity Debt remains unpaid, the City shall forthwith deposit in a fund, designated as the "Water Revenue Fund," which fund the City shall establish and maintain, all Water Net Revenues when and as received by the City.
Unless otherwise provided herein or in any Supplemental Indenture, investment income on amounts held by the City hereunder (other than amounts held in the Rebate Fund or for which particular instructions are provided in a Supplemental Indenture) shall also be deposited in the Water Revenue Fund. All moneys at any time held in the Water Revenue Fund shall be held in trust for the benefit of the Owners of the Bonds and Parity Debt and shall be disbursed, allocated and applied solely for the uses and purposes set forth herein.
SECTION 5.02. Payments Into Other Funds.
As soon as practicable in each month after the deposit of Water Net Revenues into the Water Revenue Fund, but in any case no later than the last Business Day of such month, the City shall withdraw from the Water Revenue Fund and pay to the Trustee for deposit in the following funds and accounts, in the following order, the amounts set forth below:
(a) in the Debt Service Fund established pursuant to Section 5.03 hereof, the amount, if any, required so that the balance in said fund, including any subaccounts therein, to the extent moneys in such subaccounts are available to pay Accrued Aggregate Debt Service as of the last day of the then current month, shall equal the Accrued Aggregate Debt Service as of the last day of the then current month; provided, that for purposes of this paragraph (a), the calculation of Debt Service with respect to the definition of Accrued Aggregate Debt Service shall be made without regard_ to an election by the City to include any· Subsidy Payment in Water Revenues or to exclude any 85740924.10 27
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Subsidy Payment from Water Revenues and without regard to paragraph (i) of the definition of Debt Service; and
(b) in the Parity Reserve Fund established pursuant to Section 5.04 hereof and in each Series Reserve Fund established pursuant to a Supplemental Indenture the amount, if any, required so that the amount credited to such Parity Reserve Fund and each such Series Reserve Fund shall, except as otheiwise provided in Section 5.04(A), be at least equal to the respective Reserve Fund Requirement as of the last day of the then current month; provided, that the deposits to the Parity Reserve Fund and each Series Reserve Fund shall be made without preference or priority between such deposits and in the event of any deficiency in Water Net Revenues to make the deposits required by this paragraph (b), such Water Net Revenues shall be deposited into the Parity Reserve Fund and each Series Reserve Fund ratably based on the amount required to be deposited in each such fund, without discrimination or preference;
provided, that on a parity with such deposits, the City shall set aside or transfer amounts to the appropriate accounts with respect to outstanding Parity Debt as provided in the proceedings for such Parity Debt (which shall be proportionate in the event such amounts are insufficient to provide for all deposits required as of any date to be made with respect to the Bonds and such Parity Debt).
SECTION 5.03. Debt Service Fund.
(A) The Trustee shall establish and maintain and hold in trust so long as any Bonds remain Outstanding, a special fund designated as the "Debt Service Fund." The Trustee shall pay out of the Debt Service Fund: (i) on or before each interest payment date for any Outstanding Bonds, the amount required for the interest payable on such date; (ii) on or before each principal payment date or redemption date, the amount required for the Bond Obligation payable on such due date (including any mandatory sinking fund payment to be paid on such date); and (iii) on or before any redemption date for Outstanding Bonds, the amount required for the payment of interest on such Bonds then to be redeemed. Such amounts shall be applied for such purposes by the Trustee on the due date thereof. The Trustee shall also pay out of the Debt Service Fund the accrued interest included in the purchase price of any Bonds, the Debt Service of which may be paid from the moneys in such fund, purchased for retirement, without regard to an election by the City to include any Subsidy Payment in Water Revenues or to exclude any Subsidy Payment from Water Revenues.
(B) On or prior to the forty-fifth (45'") day preceding the due date of each mandatory sinking fund payment, any amounts then on deposit in the Debt Service Fund with respect to any mandatory sinking fund payment (exclusive of amounts, if any, set aside in said fund which were deposited therein from the proceeds of Bonds, but inclusive of amounts accumulated therein with respect to interest on the Bonds for which such mandatory sinking fund payment is to be paid) may, and if so directed by the City shall, be applied by the Trustee to the purchase of Bonds of the Series and maturity for which such mandatory sinking fund payment was established in an amount not exceeding that necessary to complete the retirement of the unsatisfied balance of such mandatory sinking fund payment. All purchases of any .Bonds pursuant to this subsection (B) shall be made at prices not exceeding the applicable 85740924.10 28
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sinking fund Redemption Price of such Bonds plus accrued interest, and such purchases shall be made by the Trustee as directed by the City. If directed by the City, on or prior to the forty fifth (451h) day next preceding a mandatory sinking fund payment due date, there shall be applied as a credit against such mandatory sinking fund payment, and there shall be deemed to constitute part of the Debt Service Fund until such mandatory sinking fund payment due date, for the purpose of calculating the amount on deposit in such fund, the applicable sinking fund Redemption Price (or principal amount of maturing Bonds) of any Bonds of the Series and maturity for which such mandatory sinking fund payment was established, that were cancelled or delivered to the Trustee for cancellation on or prior to the forty-fifth (451h) day next preceding such mandatory sinking fund payment due date and that was not previously applied as a credit against a mandatory sinking fund payment, including any Bonds purchased pursuant to this subsection (B) and as to which the City has properly claimed a credit against the next mandatory sinking fund payment. As soon as practicable after the forty-fifth (4511!) day preceding the due date of any such mandatory sinking fund payment, the Trustee shall proceed to call for redemption on such date, Bonds of the Series and maturity for which such mandatory sinking fund payment was established (except in the case of Bonds maturing on a mandatory sinking fund payment due date). The Trustee shall pay out of the Debt Service Fund, on or before such redemption date (or maturity date), the amount required for the redemption of the Bonds so called for redemption (or for the payment of such Bonds then maturing), and such amounts shall be applied to such redemption (or payment). (C) The amount, if any, deposited in the Debt Service Fund, including any subaccount, from the proceeds of each Series of Bonds shall be set aside in such fund and applied to the payment of interest on Bonds as provided in the Supplemental Indenture relating to the issuance of such Series of Bonds and shall be deemed available to pay Accrued Aggregate Debt Service only to the extent so provided without regard to an election by the City to include any Subsidy Payment in Water Revenues or to exclude any Subsidy Payment from ' Water Revenues.
(D) If one or more Bonds are refunded, the Trustee may, upon the direction of the City, with the advice of Bond Counsel, withdraw from the Debt Service Fund amounts accumulated therein with respect to Debt Service (without regard to an election by the City to include any Subsidy Payment in Water Revenues or to exclude any Subsidy Payment from Water Revenues) on the Bonds being refunded and deposit such amounts as directed by the City, to be held for the payment of the principal or Redemption Price, if applicable, or interest on the Bonds being refunded; provided that such withdrawal shall not be made unless (a) immediately thereafter the Bonds being refunded shall be deemed to have been paid pursuant to Article X hereof, and (b) the amount remaining in the Debt Service Fund after such withdrawal shall not be less than the requirement of such fund pursuant to Section 5 .02 hereof. (E) Any provisions of this Indenture to the contrary notwithstanding, so long as there shall be held in the Debt Service Fund an amount sufficient to pay in full all Outstanding Bonds in accordance with their tenns (including principal or Redemption Price, if applicable, and interest thereon), no deposits shall be required to be made into the Debt Service Fund. 85740924.10 29
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SECTION 5.04. Parity Reserve Fund: Series Reserve Funds. (A) The Trustee shall establish and maintain and hold in trust so long as Participating Bonds remain Outstanding, a special fund designated as the "Parity Reserve Fund." Amounts on deposit in the Parity Reserve Fund are hereby pledged to the payment of the Participating Bonds and shall be applied only for such purposes as hereinafter permitted.
In accordance with Section 3.02 and as provided in any Supplemental Indenture for a Series of Bonds which are not Participating Bonds, the Trustee shall establish and maintain and hold in trust so long as such Series of Bonds which are not Participating Bonds remains outstanding, a Series Reserve Fund for such Series of Bonds that are not Participating Bonds. In accordance with Section 3.02 and pursuant to the Supplemental Indenture for any Series of Bonds which are not Participating Bonds, amounts on deposit (if any) in each such Series Reserve Furid shall be pledged to the payment of the applicable Series of Bonds which are not Participating Bonds to be secured thereby and shall be applied onl)' for such purposes as hereinafter permitted. The Trustee shall deposit in the Parity Reserve Fund and in each Series Reserve Fund, the amounts required to be deposited therein pursuant to Section 3.0l(c) and such other amounts transferred to the Trustee by the City for deposit therein pursuant to Section 5.02(b). No deposit need be made in the Parity Reserve Fund or any Series Reserve Fund so long as there shall be on deposit therein a sum equal to the respective Reserve Fund Requirement. Whenever the amount on deposit in the Parity Reserve Fund or any Series Reserve Fund is less than the applicable Reserve Fund Requirement, such amount shall be increased to the applicable Reserve Fund Requirement as provided for in this clause (A) not later than twelve months thereafter.
(B) If on the last Business Day of any month, the amount on deposit in the Debt Service Fund shall be less than the amount required to be in such Debt Service Fund pursuant to Section 5.02(a) with respect to Participating Bonds, the Trustee shall apply amounts from the Parity Reserve Fund to the extent necessary to make good the deficiency with respect to the Participating Bonds; and if on the last Business Day of any month, the amount on deposit in the Debt Service Fund shall be less than the amount required to be in such Debt Service Fund pursuant to Section 5.02(a) with respect to any Series of Bonds for which a Series Reserve Fund has been established, the Trustee shall apply amounts (if any) from the applicable Series Reserve Fund to the extent necessary to make good the deficiency with respect to the Series of Bonds secured by such Series Reserve Fund.
(C) Whenever the amount in the Parity Reserve Fund, together with the amount in the Debt Service Fund available for such purpose, is sufficient to pay in full all Outstanding Participating Bonds in accordance with their terms (including principal or applicable mandatory sinking fund payments and interest thereon), the funds on deposit in the Parity Reserve Fund shall be transferred to the Debt Service Fund and applied ratably to the payment or redemption of the Participating Bonds. Whenever the amount in the Series Reserve Fund, together with the amount in the Debt Service Fund available for such purpose, is sufficient to pay in full all of the Outstanding future Series of Bonds secured by such Series Reserve Fund in accordance with their terms (including principal or applicable mandatory sinking fund payments and interest thereon), the funds on deposit in the applicable Series Reserve Fund shall be transferred to the Debt Service Fund and applied to the payment or redemption of the Series of Bonds secured by such Series Reserve Fund.
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(D) If any Participating Bonds are refunded, the Trustee may, upon the direction of the City with the advice of Bond Counsel, withdraw from the Parity Reserve Fund any amounts on deposit therein and deposit such amounts as directed by the City, to be held for the payment of the principal or Redemption Price, if applicable, or interest on the Participating Bonds being refunded; provided, that such withdrawal shall not be made unless (a) immediately thereafter any Participating Bonds being refunded shall be deemed to have been paid pursuant to Article X hereof, and (b) the amount remaining in the Parity Reserve Fund after such withdrawal, taking into account any deposits to be made in the Parity Reserve Fund in connection with such refunding, shall not be less than the Reserve Fund Requirement with respect to the Parity Reserve Fund. If all or any portion of any Series of Bonds secured by a Series Reserve Fund are refunded, the Trustee may, upon the direction of the City with the advice of Bond Counsel, withdraw from such Series Reserve Fund any amounts on deposit therein and deposit such amounts as directed by the City, to be held for the payment of the principal or Redemption Price, if applicable, or interest on such Series of Bonds secured by such Series Reserve Fund or portion thereof being refunded; provided, that such withdrawal shall not be made unless (a) immediately thereafter such Series of Bonds or portion thereof being refunded shall be deemed to have been paid pursuant to Article X hereof, and (b) the amount remaining in the Series Reserve Fund after such withdrawal shall not be less than the Reserve Fund Requirement with respect to such Series Reserve Fund. (E) Except as otherwise provided in a Supplemental Indenture, amounts on deposit in the Parity Reserve Fund or any Series Reserve Fund in excess of the respective Reserve Fund Requirement shall, at the Written Request of the City, be withdrawn from the Parity Reserve Fund or Series Reserve Fund, as applicable, and transferred to the City and applied as permitted by Bond Counsel.
(F) The City may provide for all or any part of the Reserve Fund Requirement for the Parity Reserve Fund or any Series Reserve Fund by delivering to the Trustee an irrevocable letter of credit issued by a financial institution having unsecured debt obligations rated in one of the two highest Rating Categories of Moody's, Fitch or Standard & Poor's at the time such letter of credit is issued, securing an amount, together with moneys, Investment Securities or surety bonds or insurance policies (as described in paragraph (G) below) on deposit in the Parity Reserve Fund or such Series Reserve Fund, equal to the applicable Reserve Fund Requirement. Such letter of credit shall have an original term of no less than three (3) years or, if less, the final maturity of the Participating Bonds or the Series of Bonds secured thereby, as applicable, and such letter of credit shall provide by its terms that it may be drawn upon as provided herein. At least one year prior to the stated expiration of such letter of credit, the City shall either (i) deliver a replacement letter of credit, (ii) deliver an extension of the letter of credit for at least an additional year or, if less, the maturity of the Participating Bonds or the Series of Bonds secured thereby, as applicable, or (iii) deliver to the Trustee a surety bond or an insurance policy satisfying the requirements of paragraph (G) below. Upon delivery of such replacement letter of credit, extended letter of credit, or surety bond or insurance policy, the Trustee shall deliver the then-effective letter of credit to or upon the order of the City. If the City shall fail to deposit a replacement letter of credit, extended letter of credit, surety bond or insurance policy with the Trustee, the City shall immediately commence to make monthly deposits with the Trustee so that an amount equal to the Reserve Fund Requirement will be on deposit in the Parity Reserve Fund or Series Reserve Fund, as applicable, no later than the 8574-0924.10 31
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stated expiration date of the letter of credit. If an amount equal to the Reserve Fund Requirement, as of the date following the expiration of the letter of credit, is not on deposit in the Parity Reserve Fund or Series Reserve Fund, as applicable, at the earlier of one week prior to the stated expiration date of the letter of credit or the debt service payment date (excluding from such determination the letter of credit), the Trustee shall draw on the letter of credit to fund the amount of any such deficiency in the Parity Reserve Fund or Series Reserve Fund, as applicable.
(G) The City may also provide for all or any part of the Parity Reserve Fund or any Series Reserve Fund by delivering to the Trustee a surety bond or an insurance policy securing an amount, together with moneys, Investment Securities or letters of credit on deposit in the Parity Reserve Fund or such Series Reserve Fund, as applicable, equal to the applicable Reserve Fund Requirement. Such surety bond or insurance policy shall be issued by an insurance company whose unsecured debt obligations (or obligations secured by such insurance company's insurance policies) are rated in one of the two highest Rating Categories of Moody's, Fitch or Standard & Poor's at the time such surety bond or insurance policy is issued. Such surety bond or insurance policy shall have a term of no less than the final maturity of the Participating Bonds or the Series of Bonds secured thereby, as applicable. If such surety bond or insurance policy for any reason lapses or expires, the City shall immediately implement (i) or (iii) of paragraph (F) above or make the required deposits to the Parity Reserve Fund or Series Reserve Fund, as applicable. (H) The Trustee shall ascertain the necessity for a draw or claim upon any letter of credit, surety bond or insurance policy provided hereby and shall take such action as is necessary in accordance with the terms thereof to received payments with respect thereto (including the giving of notice as required thereunder) on any date on which moneys will be required to be withdrawn from the Parity Reserve Fund or a Series Reserve Fund, as applicable, and applied to the payment of the principal of or interest on any Participating Bonds or Series of Bonds secured by such Parity Reserve Fund or Series Reserve Fund and such withdrawal cannot be met by amounts on deposit in the Parity Reserve Fund or Series Reserve Fund, as applicable. If a disbursement is made pursuant to letter of credit, surety bond or insurance policy credited to the Parity Reserve Fund or any Series Reserve Fund, the City shall be obligated either (i) to reinstate the full amount of such letter of credit, surety bond or insurance policy or (ii) to deposit into the Parity Reserve Fund or Series Reserve Fund, as applicable, funds in the amount of such disbursement or a combination of such alternatives, as shall provide that the amount in the Parity Reserve Fund or such Series Reserve Fund, as applicable, is at least equal to the applicable Reserve Fund Requirement. So long as a letter of credit, surety bond or insurance policy shall be in full force and effect for purposes of funding all or any part of the Parity Reserve Fund or any Series Reserve Fund, as applicable, any deposits required to be made in the Parity Reserve Fund or a Series Reserve Fund pursuant to Section 5.02(b) shall include any amounts due to the provider of the letter of credit, surety bond or insurance policy resulting from a draw or claim upon such letter of credit, surety bond or insurance policy (which amounts shall constitute a deficiency in the Reserve Fund Requirement for purposes of said Section 5.02(b)). Any such amounts shall be paid to the provider of such letter of credit, surety bond or insurance policy as provided therein or in any related agreement.
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SECTION 5.05. Investment of Moneys in Funds and Accounts. All moneys in any of the funds, accounts and subaccounts held by the Trustee and established pursuant to this Indenture shall be invested, as directed by the City, solely in Investment Securities. All Investment Securities shall, as directed by the City in writing or by telephone, promptly confirmed in writing, be acquired subject to the limitations as to maturities hereinafter in this Section set forth and such additional limitations or requirements consistent with the foregoing as may be established by Request of the City. The Trustee may conclusively rely upon any investment direction from the City as a certification to the Trustee that such investment constitutes an Investment Security. If and to the extent the Trustee does not receive investment instructions from the City with respect to the moneys in the funds and accounts held by the Trustee pursuant to this Indenture, such moneys shall be invested in Investment Securities described in clause (xi) of the definition thereof and the Trustee ·shall thereupon request investment instructions from the City for such moneys.
Unless otherwise provided herein or in a Supplemental Indenture, all interest, profits and other income received from the investment of moneys in any fund or account, other than the Rebate Fund, shall be transferred to the Water Revenue Fund when received. All interest, profits and other income received from the investment of moneys in the Rebate Fund shall be deposited in the Rebate Fund, except as provided in Section 6.07 and any applicable Supplemental Indenture. Notwithstanding anything to the contrary contained herein, an amount of interest received with respect to any Investment Security equal to the amount of accrued interest, if any, paid as part of the purchase price of such Investment Security shall be credited to the fund or account from which such accrued interest was paid.
The Trustee may commingle any of the funds or accounts established pursuant to this Indenture into a separate fund or funds for investment purposes only, provided that all funds or accounts held by the Trustee hereunder shall be accounted for separately as required by this Indenture. The Trustee may act as principal or agent in the making or disposing of any investment and, with the prior written consent of the City, may impose its customary charge therefor. The Trustee may sell or present for redemption, any Investment Securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Investment Security is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment.
The City may and the Trustee shall, upon the Request of the City, and provided that the Trustee is supplied with an Opinion of Bond Counsel to the effect that "Such action is permitted under the laws of the State of California, enter into an interest rate swap agreement corresponding to the interest rate or rates payable on a Series of Bonds or any portion thereof and the amounts received by the City or the Trustee, if any, pursuant to such a swap agreement may be applied to the deposits required hereunder; in which case, the entity with which the City or the Trustee may contract for an interest rate swap is limited to entities the debt securities of which are rated in their respective highest short-term debt Rating Categories by Moody's, Fitch or Standard & Poor's. If the City so designates, amounts payable under the interest rate swap agreement (other than termination payments due thereunder which shall be made expressly subordinate to the payment of the Bonds) shall be secured by Water Net Revenues on a parity basis with the Bonds and any Parity Debt and, in such event, the City shall pay to the Trustee for 85740924.10 33
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deposit in the Debt Service Fund, at the times and in the manner provided by Section 5.02, the amounts to be paid under such interest rate swap agreement, as if such amounts were additional interest due on the Bonds to which such interest rate swap agreement relates, and the Trustee shall pay to the other party to the interest rate swap agreement, to the extent required thereunder, amounts deposited in the Debt Service Fund for the payment of interest on the Bonds with respect to which such agreement was entered.
The Trustee and the City shall each keep proper books of record and accounts containing complete and correct entries of all transactions made by it relating to the receipt, investment, disbursement, allocation and application of the moneys related to the Bonds, including moneys derived from, pledged to, or to be used to make payments on the Bonds. Such records shall specify the account or fund to which each investment (or portion thereof) is to be allocated and shall set forth, in the case of each investment security, (a) its purchase price, (b) identifying information, including par amount, coupon rate, and payment dates, (c) the amount received at maturity or its sale price, as the case may be, including accrued interest, ( d) the amounts and dates of any payments made with respect thereto, and (e) the dates of acquisition and disposition or maturity.
ARTICLE VI
COVENANTS
SECTION 6.01. Punctual Payment. The City will punctually pay or cause to he paid the principal or Redemption Price of and interest on all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, and shall punctually pay or cause to be paid all mandatory sinking fund payments, but in each case only out of Water Net Revenues, as provided in this Indenture.
SECTION 6.02. Extension of Payment of Bonds. The City will not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any Bonds or claims for interest of such Bonds or claims for interest and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the City to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of Bonds.
SECTION 6.03. Waiver of Laws. The City will not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the City to the extent permitted by law.
SECTION 6.04. Further Assurances. The City will make, execute and deliver any and all such instruments and assurances as may be reasonably necessary or proper to carry out 85740924.IO 34
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the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.
SECTION 6.05. Against Encwnbrances. The City will not create any pledge, lien or charge upon any of the Water Net Revenues, having priority over the lien of the Bonds. The City will pay or cause to be paid when due all sums of money that may become due or purporting to be due for any labor .. services, materials, supplies or equipment furnished, or alleged to have been furnished, to or for the City in, upon, about or relating to the Water System and will keep the Water System free of any and all liens against any portion of the Water System. If any such lien attaches to or is filed against any portion of the Water System, the City will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that if the City desires to contest any such lien it may do so if contesting such lien will not materially impair operation of the Water System. If any such lien shall be reduced to final judgment and such judgment or any_ process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the City will forthwith pay or cause to be paid and discharged such judgment.
SECTION 6.06. Accounting Records and Financial Statements. (A) The City will at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with Generally Accepted Accounting Principles Applicable to Governments, in which complete and accurate entries shall be made of all calculations relating to Water Net Revenues. Such books of record and account shall be available for inspection by the Trustee (who shall have no duty to inspect) or the Owners at reasonable hours and under reasonable circumstances.
(B) The City will furnish the Trustee, within one hundred and eighty (180) days after the end of each Fiscal Year, the financial statements of the City's Water and Electric Utility Enterprise Funds for such Fiscal Year, together with the report and opinion of an independent certified public accountant stating that the financial statements have been prepared in accordance with Generally Accepted Accounting Principles Applicable to Governments and that such accountant's examination of the financial statements was performed in accordance with generally accepted auditing standards and a Certificate of the Treasurer of the City stating that no event which constitutes an Event of Default or which with the giving of notice or the passage of time or both would constitute an Event of Default has occurred and is continuing as of the end of such Fiscal Year, or specifying the nature of such event and the actions taken and proposed to be taken by the City to cure such default. Thereafter, a copy of such financial statements will be furnished to any Owner of Bonds upon written request to the City. The Trustee shall have no duty to review such financial statements. (C) The City shall furnish to the Trustee within thirty (30) days after approval thereof, the annual budget of the City for the Water System.
SECTION 6.07. Rebate Fund. The Trustee shall establish and maintain, so long as any Bonds remain Outstanding, a fund separate from any other fund established and maintained hereunder designated as the "Rebate Fund" (the "Rebate Fund"). All amounts at any time on 85740924.10 35
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deposit in the Rebate Fund shall be held by the Trustee to the extent required to satisfy the requirement to make rebate payments to the United States (the "Rebate Requirement") pursuant to Section 148 of the Code and the Treasury Regulations promulgated thereunder (the "Treasury Regulations"). Such amounts shall be free and clear of any lien under this Indenture and shall be governed by this Section and Section 6.08 of this Indenture, any applicable Supplemental Indenture and by the Tax Certificate for the applicable Series of Bonds, if any. The provisions relating to the Rebate Fund for a Series of Bonds shall be set forth in the related Supplemental Indenture.
SECTION 6.08. Tax Covenants. The City covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Bonds under Section 103 of the Code; provided that, prior to the issuance of any Series of Bonds, the City may exclude the application of the covenants contained in this Section 6.08 to such Series of Bonds.
SECTION 6.09. Rates and Charges. The City hereby covenants that it shall prescribe, revise and collect such charges for the services, facilities and water :furnished by the Water System which, after making allowances for contingencies and error in the estimates, shall provide Water Net Revenues at least sufficient to pay the following amounts in the order set forth:
(a) The interest on, and principal and Redemption Price of, the outstanding Bonds and any Parity Debt as the same shall become due and payable; (b) All payments required for compliance with this Indenture, including payments required to be made into any bond reserve fund; and (c) All payments required to meet any other obligations of the City which are charges, liens, encumbrances upon or payable from the Water Net Revenues; and the charges shall be fixed so that in each Fiscal Year the Water Net Revenues shall be at least equal to 1.20 times the amount of the Annual Debt Service.
SECTION 6.10. Maintenance and Ooeration of System: Insurance. The City will maintain and preserve the Water System in good repair and working order at all times, and will operate the Water System in an efficient and economical manner. Subject in each case to the condition that insurance is obtainable at rates deemed reasonable by the City and upon terms and conditions deemed reasonable by the City, the City will procure and maintain at all times: (a) insurance on the Water System against such risks as and in such amounts as the City deems prudent taldng into account insurance coverage for similar utilities, and (b) public liability insurance, including self-insurance, as appropriate, in such amounts as the City deems prudent taking into account insurance coverage for similar utilities.
SECTION 6.11. Sale of Water System. The Water System shall not be sold or leased or otherwise disposed of as a whole, or substantially as a whole, unless such sale, lease or other disposition be so arranged as to provide for a continuance of timely payments sufficient in amount to permit payment therefrom of the principal of and interest on, and premiums, if any, due upon the redemption of, all Bonds and Parity Debt payable out of Water Net Revenues, or to 85740924.10 36
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provide for such payments into some other fund charged with such payments. None of the works, plant, properties, facilities or other part of the Water System or any real or personal property comprising a part of the Water System will be sold, leased or otherwise disposed of if such sale, lease or disposition would cause the City to be unable to satisfy the requirements of Section 6.09 hereof.
SECTION 6.12. Continuing Disclosure Agreement. The City will comply with and carry out all of its obligations under any Continuing Disclosure Agreement executed in connection with a Series of Bonds. Upon the failure of the City to comply with the Continuing Disclosure Agreement relating to any Series of Bonds, the Trustee (at the written request of any Participating Underwriter (as defined in the Continuing Disclosure Agreement) or the Owners of at least 25% in aggregate Bond Obligation of the related Series of Bonds, shall, but only to the extent indemnified to its satisfaction from any liability or expense, including, without limitation, fees and expenses of its attorneys) or any Owner or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City, to co1nply with its obligations under this section. For purposes of this section, "Beneficial Owner" shall have the meaning prescribed thereto in the respective Continuing Disclosure Agreement relating to such Series of Bonds.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
SECTION 7.01. Events of Default. The following events shall be Events of Default:
(a) default in the due and punctual payment of the principal or Redemption Price of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise in the amounts and at the times provided therefor;
(b) default in the due and punctual payment of any install1nent of interest on any Bond when and as such interest installment shall become due and payable; (c) failure by the City to observe or perfonn any covenant, condition, agreement or provision in this Indenture on its part to be observed or performed, other than as referred to in subsection (a) or (b) of this Section, for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, has been given to the City by the Trustee; except that, if such failure can be remedied but not within such thirty (30) day period and if the City has taken all action reasonably possible to remedy such failure within such thirty (30) day period, such failure shall not beco1ne an Event of Default for so long as the City shall diligently proceed to remedy the same in accordance with and subject to any directions or limitations of time established by the Trustee;
(d) default by the City under any agreement governing any Parity Debt and the continuance of such default beyond the therein stated grace period, if any, with respect to such default;
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(e) the filing by the City of a pet1t1on in voluntary bankruptcy for the composition of its affairs or for_ its corporate reorganization under any state or federal bankruptcy or insolvency law, or an assignment by the City for the benefit of creditors, or the admission by the City in writing to its insolvency or inability to pay debts as they mature, or the consent by the City in writing to the appointment of a trustee or receiver for itself;
(f) the entering by a court of competent jurisdiction of an order, judgment or decree declaring the City insolvent, or adjudging it bankrupt, or appointing a trustee or receiver of the City, or approving a petition filed against the City seeking reorganization of the City under any applicable law or statute of the United States of America or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of the entry thereof; or (g) the assumption, under the provisions of any other law for the relief or aid of debtors, by any court of competent jurisdiction of custody or control of the City or of the Water Net Revenues and such custody or control shall not be terminated within sixty (60) days from the date of assumption of such custody or control.
SECTION 7.02. APPiication of Water Net Revenues and Other Funds After Default; Acceleration. If an Event of Default shall occur and be continuing, the City shall immediately transfer to the Trustee all Water Net Revenues held by it and received thereafter and the Trustee shall apply all Water Net Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (except as otherwise provided in this Indenture) as follows and in the following order:
(I) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and Parity Debt, including the costs and expenses of the Trustee and the Owners in declaring such Event of Default, and payment of reasonable fees and expenses of the Trustee (including reasonable fees and disbursements of its counsel and other agents) incurred in and about the performance of its powers and duties under this Indenture; and
(2) To the payment of the whole amount of Bond Obligation then due on the Bonds and Parity Debt (upon presentation of the Bonds and Parity Debt to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, with interest on such Bond Obligation at the rate or rates of interest borne by the respective Bonds and Parity Debt, to the payment to the persons entitled thereto of all installments of interest then due and the unpaid principal or Redemption Price of any Bonds and Parity Debt which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, with interest on the overdue Bond Obligation and Parity Debt at the rate borne by the respective Bonds and Parity Debt, and, if the amount available shall not be sufficient to pay in full all the Bonds and Parity Debt due on any date, together with such interest, then to the payment thereof ratably, according to the amounts of principal or interest or Accreted Value (plus accrued interest) due on such date to the persons entitled thereto, without any discrimination or preference.
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In each and every such case during the continuance of such Event of Default, the Owners of not less than a majority in aggregate amount of Bond Obligation of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding.
This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, the City shall pay to or shall deposit with the Trustee a sum sufficient to pay all principal on such Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, and the reasonable fees and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee, or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of not less than a majority in aggregate amount of Bond Obligation of the Bonds at the time Outstanding, by written notice to the City and to the Trustee, may, on behalf of the Owners of all the Bonds, rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.
SECTION 7 .03. Trustee to Represent Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Owners, the Trustee in its discretion may, and upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate amount of Bond Obligation of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under this Indenture or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Water Net Revenues, and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture (including Section 7 .05). 85740924.10 39
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SECTION 7.04. Owners' Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate amount of Bond Obligation of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee and upon furnishing the Trustee with indemnification satisfactory to it, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Owners or holders of Parity Debt not parties to such direction.
SECTION 7.05. Limitation on Owners' Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture or any other applicable law with respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Owners of not less than twenty-five percent (25o/o) in aggregate amount of Bond Obligation of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (5) the Trustee shall not have received contrary directions from the Owners of a majority in aggregate amount of Bond Obligation of the Bonds then Outstanding.
Such notification, request, tender of indemnity and refusal or om1ss1on are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his, her or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under this Indenture or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture.
SECTION 7 .06. Absolute Obligation of the City. Nothing in any other provision of this Indenture or in the Bonds contained shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal or Redemption Price of and interest on the Bonds to the respective Owners of the Bonds at their respective due dates therefor or upon call for redemption, as herein provided, but only out of the Water Net Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.
SECTION 7 .07. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Owners on account of any Event of Default shall have been 85740924.10 40
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discontinued or abandoned for any reason or shall have been detennined adversely to the Trustee ·or the Owners, then in every such case the City, the Trustee and the Owners, subject to any detennination in such proceedings, shall be restored to their fonner positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the City, the Trustee and the Owners shall continue as though no such proceedings had been taken.
SECTION 7.08. Remedies Not Exclusive. _No remedy herein conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.
SECTION 7.09. No Waiver of Default. No delay or omission of the Trustee or of any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Appointment: Duties, Immunities and Liabilities of Trustee. (A) Wells Fargo Bank, National Association is hereby appointed as Trustee under this Indenture and hereby accepts the trust imposed upon it as Trustee hereunder and to perfonn all the functions and duties of the Trustee hereunder, subject to the tenns and conditions set forth in this Indenture. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perfonn such duties and only such duties as are specifically set forth in this Indenture and no implied covenants shall be read into this Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(B) The City may remove the Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate amount of Bond Obligation of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (E) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving 85740924.10 41
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written notice of such removal to the Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing.
(C) The Trustee may at any time resign by giving written notice of such resignation to the City and by giving the Owners notice of such resignation by mail at the addresses shown on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing. (D) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee Shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf of himself or herself and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper; appoint such successor Trustee.
Any successor Trustee appointed under this Indenture, shall signify its acceptance of such appointment by executing and delivering to the City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at ihe Request of the City or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the City shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the City shall give notice of the· succession of such Trustee to the trusts hereunder by mail to the Owners at the addresses shown on the registration books maintained by the Trustee. If the City fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the City. (E) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a trust company or bank having the powers of a trust company having a corporate trust office in the State, having a combined capital and surplus of at least seventy five million dollars ($75,000,000) and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (E), the Trustee shall resign immediately in the maIUier and with the effect specified in this Section. 85740924,10 42
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If, by reason of the judgment of any court, the Trustee or any successor Trustee is rendered unable to perform its duties hereunder, and if no successor Trustee be then appointed, all such duties and all of the rights and powers of the Trustee hereunder shall be assumed by and vest in the City in trust for the benefit of the Owners.
SECTION 8.02. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (E) of Section 8.01, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
SECTION 8.03. Liability of Trustee.
(A) The recitals of facts herein and in the Bonds contain'ed shall be taken as statements of the City, and the Trustee assumes no responsibility for the correctness of the same (other than the certificate of authentication of the Trustee on each Bond), and makes no representations as to the validity or sufficiency of this Indenture or of the Bonds or of any Investment Security, as to the sufficiency of the Water Net Revenues, or the priority of the lien of this Indenture thereon, or as to the :financial or technical feasibility of the Water System and shall not incur any responsibility in respect of any such matter, other than in connection with the duties or obligations expressly herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence, willful misconduct or breach of the express tenns and conditions hereof. The Trustee and its directors, officers, employees or agents may in good faith buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner of a Bond may be entitled to take, with like effect as if the Trustee was not the Trustee under this Indenture. The Trustee may in good faith hold any other fonp_ of indebtedness of the City, own, accept or negotiate any drafts, bills of exchange, acceptances or obligations of the City and make disbursements for the City and enter into any commercial or business arrangement therewith, without limitation. (B) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, but the Trustee shall be answerable for the negligence or misconduct of any such attorney, agent, or receiver selected by it; provided, however, that the Trustee shall not be answerable for the negligence or misconduct of any attorney or certified public accountant selected by it with due care.
(C) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than twenty five percent (25o/o) in aggregate amount of Bond Obligation of the Bonds at the time 85740924.10 43
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Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee under this Indenture.
(D) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indeuture at the request, order or direction of any of the Owners pursuant to the provisions of this Indenture, including, without limitation, the provisions of Article VII hereof, unless such Owners shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby. (E) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder.
(F) The Trustee shall not be deemed to have knowledge of and shall not be required to take any action with respect to, any Event of Default (other than an Event of Default described in subsections (a) or (b) of Section 7.01) or event which would, with the giving of notice, the passage of time or both, constitute an Event of Default, unless the Trustee shall have actual knowledge of such event or shall have been notified of such event by the City or the Owners of twenty-five percent (25%) in aggregate amount of Bond Obligation of the Bonds at the time Outstanding. Without limiting the generality of the foregoing, the Trustee shall not be required to ascertain, monitor or inquire as to the performance or observance by the City of the terms, conditions, covenants or agreements set forth in Article VI hereof (including, without limitation, the covenants of the City set forth in Section 6.08 hereof), other than the covenants of the City to make payments with respect to the Bonds when due as set forth in Section 6.01 and to file with the Trustee when due, such reports and certifications as the City is required to file with the Trustee hereunder.
(G) No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy. (H) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the City, personally or by agent or attorney.
(I) The Trustee shall not be responsible for:
(1) the application, or handling by the City of any Water Net Revenues or other moneys transferred to or pursuant to any Requisition or Request of the City in accordance with the terms and conditions hereof;
(2) the application and handling by the City of any other fund or account designated to be held by the City hereunder;
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(3) any error or omission by the City in making any computation or giving any instruction with respect to the Rebate Fund and may rely conclusively on any computations or instructions furnished to it by the City with respect to the Rebate Fund and the Tax Certificate; or
(4) the construction, operation or maintenance of the Water System by the City.
(J) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VIII.
(K) The Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.
SECTION 8.04. Right of Trustee to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, requeSt, consent. order, certificate, report, opinion, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, including, without limitation, counsel of or to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance herewith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the City, and such Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. The Trustee may also rely conclusively on any report or certification of any certified public accountant, investment banker, financial consultant, or other expert selected by the City or selected by the Trustee with due care in connection with matters required to be proven or ascertained in connection with its administration of the trusts created hereby.
SECTION 8.05. Compensation and Indemnification of Trustee. The City shall cause to be paid to the Trustee from time to time reasonable compensation for all service rendered under this Indenture, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents, and employees, incurred in and about the performance of their powers and duties under this Indenture, subject to the provisions of Section 11.10 hereof. The City further agrees to indemnify and save the Trustee, its officers, directors and employees harmless from and against any costs, claims, expenses or liabilities, including fees and expenses of its attorneys, which it may incur in the exercise and performance 85740924.\0 45
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of its powers and duties hereunder, and which are not due to its negligence, misconduct or default.
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS INDENTURE
SECTION 9.01. Amendments Permitted.
(A) (!) This lndeuture and the rights and obligations of the City, the Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may enter into with the written consent of the Owners of a majority in aggregate amount of Bond Obligation of the Bonds (or, if such Supplemental Indenture is only applicable to a Series of Bonds, such Series of Bonds} then Outstanding or, in case less than all of the Series of Bonds then Outstanding are affected by the modification or amendment, of the Owners of at least a majority in aggregate principal amount of the Bonds so affected and Outstanding at the time such consent is given, shall have been filed with the Trustee; provided, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any particular maturity remain Outstanding, the consent of the.Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Bonds Outstanding under this Section. (2) In lieu of satisfying the requirements of Section 9.0l(A)(l) hereof, this Indenture and the rights and obligations of the City and of the Owners of the Bonds and of the Trustee may also be modified or amended at any time by a Supplemental Indenture entered into by the City and the Trustee which shall become binding when the written consents of each provider of a letter of credit or a policy of bond insurance for the Bonds shall have been filed with the Trustee; provided, that at such time the payment of all the principal of and interest on all Outstanding Bonds shall be insured by a policy or policies of municipal bond insurance or payable under a letter of credit the provider of which shall be a financial institution or association having unsecured debt obligations rated, or insuring or securing other debt obligations rated on the basis of such insurance or letters of credit, in one of the two highest Rating Categories of Moody's, Fitch or Standard & Poor's. A copy of each such Supplemental Indenture when executed and delivered shall be sent by the City to Moody's, Fitch and Standard & Poor's to extent such rating agency is then rating the Bonds.
(3) No such modification or amendment shall (a) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, or extend the time of payment or reduce the amount of any mandatory sinking fund payment provided for the payment of any Bond, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof exclusively, without the consent of the Owner of each Bond so affected, or (b) reduce the aforesaid percentage of Bond Obligation the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Water Net Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture, or deprive the Owners of the Bonds of the lien created by 85740924.10 46
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this Indenture on such Water Net Revenues and other assets (in each case, except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary· for the consent of the Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof
(B) This Indenture and the rights and obligations of the City, of the Trustee and of the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the City may adopt without the consent of any Owners but only to the extent permitted by law and only for any one or more of the following purposes:
(1) to add to the covenants and agreements of the City in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the City;
(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in this Indenture, or in regard to matters or questions arising under this Indenture, as the City may deem necessary or desirable, and which shall not materially and adversely affect the interests of the Owners of the Bonds;
(3) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said Act or similar federal statute, and which shall not materially and adversely affect the interests of the Owners of the Bonds; (4) to make modifications or adjustments necessary, appropriate or desirable to provide for the issuance of Variable Rate Indebtedness, Capital Appreciation Indebtedness or Parity Debt with such interest rate, payment, maturity and other terms as the City may deem desirable; subject to the provisions of Section 3.01, 3.03 and 3.05; (5) to provide for the issuance of Bonds in book-entry form or bearer form, provided that no such provision shall materially and adversely affect the interests of the Owners of the Bonds;
(6) if the City agrees in a Supplemental Indenture to maintain the exclusion of interest on a Series of Bonds from gross income for purposes of federal income taxation, to make such provisions as are necessary or appropriate to ensure such exclusion; (7) to provide for the issuance of an additional Series of Bonds pursuant to provisions of Section 3.02 or Section 3.03; and
(8) for any other purpose that does not materially and adversely affect the interests of the Owners of the Bonds.
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SECTION 9.02. Effect of Supplemental Indenture. From and after the time any Supplemental Indenture becomes effective pursuant to this Article, this Indenture shall be deemed to be supplemented, modified and/or amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the City, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such supplement, modification and/or amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after any Supplemental Indenture becomes effective pursuant to this Article may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in fonn approved by the City and the Trustee as to any rriodification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such execution and presentation of his or her Bond for such purpose at the Corporate Trust Office or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bond. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the City and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Principal Corporate Trust Office, without cost to any Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amounts of the same Series, tenor and maturity.
SECTION 9.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him or her, provided that due notation thereof is made on such Bonds.
ARTICLEX
DEFEASANCE
SECTION 10.01. Discharge of Indenture. Bonds of any Series or a portion thereof maybe paid by the City in any of the following ways:
(a) by paying or causing to be paid the Bond Obligation of and interest on such Outstanding Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, an escrow agent or other fiduciary, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem such Outstanding Bonds; or (c)
Bonds.
by delivering to the Trustee, for cancellation by it, such Outstanding If the City shall pay all Series for which any Bonds are Outstanding and also pay or cause to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (evidenced by a Certificate of the City filed with the Trustee signifying the intention of the 85740924.10 48
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City to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Water Net Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the City under this Indenture shall cease, terminate, become void and be completely discharged and satisfied. In such event, upon Request of the City, the Trustee shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it pursuant to this Indenture which, as evidenced by a verification report, upon which the Trustee may conclusively rely, from a firm of certified public accountants, are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption.
SECTION 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, escrow agent or other fiduciary, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the City in respect of such Bond shall cease, terminate and be completely discharged, provided that the Owner thereof shall thereafter be entitled to the payment of the principal of and premium, if any, and interest on the Bonds, and the City shall remain liable for such payment, but only out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04 and the continuing duties of the Trustee hereunder.
The City may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the City may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
SECTION 10.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be:
(a) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount or Redemption Price of such Bonds and all unpaid interest thereon to the redemption date; or (b) Defeasance Securities, the principal of and interest on which when due will, in the opinion of an independent certified public accountant or, as determined by the City using due diligence, another firm of verification agents, delivered to the Trustee 85740924.10 49
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(upon which opinion the Trustee may conclusively rely), provide money sufficient to pay the principal or Redemption Price of and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal or Redemption Price and interest become due, provided that, in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article N provided or provision satisfactory to the Trustee shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Request of the City) to apply such money to the payment of such principal or Redemption Price and interest with respect to such Bonds.
SECTION 10.04. Pavment of Bonds After Discharge of Indenture. Any moneys held by the Trustee in trust for the payment of the principal or Redemption Price of, or interest on, any Bonds and remaining unclaimed for two years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption as provided in this Indenture), if such moneys were so held at such date, or two (2) years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the City free from the trust created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trustee may (at the cost of the City) first mail to the Owners of any Bonds remaining unpaid at the addresses shown on the registration books maintained by the Trustee a notice, in such form as may be deemed appropriate by the Trustee, with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof. All moneys held by or on behalf of the Trustee for the payment of principal or Accreted Value of or interest or premium on Bonds, whether at redemption or maturity, shall be held in trust for the account of the Owners thereof and the Trustee shall not be required to pay Owners any interest on, or be liable to the Owners or any other person (other than the City) for any interest earned on, moneys so held.
Any interest earned thereon shall belong to the City and shall be deposited monthly by the Trustee into the Water Revenue Fund.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Liability of City Limited to Water Net Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, the City shall not be required to advance any moneys derived from any source other than the Water Net Revenues and other assets pledged hereunder for any of the purposes in this Indenture mentioned, whether for the payment of the principal or Redemption Price of or interest on the Bonds or for any other purpose of this Indenture.
The Bonds are special, limited obligations of the City. The Bonds shall not be deemed to constitute a debt or liability of the City, the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory provision, or a pledge of the faith and credit of the City, the State of California or of any political subdivision thereof, but shall be 85740924.10 50
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payable, except to the extent of certain amounts held hereunder pledged therefor, solely from Water Net Revenues. Neither the faith and credit nor the taxing power of the City, the State of California or of any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or the interest on the Bonds. The issuance of the Bonds shall not directly or indirectly or contingently obligate the City, the State of California or any political subdivision thereof to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for. their payment.
SECTION 11.02. Successor is Deemed Included in All References to Predecessor.
Whenever in this Indenture either the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
SECTION 11.03. Limitation of Rights to City, Trustee and Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the City, the Trustee and the Owners of the Bonds and any Parity Debt, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Trustee and the Owners of the Bonds and any Parity Debt.
SECTION 11.04. Waiver of Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
SECTION 11.05. Destruction or Delivery of Cancelled Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the City of any Bonds, the Trustee may, in its sole discretion, in lieu of such cancellation and delivery, destroy such Bonds, and deliver a certificate of such destruction to the City.
SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The City hereby declares that it would have executed and delivered this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable.
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SECTION 11.07. Notice to City and Trustee. Any notice to or demand upon the Trustee may be served or presented, and such demand may be made, at the Corporate Trust Office of the Trustee. Any notice to or demand upon the City, shall be deemed to have been sufficiently given or served for all purposes by being deposited, first-class mail postage prepaid, in a post office letter box, addressed to the City at 275 East Olive Avenue, Burbank, California 91502, Attention: City Manager (or such other address as may have been filed in writing by the City with the Trustee).
SECTION 11.08. Evidence of Rights of Owners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the City if made in the manner provided in this Section.
The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument acknowledged to him or her the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.
The ownership of Bonds shall be proved by the bond registration books held by the Trustee. The Trustee may establish a record date as of which to measure consent of the Owners to determine whether the requisite consents are received.
Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Own~r of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in accordance therewith or reliance thereon.
SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate amount of Bond Obligation have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the City, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.
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SECTION 11. l 0. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or Redemption Price due on any date with respect to particular Bonds (or portions of Bonds in the case of registered Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04.
SECTION 11.11. Funds and Accounts; Valuation. Any fund required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with customary standards of the industry, to the extent practicable, and with due regard for the protection of the security of the Bonds and the rights of every holder thereof. Notwithstanding anything to the contrary herein, for the purposes of determining the amount in any fund or account held by the Trustee, all Investment Securities credited to such fund or account shall be valued at the lesser of cost or market value (plus, prior to the first payment of interest following purchase, the amount of any accrued interest paid as part of the purchase price).
SECTION 11.12. Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture.
All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender shall mean and include words of the feminine and neuter genders.
SECTION 11.13. Waiver of Personal Liability. No Council member, officer, agent or employee of the City or the Trustee shall be individually or personally liable for the payment of the principal or Redemption Price of or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such Council member, officer, agent or employee of the City or the Trustee from the performance of any official duty provided by law or by this Indenture.
SECTION 11.14. Goven1ing Law. This Indenture sl1all be construed and governed in accordance with the laws of the State of California.
SECTION 11.15. Business Day. Except as specifically set forth in a Supplemental Indenture, any payments or transfers which would othenvise become due on any day which is not a Business Day shall become due or shall be made on the next succeeding Business Day with the same effect as if made on such preceding non-Business Day. 8574-0924.10 53
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SECTION 11.16. Effectiveness. This Indenture shall take effect upon its execution and delivery.
SECTION 11.17. Execution in Countemarts. This Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Indenture by their officers thereunto duly authorized as of the day and year first written above. (Seal)
ATTEST:
By: Cit ~~c- ~~,,
City Clerk
85740924.9
CITY OF BURBANK
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
54 ATTACHMENT 8
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85745299.11
FIRST SUPPLEMENTAL BURBANK WATER AND POWER
WATER REVENUE BOND INDENTURE
by and between the
CITY OF BURBANK, CALIFORNIA
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
Dated as of November 1, 2010
(Supplemental to the Burbank Water and Power Water Revenue Bond Indenture dated as of November l, 2010)
ATTACHMENT 8
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SECTION 12.01.
SECTION 12.02.
SECTION 12.03.
SECTION 12.04.
SECTION 12.05.
SECTION 12.06.
SECTION 12.07.
SECTION 12.08.
SECTION 12.09.
SECTION 12.10.
SECTION 12.11.
SECTION 12.12.
SECTION 12.13.
SECTION 12.14.
SECTION 12.15.
SECTION 12.16.
EXHIBIT A
85745299.11
ARTICLE XII
THE 2010A BONDS
Definitions .................................................................................................. 2 Authorization; Terms of the Series 2010A Bonds ..................................... 3 Redemption of Series 201 OA Bonds .......................................................... 4 Selection of Series 2010A Bonds for Redemption .................................... 5 Notice of Redemption of Series 2010A Bonds .......................................... 5 Partial Redemption of Series 2010A Bonds .............................................. 5 Effect of Redemption of Series 2010A Bonds ........................................... 5 Form of Series 2010A Bonds ..................................................................... 6 Issuance of Series 201 OA Bonds ................................................................ 6 Application of Proceeds of Series 2010A Bonds ....................................... 6 Establishment and Application of Series 2010A Water System Fund and Series 2010A Costs of Issuance Fund ........................................ 6 Designation of Series 2010A Bonds as Non-Participating Bonds; No Reserve Fund ........................................................................................ 7 Tax Covenants ........................................................................................... 7 Terms of Series 201 OA Bonds Subject to the Master Water Revenue Bond Indenture .......................................................................... 12 Effective Date of First Supplement. ......................................................... 12 Execution in Counterparts ........................................................................ 12 FORM OF SERIES 2010ABOND ....................................................... A-1 i
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First Supplemental Burbank Water and Power Water Revenue Bond Indenture (Supplemental to the Burbank Water and Power Water
Revenue Bond Indenture dated
as of November 1, 2010)
Authorizing the Issuance of
$8,795,000 Aggregate Principal Amount of
City of Burbank, California
Burbank Water and Power Water Revenue/Refunding Bonds,
Series of2010A
This FIRST SUPPLEMENTAL BURBANK WATER AND POWER WATER
REVENUE BOND INDENTURE, dated as of November I, 2010 (the "First Supplement"), by and between the CITY OF BURBANK, CALIFORNIA (the "City''), a municipal corporation and chartered city duly organized and existing under the Constitution and laws of the State of California, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee (the "Trustee"),
WHEREAS, this First Supplement is supplemental to the Burbank Water and Power Water Revenue Bond Indenture, dated as of November l, 2010 (the "Master Water Revenue Bond Indenture"), by and between the City and the Trustee, providing for the issuance of City of Burbank, California Burbank Water and Power Water Revenue Bonds (the "Bonds"); and WHEREAS, the Master Water Revenue Bond Indenture provides that the City may issue Bonds from time to time as authorized by a supplemental indenture thereto; and WHEREAS, Article 12 of Chapter 4 of Title 2 of the City Code authorizes the City to issue revenue bonds for the purpose of financing additions, betterments and extensions to and improvements of the water system of the City and related facilities and to refund obligations issued for such purpose; and
WHEREAS, the City Council has determined to issue a series of water revenue bonds to be known as the City of Burbank, California Burbank Water and Power Water Revenue/Refunding Bonds, Series of 2010A (the "Series 2010A Bonds") to (i) refund on a current basis all of the outstanding 1998 Water Bonds (as defined herein), (ii) finance the costs of the 2010 Water Project (as defined herein), (iii) reimburse the City for certain expenditures made in connection with the Water System, and (iv) pay costs of issuance of the 2010A Water .Bonds; and
WHEREAS, concurrently with the issuance of the Series 2010A Bonds, the City intends to issue its City of Burbank, California Burbank Water and Power Water Revenue Bonds, Series of 2010B (Taxable Build America Bonds) (the "Series 2010B Bonds" and, together with the !15745299.11
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Series 201 OA Bonds, the "2010 Water Bonds") pursuant to the Master Water Revenue Bond Indenture, as supplemented by a Second Supplemental Burbank Water and Power Water Revenue Bond Indenture, dated as of November l, 2010 (the "Second Supplement"), to (i) finance the costs of the 2010 Water Project, (ii) reimburse the City for certain expenditures made in connection with the Water System, and (iii) pay costs of issuance of the Series 2010B Bonds; and
WHEREAS, the City Council has determined that it is necessary and required that the City enter into this First Supplement to establish and declare, in conjunction with the Master Water Revenue Bond Indenture, the terms and conditions upon which the Series 2010A Bonds shall be issued and secured and to secure the payment of the principal thereof and premium (if any) and interest thereon; and
WHEREAS, the City Council has determined that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this First Supplement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this First Supplement; NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE XII
THE 2010A BONDS
SECTION 12.01. Definitions. The terms defined in this Section shall, for all purposes of this First Supplement and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Terms defined in the Master Water Revenue Bond Indenture not otherwise defined herein shall have the meanings specified therein. "Prior Indenture" means the Burbank Water and Power Water Revenue Bond Indenture, dated as of October I, 1998, by and between the City and U.S. Bank Trust National Association, which has been succeeded by the Trustee, as supplemented and amended by a First Supplemental Burbank Water and Power Water Revenue Bond Indenture, dated as of October 1, 1998, by and between the City and the Trustee.
"Prior Trustee" means Wells Fargo Bank, National Association. "Redemption Date" means November 12, 2010.
"Series 2010A Bonds" means the City of Burbank, California Burbank Water and Power Water Revenue/Refunding Bonds, Series of 201 OA.
"Series 2010A Costs of Issuance Fund" means the Series 2010A Costs of Issuance Fund established under Section 12.11.
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"Series 201 OA Water System Fund" means the Series 201 OA Water System Fund established under Section 12.11.
"1998 Water Bonds" means the City qf Burbank, California Burbank Water and Power Water Revenue Bonds, Series of 1998.
"1998 Water Bonds Redemption Fund" means the 1998 Water Bonds Redemption Fund established under the Prior Indenture.
"2010 Water Project" means improvements to the Water System, including the build-out of the recycled water expansion, replacement of a water reservoir, conversion of the automatic meter infrastructures and other improvements to the water production, distribution, storage and general plant facilities, as described herein or such other or additional facilities for the Water System as the City hereafter determines to substitute therefor.
SECTION 12.02. Authorization; Terms of the Series 2010A Bonds. (A) A frrst Series of Bonds to be issued under the Master Water Revenue Bond Indenture is hereby created. Such Series shall be known as the "City of Burbank, California Burbank Water and Power Water Revenue/Refunding Bonds, Series of 2010A" (herein referred to as the "Series 2010A Bonds"). The· Series 2010A Bonds shall be issued in the aggregate initial principal amount of$8,795,000 in accordance with the law and the Master Water Revenue Bond Indenture to (i) refund on a current basis all of the outstanding 1998 Water Bonds, (ii) finance the costs of the 2010 Water Project, (iii) reimburse the City for certain expenditures made in connection with the Water System, and (iv) pay costs of issuance of the 2010A Water Bonds.
(B) The Series 2010A Bonds shall be issued in fully registered form and shall be initially registered in the name of "Cede & Co.," as nominee of The Depository Trust Company.
The Series 2010A Bonds shall be evidenced by one Series 2010A Bond maturing on each of the maturity dates as set forth in subsection 12.02(C) in a denomination corresponding to the total principal amount of the Series 2010A Bonds of such maturity. Each Series 2010A Bond maybe assigned by the Trustee a distinctive number or letter and number, and a record of the same shall be maintained by the Trustee. Registered ownership of the Series 2010A Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 2.10 of the Master Water Revenue Bond Indenture.
(C) The Series 2010A Bonds shall be dated the date of delivery thereof, shall be issued in denominations of $5,000 or any integral multiple thereof, and shall bear interest from the date thereof at the following rates per annum and shall mature on June 1 in the following years in the following amounts:
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Maturity Date Principal futerest
(June 1) Amount Rate
2011 $410,000 2.00o/o
2012 480,000 3.00
2013 490,000 3.00
2014 470,000 4.00
2015 735,000 4.00
2016 765,000 4.00
2017 795,000 4.00
2018 830,000 4.00
2019 860,000 4.00
2020 895,000 4.00
2021 930,000 4.00
2022 970,000 5.00
2023 165,000 5.00
Interest on the Series 2010A Bonds shall be payable commencing on June 1, 2011 and semiannually thereafter on December 1 and June 1 of each year in lawful money of the United States of America by check mailed by first-class mail on each interest payment date to the Owner thereof as of the close of business on the fifteenth (15th) day (whether or not a Business Day) of the calendar month immediately preceding such interest payment date (each a "Record Date"); provided, that upon the written request of an Owner of one million dollars ($1,000,000) or more in aggregate principal amount of Series 2010A Bonds received by the Trustee prior to the applicable Record Date (which such request shall remain in effect until rescinded in writing by such Owner), interest shall be paid by wire transfer in immediately available funds. futerest on the Series 2010A Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. The principal of and premium, if any, on the Series 2010A Bonds are payable when due upon presentation thereof at the Corporate Trust Office of the Trustee, in lawful money of the United States of America.
So long as the Series 2010A Bonds are maintained in book-entry form, payments of principal, premium, if any, and interest shall be made by the Trustee to the Securities Depository by wire transfer.
The Trustee shall provide to Owners CUSIP number identification, wit.h appr6priate dollar amounts for each CUSIP number, on all redemption payments and interest payments, whether by check or by wire transfer.
SECTION 12.03. Redemption of Series 2010A Bonds. The Series 2010A Bonds maturing on or before June 1, 2020 are not subject to optional redemption prior to maturity. The Series 2010A Bonds maturing on or after June l, 2021 are subject to redemption prior to their respective stated maturities, at the option of the City, from any source of available funds, as a whole or in part on any date (by such maturities as may be specified by the City and by lot within a maturity), on or after June 1, 2020, at a redemption price equal to 100% of the principal 85745299.11 4
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amount of the Series 2010A Bonds to be redeemed, plus accrued interest to the date fixed for redemption.
SECTION 12.04. Selection of Series 2010A Bonds for Redemption. If less than all of the Series 2010A Bonds are to be redeemed, the maturities of the Series 2010A Bonds to be redeemed shall be selected by the City. Whenever provision is made in this First Supplement for the redemption of less than all of the Series 2010A Bonds of any maturity, the Trustee shall select the Series 2010A Bonds to be redeemed, from all Series 2010A Bonds of the respective maturity not previously called for redemption, in authorized denominations, by lot in any manner which the Trustee in its sole discretion shall deem appropriate. The Trustee shall promptly notify the City in writing of the Series 2010A Bonds so selected for redemption.
SECTION 12.05. Notice of Redemption of Series 2010A Bonds. The City shall notify the Trustee at least forty-five (45) days prior to the redemption date for Series 2010A Bonds pursuant to Section 12.03 (or such shorter time as may be agreed to by the Trustee).
Notice of redemption shall be mailed by the Trustee, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, (i) to the respective Owners of any Series 2010A Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee by first-class mail, (ii) to the Securities Depository by facsimile or other electronic means of communication and by first-class mail, and (iii) to EMMA at www.emma.msrb.org, by electronic means of communication, or to such other securities depositories or information services as the City may designate in a Request of the City delivered to the Trustee. Notice of redemption shall be given in the form and otherwise in accordance with the terms of the Master Water Revenue Bond Indenture and this First Supplement.
The City has the right to rescind any notice of the optional redemption of Series 2010A Bonds by written notice to the Trustee on or prior to the dated fixed for such redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the .Series 2010A Bonds then called for redemption, and such cancellation will not constitute an Event of Default.
The City and the Trustee shall have no. liability to the Owners or any other party related to or arising from such rescission of notice of redemption. The Trustee shall provide notice of rescission of redemption in the same maruier as the original notice of redemption was provided.
SECTION 12.06. Partial Redemption of Series 2010A Bonds. Upon surrender of any 2010A Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new 2010A Bond of authorized denominations, and of the same maturity and interest rate, equal in aggregate principal amount to the unredeemed portion of the 201 OA Bond surrendered.
SECTION 12.07. Effect of Redemption of Series 2010A Bonds. Notice of redemption having been duly given as aforesaid, and moneys for payment of the Redemption Price of, together with interest accrued to the redemption date on, the 2010A Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Series 2010A Bonds (or portions thereof) so called for redemption shall become due and payable at the Redemption Price specified in such notice, together with interest accrued thereon to the date fixed for redemption, interest on the Series 2010A Bonds so called for 85745299. l I 5
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redemption shall cease to accrue, said Series 2010A Bonds (or portions thereof) shall cease to be entitled to any benefit or security under the Master Water Revenue Bond Indenture, and the Owners of such Series 2010A Bonds shall have no rights in respect thereof except to receive payment of such Redemption Price and accrued interest.
All Series 2010A Bonds redeemed pursuant to the provisions of this Article shall be cancelled upon surrender thereof and destroyed.
SECTION 12.08. Form of Series 2010A Bonds. The Series 2010A BondS and the certificate of authentication and registration to be executed thereon shall be in substantially the form set forth as Exhibit A hereto. The 2010A Bond designation letters and numbers, maturity dates, principal amounts, and interest rates and yields to maturity shall be inserted therein in conformity with Section 12.01.
SECTION 12.09. Issuance of Series 2010A Bonds. At any time after the execution and delivery of this First Supplement, the City may execute and the Trustee shall authenticate and deliver the Series 2010A Bonds in the aggregate principal amount of $8,795,000.00 upon the Order of the City.
SECTION 12.10. Application of Proceeds of Series 2010A Bonds. (A) The proceeds of the sale of the Series 201 OA Bonds in the amount of $9,866,468.95 (computed as $8,795,000.00 aggregate principal amount of the Series 20\0A Bonds, less $36,956.25 Underwriter's discount, plus $1,108,425.20 original issue premium), including the allocable portion of the good faith deposit previously received by the Trustee in the amount of $837,847.00, shall be received by the Trustee on behalf of the City and held in trust and set aside or transferred as follows:
(i) The Trustee shall transfer for deposit by the Prior Trustee in the 1998 Water Bonds Redemption Fund in accordance with a Written Request of the City $1,876,826.05 from the proceeds of the sale of the Series 2010A Bonds which, together with $494,590.10 released from the Parity Rese~e Fund for the 1998 Water Bonds and $593,475.79 released from the Debt Service Fund for the 1998 Water Bonds, or a total of $2,964,891.94, will be applied by the Prior Trustee towards the redemption of the 1998 Water Bonds to be redeemed pursuant to the Prior Indenture on the Redemption Date; (ii) The Trustee shall transfer to the City for deposit in the Series 201 OA Water System Fund $7,904,134.76, to be applied in accordance with Section 12.11 hereof; and
(iii) The Trustee shall deposit in the Series 2010A Costs of Issuance Fund from proceeds of the Series 2010A Bonds the amount of $85,508.14, to be applied in accordance with Section 12.11 hereof.
SECTION 12.11. Establishment and Application of Series 20\0A Water System Fund and Series 2010A Costs of Issuance Fund. The City shall establish, maintain and hold in trust a separate fund designated as the "Series 2010A Water System Fund." The moneys in the Series 2010A Water System Fund shall be used and withdrawn by the City to pay the costs of the 85745299.11 6
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2010 Water Project. Moneys on deposit in the Series 2010A Water System Fund may be invested in Investment Securities, including the Local Agency fuvestment Fund. All interest, profit and other income received from the investment of moneys in the Series 2010A Water System Fund shall be credited to such fund.
The Trustee shall establish and maintain and hold in trust a separate fund designated as the "Series 2010A Costs of Issuance Fund." The moneys in the Series 2010A Costs of Issuance Fund shall be used and withdrawn by the Trustee, at the Written Request of the City, to pay the Costs of Issuance of the Series 201 OA Bonds as approved by the City. If any sum shall remain unexpended in the Series 2010A Costs of Issuance Fund after May 10, 2011, it shall, at the direction of the City, be applied for any lawful purpose with respect to the Water System upon such terms and conditions as shall not in the opinion of Bond Counsel adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 201 OA Bonds. Unless otherwise instructed in a Written Request of the City, to the extent any Written Request is for the payment of Costs of Issuance of both the Series 2010A Bonds and the Series 2010B Bonds, the Trustee shall pay such Costs of Issuance out of the Series 2010A Costs of Issuance Fund and the Series 2010B Costs of Issuance Fund established pursuant to the Second Supplement proportionately.
SECTION 12.12. Designation of Series 2010A Bonds as Non-Participating Bonds; No Reserve Fund. The Series 201 OA Bonds shall not constitute Participating Bonds in accordance with the provisions of Section 3.02 of the Master Water Revenue Bond fudenture.
The Reserve Fund Requirement for the Series 201 OA Bonds shall be zero ($0).
SECTION 12.13. Tax Covenants. In furtherance of the covenants set forth in Sections 6.07 and 6.08 of the Indenture, in connection with the Series 2010A Bonds, the City hereby covenants as follows:
(A) Special Definitions. When used in this Section, the following terms have the following meanings:
"Code" means the futernal Revenue Code of 1986.
"Computation Date" has the meaning set forth in section 1.148-l(b) of the Treasury Regulations.
"Gross Proceeds", with respect to an issue, means any proceeds of that issue as defined in section 1.148-l(b) of the Treasury Regulations (referring to sales, investment and transferred proceeds}, and any replacement proceeds of that issue as defined in section 1.148- 1 ( c) of the Treasury Regulations.
"Investment" means (i) any security (within the meaning of section 165(g)(2)(A) or (B) of the Code), (ii) any obligation (notwithstanding that such obligation may be a tax exempt bond), (iii) any annuity contract, (iv) when allocated to a bond other than a private activity bond, any residential rental property for family units that is not located within the jurisdiction of the issuer and that is not acquired to implement a court ordered or approved 85745299.11 7
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housing desegregation plan, or (v) any investment-type property (as defined in section 1.148-1 ( e) of the Treasury Regulations).
"Nonpurpose Investment", with respect to an issue, means any investment other than a tax-exempt bond that is not a specified private activity bond (within the meaning of sectio1157(a)(5)(C) of the Code), in which Gross Proceeds of that issue are invested and that is not acquired to carry out the governmental purposes of that issue. "Prior Issue" means the 1998 Water Bonds.
"Proceeds," with respect to an issue of governmental obligations, has the meaning set forth in has the meaning set forth in section 1.148-l(b) of the Treasury Regulations (referring to sales, investment and transferred proceeds, but not replacement proceeds, of that issue). "Rebate Amount'' has the meaning set forth in section 1.148-l(b) of the Treasury Regulations.
"Treasury Regulations" means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 of the Code. "Yield" shall have:
(1) with respect to any Investment or class of Investments, that meaning which is set forth in section 1.148-5 of the Treasury Regulations; and (2) with respect to any issue, that meaning which is set forth in section 1.148- 4 of the Treasury Regulations.
(B) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds of the Series 2010A Bonds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with such Gross Proceeds) in a manner that if made or omitted, respectively, could cause the interest component of any purchase payment to fail to be excluded pursuant to section 103 of the Code from the gross income of the owner thereof for federal income tax purposes.
Without limiting the generality of the foregoing, unless and until the City receives a written opinion of Bond Counsel to the effect that failure to comply with such covenant will not adversely affect the exclusion from gross income of interest on any Series 2010A Bond and the City shall comply with each of the specific covenants in this Section. (C) Private Use or Private Payments. Except as would not cause any Series 2010A Bond to become a "private activity bond" within the meaning of section 141 of the Code and the Treasury Regulations and rulings thereunder, the City shall at all times prior to the fmal cancellation of the last of the Series 2010A Bonds to be retired:
(1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Series 2010A Bonds or of any Prior Issue and not use or permit the use of 85745299.11 8
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such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereoQ other than a state or local government, or agency or instrumentality thereof, unless such use is solely as a member of the general public; (2) not directly or indirectly impose or accept any charge or other pa)'Tilent by any governmental or nongovernmental person or entity in respect of the use of Gross Proceeds of the Series 201 OA Bonds or of any Prior Issue, or of any property the acquisition, construction or improvement of which is to be fmanced or refinanced directly or indirectly with such Gross Proceeds, of the type described in clause (1) foregoing, other than pa)'Tilents that are of taxes of general application within the jurisdiction of the City; and (3) where the Series 2010A Bonds are refunded, the City will apply the foregoing restrictions taking cognizance of the provisions of sections 1.141-3(g) and l.141- 4(c)(2)(ii) of the Treasury Regulations and of any subsequently adopted rules or regulations applicable to such a refunding.
(D) No Private Loan. Except as would not cause any Series 201 OA Bond to become a ''private activity bond" within the meaning of section 141 of the Code and the Treasury Regulations and rulings thereunder, the City shall not use Gross Proceeds to make or finance any loan to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity not only if such Gross Proceeds are provided to such a person or entity under circumstances that create an indebtedness of that person or entity under local law or for federal income tax purposes, but also if: (a) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (b) capacity in or service from such property is committed to such person or entity under a take or-pay, output or similar contract or arrangement; or (c) indirect benefits of such Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or improved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. For purposes of this covenant, the City will treat any transaction constituting a loan of Gross Proceeds of the Prior Issue as resulting in a loan of Gross Proceeds of the Series 2010A Bonds.
(E) Not to Invest at Higher Yield. Except as would not cause such Series 201 OA Bonds to become "arbitrage bonds" within the meaning of section 148 of the Code and the Treasury RegulationS and rulings thereunder, the City shall not, at any time prior to the final cancellation of the last Series 2010A Bond to be retired, directly or indirectly invest Gross Proceeds in any Investment, if as a result of such investment the Yield of any Investment or class of Investments acquired with Gross Proceeds, whether then held or previously disposed of, would materially exceed the Yield of the Series 2010A Bond, all as detennined in accordance with the provisions of said section 148 and Treasury Regulations and rulings. (F) Not Federally Guaranteed. Except to the extent pennitted by section 149(b) of the Code and the Treasury Regulations and rulings thereunder, the City shall not take or omit to take any action that would cause any Series 2010A Bond· to be "federally guaranteed" within the 85745299.11 9
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meaning of section 149(b) of the Code and the Treasury Regulations and rulings thereunder.
Without limitation of the foregoing, the City will not permit any portion of the debt service on the Series 201 OA Bonds to be guaranteed (in whole or in part) by the United States, or more than 5% of the proceeds of the 2010A Bonds to be loaned to any person under which the obligation of that person to repay such loan is guaranteed (in whole or in part) by the United States, or more than 5% of the proceeds of the 2010A Bonds to be invested (directly or indirectly) in federally i11sured deposits or accounts. For this purpose, a guarantee or insurance by an agency or instrumentality of the United States will be treated as though made or provided by the United States.
(G) Information Report. The City shall timely file any information required by section 149(e) of the Code with respect to the Series 20IOA Bonds with the Secretary of the Treasury on Fonns 803 8-G or such other forms and in such place as the Secretary may prescribe. (H) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Treasury Regulations, in order to assure that no Series 2010A Bond is treated as an arbitrage bond:
(1) the City shall account for all Gross Proceeds of the Series 2010A Bonds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Series 2010A Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of Series 2010A Bonds with its other monies, provided that it separately accounts for each receipt and expenditure of-Gross Proceeds and the obligations acquired therewith; (2) not less frequently than each Computation Date, the City shall retain the services of a qualified rebate analyst to calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Treasury Regulations and rulings thereunder. The City promptly shall report to the Trustee the results of such calculation, including the basis therefor, in sufficient detail and on a timely basis in order that the City shall be able to comply with its covenants herein. The Trustee shall maintain a copy of the calculation with its official transcript of proceedings relating to the issuance of the Series 2010A Bonds until six years after the final Computation Date;
(3) to assure the excludability of the interest on Series 201 OA Bonds from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the Trustee for deposit into the Rebate Fund established herein an amount sufficient to permit the City timely to pay to the United States the amount that when added to the future value of previous rebate payments made for the Series 201 OA Bonds equals (i) in the case of a Final Computatio11 Date as defined in section 1.148-3( e )(2) of the Treasury Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, such rebate payments shall be made by the City at the times and in the amounts as are or may be required by section 148(f) of the Code and the Treasury Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be 85745299.1 ! 10
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required by section 148(f) of the Code and the Treasury Regulations and rulings thereunder for execution and filing by the City; and
(4) the City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (ii) and (iii), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including by payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under section l.148-3(h) or other provision of the Code or Treasury Regulations.
(I) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Treasury Regulations and rulings thereunder, the City shall, not at any time prior to the frnal cancellation of the last of the Series 2010A Bonds to be retired, enter into any transaction that reduces the amount required to be paid to the United States pursuant to paragraph (H) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield on the Series 201 OA Bonds not been relevant to either party.
(J) Series 2010A Bonds Not Hedge Bonds. The City represents and covenants that none of the Prior Issue or the Series 2010A Bonds is or will become a "hedge bond" within the meaning of section 149(g) of the Code. Without limitation of the foregoing, with respect to the Prior Issue, (i)(A) on the date of issuance of that issue the City reasonably expected (based upon its own knowledge and upon representations made by other governmental persons upon the issuance of those obligations) that within the three-year period commencing on such date no less than 85% of the spendable proceeds of that issue would be expended for the governmental purposes thereof and (B) t:J:ie City believes and represents that at no time has more than 50% of the proceeds of that issue been invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more, and with respect to the application of Proceeds of the Series 2010A Bonds other than for refunding purposes, (ii)(A) the City will not deliver the Series 2010A Bonds unless on the date of the issuance of the 2010A Bonds it reasonably expects that within the three-year period commencing on such date of issuance at least 85o/o of such spendable proceeds of the 2010A Bonds will be expended for the governmental purposes thereof and (B) the City covenants that at no time will more than 50% of such spendable proceeds of the Series 2010A Bonds be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. Notwithstanding the foregoing, as and to the extent provided in section 149(g)(3)(c)(ii) of the Code, in the case of the refunding (or series of refundings) of any Prior Issue that was issued prior to the effective date of section 149(g) of the Code, the requirements of this paragraph in respect of such Prior Issue will be treated as met if (i) the weighted average maturity of the issue or portion thereof (or, the case of a series of refundings, the weighted average maturity of each issue (or portion thereof) in that series), allocable to the refrnancing of that Prior Issue was not longer than the weighted average maturity of the bonds directly refunded by such issue (or portion thereof), and (ii) the amount of each issue (or portion thereof) described in clause (i) preceding was not greater than the amount of the bonds directly refunded by such issue (or portion thereof). 85745299.1 I 11
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(K) Use of Proceeds; Weighted Average Maturity. The City hereby represents and covenants that it will apply the proceeds of the Series 2010A Bonds in a manner so that the weighted average maturity of the Series 2010A Bonds does not exceed 120% of the average reasonably expected remaining economic life of the facilities financed or refinanced therewith (all determined in accordance with the provisions of section 147(b) of the Code). (L) Elections. The City hereby directs and authorizes the Mayor, the Vice Mayor, the City Manager, the Deputy City Manager, the City Treasurer, the Chief Financial Officer of Burbank Water and Power or the Financial Services Director to make elections permitted or required pursuant to the provisions of the Code or the Treasury Regulations, as such authorized City representative (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Series 2010A Bonds, in the Series 2010A Bond as to Tax Exemption or similar or other appropriate certificate, form or document. (M) Closing Certificate. The City agrees to execute and deliver in connection with the issuance of Series 2010A Bonds a Tax Certificate as to Arbitrage and the Provisions of Sections 103 and 141-150 of the Code, or similar document containing additional representations and covenants pertaining to the excludability of interest from the gross income of the Owners for federal income tax purposes, which representations and covenants are incorporated as though expressly set forth herein.
SECTION 12.14. Terms of Series 2010A Bonds Subject to the Master W"ater Revenue Bond Indenture. Except as in this First Supplement expressly provided, every term and condition contained in the Master Water Revenue Bond Indenture shall apply to the First Supplement and to the Series 2010A Bonds with the same force and effect as ifthe same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to the First Supplement.
The First Supplement and all the terms and provisions herein contained shall form part of the Master Water Revenue Bond Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Master Water Revenue Bond Indenture. The Master Water Revenue Bond Indenture is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof, as supplemented hereby.
SECTION 12.15. Effective Date of First Supplement. The First Supplement shall take effect upon its execution and delivery.
SECTION 12.16. Execution in Counterparts. The First Supplement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
85745299.11 12
ATTACHMENT 8
A8-72
IN WITNESS WHEREOF, the parties hereto have executed the First Supplement by their officers thereunto duly authorized as of the day and year first written above.
CITY OF BURBANK
(Seal)
ATTEST:
By:dn~~;_, ~~~
City Clerk
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
ATTACHMENT 8
A8-73
EXHIBIT A
(FORM OF SERIES 2010A BOND)
No. $. ___ _
UNLESS THIS SERIES 2010A BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE REGISTRAR
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SERIES 2010A BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS JS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON JS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CITY OF BURBANK, CALIFORNIA
BURBANK WATER AND POWER WATER REVENUE/REFUNDING BONDS,
SERIES OF 201 OA
Maturity Date Interest Rate Dated Date CU SIP
REGISTERED OWNER: CEDE&CO.
PRINCIPAL AMOUNT: $
The CITY OF BURBANK, CALIFORNIA a municipal corporation and chartered city duly organized and existing under the Constitution and the laws of the State of California (the "City"), for value received, hereby promises to pay (but only out of the Water Net Revenues and funds hereinafter referred to) to the registered owner named above or registered assigns, on the maturity date specified above (subject to any right of prior redemption or payment as provided in the hereinafter mentioned fudenture), the principal sum specified above together with interest thereon from the dated date specified above until the principal hereof shall have been paid, at the interest rate per annum specified above, payable on 1, 20_, and semiannually thereafter on December 1 and June 1 in each year. Interest hereon is payable in lawful money of the United States of America by (except as otherwise provided in the hereinafter mentioned Indenture) check mailed by first-class mail on each interest payment date to the registered owner as of the close of business on the 15th day of the calendar month immediately preceding such 85745299.11 A-1
ATTACHMENT 8
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interest payment date. The principal hereof and premium, if any, hereon are payable when due upon presentation hereof at the Corporate Trust Office (as defined in the Indenture) of Wells Fargo Bank, National Association, as trustee (together with any successor as trustee under said Indenture, the "Trustee"), in lawful money of the United States of America. 1bis bond is one of a duly authorized issue of City of Burbank, California, Burbank Water and Power Water Revenue Bonds (the "Bonds") of the series and designation indicated on the face hereof Such authorized issue o_f Bonds is not limited in aggregate principal amount, except as othenvise provided in the hereinafter mentioned Indenture, and consists or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Indenture provided, all issued and to be issued pursuant to the provisions of Article 12 of Chapter 4 of Title 2 of the City Code. This Bond is issued pursuant to a Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010, by and between the City and the Trustee and a First Supplemental Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010 (the "First Supplement"), by and between the City and the Trustee, authorizing the issuance of a Series of Bonds of which this Bond is one (such indenture as amended and supplemented, including as supplemented by the First Supplement, collectively, the "Indenture"). Reference is hereby made to the Indenture for a description of the terms under which the Bonds are issued and to be issued, the provisions with regard to the nature and extent of the Water Net Revenues (as that term is defined in the Indenture), and the rights of the registered owners of the Bonds; and all the terms of the Indenture are hereby incorporated herein and constitute a contract between the City and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by its acceptance hereof, consents and agrees. Additional Bonds may be issued, and indebtedness may be incurred, on a parity with the Bonds of this authorized issue, but only subject to the conditions and limitations contained in the Indenture.
The Bonds and the Parity Debt (as defined in the Indenture) hereafter issued by the City are payable from, and are secured by a pledge of and lien on, the Water Net Revenues and all amounts held by the Trustee under the Indenture (except for amounts held in the Rebate Fund), subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions provided in the Indenture.
The Bonds are revenue obligations of the City and are payable as to both principal and interest, and any premium upon redemption thereof, exclusively from Water Net Revenues and certain other funds pledged under the Indenture. The Bonds are special, limited obligations of the City. The Bonds shall not be deemed to constitute a debt or liability of the City, the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory provision, or a pledge of the faith and credit of the City, the State of California or of any political subdivision thereof, but shall be payable, except to the extent of certain amounts held under the Indenture pledged therefor, solely from Water Net Revenues. Neither the faith and credit nor the taxing power of the City, the State of California or of any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or the interest on the Bonds. The issuance of the Bonds shall not directly or indirectly or contingently obligate the City, the _State of California or any political subdivision thereof to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for their payment. 85745299.11 A-2
ATTACHMENT 8
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The Bonds are subject to redemption as provided 1n the First Supplement and as otherwise provided in the Indenture.
This Bond is transferable or exchangeable for other authorized denominations by the registered owner hereof, in person or by its duly authorized attorney, at the Corporate Trust Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Boud. Upon such transfer or exchange a new fully registered Bond or Bonds, of authorized denomination or denominations, of the same series, tenor, maturity and interest rate for the same aggregate principal amount will be issued to the registered owner in exchange herefor.
The City, the Trustee and any paying agent may deem and treat the registered owner hereof as the absolute owner hereof for all purposes, and the City, the Trustee and any paying' agent shall not be affected by any notice to the contrary.
The rights and obligations of the City and of the registered owners of the Bonds may be modified or amended at any time in the manner, to the extent, and upon the terms provided in the Indenture, which provide, in certain circumstances, for modifications and amendments without the consent of or notice to the registered owners of the Bonds.
It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by this Bond, and in the issuing of this Bond, do exist; have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State of California, and that this Bond, together with all other indebtedness of the City pertaining to the Water Net Revenues, is within every debt and other limit prescribed by the Constitution and the statutes of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture or otherwise.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee.
Capitalized terms used but not defined herein shall have the meanings assigned to them in the Indenture.
85745299.11 A-3
ATTACHMENT 8
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IN WITNESS WHEREOF, THE CITY OF BURBANK has caused this Bond to be executed in its name and on its behalf by the Mayor or Vice Mayor of the City aud countersigned by the City Clerk or Assistant City Clerk by their facsimile or manual signatures and the seal of the City to be reproduced hereon.
CITY OF BURBANK
Mayor
(SEAL)
Attested:
85745299.11 A-4
ATTACHMENT 8
A8-77
[FORM OF CERTIFICATE OF AUTHENTICATION
AND REGISTRATION]
This is one of the Bonds described in the within mentioned Indenture and registered on the date set forth below.
Dated: _____ ,, 20 __
85745299.11
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By: _______________ _
Authorized Officer
A-5
ATTACHMENT 8
A8-78
[FORM OF ASSIGNMENT]
For value received hereby sell, assign and transfer
unto the within Bond and hereby irrevocably constitute
and appoint attorney, to transfer the same on the books of the City at the office of the Trustee, with full power of substitution in the premises.
Dated:
Signature Guaranteed by:
85745299.11
NOTE: The signature to this Assigrunent
must correspond with the name on the face
of the within registered bond in every
particular, without alteration or enlargement
or any change whatsoever.
NOTE: Signature must be guaranteed by an
eligible guarantor institution.
A-6
ATTACHMENT 8
A8-79
90168346.11
SECOND SUPPLEMENTAL BURBANK WATER AND POWER
WATER REVENUE BOND INDENTURE
by and between the
CITY OF BURBANK, CALIFORNIA
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
Dated as of November I, 2010
(Supplemental to the Burbank Water and Power Water Revenue Bond Indenture dated as of November 1, 2010)
ATTACHMENT 8
A8-80
SECTION 13.01.
·SECTION 13.02.
SECTION 13.03.
SECTION 13.04.
SECTION 13.05.
SECTION 13.06.
SECTION 13.07.
SECTION 13.08.
SECTION 13.09.
SECTION 13.10.
SECTION 13.11.
SECTION 13.12.
SECTION 13.13.
SECTION 13.14.
SECTION 13.15.
SECTION 13.16.
SECTION 13.17.
EXHIBIT A
90168346.11
ARTICLE XIII
THE 2010B BONDS
Definitions .................................................................................................. 2 Authorization; Terms of the Series 201 OB Bonds ..................................... 4 Redemption of Series 2010B Bonds .......................................................... 6 Selection of Series 201 OB Bonds for Redemption .................................... 7 Notice of Redemption of Series 2010B Bonds .......................................... 8 Partial Redemption of Series 201 OB Bonds ............................................... 8 Effect of Redemption of Series ·2010B Bonds ........................................... 9 Form of Series 2010B Bonds ..................................................................... 9 Issuance of Series 2010B Bonds ................................................................ 9 Application of Proceeds of Series 2010B Bonds ....................................... 9 Establishment and Application of Series 2010B Water System Fund and Series 2010B Costs of Issuance Fund ...................................... 10 Designation of Series 2010B Bonds as Non-Participating Bonds; No Reserve Fund ...................................................................................... 10 No Tax Covenants .................................................................................... 10 Subsidy Payment Excluded from Water Revenues ................................. 10 Terms of Series 2010B Bonds Subject to the Master Water Revenue Bond Indenture .......................................................................... 10 Effective Date of Second Supplement ..................................................... 11 Execution in Counterparts ........................................................................ 11 FORM OF SERIES 2010B BOND ........................................................ A-1 [
ATTACHMENT 8
A8-81
Second Supplemental Burbank Water and Power Water Revenue Bond Indenture (Supplemental to the Burbank Water and Power Water
Revenue Bond Indenture dated
as of November 1, 2010)
Authorizing the Issuance of
$27,945,000 Aggregate Principal Amount of
City of Burbank, California
Burbank Water and Power Water Revenue Bonds,
Series of2010B
(Taxable Build America Bonds)
This SECOND SUPPLEMENTAL BURBANK WATER AND POWER WATER
REVENUE BOND INDENTURE, dated as of November 1, 2010 (the "Second Supplement"), by and between the CITY OF BURBANK, CALIFORNIA (the "City"), a municipal corporation and chartered city duly organized and existing under the Constitution and laws of the State of California, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee (the "Trustee"),
WHEREAS, this Second Supplement is supplemental to the Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010 (the "Master Water Revenue Bond Indenture"), by and between the City and the Trustee, providing for the issuance of City of Burbank, California Burbank Water and Power Water Revenue Bonds (the "Bonds"); and WHEREAS, the Master Water Revenue Bond Indenture provides that the City may issue Bonds from time to time as authorized by a supplemental indenture thereto; and WHEREAS, Article 12 of Chapter 4 of Title 2 of the City Code authorizes the City to issue revenue bonds for the purpose of financing additions, betterments and extensions to and improvements of the water system of the City and related facilities and to refund obligations issued for such purpose; and
WHEREAS, the City Council has determined to issue a series of water revenue bonds to be known as the City of Burbank, California Burbank Water and Power Water Revenue Bonds, Series of 2010B (Taxable Build America Bonds) (the "Series 2010B Bonds") to (i) finance the costs of the 2010 Water Project, (ii) reimburse the City for certain expenditures made in coIUlection with the Water System, and (iii) pay costs of issuance of the Series 2010B Bonds; and
90168346.11
ATTACHMENT 8
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WHEREAS, concurrently with the issuance of the Series 201 OB Bonds, the City intends to issue its City of Burbank, California Burbank Water and Power Water Revenue/Refunding Bonds, Series of2010A (the "Series 2010A Bonds" and, together with the Series 2010B Bonds, the "2010 Water Bonds") pursuant to the Master Water Revenue Bond Indenture, as supplemented by a First Supplemental Burbank Water and Power Water Revenue Bond Indenture, dated as of November l, 2010 (the "First Supplement") to (i) refund on a current basis all of the outstanding City of Burbank, California Burbank Water and Power Water Revenue Bonds, Series of 1998, (ii) finance the costs of the 2010 Water Project (as defmed herein), (iii) reimburse the City for certain expenditures made in connection with the Water System, and (iv) pay costs of issuance of the 2010A Water Bonds; and
WHEREAS, the City Council has determined that it is necessary and required that the City enter into this Second Supplement to establish and declare, in conjunction with the Master Water Revenue Bond Indenture, the terms and conditions upon which the Series 2010B Bonds shall be issued and secured and to secure the payment of the principal thereof and premium (if any) and interest thereon; and
WHEREAS, the City Council has determined that all acts, conditions and things required by law to exist, to· have happened and to have been performed precedent to and in connection with the execution and delivery of this Second Supplement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Second Supplement; NOW, THEREFORE; the parties hereto agree, as follows:
ARTICLE XIII
THE 201 OB BONDS
SECTION 13.01. Defmitions. The terms defined in this Section shall, for all purposes of this Second Supplement and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the tenns herein defined. Terms defined in the Master Water Revenue Bond Indenture not otherwise defined herein shall have the meanings specified therein. "Comparable Treasury Issue" means, with respect to any redemption date for a particular Series 201 OB Bond, the United States Treasury security or securities selected by the Designated Investment Banker which has an actual or interpolated maturity comparable to the rei;naining average life of the Series 201 OB Bond to be redeemed, and that would be utilized in accordance with customary financial practice in pricing new issues of debt securities of comparable maturity to the remaining average life of the Series 2010B Bond to be redeemed. "Comparable Treasury Price" means, with respect to any redemption date for a particular Series 20 I OB Bond:
(i) the most recent yield data for the applicable U.S. Treasury maturity index from the Federal Reserve Statistical Release H.15 Daily Update (or any comparable or 90168346.ll 2
ATTACHMENT 8
A8-83
City.
successor publication) reported, as of 11:00 a.m., New York City time, on the Valuation Date; or
(ii) if the yield described in (i) above is not reported as of such time or the yield reported as of such time is not ascertainable, the average of four Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or if the Designated Investment Banker obtains fewer than four Reference Treasury Dealer Quotations, the average of all quotations obtained by the Designated Investment Banker. "Designated Investment Banker" means the Reference Treasury Dealer appointed by the "Extraordinary Event" means an event that will have occurred if the City determines that a material adverse change has occurred to section 54AA or section 6431 of the Code or there is any guidance published by the Intemal Revenue Service or the United States Treasury with respect to such sections or any other determination by the Internal Revenue Service or the United States Treasury, which determination is not the result of an act or omission by the City to satisfy the requirements to receive the 35% cash subsidy payments from the United States Treasury with respect to the Series 2010B Bonds, pursuant to which the City's 35% cash subsidy payments from the United States Treasury with respect to the Series 201 OB Bonds are reduced or eliminated.
"Extraordinary Optional Redemption Price" means, for each maturity of the Series 201 OB Bonds, the greater of (i) the issue price of the Series 2010B Bonds of such maturity as determined in accordance with the Code (but not less than 100% of the principal amount of the Series 2010B Bonds of such maturity to be redeemed) or (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the Series 2010B Bonds of such maturity to be redeemed to the maturity date of such Series 2010B Bonds, not including any portion of those payments of interest accrued and unpaid as of the date on 'vhich the Series 201 OB Bonds of such maturity are to be redeemed, discounted to the date on which the Series 201 OB Bonds of such maturity are to be redeemed on a semi-annual basis, assuming a 360-day year containing twelve 30-day months, at the Treasury Rate plus one hundred (100) basis points, plus accrued interest on the Series 2010B Bonds of such maturity to be redeemed to the redemption date.
"Make-Whole Redemption Price" means, for each maturity of the Series 2010B Bonds, the greater of (i) the issue price of the Series 2010B Bonds of such maturity as determined in accordance with the Code (but not less than 100% of the principal amount of the Series 2010B Bonds of such maturity to be redeemed) or (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the Series 2010B Bonds of such maturity to be redeemed to the maturity date of such Series 201 OB Bonds, discounted to the date on which the Series 2010B Bonds of such maturity are to be redeemed on a semi-annual basis, assuming a 360-day year containing twelve 30-day months, at the Treasury Rate plus thirty-five (35) basis points, plus accrued interest on the Series 201 OB Bonds of each such maturity to be redeemed to the redemption date.
90168346.11 3
ATTACHMENT 8
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''Reference Treasury Dealer" means the firm or firms, specified by the City from time to time, that are primary United States Government securities dealers in the City of New York (each, a "Primary Treasury Dealer"); provided, that if any of them ceases to be a Primary Treasury Dealer, the City will substitute another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date for a particular Series 201 OB Bond, the average, as determined by the Designated Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Designated Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the Valuation Pate.
"Securities Depository Participant" means any broker-dealer, bank or other financial institution for which a Securities Depository holds Series 2010B Bonds as a Securities Depository from time to time.
"Series 2010B Costs of Issuance Fund" means the Series 2010B Costs of Issuance Fund established in Section 13.11.
"Series 2010B Water System Fund" means the Series 2010B Water System Fund established in Section 13.11
"Treasury Rate" means, with respect to any redemption date of any maturity of the Series 2010B Bonds, the rate per annum, expressed as a percentage of the principal amount, equal to the semi-annual equivalent yield to maturity or interpolated maturity of the Comparable Treasury Issue, assuming that the Comparable Treasury Issue is purchased on the redemption date for a price equal to the Comparable Treasury Price, as calculated by the Designated Investment Banker.
"Valuation Date" means at least two Business Days, but not more than 45 calendar days, preceding the redemption date.
"2010 Water Project" means improvements to the Water System, including the build-out of the recycled water expansion, replacement of a water reservoir, conversion of the automatic meter infrastructures and other improvements to the water production, distribution, storage and general plant facilities, as described herein or such other or additional facilities for the Water System as the City hereafter determines to substitute therefor.
SECTION 13.02. Authorization: Terms of the Series 2010B Bonds. (A) A second Series of Bonds to be issued under the Master Water Revenue Bond Indenture is hereby created. Such Series shall be known as the "City of Burbank, California Burbank Water and Power Water Revenue Bonds, Series of 2010B (Taxable Build America Bonds)" (herein referred to as the "Series 2010B Bonds"). The Series 2010B Bonds shall be issued in the aggregate initial principal amount of $27,945,000 in accordance with the law and the Master Water Revenue Bond Indenture to (i) finance the costs of the 2010 Water Project, (ii) reimburse the City for certain expenditures made in connection with the Water System, and (iii) pay costs of issuance of the Series 2010B Bonds.
90168346.11 4
ATTACHMENT 8
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(B) The Series 2010B Bonds shall be issued in fully registered fonn and shall be initially registered in the name of"Cede & Co.," as nominee of The Depository Trust Company.
The Series 2010B Bonds shall be evidenced by one Series 2010B Bond maturing on each of the maturity dates as set forth in subsection 13.02(C) in a denomination corresponding to the total principal amount of the Series 2010B Bonds of such maturity. Each Series 2010B Bond may be assigned by the Trustee a distinctive number or letter and number, and a record of the same shall be maintained by the Trustee. Registered ownership of the Series 2010B Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 2.10 of the Master Water Revenue Bond Indenture.
(C) The Series 2010B Bonds shall be dated the date of delivery thereof, shall be issued in denominations of $5,000 or any integral multiple thereof, and shall bear interest from the date thereof at the following rates per annum and shall mature on June 1 in the following years in the following amounts:
Maturity Date Principal Interest
(June 1) Amount Rate
2025 $ 2,985,000 4.891%
2036 16,340,000 5.647
2040 8,620,000 5.797
Interest on the Series 2010B Bonds shall be payable commencing on June 1, 2011 and semiannually thereafter on December 1 and June 1 of each year in lawful money of the United States of America by check mailed by first-class mail on each interest payment date to the Owner thereof as of the close of business on the fifteenth (15th) day (whether or not a Business Day) of the calendar month immediately preceding such interest payment date (each a "Record Date"); provided, that upon the written request of an Owner of one million dollars ($1,000,000) or more in aggregate principal amount of Series 2010B Bonds received by the Trustee prior to the applicable Record Date (which such request shall remain in effect until rescinded in writing by such Owner), interest shall be paid by wire transfer in immediately available funds. Interest on the Series 2010B Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. The principal of and premium, if any, on the Series 2010B Bonds are payable when due upon presentation thereof at the Corporate Trust Office of the Trustee, in lawful money of the United States of America.
So long as the Series 2010B Bonds are maintained in book-entry fonn, payments of principal, premium, if any, and interest shall be made by the Trustee to the Securities Depository by wire transfer.
The Trustee shall provide to Owners CUSIP number identification, with appropriate dollar amounts for each CUSIP number, on all redemption payments and interest payments, whether by check or by wire transfer.
90168346.11 5
ATTACHMENT 8
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SECTION 13.03. Redemption of Series 2010B Bonds.
(A) The Series 2010B Bonds are subject to redemption prior to their stated maturities, at the option of the City, from any source of available funds, as a whole or in part, on any date, at the Make-Whole Redemption Price.
(B) The Series 2010B Bonds are subject to redemption prior to their respective stated maturity dates, at the option of the City, upon the occurrence of an Extraordinary Event, from any source of available funds, as a whole or in part (and, if in part, in such order of maturity as the City shall direct), at any time, at the Extraordinary Optional Redemption Price. (C) The Series 2010B Bonds maturing on June I, 2025 shall also be subject to redemption prior to their stated maturity, in part, from mandatory sinking fund payments as specified below, commencing on June 1, 2023, at a Redemption Price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption without premium. t Final Maturity.
Term Series 2010B Bonds Due June I, 2025
Mandatory Sinking Fund
Payment Dates
(June I)
2023
2024
20251
Mandatory
Sinking Fund Payments
$ 850,000
1,050,000
1,085,000
The Series 2010B Bonds maturing on June 1, 2036 shall also be subject to redemption prior to their stated maturity, in part, from mandatory sinking fund payments as specified below, commencing on June 1, 2026, at a Redemption Price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption without premium. 90168346.11 6
ATTACHMENT 8
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t Final Maturity.
Tenn Series 2010B Bonds Due June I, 2036
Mandatory Sinking Fund
Payment Dates
(June I)
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
20361
Mandatory
Sinking Fund Payments
$1,120,000
1,160,000
1,205,000
1,245,000
1,290,000
1,340,000
1,525,000
1,765,000
1,830,000
1,895,000
1,965,000
The Series 2010B Bonds maturing on June 1> 2040 shall also be subject to redemption prior to their stated maturity, in part, from mandatory sinking fund payments as specified below, commencing on June l, 2037, at a Redemption Price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption without premium. t Final Maturity.
Term Series 2010B Bonds Due June 1, 2040
Mandatory Sinking Fund
Payment Dates
(June I)
2037
2038
2039
20401
Mandatory
Sinking Fund Payments
$2,035,000
2,115,000
2,195,000
2,275,000
SECTION 13.04. Selection of Series 2010B Bonds for Redemption. Whenever provision is made in this Second Supplement for the redemption of less than 3.11 of the Series 2010B Bonds, the maturities of the Series 2010B Bonds to be redeemed shall be specified by-the City. For so long as (i) the Series 2010B Bonds are registered in book-entry only form and (ii) the Securities Depository or a successor Securities Depository is the sole registered owner of the Series 2010B Bonds, if less than all of the Series 2010B Bonds of a maturity are called for redemption, the particular Series 2010B Bonds or portions thereof to be redeemed shall be selected on a "Pro Rata Pass-Through Distribution of Principal" basis in accordance with the Securities Depository's procedures, provided that, so long as the Series 2010B Bonds are held in book-entry form, the selection for redemption of such Series 2010B Bonds shall be made in 90168346.11 7
ATTACHMENT 8
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accordance with the operational arrangements of the Securities Depository then in effect, which operational arrangements currently provide for adjustment of the principal by a factor provided pursuant to such operational arrangements. None of the City, the Underwriter, or the Trustee shall have any responsibility to ensure that the Securities Depository or the Securities Depository Participants properly select any Series 2010B Bond for redemption in such manner and in each case any failure to select any Series 2010B Bond for redemption shall not affect the sufficiency or the validity of the redemption of such Series 2010B Bond.
Redemption allocations made by the Securities Depository, direct or indirect participants in the Securities Depository, or such other intermediaries that may exist between the City and the Beneficial Owners are to be made on a "Pro Rata Pass-Through Distribution of Principal" basis as described above. If the Trustee does not identify the redemption as on a Pro Rata Pass Through Distribution of Principal basis and provide the necessary information to the Securities Depository or if the Securities Depository's operational arrangements do not allow for the redemption of the Series 2010B Bonds on a Pro Rata Pass-Through Distribution of Principal basis, then the Series 2010B Bonds shall be selected for redemption by lot in accordance with the Securities Depository's procedures. If the Series 2010B Bonds are not registered in book-entry only form, any redemption of less than all of a maturity of the Series 2010B Bonds shall be effected by the Trustee among Owner's on a pro-rata basis subject to minimum Authorized Denominations. The particular Series 2010B Bonds to be redeemed shall be determined by the Trustee, using such method as the Trustee shall deem fair and appropriate.
SECTION 13.05. Notice of Redemption of Series 2010B Bonds. The City shall notify the Trustee at least forty-five (45) days prior to the redemption date for Series 2010B Bonds pursuant to Section 13.03 (or such shorter time as may be agreed to by the Trustee).
Notice of redemption shall be mailed by the Trustee, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, (i) to the respective Owners of any Series 2010B Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee by first-class mail, (ii) to the Securities Depository by facsimile or other electronic means of communications and by first-class mail, and (iii) to EMMA at www.emma.msrb.org, by electronic means of communication, or to such other securities depositories or information services as the City may designate in a Request of the City delivered to the Trustee. Notice of redemption shall be given in the form and otherwise in accordance with the tenns of the Master Water Revenue Bond Indenture and this Second Supplement.
The City has the right to rescind any notice of the optional redemption of Series 2010B Bonds by written notice to the Trustee on or prior to the dated fixed for such redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Series 2010B Bonds then called for redemption, and such cancellation will not constitute an Event of Default.
The City and the Trustee shall have no liability to the Owners or any other party related to or arising from such rescission of notice of redemption. The Trustee shall provide notice of rescission of redemption in the same manner as the original notice of redemption was provided.
SECTION 13.06. Partial Redemption of Series 2010B Bonds. Upon surrender of any 2010B Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new 20IOB Bond of authorized 90168346.11 8
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denominations, and of the same maturity and interest rate, equal in aggregate principal amount to the unredeemed portion of the 2010B Bond surrendered.
SECTION 13.07. Effect of Redemption of Series 2010B Bonds. Notice of redemption having been duly given as aforesaid, and moneys for payment of the Redemption Price of, together with interest accrued to the redemption date on, the 201 OB Bonds (or portions .thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Series 2010B Bonds (or portions thereof) so called for redemption shall become due and payable at the Redemption Price specified in such notice, together with interest accrued thereon to the date fixed for redemption, interest on the Series 2010B Bonds so called for redemption shall cease to accrue, said Series 2010B Bonds (or portions thereof) shall cease to be entitled to any benefit or security under the Master Water Revenue Bond Indenture, and the Owners of such Series 2010B Bonds shall have no rights in respect thereof except to receive payment of such Redemption Price and accrued interest.
All Series 2010B Bonds redeemed pursuant to the provisions of this Article shall be cancelled upon surrender thereof and destroyed.
SECTION 13.08. Form of Series 2010B Bonds. The Series 2010B Bonds and the certificate of authentication and registration to be executed thereon shall be in substantially the form set forth as Exhibit A hereto. The 2010B Bond designation letters and numbers, maturity dates, principal amounts, and interest rates and yields to maturity shall be inserted therein in conformity with Section 13.01.
SECTION 13.09. Issuance of Series 2010B Bonds. At any time after the execution and delivery of this Second Supplement, the City may execute and the Trustee shall authenticate and deliver the Series 2010B Bonds in the aggregate principal amount of $27,945,000 upon the Order of the City.
SECTION 13.10. Application of Proceeds of Series 2010B Bonds. (A) The proceeds of the sale of the Series 2010B Bonds in the amount of $27,786,139.72 (computed as $27,945,000.00 aggregate principal amouot of the Series 2010B Bonds, less $158,860.28 Underwriter's discount), including the allocable portion of the good faith deposit previously received by the Trustee in the amount of $2,662,153.00, shall be received by the Trustee on behalf of the City and held in trust and set aside as follows:
(i) The Trustee shall transfer to the City for deposit in the Series 201 OB Water System Fund $27,556,317.29, to be applied in accordance with Section 13.11 hereof; and
(ii) The Trustee shall deposit in the Series 2010B Costs of Issuance Fund from proceeds of the Series 2010B Bonds the amount of $229,822.43, to be applied in accordance with Section 13.11 hereof.
90168346.11 9
ATTACHMENT 8
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SECTION 13.11. Establishment and Application of Series 2010B Water System Fund and Series 2010B Costs of Issuance Fund. The City shall establish, maintain and hold in trust a separate fund designated as the "Series 2010B Water System Fund." The moneys in the Series 2010B Water System Fund shall be used and withdrawn by the City to pay the costs of the 2010 Water Project. Moneys on deposit in the Series 2010B Water System Fund may be invested in Investment Securities, including the Local Agency Investment Fund. All interest, profit and other income received from the investment of moneys in the Series 2010B Water System Fund shall be credited to such fund.
The Trustee shall establish and maintain and hold in trust a separate fund designated as the "Series 2010B Costs of Issuance Fund." The moneys in the Series 2010B Costs of Issuance Fund shall be used and withdrawn by the Trustee, at the Written Request of the City, to pay the Costs of Issuance of the Series 2010B Bonds as approved by the City. If any sum shall remain unexpended in the Series 2010B Costs of Issuance Fund after May 10, 2011, such sum will be transferred by the Trustee to the City for deposit in the Series 201 OB Water System Fund, to be used to pay costs of the 2010 Water Project or any additions t_o and/or extensions and improvements of the Water System of the City. Unless otherwise instructed in a Written Request of the City, to the extent any Written Request is for the payment of Costs of Issuance of both the Series 2010A Bonds and the Series 2010B Bonds, the Trustee shall pay such Costs of Issuance out of the Series 2010B Costs of Issuance Fund and the Series 2010A Costs of Issuance Fund established pursuant to the First Supplement proportionately.
SECTION 13.12. Designation of Series 2010B Bonds as Non-Participating Bonds; No Reserve Fund. The Series 2010B Bonds shall not constitute Participating Bonds in accordance with the provisions of Section 3.02 of the Master Water Revenue Bond Indenture.
The Reserve Fund Requirement for the Series 2010B Bonds shall be zero ($0).
SECTION 13.13. No Tax Covenants. The City hereby excludes the application of the covenants contained in Section 6.07 and Section 6.08 of the Master Water Revenue Bond Indenture to the Series 201 OB Bonds.
SECTION 13.14. Subsidy Payment Excluded from Water Revenues. The City hereby elects in connection with the Series 2010B Bonds to exclude from Water Revenues all Subsidy Payments.
SECTION 13.15. Terms of Series 2010B Bonds Subject to the Master Water Revenue Bond Indenture. Except as in this Second Supplement expressly provided, every term and condition contained in the Master Water Revenue Bond Indenture shall apply to the Second Supplement and to the Series 2010B Bonds with the same force and effect as ifthe same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to the Second Supplement.
The Second Supplement and all the terms and provisions herein contained shall form part of the Master Water Revenue Bond Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Master Water Revenue Bond Indenture. The Master Water Revenue Bond Indenture is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof, as supplemented hereby. 90168346.11 10
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SECTION 13.16. Effective Date of Second Supplement. The Second Supplement shall take effect upon its execution and delivery.
SECTION 13.17. Execution in Counteroarts. The Second Supplement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed the Second Supplement by their officers thereunto duly authorized as of the day and year first written above. (Seal)
ATTEST:
By: ni &:JM<d ~&µ,,
City Clerk
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By: ----"'h---~-""'--A-_.------
Authorized Officer
ATTACHMENT 8
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EXHIBIT A
(FORM OF SERIES 2010B BOND)
No. $ ___ _
UNLESS THIS SERIES 2010B BOND JS PRESENTED BY AN AUTHORIZED
REPRESENTATNE OF THE DEPOSITORY TRUST COMPANY TO THE REGISTRAR
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SERIES 20IOB BOND ISSUED JS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS JS REQUESTED BY AN AUTHORIZED REPRESENTATNE OF THE DEPOSITORY TRUST COMP ANY (AND ANY PAYMENT JS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATNE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CITY OF BURBANK, CALIFORNIA
BURBANK WATER AND POWER WATER REVENUE BONDS,
SERIES OF 2010B
(TAXABLE BUILD AMERICA BOND)
Maturity Date Interest Rate Dated Date CU SIP
REGISTERED OWNER: CEDE&CO.
PRINCJP AL AMOUNT: $
The CITY OF BURBANK, CALIFORNIA a municipal corporation and chartered city duly organized and existing under the Constitution and the laws of the State of California (the "City''), for value received, hereby promises to pay (but only out of the Water Net Revenues and funds hereinafter referred to) to the registered owner named above or registered assigns, on the maturity date specified above (subject to any right of prior redemption or payment as provided in the hereinafter mentioned Indenture), the principal sum specified above together with interest thereon from the dated date specified above until the principal hereof shall have been paid, at the interest rate per annum specified above, payable on 1, 20_, and semiannually thereafter on December 1 and June 1 in each year. Interest hereon is payable in lawful money of the United States of America by (except as otherwise provided in the hereinafter mentioned Indenture) check mailed by first-class mail on each interest payment date to the registered owner 90168346.11 A-1
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as of the close of business on the 15th day of the calendar month immediately preceding such interest payment date. The principal hereof and premium, if any, hereon are payable when due upon presentation hereof at the Corporate Trust Office (as defined in the Indenture) of Wells Fargo Bank, National Association, as trustee (together with any successor as trustee under said Indenture, the "Trustee"), in lawful money of the United States of America.
This bond is one of a duly authorized issue of City of Burbank, California, Burbank Water and Power Water Revenue Bonds (the "Bonds,.) of the series and designation indicated on the face hereof. Such authorized issue of Bonds is not limited in aggregate principal amount, except as- otherwise provided in the hereinafter mentioned Indenture, and consists or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Indenture provided, all issued and to be issued pursuant to the provisions of Article 12 of Chapter 4 of Title 2 of the City Code. This Bond is issued pursuant to a Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010, by and between the City and the Trustee and a Second Supplemental Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010 (the "Second Supplement"), by and between the City and the Trustee, authorizing the issuance of a Series of Bonds of which this Bond is one (such indenture as amended and supplemented, including as supplemented by the Second Supplement, collectively, the "Indenture"). Reference is hereby made to the Indenture for a description of the terms under which the Bonds are issued and to be issued, the provisions with regard to the nature and extent of the Water Net Revenues (as that term is defined in the Indenture), and the rights of the registered owners of the Bonds; and all the terms of the Indenture are hereby incorporated herein and constitute a contract between the City and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by its acceptance hereof, consents and agrees. Additional Bonds may be issued, and indebtedness may be incurred, on a parity with the Bonds of this authorized issue, but only subject to the conditions and limitations contained in the Indenture.
The Bonds and the Parity Debt (as defined in the Indenture) hereafter issued by the City are payable from, and are secured by a pledge of and lien on, the Water Net Revenues and all amounts held by the Trustee under the Indenture (except for amounts held in the Rebate Fund}, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions provided in the Indenture.
The Bonds are revenue obligations of the City and are payable as to both principal and interest, and any premium upon redemption thereof, exclusively from Water Net Revenues and certain other funds pledged under the Indenture. The Bonds are special, limited obligations of the City. The Bonds shall not be deemed to constitute a debt or liability of the City, the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory provision, or a pledge of the faith and credit of the City, the State of California or of any political subdivision thereof, but shall be payable, except to the extent of certain amounts held under the Indenture pledged -therefor, solely from Water Net Revenues. Neither the faith and credit nor the taxing power of the City, the State of California or of any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or the interest on the Bonds. The issuance of the Bonds shall not directly or indirectly or contingently obligate the City, the State of California or any political subdivision thereof to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for their payment. 90168346.11 A-2
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The Bonds are subject to redemption as provided in the Second Supplement and as otherwise provided in the Indenture.
This Bond is transferable or exchangeable for other authorized denominations by the registered owner hereof, in person or by its duly authorized attorney, at the Corporate Trust Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer or exchange a new fully registered Bond or Bonds, of authorized denomination or denominations, of the same series, tenor, maturity and interest rate for the same aggregate principal amount will be issued to the registered owner in exchange herefor.
The City, the Trustee and any paying agent may deem and treat the registered owner hereof as the absolute owner hereof for all purposes, and the City, the Trustee and any paying agent shall not be affected by any notice to the contrary.
The rights and obligations of the City and of the registered owners of the Bonds may be modified or amended at any time in the manner, to the extent. and upon the tenns provided in the Indenture, which provide, in certain circumstances, for modifications and amendments without the consent of or notice to the registered owners of the Bonds.
It is hereby certified and recited that any and all acts, conditions and tirings required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by this Bond, and in the issuing of this Bond, do exist, have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State of California, and that this Bond, together with all other indebtedness of the City pertaining to the Water Net Revenues, is within every debt and other limit prescribed by the Constitution and the statutes of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture or otherwise.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee.
Capitalized terms used but not defined herein shall have the meanings assigned to them in the Indenture.
90168346.11 A-3
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IN WITNESS WHEREOF, THE CITY OF BURBANK has caused this Bond to be executed in its name and on its behalf by the Mayor or Vice Mayor of the City and countersigned by the City Clerk or Assistant City Clerk by their facsimile or manual signatures and the seal of the City to be reproduced hereon.
CITY OF BURBANK
Mayor
(SEAL)
Attested:
90168346.11 A-4
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[FORM OF CERTIFICATE OF AUTI!ENTICATION
AND REGISTRATION]
This is one of the Bonds described in the within mentioned Indenture and registered on the date set forth below.
Dated: _____ , 20
90168346.11
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By'-------,--~----~
Authorized Officer
A-5
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[FORM OF ASSIGNMENT]
For value received hereby sell, assign and transfer
unto the within Bond and hereby irrevocably constitute
and appoint attorney, to transfer the same on the books of the City at the office of the Trustee, with full power of substitution in the premises.
Signature Guaranteed by:
90168346.11
NOTE: The signature to this Assignment
must correspond with the name on the face
of the within registered bond in every
particular, without alteration or enlargement
or any change whatsoever.
NOTE: Signature must be guaranteed by an
eligible guarantor institution.
A-6
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