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Attachment: Hanford 2022 POBs - Financing Schedule 220513 (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation City of Hanford 2022 Taxable Pension Obligation Bonds
Financing Schedule
May 13, 2022
Date Activity Participants
Monday, May 23 Closing ALL
Thursday, June 23 Wire Funds to CalPERS TR
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Attachment: Hanford 2022 POBs - Financing Schedule 220513 (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation RESOLUTION 22-22-R
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HANFORD AUTHORIZING THE ISSUANCE OF ITS 2022 TAXABLE PENSION
OBLIGATION BONDS TO REFINANCE OUTSTANDING OBLIGATIONS OF THE CITY TO THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT
SYSTEM, AND APPROVING AND DIRECTING RELATED MATTERS
At a regular meeting of the City Council of the City of Hanford duly called and held on May 17, 2022, at 7:00 p.m. in the Council Chambers of the Civic Auditorium, it was agreed by City Council:
WHEREAS, the City of Hanford (the “City”) is a contracting member of the California Public Employees’ Retirement System (“PERS”), and as such the City is obligated to make certain payments to PERS relating to pension benefits accruing to current and former City employees wh o are PERS members, including retired employees (the “PERS Obligations”); and
WHEREAS, the City is authorized under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Sec tion 53570 of said Code (the “Bond Law”), to issue its bonds for the purpose of refunding certain outstanding obligations of the City, including the PERS Obligations; and
WHEREAS, pursuant to Resolution 21-55-R, adopted by the City Council on December 7, 2021, the City Council authorized the issuance of one or more series of pension obligation bonds from time to time under the Bond Law for the purpose of refinancing the PERS Obligations, in whole or in part, and to pursue a judicial validation action with respect to such issuance; and
WHEREAS, the judicial validation action has been successfully completed and City staff, with the aid of outside consultants, have compiled the documents necessary for the issuance of an initial series of bonds to be issued in 2022 to refund a portion of the City’s existing PERS Obligations and pay related costs of issuance (the “2022 Bonds”); and
WHEREAS, the information required to be obtained and disclosed with respect to the 2022 Bonds in accordance with Section 5852.1 of the California Government Code is set forth in the staff report accompanying this resolution; and
THEREFORE, BE IT RESOLVED, by the City Council of the City of Hanford as follows:
Section 1. Authorization of 2022 Bonds. Consistent with its actions in Resolution 21-55-R and based on the final judgment filed on March 7, 2022 related thereto, the City Council hereby authorizes the issuance of the 2022 Bonds in the maximum principal amount not to exceed $ 31,000,000 and with an interest rate not to e xceed 4.65% (assuming no event of default has occurred) , for the purpose of refunding a portion of the City’s existing PERS Obligations and paying the costs of issuance of the 2022 Bonds. The 2022 Bonds are contemplated to be issued, on a private placement basis, to Umpqua Bank or its affiliates pursuant to the hereinafter approved Bond Indenture; provided, that if for any reason Umpqua Bank is unable to complete the purchase of the 2022 Bonds, City staff are authorized to negotiate with other potential lenders for the purchase of the 2022 Bonds subject to the foregoing parameters.
Section 2. Approval of Bond Indenture. The 2022 Bonds shall be issued under an Indenture of Trust (the “Bond Indenture”) , between the City and U.S. Bank Trust Company, Nation al Association, as trustee, in substantially the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the City Manager or the Finance Director (each, an “Authorized Officer”). The execution of the Bond Indenture by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions.
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Attachment: Resolution #2 Confirming Isssuance of Bonds, 2[3] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation -2-
Section 3. Approval of Placement Agent Agreement. Oppenheimer & C o. Inc. is serving as placement agent with respect to the 2022 Bonds. Each Au thorized Officer is authorized and directed to execute and deliver the Placement Agent Agreement, in substantially the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the Authorized Officer executing the same. The execution of the Placement Agent Agreement by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions.
Section 4. Approval of Additional Documents and Actions. The Authorized Officers, the City Clerk, and any and all other officers of th e City are hereby authorized and directed, for and in the name and on behalf of the City, to sign any and all additional agreements, certificates, requisitions and other documents, and take any and all other actions, which they, or any of them, may deem ne cessary or advisable in connection with the issuance, sale and delivery of the 2022 Bonds. Whenever in this Resolution any officer of the City is directed to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable.
Section 5. Effective Date . This Resolution shall take effect from and after the date of approv al and adoption thereof.
PASSED, ADOPTED AND APPROVED at a regular meeting of the City Council of the City of Hanford duly called and held on May 17, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
APPROVED: _________________________
KALISH MORROW
MAYOR of the City of Hanford
ATTEST:
NATALIE CORRAL
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF KINGS ) ss
CITY OF HANFORD )
I, NATALIE CORRAL , City Clerk of the City of Hanford, do hereby cer tify the foregoing Resolution was duly passed and adopted at a regular meeting of the City Council of the City of Hanford held on the 17th day of May, 2022.
Date: ___________
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Attachment: Resolution #2 Confirming Isssuance of Bonds, 2[3] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation -3-
_________________________________________
NATALIE CORRAL
CITY CLERK
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Attachment: Resolution #2 Confirming Isssuance of Bonds, 2[3] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Jones Hall Draft of May 13, 2022
INDENTURE OF TRUST
Dated as of May 1, 2022
between the
CITY OF HANFORD
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Relating to
$____________
City of Hanford
2022 Taxable Pension Obligation Bonds
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
-i-
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions ................................ ................................ ............................... 2 SECTION 1.02. Authorization ................................ ................................ ........................... 2 SECTION 1.03. Interpretation ................................ ................................ ........................... 2
ARTICLE II
AUTHORIZATION AND TERMS OF BONDS
SECTION 2.01. Authorization and Purpose of Bonds ................................ ....................... 3 SECTION 2.02. Terms of the Bonds ................................ ................................ ................. 3 SECTION 2.03. Redemption of Bonds ................................ ................................ .............. 4 SECTION 2.04. No DTC ................................ ................................ ................................ ... 5 SECTION 2.05. Form and Execution of Bonds ................................ ................................ . 5 SECTION 2.06. Transfer and Exchange of Bonds ................................ ............................ 6 SECTION 2.07. Registration Books ................................ ................................ .................. 6 SECTION 2.08. Bonds Mutilated, Lost, Destroyed or Stolen ................................ ............. 6
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS
SECTION 3.01. Issuance of Bonds ................................ ................................ ................... 7 SECTION 3.02. Deposit and Application of Proceeds ................................ ....................... 7 SECTION 3.03. Costs of Issuance Fund ................................ ................................ ........... 7 SECTION 3.04. PERS Prepayment Fund ................................ ................................ ......... 8 SECTION 3.05. Validity of Bonds ................................ ................................ ..................... 8
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS; INVESTMENTS
SECTION 4.01. Security of Bonds; Equal Security ................................ ........................... 8 SECTION 4.02. Debt Service Fund; Transfer of Amounts to Trustee ................................ 9 SECTION 4.03. Investment of Moneys in Funds ................................ ............................... 9
ARTICLE V
OTHER COVENANTS OF THE TOWN
SECTION 5.01. Punctual Payment ................................ ................................ ................. 10 SECTION 5.02. Budget and Appropriation of Debt Service; Certification to Trustee ....... 10 SECTION 5.03. Extension of Payment of Bonds ................................ ............................ 10 SECTION 5.04. Books and Accounts; Financial Statements; Additional Information ....... 11 SECTION 5.05. Ongoing Reporting by City ................................ ................................ .... 11 SECTION 5.06. Protection of Security and Rights of Owners ................................ ......... 11 SECTION 5.07. Further Assurances ................................ ................................ ............... 11 SECTION 5.08. Role of Owner ................................ ................................ ....................... 11 SECTION 5.09. Other Representations and Warranties of the City ................................ . 12
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Duties, Immunities and Liabilities of Trustee ................................ ......... 13 SECTION 6.02. Merger or Consolidation ................................ ................................ ........ 15 SECTION 6.03. Liability of Trustee ................................ ................................ ................. 15 SECTION 6.04. Right to Rely on Documents ................................ ................................ .. 17 SECTION 6.05. Preservation and Inspection of Documents ................................ ........... 17 SECTION 6.06. Compensation and Indemnification ................................ ....................... 17 SECTION 6.07. Accounting Records and Financial Statements ................................ ..... 18
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
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ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
SECTION 7.01. Amendments Permitted ................................ ................................ ......... 18 SECTION 7.02. Effect of Supplemental Indenture ................................ .......................... 19 SECTION 7.03. Endorsement or Replacement of Bonds After Amendment ................... 19 SECTION 7.04. Amendment by Mutual Consent ................................ ............................ 19 SECTION 7.05. Trustee's Reliance ................................ ................................ ................. 19
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default ................................ ................................ ................... 19 SECTION 8.02. Remedies on Default ................................ ................................ ............. 20 SECTION 8.03. Notice of Event of Default ................................ ................................ ...... 21 SECTION 8.04. Application of Funds Upon Event of Default ................................ .......... 21 SECTION 8.05. Power of Trustee to Control Proceedings ................................ .............. 21 SECTION 8.06. Limitation on Owners' Right to Sue ................................ ....................... 22 SECTION 8.07. Non-waiver ................................ ................................ ............................ 22 SECTION 8.08. Actions by Trustee as Attorney-in-Fact ................................ .................. 23 SECTION 8.09. Remedies Not Exclusive ................................ ................................ ....... 23
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Benefits Limited to Parties ................................ ................................ ..... 23 SECTION 9.02. Successor is Deemed Included in All References to Predecessor ......... 23 SECTION 9.03. Defeasance of Bonds ................................ ................................ ............ 23 SECTION 9.04. Execution of Documents and Proof of Ownership by Owners ................ 24 SECTION 9.05. Disqualified Bonds ................................ ................................ ................ 25 SECTION 9.06. Waiver of Personal Liability ................................ ................................ ... 25 SECTION 9.07. Destruction of Canceled Bonds ................................ ............................. 25 SECTION 9.08. Notices ................................ ................................ ................................ .. 25 SECTION 9.09. Partial Invalidity ................................ ................................ ..................... 26 SECTION 9.10. Unclaimed Moneys ................................ ................................ ................ 26 SECTION 9.11. Execution in Counterparts and Electronic Signing ................................ . 26 SECTION 9.13. Governing Law ................................ ................................ ...................... 26 SECTION 9.13. Force Majeure ................................ ................................ ....................... 26 SECTION 9.14. U.S.A. Patriot Act ................................ ................................ .................. 27 SECTION 9.15. Waiver of Sovereign Immunity ................................ ............................... 27 SECTION 9.16. Waiver of Jury Trial ................................ ................................ ............... 27
APPENDIX A - DEFINITIONS
APPENDIX B - FORM OF BOND
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
INDENTURE OF TRUST
This INDENTURE OF TRUST (this “Indenture”) dated as of May 1, 2022, is between the CITY OF HANFORD, a general law city and municipal corporation duly organized and existing under the laws of the State of California (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”).
B A C K G R O U N D :
1. The City has previously elected to become a contracting member of the California Public Employees ’ Retirement System ( “PERS”), and as such the City is obligated by Sections 20000 et seq. of the California Government Code (the “Retirement Law”), to make payments to PERS relating to pension benefits accruing to retired City employees who are PERS members, including retired public safety employees and retired miscellaneous employees (the “PERS Obligations”).
2. The City is authorized under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the “Bond Law ”), to issue its bonds for the purpose of refunding certain outstanding indebtedness of the City, including the PERS Obligations.
3. In order to refund the PERS Obligations and thereby realize substantial cash flow savings and accomplish a more prudent amortization of its unfunded actuarial accrued liability in respect of the PERS Obliga tions, the City has determined to issue its $____________ aggregate principal amount of City of Hanford 2022 Taxable Pension Obligation Bonds (the “Bonds”) under the Bond Law and this Indenture, and under the Authorizing Resolution.
4. The principal of an d interest on the Bonds are payable from any source of legally available funds of the City, including amounts on deposit in the General Fund of the City.
5. The Bonds have been determined to be the legal, valid and binding obligations of the City by judgment of the Kings County Superior Court rendered on March 7, 2022 in City of Hanford v. All Persons Interested, et al., Case No. 21C-0405.
6. The City has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the City, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligations of the City, and to constitut e this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done or taken.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
2 A G R E E M E N T :
In order to secure the payment of the principal of and the interest and redemption premium (if an y) on all the Outstanding Bonds under this Indenture according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the City and the Trustee hereby covenant and agree with one another, for the benefit of the respective Owners from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms defined in Appendix A attached to this Indenture have the respective meanings specified in Appendix A when used in this Indenture.
SECTION 1.02. Authorization. Each of the parties represents and warrants that it has full legal authority and is duly empowered to enter into this Indenture, and has taken all actions necessary to authorize the execution hereof by the officers and persons signing it.
SECTION 1.03. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and do not affect the meaning, construction or effect hereof.
(c) 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.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
3 ARTICLE II
AUTHORIZATION AND TERMS OF BONDS
SECTION 2.01. Authorization and Purpose of Bonds . The City has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now duly empowered, under each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture.
The City hereby authorizes the issuance of the Bonds in the aggregate principal amount of $____________ under the Authorizing Resolution and the Bond Law for the purposes of providing funds to refinance the PERS Obligations of the City as provided herein. The Bonds are designated the “City of Hanford 2022 Taxable Pension Obligation Bonds.”
SECTION 2.02. Terms of the Bonds. The Bonds shall be issued in fully registered form, as a single bond form, without coupons, in the denominations of $1 or integral multiples thereof. The single Bond shall be dated as of the Closing Date, shall mature on June 1, 2039, shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rate per annum of 4.390% and be payable as set forth in the following table.
Date Principal Interest Debt Service
TOTALS
The foregoing rate of 4.390% assumes that the City deposits at least $4,000,000 in a money market account at Umpqua Bank that qualifies under the City’s investment policy within 30 days of the Closing Date. If the funds are withdrawn from Umpqua Bank prior to the Bonds being paid off, the interest rate on the Bonds shall increase to 4.590% (i.e., increase of 0.20%). The City may withdraw up to $1,000,000 every 5th year as the principal balance on the Bond is reduced without impact on the interest rate.
Interest on the Bond is payable from the Interest Payment Date immediately preceding the date of authentication thereof unless:
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
4 (a) the Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date,
(b) the Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or
(c) interest on the Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date.
Notwithstanding anything herein to the contrary, so long as the Bonds are owned by the Initial Owner: (i) the Trustee shall pay principal of and interest and premium on, if any, on the Bonds when due by wire transfer in immediately available funds to the Initial Owner in accordance with such wire transfer instructions as shall be filed by the Initial Owner with the Trustee from time to time; (ii) for so long as the Bonds shall be held by the Initial Owner and any subsequent Owner as a single Bond, presentation and surrender of such Bond shall not be required for payment thereof, provided that principal which is payable at maturity or earlier redemption in full shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Initial Owner of the mandatory sinking fund payments described hereunder.
SECTION 2.03. Redemption of Bonds.
(a) Optional Redemption. The Bonds are subject to optional redemption from any source of available funds of the City , in whole or in part on any date at the following respective redemption prices (expressed as percentages of the principal amount of the Bond to be redeemed), plus accrued interest thereon to the date of redemption:
Redemption Dates Redemption Price
Any date through May 31, 2025 103%
June 1, 2025 – May 31, 2027 102
June 1, 2027 – May 31, 2029 101
June 1, 2029 and any date thereafter 100
Partial redemptions under this Section 2.03(a) may be made only once in each calendar year and shall be applied to the principal of the Bonds in inverse order of maturity/sinking fund redemption date.
(b) Mandatory Sinking Fund Redemption . The Bond is subject to mandatory redemption by lot at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on June 1 of each year until maturity , as set forth in the debt service schedule shown at Section 2.02.
(c) Notice of Redemption. Written notice of any redemption shall be given by the City to the Trustee at least 20 days prior to the date of redemption (unless a shorter time shall be acceptable to the Trustee for its convenience).The Trustee on behalf and at the expense of the City will mail (by first class mail) notice of any redemption to the Owner at its respective address appearing on the Registration Books at least 10 days prior to the
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
5 redemption date; provided, however, that neither failure to receive any such notice so mailed nor any defect therein will affect the validity of the proceedings for the redemption of the Bond or the cessation of the accrual of interest thereon. Such notice must state the date of the notice, the redemption date, the redemption place and the redemption price, giving notice also that further interest on such Bond will not accrue from and after the redemption date. No notice of sinking fund redemption shall be given.
(d) Right to Rescind Notice of Optional Redemption . The City may send a conditional notice of an optional redemption of Bonds under subsection (a) of this Section.
The City may rescind any notice of the optional redemption of Bonds under subsection (a) of this Section by written notice to the Trustee on or prior to the dated fixed for redemption.
Any notice of optional redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the paym ent in full of the Bonds then called for redemption, and such cancellation will not constitute an Event of Default. The City and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Trustee will mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under subsection (c) of this Section.
(e) Partial Redemption of Bonds . If only a portion of a Bond is called for redemption, then upon surrender of such Bond the City will execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new Bond or Bonds of the same series and matu rity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed.
(f) Effect of Redemption. From and after the date fixed for redemption, if notice of redemption has been duly mailed and fund s available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. Unless otherwise directed in writing by the City, the Trustee shall cancel and destroy all Bonds redeemed under this Section 2.03.
SECTION 2.04. No DTC . Upon initial delivery, the Trustee shall register the ownership of the Bond on the Registration Books in the name of the Initial Owner. The Depository Trust Company will not be utilized for initial registration of the Bond.
SECTION 2.05. Form and Execution of Bonds. The Bonds will be initially delivered in the form of a single fully -registered bond (which may be typewritten) in the aggregate principal amount of the Bond, which shall be executed, authenticated and delivered to the Initial Owner on the Closing Date. Upon initial delivery of Bonds to the Owner, the Trustee shall register the ownership of the Bond on the Registration Books in the name of the Owner.
The Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix B attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
6 The City Manager shall execute, and the City Clerk of the City shall attest each Bond. Any or all of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on a Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date. The Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of that Bond are the proper officers of the City, duly authorized to execute debt instruments on behalf of the City, although on the date of that Bond any such person was not an officer of the City.
Only the Bond bearing a certificate of authentication in the form set forth in Appendix B, manually executed and dated by the Authorized City Official, is valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee is conclusive evidence that such Bond has been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
SECTION 2.06. Transfer and Exchange of Bonds.
(a) Transfers. Ownership of the Bonds may be transferred in whole only to (i) an affiliate of the Initial Owner or (ii) a bank, insurance company, or other financial institution, or (iii) a trust, partnership, custodial arrangement or similar entity for the Owner or its assignees to sell or assign participation interests in the Bonds to an entity listed in (i) or (ii); provided that any participation, custodi al or similar agreement under which multiple ownership interests in the Bond are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees to act on their behalf with respect to the rights and interests of the registered owner, including with respect to the exercise of rights and remedies of the registered owner on behalf of such owners upon the occurrence of an Event of Default. Transfer shall be made upon surrender of the Bond to the Trustee at its Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed.
(b) Taxes. The Trustee shall collect any tax or other governmental charge on the transfer of the Bond under this Section 2.06. Whenever the Bond is surrendered for transfer, the City will execute and the Trustee shall authenticate and deliver to the transferee a new Bond of like interest rate, maturity and aggregate principal amount. The City will pay the cost of printing the Bond and any services rendered or expenses incurred by the Trustee in connection with any transfer of the Bond.
SECTION 2.07. Registration Books. The Trustee will keep or cause to be kept, at its Office, sufficient records for the registration and registration of transfer of the Bonds, which shall at all times during normal business hours, and upon re asonable notice, be open to inspection by the City. The Trustee will register the ownership and transfer of the Bonds on the Registration Books under such reasonable regulations as it may prescribe.
SECTION 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If a Bond is mutilated, the City, at the expense of the Owner of that Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, upon surrender to the Trustee of the Bond so mutilated. The Trustee shall cancel every mutilated Bond surrendered to it and deliver such mutilated Bond to or upon the order of the City. If a Bond is lo st, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
7 satisfactory to the Trustee and if indemnity satisfactory to the Trustee is given, the City, at the expense of the Owner, will exe cute, and the Trustee will thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee 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 Trustee in connection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen will 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 are equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued under this Indenture.
Notwithstanding any other provision of this Section 2.08, in lieu of delivering a new Bond for which principal has become due for a Bond which has been mutilated, lost, destroyed or stolen, the Trustee may make payment of such Bond in accordance with its terms upon receipt of indemnity satisfactory to the Trustee.
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS
SECTION 3.01. Issuance of Bonds . Upon the execution and delivery of this Indenture, the City shall execute and deliver Bonds in the aggregate principal amount of $____________ to the Trustee and the Trustee shall authenticate and deliver the Bonds to the Initial Owner upon receipt of a Request of the City therefor.
SECTION 3.02. Deposit and Application of Proceeds. Upon receipt of the proceeds of the Bonds on the Closing Date in the amount of $__________, the Trustee shall deposit the proceeds into a special fund to be held by the Trustee and known as the Bond Proceeds Account which the Trustee shall establish and hold in trust hereunder, to be applied as follows:
(a) The Trustee shall deposit the amount of $________ in the Costs of Issuance Fund.
(b) The Trustee shall apply the amount of $_______, constituting the remainder of the proceeds of sale of the Bonds, to the P ERS Prepayment Fund.
After making the foregoing transfers, the Trustee shall close the Bond Proceeds Account.
SECTION 3.03. Costs of Issuance Fund. There is hereby established a separate fund to be known as the “Costs of Issuance Fund,” to be held by the Trustee. The Trustee shall disburse moneys in the Costs of Issuance Fund from time to time to pay Costs of Issuance upon submission of a Request of the City stating (a) the person to whom payment is to be made, (b) the amounts to be paid, (c) the purpose for which the obligation was incurred, (d) that such payment is a proper charge against the Costs of Issuance Fund, and (e) that such amounts have not been the subject of a prior Request of the City;
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8 in each case together with a statement or invoice for each amount requested thereunder.
On the date that is six months after the Closing Date , the Trustee shall transfer any amounts remaining in the Costs of Issuance Fund to the Debt Service Fund.
SECTION 3.04. PERS Prepayment Fund. There is hereby established a separate fund to be known as the “PERS Prepayment Fund,” to be held by the Trustee. The Trustee shall disburse $_________, constituting all the funds deposited into the PERS Prepayment Fund on the Closing Date, to PERS via wire transfer(s) on June 23, 2022, in accordance with a Request of the City . Suc h wire transfer(s) shall be made in full satisfaction of the amount calculated by PERS and provided to the City as a pay -off for the portion of the City’s outstanding obligation owed to PERS under the PERS Contracts that is being refunded with the Bonds. Until disbursed, all amounts held in the PERS Prepayment Fund shall be separately accounted for and held, as an irrevocable escrow , for the payment to be made to PERS and used for no other purpose.
SECTION 3.05. Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent upon the expenditure of the proceeds thereof to pay PERS Obligations, or upon the performance by any person of its obligation with respect to the PERS Obligations.
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS;
INVESTMENTS
SECTION 4.01. Security of Bonds; Equal Security. The obligations of the City under the Bonds, including the obligation to make all payments of principal of and interest on the Bonds when due and the obligation of the City to make the deposits required hereunder for the security of the Bonds, are obligations of the City imposed by law and are absolute and unconditional, without any right of set -off or counterclaim. Principal, interest, and redemption premiums (if any) on t he Bonds shall be secured by a lien on, and security interest in, the funds and accounts provided for in this Article IV.
The City agrees to pay from any legally available source of revenues of the City, including amounts on deposit in the General Fund of the City, all amounts due and owing with respect to Bonds issued under this Indenture, including principal and interest thereon and the redemption price thereof.
The Bonds do not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation. Neither the Bonds nor the obligations of the City to make payments on the Bonds constitute an indebtedness of the City, the State of California, or any of its political subdivisions within the meaning of any constitutiona l or statutory debt limitation or restriction.
In consideration of the acceptance of the Bonds by those who hold the same from time to time, this Indenture constitutes a contract between the City and the Owners from time to time of the Bonds, and the cove nants and agreements herein set forth to be performed on behalf of the City are for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number
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9 or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein.
SECTION 4.02. Debt Service Fund; Transfer o f Amounts to Trustee . There is hereby established a separate fund to be known as the “Debt Service Fund” which shall be held by the Trustee in trust for the benefit of the Bond Owners. The Trustee will hold the Debt Service Fund for the uses and purposes set forth herein, so long as any of the Bonds remain Outstanding. The City will transfer an amount of legally available funds to the Trustee in the following amounts at the fo llowing times, for deposit by the Trustee in the following respective special accounts within the Debt Service Fund, which accounts are hereby established with the Trustee with respect to the Bonds, in the following order of priority:
(a) Interest Account. On or before the 5th Business Day preceding each date on which interest on the Bonds is due and payable, the City will transfer to the Trustee for deposit in the Interest Account an amount which, when added to the amount then on deposit in the Interest Account, equals the aggregate amount of the interest coming due and payable on the Outstanding Bonds on that date. T he Trustee will apply amounts in the Interest Account solely for the purpose of paying the interest on the Bonds when due and payable.
(b) Principal Account . On or before the 5 th Business Day preceding each date on which principal of the Bonds is due and payable at maturity or upon mandatory sinking fund redemption, the City will transfer to the Trustee for deposit in the Principal Account an amount which, when added to the amount then on deposit in the Principal Account, equals the amount of principal coming due and payable on that date on the Outstanding Bonds, including the principal amount of the Term Bonds which are subject to mandatory sinking fund redemption on that date under Section 2.03(b). The Trustee will apply amounts in the Principal Account solely for the purpose of paying the principal of the Bonds at the maturity thereof and the principal of the Term Bonds upon the mandatory sinking fund redemption thereof.
SECTION 4.03. Investment of Moneys in Funds. The Trustee shall invest moneys in the funds and accounts established and held by it hereunder in Permitted Investments specified in the Request of the City (which Request will be deemed to include a certification that the specified investment is a Permitted Investment) delivered to the Trustee at least two Business Days in advance of the making of such investments. In the absence of any direction from the City concerning the investment of amounts held by the Trustee hereunder, the Trustee shall invest any such amounts solely in Permitted Investments described in subsection (c) of the definition thereof . The City shall ensure that all Permitted Investments mature not later than the date on which the funds invested therein are required to be expended.
Obligations purchased as an investment of moneys in any fund or account will be deemed to be part of such fund or account. Whenever in this Indenture the City is required to transfer any moneys to the Trustee, such transfer may be accomplished by transferring a like amount of Permitted Investments. All interest or gain derived from the investment
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10 of amounts in any of the funds or accounts held by the Trustee hereunder will be retained in the respective fund or account from which such i nvestment was made. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder upon receipt by the Trustee of the Request of the City. The Trustee may act as principal or agent in the acquisition or disposit ion of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made under this Section.
The Trustee shall provide the City with periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the City’s election, such statements will be delivered via the Trustee’s online service and upon electi ng such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.
The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder.
ARTICLE V
OTHER COVENANTS OF THE CITY
SECTION 5.01. Punctual Payment. The City shall, from any legally available source of funds of the City, including amounts on deposit in the General Fund of the City, punctually pay or cause to be paid the principal, premium (if any) and interest to become due in respect of all the Bonds in strict conformity with the terms of this Indenture. The City shall faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures.
SECTION 5.02. Budget and Appropriation of Debt Service; Certification to Trustee.
The City covenants to take such action as may be necessary to include in each of its annual budgets the payments required to be made by the City under Section 4.02, and to make the necessary annual appropriations for all such payments. If any payment of Debt Service requires the adoption by the City of a supplemental budget or appropriation, the City will promptly adopt the same. The covenants on the part of the City herein contained constitute duties imposed by law , which have been validated by judgment of th e Kings County Superior Court rendered on March 7, 2022 in City of Hanford v. All Persons Interested, et al., Case No. 21C-0405, and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Indenture agreed to be carried out and performed by the City.
SECTION 5.03. Extension of Payment of Bonds . The City may 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 claims for interest by the purchase of such Bonds or by any other arrangement, and if the maturity of any of the Bonds or th e time of payment of any such
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11 claims for interest is extended, such Bonds or claims for interest are not 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 Outstanding Bonds and of all claims for interest thereon which have not been so extended. Nothing in this Section limits the right of the City to issue bonds for the purpose of refunding any Outstanding Bonds, and such issuance does not constitute an extension of maturity of the Bonds.
SECTION 5.04. Books and Accounts; Financial Statements; Additional Information.
The City will keep, or cause to be kept, pro per books of record and accounts, separate from all other records and accounts of the City. Such books of record and accounts shall at all times during business hours be subject, upon prior written request, to the reasonable inspection of the Trustee (who has no duty to inspect) or the Owners of not less than 10% in aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in writing.
The City will cause to be prepared annually, within 270 days after the close of each Fiscal Year so long as any of the Bonds are Outstanding, complete audited financial statements with respect to such Fiscal Year, as of the end of such Fiscal Year. The City will furnish a copy of such statements, upon reasonable request, to the Trustee. T he Trustee has no duty to review any such financial statement.
SECTION 5.05. Ongoing Reporting by City. The City shall provide the following items to the Initial Owner (and any subsequent Owner) , in each case in an electronic format which is acceptable to the Owner:
(a) audited financial statements of the City pursuant to Section 5.04;
(b) annual/biennial budgets of the City, and all amendments thereto, no later than 30 days after the approval thereof;
(c) notice of any Material Litigation; and
(d) such additional information as the Owner shall reasonably request from time to time pursuant to written request to the City.
SECTION 5.06. Protection of Security and Rights of Owners . The City shall preserve and protect the security of the Bonds and the rights of the Owners. From and after the date of issuance of the Bonds, the City shall not contest the validity or enforceability of the Bonds or this Indenture.
SECTION 5.07. Further Assurances. The City shall adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to fac ilitate the performance of this Indenture, and for the better assuring and confirming unto the Bond Owners the rights and benefits provided in this Indenture.
SECTION 5.08. Role of Owner . The City acknowledges and agrees that (i) the transaction contemplated by this Indenture is an arm’s -length commercial transaction between the City and the Initial Owner (ii) the City will make its own determination regarding whether to enter into the proposed transaction and the terms thereof, and will consult with and rely on the advice of its own financial, accounting, tax, legal and other
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12 advisors; (iii) the Initial Owner is acting solely for its own Bond account in connection with the proposed transaction, and is not acting as a municipal advisor, financial advisor, agent or fiduciary to the City or any other person or entity (including to any municipal advisor or placement agent engaged by the City) and the City, its municipal advisor and placement agent are free to retain the services of such advisors (including as it relates to structure, timing, terms and similar matters and compliance with legal requirements applicable to such parties) as it deems necessary or appropriate; (iv) the Initial Owner has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to the City with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto, (v) neither the Initial Owner nor any of its affiliates is acting as a broker, dealer, underwriter or placement agent with respect the transactions contemplated hereby; (vi) the only obligations the Initial Owner has to the City with respect to the transaction contemplated hereby expressly are set forth in this Indenture; (vii) the Initial Owner is not recommending that the City take an action with respect to the transactions contemplated by this Indenture and before taking any action with respect to the contemplated transactions the City has discussed the information contained herein and consulted its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate; and (viii). If City would like a municipal advisor in this transaction that has legal fiduciary duties to it, the City is free to engage a municipal advisor to serve in that capacity.
SECTION 5.09. Other Representations and Warranties of the City. The City makes the following representations and warranties as of the Closing Date for the benefit of the Owners:
(a) Accuracy of Information. All information, reports and other papers and data furnished by the City to the Initial Owner were, at the time the same were so furnished, complete and accurate in all material respects and insofar as necessary to give the Initial Owner a true and accurate knowledge of the subject matter and were provided in expectation of th e Initial Owner ’s reliance thereon in entering into the transactions contemplated by this Indenture. No fact is known to the City which has had or, so far as the City can now reasonably foresee, may in the future have a material adverse effect on the City, which has not been set forth in the financial statements previously furnished to the Initial Owner or in other such information, reports, papers and data or otherwise disclosed in writing to the Initial Owner prior to the Closing Date. Any financial, budg et and other projections furnished to the Initial Owner by the City or its or their agents were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of the conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent the City’s best estimate of its future financial performance.
(b) Environmental Laws . In the ordinary course of its busine ss, the City conducts an ongoing review of Environmental Laws on the business, operations and the condition of its property, in the course of which it identifies and evaluates associated liabilities and costs (including, but not limited to, any capital or operating expenditures required for clean-up or closure of properties currently or previously owned or operated, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat and any actual or potential liabilities to third parties,
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13 including employees, and any related costs and expenses). On the basis of such review, the City does not believe that Environmental Laws are likely to have a Material Adverse Effect.
(c) No Sovereign Immunity. The City is not entitled to claim immunity on the grounds of sovereignty or other similar grounds (including, without limitation, governmental immunity) with respect to itself or its revenues (irrespective of their use or intended use) from (i) any action, suit or other proceeding arising under or relating to this Indenture, (ii) relief by way of injunction, order for specific performance or writ of mandamus or for recovery of property or (iii) execution or enforcement of any judgment to which it or its revenues might otherwise be made subject in any action, suit or proceeding relating to this Indenture, and no such immunity (whether or not claimed) may be attributed to the City or its revenues.
(d) Anti-Corruption Laws. The City and its respective officer s and directors and to the knowledge of the City, its employees and agents, are in compliance with Anti - Corruption Laws in all material respects. None of (i) the City, any of its directors or officers or employees, or (ii) to the knowledge of the City, any agent of the City that will act in any capacity in connection with or benefit from the transaction contemplated by this Indenture, is a sanctioned person (as defined in the Anti -Corruption Laws). The transaction contemplated by this Indenture does not violate Anti-Corruption Laws.
(e) Compliance with Laws, Etc. The City is in compliance with its investment policy and all laws applicable to the City, non-compliance with which could reasonably be expected to have a Material Adverse Effect.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Duties, Immunities and Liabilities of Trustee.
(a) The Trustee shall, prior to the occurrence of an Event of Default, and after the curing or waiving of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or duties will 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 reasonable corporate trustee would exercise or use.
(b) The City may remove the Trustee at any time, and shall remove the Trustee (i) 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 principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (ii) if at any time (A) the Trustee ceases to be eligible in accordance with subsection (e) of this Sectio n
6.01, (B) becomes incapable of acting, (C) is adjudged a bankrupt or insolvent, (D) a receiver of the Trustee or its property is appointed, or (E) any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. The City may accomplish such removal by giving 30 days
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14 written notice to the Trustee, whereupon the City will 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 notice of such resignation by first class mail, postage prepaid, to the Bond Owners at their respective addresses shown on the Registration Books. Upon receiving such notice of resignati on, the City will promptly appoint a successor Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee becomes effective upon acceptance of appointment by the successor Trustee. If no succ essor Trustee has been appointed and accepted appointment within 45 days following giving notice of removal or notice of resignation as aforesaid, the resigning Trustee, at the expense of the City, or any Owner (on behalf of such Owner and all other Owners) may petition any federal or state court 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 to the predecessor Trustee an instrument indemnifying the predecessor Trustee for any costs or claims arising during the time the successor Trustee serves as Trustee hereunder, and 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, upon the receipt by the predecessor Trustee of the 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 will 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 will mail or cause the successor Trustee to mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then maintains a rating on the Bonds and to the Owners at the addresses shown on the Registration Books. If the City fails to mail such notice within 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 (i) be a company or bank having trust powers, (ii) have a corporate trust office in the State of California, ( iii) have (or be part of a bank holding company system whose bank holding company has) a combined capital and surplus of at least $50,000,000, and ( iv) be subject to supervision or examination by federal or state authority.
If such bank or company publishes a report of condition at least annually, under law or to the requirements of any supervising or examining authority above referred to,
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15 then for the purpose of this subsection the combined capital and surplus of such bank or company is 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 manner and with the effect specified in subsection (c) of this Section.
SECTION 6.02. Merger or Consolidation . Any bank or company into which the Trustee may be merged or converted or with which either of them may be consolidated or any bank or company resulting from any merger, conversion or consolidation to which it shall be a party or any bank or company to w hich the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank or company shall be eligible under subsection (e) of Section 6.01, 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 6.03. Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the City, and the Trustee assumes no responsibility for the correctness of the same, nor does it have any liability whatsoever therefor, nor does it make any representations as to the validity or sufficiency of this Indenture or of the Bonds nor does it incur any responsibility in respect thereof, other than as expressly stated herein. The Trustee is, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee is not liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee is not liable for the acts of any agents of the Trustee selected by it with due care. The Trustee may become the Owner of Bonds with the same rights it would have if they were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of the Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. The Trustee, either as principal or agent, may engage in or be entrusted in any financial or other transaction with the City.
(b) The Trustee is not liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of the Bonds at the time 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.
(c) The Trustee is not liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture, except for actions arising from the negligence or willful misconduct of the Trustee. The permissive right of the Trustee to do things enumerated hereunder shall not be construed as a mandatory duty.
(d) The Trustee will not be deemed to have knowledge of any Event of Default hereunder unless and until a responsible officer of the Trustee has actual knowledge thereof, or unless and until a responsible officer of the Trustee has received written notice thereof at its Office. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms,
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16 conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default hereunder or thereunder. The Trustee shall not be responsible for the City’s payment of principal and interest on the Bonds, the City’s observance or performance of any other covenants, conditions or terms contained herein, or the validity or effectiveness of any collateral given to or held by it. Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, the Trustee is not responsible for reviewing the contents of any financial statements furnished to the Trustee under Section 5.05 and may rely conclusively on the Certificate of the City accompanying such financial statements to establish the City’s compliance with its financial covenants hereunder.
(e) No provision in this Indenture requires the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder. The Trustee is entitled to receive interest on any moneys advanced by it hereunder, at the maximum rate permitted by law.
(f) The Trustee may establish additional accounts or subaccounts of the funds established hereunder as the Trustee deems necessary or prudent in furtherance of its duties under this Indenture.
(g) The Trustee has no responsibility or liability whatsoever 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, nor shall the Trustee have any obligation to review any such material, and any such review by the Trustee will not be deemed to create any obligation, duty or liability on the part of the Trustee.
(h) Before taking any action under Article VIII he reof the Trustee may require indemnity satisfactory to the Trustee be furnished to it to hold the Trustee harmless from any expenses whatsoever and to protect it against any liability it may incur hereunder.
(i) The immunities extended to the Trustee also extend to its directors, officers, employees and agents.
(j) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty.
(k) The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of the same if appointed by it with reasonable care.
(l) The Trustee will not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to any project refinanced with the proceeds of the Bonds, malicious mischief, condemnation, and
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17 unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
SECTION 6.04. Right to Rely on Documents . The Trustee is protected in acting upon any notice, resolution, requisition, request, consent, order, certificate, report, opinion 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, Bond Counsel or other 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 a ny action taken or suffered by the Trustee hereunder in accordance therewith.
The Trustee is not bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and such person’s title thereto is established to the satisfaction of the Trustee.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee deems 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 respe ct thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the City, which shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Inden ture in reliance upon such Certificate, but in its discretion the Trustee may (but has no duty to), in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee may conclusively rely on any certificate or report of any Independent Accountant appointed by the City.
SECTION 6.05. Preservation and Inspection of Documents . The Trustee shall retain in its possession all documents received by it under the provisions of this Indenture, which are subject during normal business hours, and upon reasonable prior written notice, to the inspection of the City and any Owner, and their agents and representatives duly authorized in writing.
SECTION 6.06. Compensation and Indemnification. Absent any agreement to the contrary, the City shall pay to the Trustee from time to time compensation for all services rendered under this Indenture and also all expenses, charges, legal and consulting fees and other disbursements and those of its attorneys (including any allocated costs of internal counsel), agents and employees, incurred in and about the performance of its powers and duties under this Indenture.
The City further covenants to indemnify the Trustee and its officers, directors, agents and employees, against any loss, expense and liabilities, whether or not litigated, which it may incur arising out of or in the exerc ise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability and of enforcing any remedies hereunder and under any related documents, but excluding any and all losses, expenses and lia bilities which are due to the negligence or willful misconduct of the Trustee, its officers, directors, agents or employees. The obligations of the City under this Section 6.06 shall survive resignation or removal of the Trustee under this Indenture and payment of the Bonds and discharge of this Indenture.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
18 SECTION 6.07. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper boo ks of record and account, prepared in accordance with industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of the Bonds and all funds and accounts established and held by the Trustee under this Indenture. Such books of record and account shall be available for inspection by the City at reasonable hours, during regular business hours, with reasonable prior notice and under reasonable circumstances.
The Trustee shall furnish to the City, at least semiannually, an accounting (which may be in the form of its customary statements) of all transactions relating to the proceeds of the Bonds and all funds and accounts held by the Trustee under this Indenture.
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
SECTION 7.01. Amendments Permitted.
(a) Amendment With Bond Owner Consent. This Indenture and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended by the City and the Trustee upon Request of the City at any time by the execution of a Supplemental Indenture, with the written consents of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.05. Any such Supplemental Indenture becomes effective upon the execution and delivery thereof by the parties thereto and upon consent of the requisite Bond Owners. No such modification or amendment may:
(i) extend the maturity of a Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal thereof, or interest thereon, or any premium payable on the redemption thereof, at the time and place and at the rate and in the currency provided therein, without the written consent of the Owner of that Bond; or
(ii) modify any of the rights or obligations of the Trustee without its written consent.
(b) Amendment Without Bond Owner Consent . This Indenture and the rights and obligations of the City and of the Owners of the Bonds may also be modified or amended at any time by a Supplemental Indenture, without the consent of any Owners of the Bonds, for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City contained in this Indenture, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City;
(ii) to provide additional security for the Bonds; or
(iii) to cure any ambiguity, or to cure, correct or supplement any defective provision contained in this Indenture, or in any other respect
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19 whatsoever as the City deems necessary or desirable, provided under any circumstances that such modifications or amendments do not mate rially adversely affect the interests of the Owners in the opinion of Bond Counsel filed with the City and the Trustee.
SECTION 7.02. Effect of Supplemental Indenture . From and after the time any Supplemental Indenture becomes effective under this Article VII, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners, as t he case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any Supplemental Indenture shall be deemed to be part of the terms and conditio ns of this Indenture for any and all purposes.
SECTION 7.03. Endorsement or Replacement of Bonds After Amendment . After the effective date of any amendment or modification hereof under this Article VII, the City may determine that any or all of the Bonds shall bear a notation, by endorsement in form approved by the City, as to such amendment or modification and in that case upon demand of the City the Owners of such Bonds shall present such Bonds for that purpose at the Office of the Trustee, and thereupon a suitable notation as to such action shall be made on such Bonds. In lieu of such notation, the City may determine that new Bonds shall be prepared and executed in exchan ge for any or all of the Bonds and in that case upon demand of the City the Owners of the Bonds shall present such Bonds for exchange at the Office of the Trustee without cost to such Owners.
SECTION 7.04. Amendment by Mutual Consent. The provisions of this Article VII do not prevent any Owner from accepting any amendment as to the particular Bond held by such Owner.
SECTION 7.05. Trustee’s Reliance. The Trustee may conclusively rely, and is protected in relying, upon a Certificate of the City and an opinion of counsel stating that all requirements of this Indenture relating to the amendment or modification hereof have been satisfied and that such a mendments or modifications do not materially adversely affect the interests of the Bond Owners.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default. Each of the following events constitutes an Event of Default hereunder:
(a) Failure to pay any installment of the principal of any Bonds when due, whether at maturity as therein expressed, by procee dings for redemption, by acceleration, or otherwise.
(b) Failure to pay any installment of interest on the Bonds when due.
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20 (c) Failure by the City to observe and perform any representation or of the other covenants, agreements or conditions on its part contained in this Indenture or in the Bonds, if such failure has continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the City by the Trustee; provided, however, if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30-day period, such failure will not constitute an Event of Default if corrective act ion is instituted by the City and thereafter diligently and in good faith cures the failure in a reasonable period of time ; provided, further, however, that such corrective action shall be completed within 60 days after such written notice.
(d) The City commences a voluntary case under Title 11 of the United States Code or any substitute or successor statute.
SECTION 8.02. Remedies on Default. If an Event of Default occurs under Section
8.01 and is continu ing, the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding the Trustee must, (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and p ayable immediately, and upon any such declaration the same will become immediately due and payable, anything in this Indenture or in the Bonds to the contrary notwithstanding, and (b) subject to the provisions of Sections 8.07 and 8.09, exercise any other remedies available to the Trustee and the Bond Owners in law or at equity to enforce the rights of the Bond Owners under this Indenture. Without limiting the generality of the foregoing, the Trustee shall have the right by mandamus, suit, action or procee ding, to compel the City and its members, officers, agents or employees to perform each and every term, provision and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the City and the fulfillment of all duties imposed upon it. From and after the occurrence of an Event of Default, the Default Rate shall be applicable.
This provision, however, is subject to the condition that if, at any time after the principal of the Bonds has been so declared due and payable, and before any judgment or decree for the payment of the moneys due has been obtained or entered, the City deposits with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal and interest at an interest rate equal to the highest rate borne by the Outstanding Bonds, and the reasonable fees and expenses of the Trustee, including fees and expenses of its attorneys, 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) has been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate has been made therefor, then, and in every such case, the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the City and to the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences. However, 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.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
21 SECTION 8.03. Notice of Event of Default. Immediately upon becoming aware of the occurrence of an Event of Default, but in no event later than five Business Days following becoming aware of such occurrence, the Trustee shall give notice of such Event of Default to the City by telephone confirme d in writing. Such notice must also state whether the principal of the Bonds has been declared to be or have immediately become due and payable as provided in Section 8.02(a). With respect to any Event of Default described in Section 8.01(a) or (b), the Trustee shall, and with respect to any Event of Default described in Section 8.01(c) the Trustee in its sole discretion may, also give such notice to the Bond Owners in the same manner as provided herein for notices of redemption of the Bonds, which must include the statement that interest on the Bonds will cease to accrue from and after the date, if any, on which the Trustee declares the Bonds to become due and payable under Section 8.02 (but only to the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such date).
SECTION 8.04. Application of Funds Upon Event of Default. All of the sums in the funds and accounts established and held by the Trustee hereunder upon the occurrence of an Event of Default, and all sums thereafter received by the Trustee hereunder, shall be applied by the Trustee as follows and in the following order:
(a) First, to the payment of any fees, costs and expenses incurred by the Trustee to protect the interests of the Owners of the Bonds; payment of the fees, costs and expenses of the Trustee (including fees and expenses of its counsel, including any allocated costs of internal counsel) incurred in and about the perform ance of its powers and duties under this Indenture and the payment of all fees, costs and expenses owing to the Trustee under Section 6.06, together with interest on all such amounts advanced by the Trustee at the maximum rate permitted by law.
(b) Second, to the payment of the whole amount then owing and unpaid upon the Bonds for interest and principal, with interest on such overdue amounts at the respective rates of interest borne by those Bonds, and in case such moneys are insufficient to pay in full th e whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and interest on overdue amounts without preference or priority among such interest, principal and interest on overdue amounts ratably to the aggregate of such interest, principal and interest on overdue amounts.
SECTION 8.05. Power of Trustee to Control Proceedings. If the Trustee, upon the happening of an Event of Default, takes any action, by judicial proceedings or otherwise, in the performance of its duties hereunder, whether upon its own discretion, with the consent or upon the request of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, it has full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action. The Trustee may not, unless there no longer c ontinues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
22 SECTION 8.06. Limitation on Owners’ Right to Sue. No Owner of a Bond has the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless:
(a) said Owner has previously given to the Trustee written notice of the occurrence of an Event of Default;
(b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding have requested the Trustee in writing to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name;
(c) said Owners have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and
(d) the Trustee has failed to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it being understood and intended that no one or more Owners has any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein p rovided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of and premium, if any, and interest on such Bond as herein provided, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.
SECTION 8.07. Non-waiver. Nothing in this Article VIII or in any other provision of this Indenture or in the Bonds, affects or impairs the obligation of the City, which is absolute and unconditional, to pay from any source of legally available funds of the City, the principal of and interest and redemption premium (if any) on the Bonds to the Bond Owners when due and payable as herein provided, or affects or impairs the right of action, which is also absolute and unconditional, of the Bond Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds.
A waiver of any default by any Owner does not affect any subsequent default or impair any ri ghts or remedies on the subsequent default. No delay or omission of the Bond Owner or any Owner to exercise any right or power accruing upon 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 conferred upon the Owners by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Bond Owners.
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23 If a suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Bond Owners, the City and the Bond Owners will be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
SECTION 8.08. Actions by Trustee as Attorney -in-Fact. Any suit, action or proceeding which any Owner has the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners similarly situated and the Trustee is hereby appointed (and the successive respective Owners by taking and holding the Bonds shall be conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the respective Owners for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney -in-fact, subject to the provisions of Article VI. Notwithstanding the foregoing provisions of this Section 8.08, the Trustee has no duty to enforce any such right or remedy unless it has been indemnified to its satisfaction for any additional fees, charges and expenses of the Trustee related thereto, including without limitation, fees and charges of its attorneys and advisors.
SECTION 8.09. Remedies Not Exclusive . No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing , at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Bond Law or any other law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Benefits Limited to Parties . Nothing in this Indenture, expressed or implied, gives any person other than the City, the Trustee and the Owners, any right, remedy, claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the City are for the sole and exclusive benefit of the Trustee and the Owners.
SECTION 9.02. Successor is Deemed Included in All References to Predecessor.
Whenever in this Indenture or any Supplemental 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 In denture contained by or on behalf of the City or the Trustee binds and inures to the benefit of the respective successors and assigns thereof whether so expressed or not.
SECTION 9.03. Defeasance of Bonds. If the City pays and discharges the entire indebtedness on any Bonds in any one or more of the following ways:
(a) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable;
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24 (b) by irrevocably depositing with the Trustee or an escrow bank, in trust, at or before maturity, an amount of cash which, together with the available amounts then on deposit in the funds and accounts established under this Indenture, in the opinion or report of an Independent Accountant is fully sufficient to pay such Bonds, including all principal, interest and redemption premium, if any;
(c) by irrevocably depositing with the Trustee or an escrow bank, in trust, Federal Securities in such amount as an Indep endent Accountant determines will, together with the interest to accrue thereon and available moneys then on deposit in any of the funds and accounts established under this Indenture, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premium, if any) at or before maturity; or
(d) by purchasing such Bonds prior to maturity and tendering such Bonds to the Trustee for cancellation;
and if such Bonds are to be redeemed prior to the maturi ty thereof notice of such redemption has been duly given or provision satisfactory to the Trustee has been made for the giving of such notice, then, at the election of the City, and notwithstanding that any such Bonds have not been surrendered for payment, all obligations of the Trustee and the City under this Indenture with respect to such Bonds shall cease and terminate, except only:
(a) the obligation of the Trustee to transfer and exchange Bonds hereunder,
(b) the obligation of the City to pay or cause to be paid to the Owners of such Bonds, from the amounts so deposited with the Trustee, all sums due thereon, and
(c) the obligations of the City to compensate and indemnify the Trustee under Section 6.06.
The City must file notice of such election with the Trustee. The Trustee shall pay any funds thereafter held by it, which are not required for said purpose, to the City.
In the case of a defeasance or payment of all of the Bonds Outstanding in accordance with this Section 9.03, the Trustee shall pay all amounts held by it in any funds or accounts hereunder, which are not required for said purpose or for payment of amounts due the Trustee under Section 6.06, to the City.
SECTION 9.04. Execution of Documents and Proof of Ownership by Owners. Any request, consent, declaration or other instrument which this Indenture may require or permit to be executed by any Owner may be in one or more instruments of s imilar tenor, and shall be executed by such Owner in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, consent, declaration or other instrument, or
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25 of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.
The ownership of Bonds and the amount, maturity, number and date of ownership thereof are conclusively proved by the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond binds all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Trustee in good faith and in accordance therewith.
SECTION 9.05. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the City shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. The Trustee will not be deemed to have knowledge that any Bond is owned or held by the City unless the Trustee has received written notice to that effect.
SECTION 9.06. Waiver of Personal Liability . No member, officer, agent or employee of the City is individually or personally liable for the payment of the principal of or interest or any premium on the Bonds. However, nothing contained herein relieves any such member, officer, agent or employee from the performance of any official duty provided by law.
SECTION 9.07. Destruction of Canceled Bonds . Whenever in this Indenture provision is made for the surrender to the City of any Bonds which have been paid or canceled under the provisions of this Indenture, a certificate of destruction duly executed by the Trustee shall be deemed to be the equivalent of the surrender of such canceled Bonds and the City is entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to. The City will pay all costs of any microfilming of Bonds to be destroyed.
SECTION 9.08. Notices. All written notices under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice is effective either (a) upon actual receipt after deposit in the United States mail, postage prepaid, or ( b) in any other case, upon actual receipt. The City or the Trustee may, by written notice to the other parties, from time to time modify the address to which communications are given hereunder.
If to the City: City of Hanford
315-321 North Douty Street
Hanford, CA 93230
Attention: Finance Director
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
26 If to the Trustee: U.S. Bank Trust Company, National Association ______________
________________, _________
Attention: ________________
If to the Initial Owner: Umpqua Bank
______________
________________, _________
Attention: ________________
SECTION 9.09. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Indenture is for any reason held illegal, invalid or unenforceable, such holding will not affect the validity of the remaining portions of this Indenture. The City and the Trustee hereby declare that they would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds irrespective of the fact that any one or more Sections, paragraphs, sentences, clause s, or phrases of this Indenture may be held illegal, invalid or unenforceable.
SECTION 9.10. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest or premium (if any) on or principal of the Bonds which remains unclaimed for two years after the date when the payments of such interest, premium and principal have become payable, if such money was held by t he Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee after the date when the interest and premium (if any) on and principal of such Bonds have become payable, shall be repaid by the Trustee to the City as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the City for the payment of the principal of and interest and redemption premium (if any) on such Bonds.
SECTION 9.11. Execution in Counterparts and Electronic Signing. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture and signature pages for all purposes. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Indenture or any document to be signed in connection with this Indenture shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the us e of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
SECTION 9.12. Governing Law. This Indenture shall be construed and governed in accordance with the laws of the State of California.
Section 9.13 Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performanc e of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation,
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27 strikes, work stoppages, pandemics, public emergencies, quarantine restrictions, accidents, acts of war or terrori sm, civil or military disturbances, nuclear or natural catastrophes or acts of God, or, as a result of the foregoing, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 9.14. U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A.
Section 9.15. Waiver of Sovereign Immunity. To the extent permitted by law, the City hereby expressly waives, and agrees not to claim, any sovereign immunity in any suits or judicial proceedings related to or arising out of this Indenture.
Section 9.16. Waiver of Jury Trial .
(a) TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF THE CITY
AND THE OWNERS IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE CITY
FURTHER AGREES THAT, IN THE EVENT OF LITIGATION, IT WILL NO T
PERSONALLY OR THROUGH ITS AGENTS OR ATTORNEYS SEEK TO REPUDIATE THE VALIDITY OF THIS SECTION 9.16, AND IT ACKNOWLEDGES THAT IT FREELY
AND VOLUNTARILY AGREED TO WAIVE TRIAL BY JURY IN ORDER TO INDUCE THE INITIAL OWNER TO PURCHASE THE BOND.
(b) To the ext ent the foregoing waiver of a jury trial is unenforceable under applicable California law, the parties agree to refer, for a complete and final adjudication, any and all issues of fact or law involved in any litigation or proceeding (including all discovery and law and motion matters, pretrial motions, trial matter and post-trial motions up to and including final judgment), brought to resolve any dispute (whether based on contract, tort or otherwise) between the parties hereto arising out of, in connection with or otherwise related or incidental to this Indenture to a judicial referee who shall be appointed under a general reference pursuant to California Code of Civil Procedure Section 638, which referee’s decision will stand as the decision of the court. S uch judgment will be entered on the referee’s statement of judgment in the same manner as if the action had been tried by the court. The parties shall select a single neutral referee, who shall be a retired state or federal judge with at least five years of judicial experience in civil matters; provided that the event the parties cannot agree upon a referee, the referee will be appointed by the court. The fees and expense of any referee appointed in such action or proceeding shall be borne by the party who does not prevail, as determined by the referee.
Section 11.16. Additional Rights of Initial Owner. The following provisions shall apply so long as the Initial Owner owns all of the Bonds:
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
28 (a) Notwithstanding any other provision of this Indenture, the Initial Owner shall have the right to consent to the appointment of a successor Trustee appointed by the City after the resignation or removal of the Trustee, subject to the requirements of Section 6.01. (b) Notwithstanding any other provision of this Indenture, the Initial Owner shall have the right to consent to any amendment to this Indenture. (c) The City shall inform the Initial Owner promptly upon the occurrence of an Event of Default.
(d) The Initial Owner is hereby expressly made a third-party beneficiary of this Indenture.
(e) The City shall pay or reimburse the Initial Owner for any and all reasonable charges, fees, costs and expenses that the Initial Owner may pay or incur in connection with the following: (i) the administration, enforcement, defense, or preservation of any rights or security hereunder; (ii) the pursuit of any remedies hereunder, or otherwise afforded by law or equity; (iii) any amendment, waiver, or other action with resp ect to or related to this Indenture whether or not executed or completed; or (iv) any litigation or other dispute in connection with this Indenture.
[Signature Page Follows]
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IN WITNESS WHEREOF, the CITY OF HANFORD has caused this Indenture to be signed in its name by its City Manager and attested to by its City Clerk, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.
CITY OF HANFORD
By
City Manager
Attest:
City Clerk
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By
Authorized Officer
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A-1
APPENDIX A
DEFINITIONS
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.
“Anti-Terrorism Laws ” means any of the Laws relating to terrorism or money laundering, including Executive Order No. 13224, the PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by OFAC.
“Authorizing Resolution” means, collectively, the resolutions adopted by the City Council of the City authorizing the issuance of the Bonds , being Resolution 21-55-R adopted on December 7, 2021, and Resolution 22-__-R adopted on May 17, 2022.
“Bank Secrecy Act” means the Bank Secrecy Act of 1970 as codified in 31 U.S.C. 5311-5314e, as now and hereafter in effect, or any successor statute.
“Bond” or “ Bonds” means the City of Hanford 2022 Taxable Pension Obligation Bonds issued by the City under the B ond Law, the Authorizing Resolution and this Indenture.
“Bond Counsel” means (a) Jones Hall, A Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally- recognized experience in the issuance of obligations issued by public agencies.
“Bond Law” means the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code, as in effect on the Closing Date or as thereafter amended.
“Bond Year” means any twelve-month period beginning on June 2 in any year and extending to the next succeeding June 1, both dates inclusive; except that the first Bond Year begins on the Closing Date and ends on June 1, 2022.
“Business Day” means a day of the year (other than a Saturday or Sunday) on which banks in California are not required or permitted to be closed, and on which the New York Stock Exchange is open.
“Certificate of the City” means a certificate in writing signed by the Mayor, City Manager or Finance Director of the City, or any other officer of the City duly authorized by the City for that purpose.
“City” means the City of Hanford, a municipal corporation organized and existing under the laws of the State of California.
“Closing Date” means the date on which the Bonds are delivered by the City to the Initial Owner, being May 23, 2022.
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“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to: printing expenses; filing and recording fees; initial fees, expenses and charges of the Trustee and its counsel, including the Trustee’s first annual administrative fee; fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals , including attorneys for the Initial Owner; fees of the California Debt Investment Advisory Commission, and any other cost, charge or fee in connection with the original issuance of the Bonds.
“Debt Service Fund ” means the fund by that name established and held by the Trustee under Section 4.02.
“Default Rate” means the interest rate then in effect on the Bonds, plus 3.00%. “Environmental Laws” means any and all federal, state and local statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or haz ardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling o f pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof.
“Event of Default” means any of the events described in Section 8.01.
“Federal Securities” means: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged; (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America.
“Fiscal Year” means any twelve-month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve-month period selected and designated by the City as its official fiscal year period under a Certificate of the City filed with the Trustee.
“Governmental Authority” means any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency, administrat ion, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other person with authority to bind a party at law.
“Indenture” means this Indenture of Trust between the City and the Trustee, as amended or supplemented from time to time under any Supplemental Indenture entered into under the provisions hereof.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
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“Independent Accountant” means any accountant or firm of such accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State of California, appointed by or acceptable to the City, and who, or each of whom:
(a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City; and (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City.
“Initial Owner” means Umpqua Bank, and, if the context requires, its successors and assigns.
“Interest Account” means the account by that name established and held by the Trustee under Section 4.02(a).
“Interest Payment Date ” means December 1 , 2022, and each June 1 and December 1 thereafter so long as any of the Bonds remain unpaid.
“Law” means any treaty or any federal, regional, state and local law, statute, rule, ordinance, regulation, code, license, authorization, decision, injunction, interpretation, policy, guideline, supervisory standard, order or decree of any court or other Governmental Authority.
“Material Adverse Effect” means an event or occurrence which adversely affects in a material manner (a) the City’s general fund, (b) the ability of the City to carry out its operations in the manner conducted as of the date of this Indenture or to meet or perform its obligations under this Indenture on a timely basis, or (c) the validity or enforceability of this Indenture.
“Material Litigation” means any action, suit, proceeding, inquiry or investigation against the City in any court or before any arbitrator of any kind or before or by any Governmental Authority, of which the City has notice or knowledge and which, (i) if determined adversely to the City, may have a Material Adverse Effect, (ii) seeks to restrain or enjoin any of the transactions contemplated hereby, or (iii) may adversely affect (A) the exemption of interest with respect to the interest payments for state income tax purposes or (B) the ability of the City to perform its obligations under this Indenture.
“OFAC” means the U.S. Depart ment of the Treasury’s Office of Foreign Assets Control, and any successor thereto.
“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224 and/or any other list of terrorists or other restricted persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable executive orders.
“Office” means, with respect to the Trustee, the corporate trust office of the Trustee at the address set forth in Section 9.08, or at such other or additional offices as may be specified by the Trustee in writing to the City.
“Outstanding”, when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.05) all Bonds except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or
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deemed to have been paid within the meaning of Section 9.03; and (c) Bonds in lieu of or in substitution for which other Bonds have been authorized, executed, issued and delivered by the City hereunder.
“Owner” means, with respect to any Bond, the person in whose name the ownership of such Bond is registered on the Registration Books. Initially, the Owner is the Initial Owner.
“Permitted Investments” means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys prop osed to be invested therein:
(a) Federal Securities;
(b) Federal Housing Administration debentures.
(c) The listed obligations of government -sponsored agencies which are not backed by the full faith and credit of the United States of America:
(i) Federal Home Loan Mortgage Corporation participation certificates (excluding stripped mortgage securities which are purchased at prices exceeding their principal amounts) or senior debt obligations;
(ii) Farm Credit Banks (formerly: Federal Land Banks, Federa l Intermediate Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes;
(iii) Federal Home Loan Banks consolidated debt obligations; and
(iv) Federal National Mortgage Association senior debt obligations or mortgage-backed securities (excluding stripped mortgage securities which are purchased at prices exceeding their principal amounts);
(d) Unsecured certificates of deposit, time deposits, and bankers ’ acceptances (having maturities of not more than 30 days) of any bank, i ncluding the Trustee or its affiliates, the short-term obligations of which are rated “A-1” or better by S&P and “Prime- 1” or better by Moody’s at the time of initial investment.
(e) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks, including the Trustee or its affiliates, which have capital and surplus of at least $15 million.
(f) Commercial paper (having original maturities of not more than 270 days) rated “A-1+” by S&P and “Prime-1” by Moody’s.
(g) Money market funds rated “AAm” or “AAm-G” by S&P, or better, including funds for which the Trustee or its affiliates or subsidiaries provide investment or other advisory services.
(h) “State Obligations”, which means:
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(i) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A3” by Moody’s and “A” by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated;
(ii) Direct general short -term obligations of any state agency or subdivision or agency thereof described in (i) above and rated “A-1+” by S&P and “Prime-1” by Moody’s; and
(iii) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (i) above and rated “AA” or better by S&P and “Aa” or better by Moody’s.
(i) Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:
(i) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions;
(ii) the municipal obligations are secured by cash or Federal Securities described in clause (a) of the definition thereof ( “United States Treasury Obligations”) which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
(iii) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”);
(iv) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
(v) no substitution of a United States Treasury Obligations shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and
(vi) the cash or United States Treasury Obligations a re not available to satisfy any other claims, including those by or against the trustee or escrow agent.
(j) Investment agreements with a domestic or foreign bank or corporation the long- term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA-” by S&P or “Aa3” by Moody’s at the time of initial investment.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
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(k) The Local Agency Investment Fund which is administered by the California Treasurer for the investment of funds belonging to local agencies within the State of California.
“PERS” means the Public Employees’ Retirement System.
“PERS Contracts” means the contracts, as amended from time to time, entered into by the City and PERS pursuant to the Retirement Law obligating the City to make contributions to PERS in exchange for PERS providing retirement benefits to certain City employees.
“PERS Obligations” means the obligation of the City under the Retirement Law and the PERS Contracts to make payments to PERS with respect to benefits accruing to City employees who are PERS members, including retired public safety employees and retired miscellaneous employees.
“Principal Account” means the account by that name established and held by the Trustee under Section 4.02(b).
“Record Date” means, with respect to any Interest Payment Date, the close of business on the 1st calendar day of the month preceding such Interest Payment Date, whether or not such 1st calendar day is a Business Day.
“Registration Books” means the records maintained by the Trustee under Section
2.07 for the registration and transfer of ownership of the Bonds.
“Request of the City” means a request in writing signed by the Mayor, City Manager or Finance Director of the City, or any other officer of the City duly authorized by the City for that purpose.
“Supplemental Indenture” means any indenture, agreement or other instrument which amends, supplements or modifies this Indenture and which has been duly entered into between the City and the Trustee; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Trustee” means U.S. Bank Trust Company, National Association , as trustee hereunder, or any successor thereto appointed as trustee hereunder in accordance with the provisions of Article VI.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
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APPENDIX B
FORM OF BOND
No. ____________ ***$______________***
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF KINGS
CITY OF HANFORD
2022 TAXABLE PENSION OBLIGATION BOND
RATE OF INTEREST: MATURITY DATE: ORIGINAL ISSUE DATE:
4.390% June 1, 2039 May 23, 2022
REGISTERED OWNER: UMPQUA BANK, AND ITS SUCCESSORS AND ASSIGNS
PRINCIPAL AMOUNT: THOUSAND DOLLARS
The CITY OF HANFORD, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), for value received, hereby promises to pay to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Rate of Interest identified above in like lawful money from the date hereof, which date shall be the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the first calendar day of the month in which such Interest Payment Date occurs (a “Record Date”), in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or before November 15, 2022, in which event it shall bear interest from the Original Issue Date identified ab ove; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on December 1 and June 1 in each year, commencing December 1, 2022 (the “Interest Payment Dates ”) until payment of such Principal Amount in full.
The Principal Amount hereof is payable upon presentation hereof at the corporate office of U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), in Los Angeles, California, or such other place as designated by the Trustee. Interest hereon is payable by check of the Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of such Registered Owner as it appears on the registration books of the Trustee as of the preceding Record Date; provided that at the written request of the owner of at least $1,000,000 aggregate prin cipal amount of
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Bonds which written request is on file with the Trustee prior to the Record Date immediately preceding any Interest Payment Date, interest on such Bonds shall be paid on such Interest Payment Date by wire transfer to such account within the United States of America as shall be specified in such written request.
Notwithstanding anything herein to the contrary, so long as the Bonds are owned by the Initial Owner: (i) the Trustee shall pay principal of and interest and premium on, if any, on the Bonds when due by wire transfer in immediately available funds to the Initial Owner in accordance with such wire transfer instructions as shall be filed by the Initial Owner with the Trustee from time to time; (ii) for so long as the Bonds shall be held by the Initial Owner and any subsequent Owner as a single Bond, presentation and surrender of such Bond shall not be required for payment thereof, provided that principal which is payable at maturity or earlier redemption in full shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Initial Owner of the mandatory sinking fund payments described hereunder.
This Bond is the duly authorized issue of bonds of the City designated as the “City of Hanford 2022 Taxable Pension Obligation Bonds ” (the “Bonds”) of an aggregate principal amount of $____________, all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities or interest rates) and all issued under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the “Bond Law”) and under an Indenture of Trust, dated as of May 1, 2022, between the City and the Trustee (the “Indenture”). The Bonds have been authorized to be issued by the City under resolutions adopted by the City Council of the City on December 7, 2021 and May 17, 2022 (together, the “Authorizing Resolution”). Reference is hereby made to the Indenture (copies of which are on file at the office of the City) and all supplements thereto and to the Bond Law for a description of the terms on which the Bonds are issued, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the City thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees.
The Bonds have been issued by the City to refinance obligations of the City owing to the Public Employees Retirement System of the State of California, and to pay costs of issuance of the Bonds. This Bond and the interest hereon and all other parity obligations and the interest thereon (to the extent set forth in the Indenture) are payable from any source of legally available funds of the City.
The rights and obligations of the City and the 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, but no such modification or amendment shall permit a change in the terms of maturity of the principal of any outstanding Bond or of any installment of interest thereon or a reduction in the rate of interest thereon without the consent of the owner of such Bond, or shall reduce the percentages of the owners required to effect any such modification or amendment.
[Insert Redemption Provisions, once Final]
If an Event of Default occurs under and as defined in the Indenture, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, and the Default Rate shall be applicable, but such
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declaration and its consequences may be rescinded and annulled as further provided in the Indenture.
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at said corporate trust office of the Trustee in Los Angeles, California, or such other place as designated by 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 registration of such transfer a new Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor.
The City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the City and the Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have bee n performed in due and regular time, form and manner as required by the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any limit prescribed by any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond is not entitled to any benefit under the Indenture and is not valid or obligatory for any purpose until the certificate of authentication hereon endorsed has been signed by the Trustee.
IN WITNESS WHEREOF, the CITY OF HANFORD has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its City Manager and to be attested to by the facsimile signature of its City Clerk, all as of the Original Issue Date specified above.
CITY OF HANFORD
By
City Manager
Attest:
City Clerk
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Dated:
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By
Authorized Signatory
FORM OF ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within -mentioned Bond and hereby irrevocably constitute(s) and appoint(s)
________________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an
eligible guarantor institution.
Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever.
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Attachment: Indenture (Hanford POBs), 5[4] (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds) SB 450 GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by NHA Advisors, LLC, the City’s Municipal Advisor (the “Municipal Advisor”).
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $30,945,000.00 (the “Estimated Principal Amounts”).
True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the respective Estimated Principal Amounts of the Bonds are sold, and b ased on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest pa yment dates to the purchase price received for the Bonds, is 4.3898545%.
Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amounts of the Bonds are sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), including the Placement Agent’s fee, is $205,000.00.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amounts of the Bonds are sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, is $30,740,000.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amounts of the Bonds are sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, including the finance charge for the Bonds, as described above, calculated to the final maturity of the Bonds, is $44,110,288.07.
The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of the estimates. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the respective Estimated Principal Amounts, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing
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Attachment: Hanford 2022 POBs - Good Faith Estimates 220513 (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on various factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.
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Attachment: Hanford 2022 POBs - Good Faith Estimates 220513 (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation
4826-1295-8409v6/200721-0005
PLACEMENT AGENT AGREEMENT
May 1, 2022
City of Hanford
315 N. Douty Street
Hanford, CA 93230
Attention: Chris Tavarez, Finance Director
The undersigned, Oppenheimer & Co. Inc. (the “Placement Agent”), offers to enter into the following agreement (this “Agreement”) with the City of Hanford (the “Issuer”) , which, upon acceptance by the Issuer, will be binding upon the Issuer and the Placement Agent.
The Issuer acknowledges and agr ees that (i) the placement of the 2022 Taxable Pension Obligation Bonds (the “Obligations”) pursuant to this Placement Agent Agreement is an arm’s-length commercial transaction between the Issuer and the Placement Agent, (ii) in connection therewith and with the discussion, undertakings and procedures leading up to the consummation of such transaction, the Placement Agent is not acting as a fiduciary of or a financial advisor to the Issuer, (iii) the Placement Agent has not assumed an advisory or fiduciary responsibility in favor of the Issuer with respect to (a) the offering of the Obligations or the process leading thereto (whether or not the Placement Agent has advised or is currently advising the Issuer on other matters) or (b) any other obligation to the Issuer except the obligations expressly set forth in this Placement Agent Agreement, and (iv) the Issuer has consulted with its own legal and other professional advisors to the extent it deemed appropriate in connection with the offering of the Obligations.
The Obligations shall be issued under and pursuant to the Indenture of Trust, dated as of May 1, 2022 (the “Issuing Document”), by and between the Issuer and U.S. Bank Trust Company, National Association (the “Trustee”).
Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Placement Agent and the Issuer hereby agree as follows:
1. Appointment of Placement Agent; Placement of Obligations; Closing. (a) The Issuer hereby appoints the Placement Agent to act, and the Placement Agent hereby agrees to act, as the exclusive placement agent for the Issuer in connection with the private sale and issuance of its Obligations, and the Placement Agent hereby accepts such appointment.
As compensation for its services hereunder, the Placement Agent shall charge a fee of $37,500. At the closing of any such sale, the Issuer shall pay or cause to be paid such fee to the Placement Agent by wire transfer or immediately available funds . The above fee does not include any services the Placement Agent may render in the future to the Issuer with respect to any offering or placement of municipal securities other than the Obligations.
(b) The Issuer understands that the Placement Agent will be acting as the agent of the Issuer in the offering and sale of the Obligations and agrees that, in connection therewith, the Placement Agent will use its “best efforts” to place the Obligations. The Placement Agent agrees that,
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in furtherance of its obligat ions hereunder, it shall provide substantially accurate and complete information to potential purchasers of the Obligations to the extent that it is able. (c) The Issuer expressly agrees that nothing in this Agreement evidences or creates any expressed or implied commitment by the Placement Agent to purchase or place any of the Obligations.
(d) On the closing date, the Issuer will cause to be delivered (a) a final approving opinion of Jones Hall , as Bond Counsel to the Issuer (“Bond Counsel”), dated the closing date, addressed to or with a reliance letter to the Placement Agent, in a form acceptable to the Placement Agent, to the effect that the Obligations constitute valid and legally binding obligations of the Issuer payable from and secured by an irrevocable pledge from any source of legally available funds as set forth in the Issuing Document , (b) one or more certificates in form and tenor satisfactory to the Placement Agent evidencing the proper execution and delivery of the Obligations and receipt of payment therefor, including statements of the Issuer, dated as of the date of such delivery, to the effect that there is no litigation pending or, to the knowledge of the signer or signers thereof, threatened relating to the issuance, sale and delivery of the Obligations, (c) a letter or certificate of the Purchaser, addressed to the Placement Agent, in form and content acceptable to the Placement Agent.
2. Reliance. The Issuer recognizes that, in providing services under this Agreement, the Placement Agent will rely upon and assume the accuracy and completeness of the financial, accounting, tax and other information discussed with or reviewed by the Placement Agent for such purpose, and the Placement Agent does not assume responsibility for the acc uracy and completeness thereof. The Placement Agent will have no obligation to conduct any independent evaluation or appraisal of the assets or the liabilities of the Issuer or any other party or to advise or opine on related solvency issues. Nothing in this Agreement is intended to confer upon any other person (including creditors, employees or other constituencies of the Issuer) any rights or remedies hereunder or by reason hereof.
3. Termination. The Placement Agent’s authorization to carry out its duties hereunder may be terminated by the Issuer or the Placement Agent at any time with or without cause, effective upon receipt of written notice to that effect by the other part y. Notwithstanding the foregoing, in the event the Issuer terminates this Agreement an d within twelve (12) months after the Issuer sells the Obligations to an investor identified by the Placement Agent prior to such termination, the amounts payable under Section 1(a) shall be immediately due and payable to the Placement Agent by the Issuer.
4. Notices. Any notice or other communication to be given to any of the parties to this Agreement may be given by delivering the same in writing as follows: to the Issuer at 315 N. Douty Street, Hanford, California 93230 Attention: Finance Director, and to the Placement Agent at 580 California Street, Suite 2300, San Francisco, California 94104, Attention: Municipal Capital Markets Group.
5. Survival of Representations, Warranties and Agreements. This Agreement is made solely for the benefit of the Issuer and the Placement Agent, and no other person shall acquire or have any right hereunder or by virtue hereof. All of the representations, warranties and agreements of the Issuer contained in this Agreement shall remain operative and in full force and effect regardless of delivery of any payment for the Obligations.
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Attachment: Placement Agent Agreement (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
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6. Counterparts. The Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
7. Effectiveness. This Agreement shall become effective upon the execution of the acceptance hereof by duly authorized signatory of the Issuer, which acceptance hereof shall be indicated on the signature page hereof, and shall be valid and enforceable as of the time of such acceptance. This Agreement may be executed by facsimile transmission and in several counterparts, each of which shall be regarded as an original and all of w hich shall constitute one and the same document.
8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
Very truly yours,
OPPENHEIMER & CO. INC.
By:
Managing Director
CITY OF HANFORD
By:
Authorized Officer, Chris Tavarez Finance Director
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Attachment: Placement Agent Agreement (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
4 4826-1295-8409v6/200721-0005
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Attachment: Placement Agent Agreement (CalPERS UAL Restructuring – Approval of 2022 Taxable Pension Obligation Bonds)
AGENDA
STAFF REPORT
MEETING DATE: 5/17/2022
AGENDA SECTION: C
SUBJECT:
Council: Adoption of Resolution 22-21-R, memorializing the City of Hanford's Formal Opposition to Measure F on the June 2022 Ballot of the County of Kings.
RECOMMENDATION:
That the City Council, by motion, adopt Resolution 22-21-R, memorializing the City of Hanford's Formal Opposition to Measure F on the June 2022 Ballot of the County of Kings.
BACKGROUND:
Like every jurisdiction in the state, the elected officials of the City of Hanford are charged with providing for the safety of its citizens and those who travel in and through the City. Council must make fiscally responsible decisions for the betterment of those they serve, which includes whether or not the City should support or oppose tax measures that directly impact City residents. Fiscal responsibility and wise spending are critical toward being responsible with taxpayer dollars. In light of these responsibilities, Council has an obligation to inform and make recommendations to their citizens on issues involving how their current and future tax dollars are spent.
The Kings County Firefighters Union, Local 3747 has put forth a Citizen Initiative sales tax measure increasing the sales tax charged throughout the County, including sales tax charged in the City, from 7.25% to 7.75%. All the funds from the 0.5% sales tax increase will go toward funding a single public agency, the Kings County Fire Department. The tax measure will result in nearly $9 million dollars in additional sales tax being paid by consumers in Hanford, but no other public safety agency in the county will receive financial support from this measure. No funding will go toward improving safety from the Hanford Police Department. No funding will go toward improving safety from the Hanford Police Dispatch Center. No funding will go to the Hanford Fire Department.
In the first year, just from sales within the City of Hanford alone, the revenues generated from this will equal nearly the equivalent to 1/3 the total general fund budget of the City of Hanford.
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The revenues generated from this tax measure is estimated to be over $2 million more than the entirety of the Hanford Fire Department’s budget. The full scope of this tax measure would more than double the operating budget of Kings County Fire Department. It is estimated that KCFD responds into the City to assist the fire department approximately 250 times per year.
That equates to about $36,000 per call in projected tax revenue.
This tax measure does not establish trigger points to reduce funding when KCFD's needs are met and does not include a sunset to allow voters to reevaluate if a continued need exists.
The City Council should oppose the tax measure due to the facts contained in this staff report and the attached Resolution.
FISCAL IMPACT:
N/A
ATTACHMENTS:
Resolution 22-21-R Measure F
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RESOLUTION NO. 22-21-R
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HANFORD
OPPOSING MEASURE F ON THE JUNE 2022 BALLOT IN THE COUNTY OF KINGS.
At regular meeting of the City Council of the City of Hanford duly called and held on May 17, 2022, it was moved by Council Member , and seconded by Council Member ______________, and carried that the following resolution be adopted:
WHEREAS, Measure F will INCREASE Hanford’s Sales Tax rate by .5%; and, WHEREAS, Measure F will cause consumers in Hanford to pay approximately $8,700,000.00 (8.7 million dollars) in additional sale tax each year; and, WHEREAS, NO Measure F money will be allocated to the City of Hanford; and, WHEREAS, NO Measure F money will be allocated to the Hanford Police/Fire Departments; and,
WHEREAS, Measure F funding, including the approximately $8,700,000.00 in extra sales tax paid by Hanford consumers, will all go to the Kings County Fire Department; and, WHEREAS, Measure F has no sunset and will PERMANENTLY increase the taxes paid by Hanford consumers; and,
WHEREAS, Measure F taxes paid by Hanford consumers each year will exceed the current budget of the Hanford Fire Department; and,
WHEREAS, Measure F will not result in improved emergency police responses in the City of Hanford; and,
WHEREAS, Measure F is not supported by the Hanford Police and Fire Departments ; and,
NOW, THEREFORE, BE IT RESOLVED that the Hanford City Council does hereby opposes Measure F for the foregoing reasons.
PASSED, ADOPTED AND APPROVED at a regular meeting of the City Council of the City of Hanford held on May 17, 2022, by the following vote:
AYES: Council Member ___________________________
NOES: Council Member ___________________________
ABSTAIN: Council Member ___________________________
ABSENT: Council Member ___________________________
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Attachment: Resolution 22-21-R Measure F (Council: Adopt Resolution 22-21-R to formally Oppose Measure F)
Kalish Morrow
MAYOR of the City of Hanford
Attest:
Natalie Corral
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF KINGS ) ss
CITY OF HANFORD )
I, Natalie Corral, City Clerk of the City of Hanford, do hereby certify the foregoing Resolution was duly passed and adopted at a regular meeting of the City Council of the City of Hanford held on the 17 day of May, 2022.
Date:
City Clerk
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Attachment: Resolution 22-21-R Measure F (Council: Adopt Resolution 22-21-R to formally Oppose Measure F)
EXHIBIT A
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Attachment: Resolution 22-21-R Measure F (Council: Adopt Resolution 22-21-R to formally Oppose Measure F)
AGENDA
STAFF REPORT
MEETING DATE: 5/17/2022
AGENDA SECTION:
SUBJECT:
Council Future Agenda Items
FISCAL IMPACT:
ATTACHMENTS:
Council Future Agenda Items
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Council Future Agenda Items
Originated
Date Item Originator Staff Lead Date Estimate
4/7/20 Discussion of Pay for Parking Options
in the Downtown Area
Council
Consensus John Doyel After presentation of
Downtown Plan
6/18/20
Discussion of Courthouse
improvements and financing options
Council
Consensus
Brad Albert
Delayed pending
additional building
review
12/21/21
Review of City Ordinance related to
property line setbacks for Patio
structures and Driveway Awnings
Council
Consensus
Tom Webb
6/21/2022
1/18/22
Discussion of options for New
Business Incentives in the Downtown
District
Council
Consensus
Mario
Cifuentez
6/7/2022
3/29/22 Discussion of Future Facility Space
Needs and Funding Mechanisms
Council
Consensus
Various Staff 6/21/2022
3/29/22 Discussion of the future use of
Roundabouts and cost savings
Council
Consensus
John Doyel 7/19/2022
3/29/2022 Discussion of the implementation of
City Geographic Information System
Council
Consensus
Various Staff 8/2/2022
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Attachment: Council Future Agenda Items (Council: Future Agenda Items)