DRAFT
Attachment E - Letter Agreement.docx
10005302
LETTER AGREEMENT FOR PURCHASE
dated as of September [__], 2026
between
CITY OF LONG BEACH
an
d
WELLS FARGO BANK, NATIONAL ASSOCIATION
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE 1 D EFINITIONS AND ACCOUNTING TERMS .......................................................1 Section 1.01. Defined Terms .......................................................................................1 Section 1.02. Other Interpretive Provisions .................................................................8 Section 1.03. Accounting Terms ..................................................................................9 Section 1.04. Times of Day........................................................................................10 Section 1.05. Interest Rates; Benchmark Notifications .............................................10 ARTICLE 2 T HE OBLIGATIONS ......................................................................................10 ARTICLE 3 T AXES, YIELD PROTECTION AND ILLEGALITY .............................................11 Section 3.01. T axes ....................................................................................................11 Section 3.02. Increased Costs ....................................................................................12 Section 3.03. Obligations Absolute ...........................................................................14 Section 3.04. Survival ................................................................................................15 ARTICLE 4 H IGHEST LAWFUL RATE .............................................................................15 ARTICLE 5 R EPRESENTATIONS AND WARRANTIES ........................................................15 Section 5.01. Organization Existence ........................................................................15 Section 5.02. Power and Authority ............................................................................15 Section 5.03. Due Authorization ................................................................................16 Section 5.04. Necessary Actions Taken .....................................................................16 Section 5.05. Binding Effect ......................................................................................16 Section 5.06. No Contravention .................................................................................16 Section 5.07. Compliance with Law; Employee Benefit Plan Compliance ..............17 S
ection 5.08. Compliance; No Breach .......................................................................17 Section 5.09. No Default ............................................................................................17 Section 5.10. No Public Vote or Referendum; Pending Legislation and Decisions ..17 Section 5.11. No Immunity ........................................................................................18 Section 5.12. Litigation ..............................................................................................18 Section 5.13. Tax Status.............................................................................................18 Section 5.14. Disclosure ............................................................................................18 Section 5.15. Financial Information...........................................................................18 Section 5.16. Official Signatures ...............................................................................19 Section 5.17. Incorporation of Representations and Warranties by Reference .........19 Section 5.18. Swap Contracts ....................................................................................19 Section 5.19. Insurance ..............................................................................................19 Section 5.20. Usury ....................................................................................................19 Section 5.21. Reserved ...............................................................................................19 Section 5.22. Investment Policy.................................................................................19 Section 5.23. Enterprise .............................................................................................19
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Section 5.24. Environmental Matters.........................................................................20 Section 5.25. Federal Reserve Board Regulations .....................................................20 Section 5.26. Investment Company Act ....................................................................20 Section 5.27. Patriot Act Representation ...................................................................20 Section 5.28. Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions21 Section 5.29. R ight to Accelerate ..............................................................................21 Section 5.30. Most Favored Nations Provision .........................................................22 ARTICLE 6 C OVENANTS ................................................................................................22 Section 6.01. Maintenance of Existence ....................................................................22 Section 6.02. Reports, Certificates and Other Information ........................................22 Section 6.03. Maintenance of Books and Records ....................................................23 Section 6.04. Access to Books and Records ..............................................................24 Section 6.05. Compliance with Documents ...............................................................24 Section 6.06. Environmental Compliance .................................................................24 Section 6.07. Further Assurances...............................................................................24 Section 6.08. Application of Proceeds of Advances ..................................................25 Section 6.09. Payment of Obligations; Removal of Liens .........................................25 Section 6.10. Compliance with Law; Employee Benefit Plan Compliance ..............25 Section 6.11. Reserved ...............................................................................................25 Section 6.12. Reserved ...............................................................................................25 Section 6.13. Insurance; Eminent Domain ................................................................25 Section 6.14. Investment Policy.................................................................................26 Section 6.15. Reserved ...............................................................................................26 Section 6.16. Most Favored Nations Provisions ........................................................26 S
ection 6.17. Preservation of Lien .............................................................................26 Section 6.18. Sovereign Immunity.............................................................................26 Section 6.19. Maintenance of Enterprise ...................................................................26 Section 6.20. Changes in Obligations ........................................................................27 Section 6.21. Additional Debt ....................................................................................27 Section 6.22. Swap Termination Payments ...............................................................27 Section 6.23. No Impairment .....................................................................................27 Section 6.24. Tax Status.............................................................................................27 Section 6.25. References to the Assignee ..................................................................27 Section 6.26. Only Authorized Uses of Property by the City ....................................27 Section 6.27. No Sale, Assignment, Transfer or Pledge ............................................27 Section 6.28. Consolidation or Merger ......................................................................28 Section 6.29. Accounting Methods and Fiscal Year ..................................................28 Section 6.30. No Priority Claim .................................................................................28 Section 6.31. Incorporation of Covenants by Re ference ...........................................28 Section 6.32. Use of Proceeds....................................................................................28 Section 6.33. Ratings .................................................................................................28 Section 6.34. Setoff Provisions in Other Documents ................................................28 Section 6.35. Acceleration .........................................................................................29 Section 6.36. Swap Contracts ....................................................................................29
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Section 6.37. Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.............................. Error! Bookmark not defined.
ARTICLE 7 D EFAULTS ...................................................................................................30 Section 7.01. Events of D efault .................................................................................30 Section 7.02. Consequences of an Event of Def ault ..................................................32 Section 7.03. Remedies Cumulative; Solely for the Benefit of the Assignee ............33 Section 7.04. Waivers or Omissions ..........................................................................34 Section 7.05. Discontinuance of Proceedings ............................................................34 Section 7.06. Injunctive R elief...................................................................................34 ARTICLE 8 M ISCELLANEOUS ........................................................................................34 Section 8.01. Amendments, E tc.; Amendments and Waivers ...................................34 Section 8.02. Notices; Effectiveness; Electronic Communication ............................34 Section 8.03. No Waiver; Cumulative Remedies; Enforcement................................36 Section 8.04. Costs and Expenses; Damage W aiver..................................................36 Section 8.05. Payments Set Aside..............................................................................37 Section 8.06. Successors and Assigns; P articipations ...............................................37 Section 8.07. Counterparts; Integration; Effect iveness ..............................................39 Section 8.08. Survival of Representations and War ranties ........................................40 Section 8.09. S everability ..........................................................................................40 Section 8.10. Governing Law; Jurisdiction E tc .........................................................40 Section 8.11. No Advisory or Fiduciary Relationship ...............................................41 Section 8.12. Electronic Execution of Certain Documents........................................41 Section 8.13. USA Patriot Act ...................................................................................41 Section 8.14. Time of the Essence .............................................................................42 S
ection 8.15. Reserved ...............................................................................................42 Section 8.16. EMMA Postings...................................................................................42 Section 8.17. US QFC Stay Rules .............................................................................42
SCHEDULE 8.02 — Assignee’ s Office, Certain Addresses for Notices
EXHIBIT A — Form of Compliance Certificate
ATTACHMENT E
LETTER AGREEMENT FOR PURCHASE
This LETTER AGREEMENT FOR PURCHASE (as amended, modified or supplemented from time to time, this “ Agreement”) is entered into as of September [__], 2026, between the City of Long Beach, a charter city and municipal corporation duly organized and existing under its charter and the Constitution and laws of the State of California (the “City”), and Wells Fargo Bank, National Association, a national banking association (together with its successors and assigns, the “Assignee”).
PRELIMINARY STATEMENTS
WHEREAS, the City wishes to obtain loans from the Assignee hereunder and the Assignee is willing, upon the terms and subject to the conditions set forth below, to provide such loans to the City for [various capital projects of the City], to pay costs in connection with this Agreement and the other Related Documents; and
WHEREAS, all obligations of the City to repay the Assignee for Borrowings (as defined in the hereinafter defined Lease Agreement) made by the Assignee under the Revolving Commitment (as defined herein) and to pay all other amounts payable to the Assignee arising under or pursuant to the Related Documents all in accordance with the terms and conditions of the Related Documents;
N
OW, THEREFORE, in consideration of the foregoing recitals and other consideration, the receipt and sufficiency of which is hereby acknowledged, and to induce the Assignee to extend to the issuer the Revolving Commitment, the City and the Assignee hereby agree as follows:
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RTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. As used in this Agreement , the following terms shall have the meanings set forth below:
“Advance” has the meaning set forth in the Lease Agreement. “Advance Request” has the meaning set forth in the Lease Agreement. “Affiliate” means, with respect to any Person, any Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person. A Person shall be deemed to control another Person for the purposes of this definition if such first Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and of the second Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise. “Agreement” has the meaning set forth in the introductory paragraph hereof.
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“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder and the U.K. Bribery Ac t 2010 and the rules and regulations thereunder.
“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rules related to terrorism financing, money laundering, any predicate crime to money laundering or any financial record keeping, including any applicable provision of the USA Patriot Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311- 5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).
“Applicable La w” means all applicable provisions of all constitutions, statutes, rules, regulations and all binding orders, judgments and decrees of any Governmental Authority. “Applicable Spread” has the meaning set forth in the Fee Letter. “Assigned Interest” means all rights assigned by the Authority to the Assignee pursuant to the Assignment Agreement and any rights under this Agreement assigned by Assignee pursuant to Section 8.06 hereof.
“Assignee” means, initially, Wells Fargo Bank, National Association, and its successors and assigns, and upon the receipt from time to time by the City of a notice described in Section 8.06(a) hereof from time to time means the Person designated in such notice as the Assignee, as more fully provided in Section 8.06(a) hereof. “Assignment Agreement” means Assignment Agreement, dated as of September 1, 2026, between the Authority, as assignor, and the Assignee, as amended, modified, restated or supplemented from time to time pursuant to the terms thereof and the terms hereof. “Audited Financial Statements” means the audited consolidated balance sheet of the City for the most recently completed Fiscal Year, which includes the complete financial information on the City, and the related consolidated statements of income or operations and cash flows for such Fiscal Year of the City, including the notes thereto.
“Authority” means Finance Authority of Long Beach, a joint exercise of powers entity organized and existing under the laws of the State of California. “Authorized Representative” means the Mayor, the City Manager, the Director of Financial Management or the City Treasurer or the designee of any such official, or any other person authorized by resolution delivered to the Authority and the Assignee to act on behalf of the City under or with respect to this Agreement and the other Related Documents ; provided, that a copy of such resolution shall have been provided to the Assignee. “Availability Period” has the meaning set forth in the Lease Agreement.
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“Available Commitment” has the meaning set forth in the Lease Agreement. “Bank Agreement ” means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement, direct purchase agreement (such as a continuing covenant agreement or supplemental bondholder ’s agreement), bond purchase agreement, indenture, supplemental indenture or other agreement or instrument (or any amendment, supplement or other modification thereof) relating to Lease Revenue Debt, or under which Lease Revenue Debt is issued by the City or on behalf of the City, or under which, directly or indirectly, any Person or Persons undertake(s) to make loans to the City or make payment of or provide funds to make payment of, or to purchase or provide credit enhancement or liquidity support for bonds, notes or other obligations or Lease Revenue Debt.
“Benchmark” has the meaning set forth in the Lease Agreement. “Benchmark Replacement” has the meaning set forth in the Lease Agreement. “Benchmark Replacement Conforming Changes ” has the meaning set forth in the Lease Agreement.
“Business Day” has the meaning set forth in the Lease Agreement. “Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c ) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law ) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i ) the Dodd Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Assignee for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued (other than any rule thereunder that has been adopted and fully implemented prior to the Closing Date).
“Charter” means the Charter of the City of Long Beach as from time to time amended under which the City is organized and operates.
“City” means the City of Long Beach, a charter city and municipal corporation organized and existing under its Charter and the Constitution and laws of the State. “City Attorney” means the Office of the City Attorney of the City, including the City Attorney, any Assistant City Attorney, or any Deputy City Attorney. “City Auditor” means the Auditor of the City.
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“Closing Date” means September __, 2026, subject to the satisfaction or waiver by the Assignee of the conditions precedent set forth in Section 3.16 of the Lease Agreement. “Code” means the Internal Revenue Code of 1986, as amended, and when appropriate, any statutory predecessor or successor thereto, and all applicable regulations (whether proposed, temporary or final ) thereunder and any applicable official rulings, announcements, notices, procedures and judicial determinations relating to the foregoing. “Commitment Fee” has the meaning set forth in the Fee Letter. “Commitment Fee Rate” has the meaning set forth in the Fee Letter. “Commitment Termination Date” has the meaning set forth in the Lease Agreement. “Compliance Certificate” means a certificate substantially in form of Exhibit A hereto. “Debt” of any Person means at any date, without duplication, (a ) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) all obligations of such Person as lessee under capital or finance leases, (e) all obligations under any Bank Agreement or Swap Contract, (f) all debt of others secured by a lien on any asset of such Person, whether or not such Debt is assumed by such Person, and (g) all guarantees by such Person of debt of other Persons.
“Debtor Relief La ws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect. “Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default. “Default Rate” has the meaning set forth in the Lease Agreement. “Dollar” and “$” mean lawful money of the United States. “Environmental Laws” means any and all federal, state, local and foreign 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 hazardous 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 of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean up or other remediation thereof.
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“Event of Default” with respect to this Agreement has the meaning set forth in Section 7.01 of this Agreement and, with respect to any other Related Document, has the meaning assigned therein.
“Fee Letter” has the meaning set forth in the Lease Agreement. “Fiscal Year” means the period commencing on October 1 of each year and terminating on the next succeeding September 30.
“Fitch” means Fitch Ratings, Inc., and any successor rating agency. “General Fund” means the “General Fund” of the City that is the general operating fund of the City.
“Generally Accepted Accounting P rinciples” or “GAAP” means generally accepted accounting principles consistently applied and maintained throughout the period indicated, except for changes permitted by the Governmental Accounting Standards Board or any similar accounting authority of comparable standing.
“Governmental Approval” means an authorization, consent, approval, license, or exemption of, registration or filing with, or report to any Governmental Authority. “Governmental Authority ” means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, tribunal, agency, bureau, court or entity (including the Federal Reserve Board, any central bank or any comparable authority), or any arbitrator with authority to bind a party at law. “Highest Lawful Rate” means the maximum interest rate permitted by applicable law. “Indemnitees” has meaning specified in Section 8.04(b) hereof. “Laws” means, collectively, all international, foreign, f ederal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lease Agreement” means the Lease Agreement, dated as of September 1, 2026, between the City and the Authority, as amended, modified, restated or supplemented from time to time pursuant to the terms thereof and the terms hereof.
“Lease Payments” has the meaning set forth in the Lease Agreement.
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“Lease Revenue Debt” means any Debt issued by or on behalf of the City, the payment of which is payable from and/or secured by lease revenue rental payments payable from the General Fund.
“Lending O ffice” means, the office or offices of the Assignee described as such in Schedule 8.02, or such other office or offices as the Assignee may from time to time notify the City.
“Margin Stock” has the meaning ascribed to such term in Regulation U promulgated by the Board of Governors of the Federal Reserve System of t he United States, together with any successors thereof.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the City or the Property; (b) a material impairment of the ability of the City to perform its respective obligations under any Related Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the City or the Authority of any Related Document to which it is a party. “Material Debt” means Debt of the City , the payment of which is payable from and/or secured by the General Fund for which there is outstanding, owing or committed an aggregated amount in excess of $5,000,000. For purposes of clarity, Material Debt shall exclude conduit, enterprise and other Debt that have no claim on the General Fund of the City. “Moody’s” means Moody’s Ratings and any successor rating agency. “Most Favored Nations Provision” means any provision in any Bank Agreement that provides for the incorporation by reference of, or provides for the entering into any amendment to incorporate, or provides that a party to such Bank Agreement has the benefit of, different or more restrictive covenants, different or more restrictive events of default, and/or greater rights or remedies than are set forth herein.
“Obligations” has the meaning set forth in the Lease Agreement. “OFAC” means the United States Department of Treasury Office of Foreign Assets Control.
“Other Taxes” has the meaning assigned to that term in Section 3.01 hereof. “Participant” means any person to whom the Assignee has assigned its rights under the Related Documents or to which the Assignee or any Participant has sold a participation in rights under the Related Documents.
“Person” means an individual, partnership, corporation (including a business trust), trust, unincorporated association, joint venture or other entity, including a government or political subdivision or any agency or instrumentality thereof.
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“Rating” means the lowest long- term unenhanced debt rating assigned by any of Fitch, Moody’s or S&P to any Lease Revenue Debt (in each case, without regard to bond insurance or any other form of credit enhancement).
“Rating Agency” or “Rating Agencies” means Moody’s, Fitch and/or S&P. “Related Documents” has the meaning set forth in the Lease Agreement. “Related Parties” means, with respect to any Person, such Person ’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person ’s Affiliates.
“Resolution” has the meaning set forth in the Lease Agreement. “Revolving Commitment” means the Assignee’s obligation to make Advances to the City pursuant to the Lease Agreement. The Revolving Commitment on the Closing Date shall initially be $50,000,000.
“S&P” means S&P Global Rating s, a division of Standard & Poor’ s Financial Services LLC, and any successor rating agency.
“Sanctioned Country” means at any time, a country, region or territory which is itself (or whose government is) the subject or target of any Sanctions (including, as of the Closing Date, Cuba, Iran, North Korea, Syria, Venezuela and Crimea).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, the United Nations Security Council, the European Union, any European member state, His Majesty’s Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any such Person or Persons described in clauses (a) and (b), including a Person that is deemed by OFAC to be a Sanctions target based on the ownership of such legal entity by Sanctioned Person(s) or (d) any Person otherwise a target of Sanctions, including vessels and aircraft, that are designated under any Sanctions program. “Sanctions” means any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and restrictions and anti -terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, any European member state, His Majesty’s Treasury, or other relevant sanctions authority in any jurisdiction in which (a) the City or any of its Subsidiaries or Affiliates is located or conducts business, (b) in which any of the proceeds of the Advances will be used, or (c) from which repayment of the Advances will be derived. “State” means the State of California.
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“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding equity interests having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly ) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, equity interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the City and the Authority.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross -currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement” ), including any such obligations or liabilities under any Master Agreement. “Tax Certificate” has the meaning set forth in the Lease Agreement. “Taxes” has the meaning assigned to that term in Section 2.07 hereof. “United States” and “U.S.” mean the United States of America. “USA Patriot Act” has the meaning set forth in Section 8.13 hereof. “Written” or “in writing” means any form of written communication or a communication by means of telex, telecopier device or electronic mail.
Section 1.02. Other Interpretive Provis ions. With reference to this Agreement and the other Related Documents , unless otherwise specified herein or in the Fee Letter or the other Related Documents:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.”
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Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in the Fee Letter or the other Related Documents), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder ,” and words of similar import when used in Agreement or the other Related Documents , shall be construed to refer to such document in its entirety and not to any particular provision thereof, (iv) all references in Agreement or the other Related Documents to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, Agreement or the other Related Documents in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including.” (c) Section headings herein and the other Related Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or the other Related Documents.
Section 1.03. Accounting Terms .
(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.
(b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Related Document, and either the City or the Assignee shall so request, the Assignee and the City shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (A) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (B) the City shall provide to the Assignee financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
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Section 1.04. Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern Time (daylight or standard, as applicable).
Section 1.05. Interest Rates; Benchmark Notifications. The Assignee does not warrant or accept any responsibility for, and shall not have any liability with respect to, ( a) the continuation of, administration of, submission of, calculation of or any other matter related to the Benchmark, any component definition thereof or rates referred to in the definition thereof , or with respect to any alternative, successor or replacement rate thereto (including any Benchmark Replacement) , including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement), as it may or may not be adjusted pursuant to the Lease Agreement , will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Benchmark or any other Benchmark prior to its discontinuance or unavailability, or ( b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. The Assignee and its A ffiliates or other related entities may engage in transactions that affect the calculation of the Benchmark , any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the City . The Assignee may select information sources or services in its reasonable discretion to ascertain the Benchmark, any component definition thereof or rates referred to in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the City, the Authority or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
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RTICLE 2
THE OBLIGATIONS
Any reference herein or in the Fee Letter to fees and/or other amounts or obligations payable hereunder shall include, without limitation, all fees and other amounts or obligations (including without limitation fees and expenses) payable pursuant to the Fee Letter and all other Obligations under all the Related Documents, and any reference to this Agreement shall be deemed to include a reference to the Fee Letter and the other Related Documents. Any reference herein to amounts payable to the Assignee shall include amounts payable to the Authority (and assigned to the Assignee) under the Related Documents. The terms and provisions of the Fee Letter are incorporated herein by reference as if fully set forth herein . The Fee Letter and this Agreement shall be construed as one agreement between the City and the Assignee and all obligations under the Fee Letter shall be construed as obligations hereunder . All fees payable pursuant to this Agreement shall be deemed to be fully earned when due and non-refundable when paid.
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ARTICLE 3
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01. T axes. (a) Any and all payments to the Assignee by the City hereunder and under each other Related Document shall be made, free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges, withholdings or liabilities, excluding, however, taxes imposed on or measured by the net income or capital or liquidity of the Assignee by any jurisdiction or any political subdivision or taxing authority thereof or therein solely as a result of a connection between the Assignee and such jurisdiction or political or political subdivision (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the City shall be required by law to withhold or deduct any Taxes imposed by the United States or any political subdivision thereof from in respect of any sum payable hereunder or under any other Related Document to the Assignee, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.01), the Assignee receives an amount equal to the sum it would have received had no such deductions been made, (ii) the City shall make such deductions and (iii) the City shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with Applicable Law. If the City shall take any payment under this Section 3.01 to or for the benefit of the Assignee with respect to Taxes and if the Assignee shall claim any credit or deduction for such Taxes against any other taxes payable by the Assignee to any taxing jurisdiction in the United States, then the Assignee shall pay to the City an amount equal to the amount by which such other taxes are actually reduced; provided, that the aggregate amount payable by the Assignee pursuant to this sentence shall not exceed the aggregate amount previously paid by the City with respect to such Taxes. In addition, the City agrees to pay any present or future stamp, recording or documentary taxes and any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America, the State of California or the State of New York from any payment made hereunder or under any other Related Document or from the execution or delivery or otherwise with respect to this Agreement or other Related Document (hereinafter referred to as “Other Taxes”). The Assignee shall provide to the City within a reasonable time a copy of any written notification it receives with respect to Other Taxes owing by the City to the Assignee hereunder or under any other Related Document, provided that the Assignee ’s failure to send such notice shall not relieve the City of its obligation to pay such amounts hereunder or under any other Related Document. (b) The City shall, to the extent permitted by law, compensate the Assignee for the full amount of Taxes and Other Taxes including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 3.01 paid by the Assignee or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. The Assignee agrees to give notice to the City of the assertion of any claim against the Assignee relating to such Taxes or Other Taxes as promptly as is practicable after being notified of such assertion; provided, that the Assignee ’s failure to notify the City promptly of such assertion shall not relieve the City of its obligation under this Section 3.01. Payments by the City pursuant to this section shall be made within thirty (30) days from the date the Assignee makes written demand therefor, which demand shall be accompanied by a certificate describing in reasonable detail the basis thereof. The Assignee agrees
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to repay to the City any refund (including that portion of any interest that was included as part of such refund) with respect to Taxes or Other Taxes paid by the City pursuant to this Section 3.01 and to contest, with the cooperation and at the expense of the City, any such Taxes or Other Taxes which the Assignee or the City reasonably believes not to have been properly assessed. (c) Within thirty (30) days after the date of any payment of Taxes by the City , the City shall furnish to the Assignee the original or a certified copy of a receipt evidencing payment thereof. The City shall compensate the Assignee for all reasonable losses and expenses sustained by the Assignee as a result of any failure by the City to so furnish such copy of such receipt. (d) All payments to the Assignee under this Agreement or under any other Related Document shall be made in U.S. Dollars and in immediately available and freely transferable funds at the place of payment without counterclaim, set off, condition or qualification, and free and clear of and without deduction or withholding for or by reason of any present or future taxes, levies, imposts, deductions or charges of any nature whatsoever. In the event that the City is compelled by law to make any such deduction or withholding, City shall nevertheless pay to the Assignee such amounts as will result in the receipt by the Assignee of the sum it would have received had no such deduction or withholding been required to be made. If requested, the Assignee shall from time to time provide the City , the United States Internal Revenue Service (to the extent such information and forms may lawfully be provided by the Assignee ) with such information and forms as may be required by Treasury Regulations Section 1.411 or any other such information and forms as may be necessary to establish that the City is not subject to any withholding obligation under Section 1442 or other comparable provisions of the Code and Treasury Regulations promulgated thereunder.
(e) As used in this Section, the term “Assignee” shall include each Participant; provided, however, that no Participant shall be entitled to recover amounts under this Section greater than those that the Assignee would be entitled to recover. The obligations of the City under this Section 3.01 shall survive the termination of this Agreement.
Section 3.02. Increased Costs. If, after the Closing Date, any Change in Law shall:
(a) subject the Assignee to any tax, duty, deduction, withholding or other charge with respect to the Advances, Lease Payments or any other Obligation , or shall change the basis of taxation of payments to the Assignee with respect to Lease Payments or any other Obligation, other than changes in the rate of tax on the overall net income of the Assignee; or
(b) impose, modify or deem applicable any reserve, capital or liquidity ratio, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, or other acquisitions of funds by, the Assignee; (c) change the basis of taxation of payments due the Assignee under this Agreement or any other Related Document (other than a change in taxation of the overall net income of the Assignee); or
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(d) impose on the Assignee any other condition with respect to such amount paid or payable to or by the Assignee or with respect to this Agreement or any Advance; and the result of any event referred to in subsection (a), (b), (c) or (d) above shall be to increase the cost to the Assignee of maintaining the Advances or any other credit facilities under the Related Documents (such increase in cost to be reasonably allocated to the City hereunder or under the other Related Documents on the basis of the amount of the Revolving Commitment and the nature of the revolving facility) or to reduce the amount of any payment received by the Assignee , or to require the Assignee to make any payment on or calculated by reference to the gross amount of any sum received by it, then, upon demand by the Assignee, the City shall pay, or cause to be paid, to the Assignee, from time to time as specified the Assignee , additional amounts which shall be sufficient to compensate the Assignee for such increased cost. A certificate setting forth such increased cost incurred by the Assignee as a result of any event mentioned in subsection (a), (b) (c) or (d) above, and giving a reasonable explanation of the basis and computation thereof, shall constitute such demand and shall, in the absence of manifest error, be conclusive and binding for purposes of payment of such amount. In making the determinations contemplated by such certificate, the Assignee may make such reasonable estimates, assumptions, allocations and the like as the Assignee in good faith determines to be appropriate. Payment shall be made by the City within 30 days to the City’s receipt of the above-mentioned certificate, and, to the extent that continuing payments are required under this Section, payments shall be made quarterly on the dates that the Commitment Fee is due. In determining the amount or amounts payable under this Section, the Assignee may use any reasonable averaging and attribution methods. The initial payment will include payment for the period from the date the Assignee was first affected to the date of such payment.
In addition to the foregoing, if after the Closing Date the Assignee shall have determined that a Change in Law has or would have the effect of reducing the rate of return on the capital or liquidity of the Assignee , as applicable, to a level below that which the Assignee could have achieved but for such adoption, change or compliance (taking into consideration the policies of the Assignee with respect to capital adequacy or liquidity) by an amount deemed by the Assignee to be material, or affects or would affect the amount of capital or liquidity required or expected to be maintained by the Assignee or any corporation controlling the Assignee by an amount deemed by the Assignee to be material, as a consequence of its obligations hereunder or under the other Related Documents then, upon demand from the Assignee , from time to time the City shall be obligated to pay or cause to be paid to the Assignee such additional amount or amounts as will compensate the Assignee for such reduction or capital or liquidity increase, as incurred in a manner consistent with that in which such increased costs are passed along to other borrowers of the Assignee in general. A certificate setting forth in reasonable detail such reduction in the rate of return on capital or liquidity, or such capital or liquidity increase, of the Assignee as a result of any event mentioned in this paragraph and giving a reasonable explanation of the basis and computation thereof shall be submitted to the City and such certificate shall, in the absence of manifest error, be conclusive as to the amount thereof. Payment shall be made by the City within 30 days of the City ’s receipt of the above-mentioned certificate together with interest on such amount for each day from the 30th day after such demand is received by the City until payment in full at the Default Rate.
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The protections of this Section shall be available to the Assignee regardless of any possible contention of invalidity or inapplicability of the law, regulation or condition which has been imposed; provided, however, that if it shall be later determined that any amount so paid by the City pursuant to this Section is in excess of the amount payable under the provisions hereof, the Assignee shall refund such excess amount to the City. As used in this Section, the term “Assignee” shall include each Participant and the Assignee’s or such Participant’s parent or holding company; provided, however, that Participants and the Assignee’s or such Participant’s parent or holding company shall not be entitled to recover amounts under this Section greater than those that the Assignee would be entitled to recover ; provided, further, however, that with respect to the Assignee’s or such Participant’s parent or holding company shall be without duplication to the Assignee or such Participant.
Failure or delay on the part of the Assignee to demand compensation pursuant to the foregoing provisions of this Section 3.02 shall not constitute a waiver of the Assignee ’s right to demand such compensation. Notwithstanding anything contained in this Section 3.02, the City shall have no liability to the Assignee or any Participant or the Assignee ’s or such Participant’s parent or holding company for any increased costs, increased capital or reduction in rate of return to the extent incurred by or imposed on the Assignee or any Participant or the Assignee’s or such Participant’s parent or holding company more than one-hundred eighty (180) days prior to the date the above-described written demand is given to the City with respect thereto (the “Cut-Off Date”), except where such increased costs, increased capital or reduction in rate of return applies to the Assignee or Participant or the Assignee ’s or such Participant’s parent or holding company retroactively to a date prior to the Cut-Off Date.
Section 3.03. Obligations Absolute. Subject to abatement as provided in the Lease Agreement, the Obligations of the City to pay money and perform its other obligations under this Agreement or under the other Related Documents shall be unconditional and irrevocable, and shall be paid and performed strictly in accordance with the terms of this Agreement and the other Related Documents under all circumstances, including, without limitation, the following:
(a) any lack of validity or enforceability of this Agreement or any of the other Related Documents;
(b) any amendment or waiver of or any consent to departure from all or any of the Related Documents;
(c) the existence of any claim, set off, defense or other right which the City may have at any time against the Assignee or any Participant, or any other Person, whether in connection with this Agreement or the other Related Documents, the transactions contemplated herein or therein or any unrelated transaction; (d) any statement or any other document presented under an Advance Request proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
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(e) any other circumstances or happening whatsoever, whether or not similar to any of the foregoing.
Section 3.04. Survival . All of the City ’s obligations under this Article 3 shall survive termination of the Revolving Commitment and repayment of all other Obligations hereunder and under the other Related Documents.
ARTICLE 4
HIGHEST LAWFUL RATE
Any interest payable pursuant to this Agreement or any other shall not exceed the Highest Lawful Rate, and for such purpose all interest and other charges, fees, goods, things in action or any other sums, things of value and reimbursable costs that the City are or may become obligated to pay or reimburse in connection with this Lease Agreement, the Fee Letter or the other Related Documents, and which may be deemed to constitute “interest” pursuant to the laws of the State , shall be deemed to constitute items of interest in addition to the rate(s) of interest specified herein, which the City hereby contracts in writing to pay. In the event any interest required to be paid hereunder at any time exceeds the Highest Lawful Rate, the portion of such interest required to be paid on a current basis shall equal such Highest Lawful Rate; provided, however, that the differential between the amount of interest payable assuming no Highest Lawful Rate was then in effect and the amount paid on a current basis after giving effect to the Highest Lawful Rate shall be carried forward and shall be payable on any subsequent date of calculation so as to result in a recovery of interest previously unrealized (because of the limitation dictated by such Highest Lawful Rate) at a rate of interest, and as part of the interest payable, that, after giving effect to the recovery of such excess and all other interest paid and accrued hereunder to the date of calculation, does not exceed such Highest Lawful Rate. Notwithstanding the foregoing, on the date on which no Obligation remains unpaid, to the extent permitted by law, the City shall pay to the Assignee a fee equal to any accrued and unpaid excess interest.
A
RTICLE 5
REPRESENTATIONS AND WARRANTIES
So long as the Revolving Commitment is outstanding and until all Obligations shall have been paid in full, the City makes the following representations and warranties to the Assignee:
Section 5.01. Organization Existence. The City is duly organized and validly existing as a charter city and municipal corporation under its Charter and the Constitution and laws of the State of California.
Section 5.02. Power and Authority . The City has and had at the time of adoption, execution, delivery, issuance, sale or performance full power, right and authority to (i) execute, deliver and perform its obligations hereunder and each of the other Related Document s, and any and all instruments and documents required to be executed, adopted or delivered pursuant to or in
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connection herewith or therewith, (ii) pay the Obligations at the times and in the manner set forth herein, (iii) own and operate the Property, and (iv) perform each and all of the matters and things herein and therein provided for and the City has complied with the laws of the State of California in, all matters relating to such execution, delivery and performance.
Section 5.03. Due Authorization. This Agreement and each of the other Related Documents have been duly authorized, executed, issued and delivered and constitute the legal, valid and binding obligations of the City enforceable in accordance with their terms.
Section 5.04. Necessary Actions Taken . The City has taken all actions necessary to be taken by it (i) for the adoption, execution, and delivery by the City of any and all such other instruments and the taking of all such other actions on the part of the City as may be necessary or appropriate for the effectuation and consummation of the transactions on the part of the City contemplated by the Related Document s or in connection herewith or therewith and (ii) to authorize or approve, as appropriate, the execution or adoption, issuance and delivery of, and the performance of its obligations under and the transactions contemplated by, each of the Related Documents and the payment of the Obligations at the times and in the manner set forth herein.
Section 5.05. Binding Effect. Each of the Related Documents was duly executed and delivered by the City and is in full force and effect. The Resolution has been duly adopted and is in full force and effect. This Agreement, Lease Payments and each of the other Related Documents has been duly authorized, executed and delivered by the City and each constitutes a legal, valid and legally binding obligation of the City , which obligation is enforceable in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, debt adjustment, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally or as to the availability of any particular remedy.
The payment of the Obligations is and shall continue to be a contractual obligation of the City for which the Property is and shall continue to be pledged as provided in the Related Documents.
There is no consent, approval, authorization or other order of, filing with, registration with, or certification by, any regulatory authority having jurisdiction over the City and no election or referendum of or by any Person, organization or public body whatsoever required in connection with any of the foregoing actions or each of the performance by the City of its obligations under the Related Documents. There are no provisions of State of California law which would allow, as of the Closing Date or any date subsequent hereto, any public vote or referendum, the results of which could invalidate this Agreement or any other Related Document or invalidate, limit or condition the obligation of the City to pay the Obligations to the Assignee or any other obligation or pledge undertaken hereunder or in connection with the transactions contemplated by the Related Documents.
Section 5.06. No Contravention. The adoption of the Resolution and the execution and delivery of this Agreement and each of the other Related Document s, and compliance with the provisions hereof and thereof, do not and will not conflict with or result in a violation of the Constitution of the State of California or the laws of the State of California, including any debt limitations or other restrictions or conditions on the debt-issuing power of the City, and do not and will not conflict with or result in a violation of, or breach of, or constitute a default under, any law, judgment, order, decree or administrative regulation or any of the terms, conditions or provisions
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of the Charter or any ordinance, judgment, decree, contract, loan agreement, note, bond, resolution, indenture, mortgage, deed of trust or other agreement or instrument to which the City is a party or by which it or any property of the City is bound and do not and will not result in the imposition or creation of any lien, charge, or encumbrance upon or invalidate or adversely affect in any way the Property (except in favor of the Authority and the Assignee) or violate any existing applicable law (including, without limitation, any Anti -Corruption Laws, Anti -Money Laundering Laws and applicable Sanctions). The City has not received any notice, not subsequently withdrawn, given in accordance with the remedy provisions of any bond resolution or ordinance, trust indenture, guarantee or agreement or state law pertaining to bonds or notes, of any default or event of default of the City which has not been cured.
Section 5.07. Compliance with Law; Employee Benefit Plan Compliance . The management of the Property is in material compliance with all applicable state and federal laws and all applicable resolutions, ordinances and rules of the City. The City has no funding liability or obligation currently due and payable with respect to any employee benefit plan which could reasonably be expected to result in a Material Adverse Effect. The City is in material compliance with the terms of the employee benefit plans in which the City or any of its employees participate in. Neither the City nor any employee benefit plan maintained by the City is subject to the Employee Retirement Income Security Act of 1974, as amended or any successor statute of similar import, and regulations thereunder as in effect from time to time.
Section 5.08. Compliance; No Breach . The City is in compliance with the terms and conditions of each of the Related Document s, and no breach of the terms hereof or thereof has occurred and is continuing, and no Default or Event of Default has occurred and is continuing.
Section 5.09. No Default. No default by the City has occurred and is continuing in the payment of the principal of or premium, if any, or interest on Lease Revenue Debt of the City. No bankruptcy, insolvency or other similar proceedings pertaining to the City or any agency or instrumentality of the City are pending or contemplated. The City is not in default under any other contract, loan agreement, note, bond, resolution, indenture, mortgage, deed of trust or other agreement or instrument to which the City is a party or by which it or any property of the City is bound, which default could have a material adverse effect on the City or the Property or to comply with its obligations under or in respect of any of this Agreement or the other Related Documents or in connection with the transactions contemplated hereby or thereby.
Section 5.10. No Public Vote or Referendum; Pending Legislation and Decisions . To the best knowledge of the City, there is no public vote or referendum pending, proposed or concluded, the results of which could in any way adversely affect the transactions contemplated by the Related Documents, or the validity or enforceability of the Related Document s. To the knowledge of the City, there is no amendment, or proposed amendment to the Constitution of the State of California or any State of California law or any administrative interpretation of the Constitution of the State of California or any State of California law, or any legislation that has passed either house of the legislature of the State of California, or any judicial decision interpreting any of the foregoing, the effect of which could in any way adversely affect the transactions contemplated by the Related Documents, or the validity or enforceability of the Related Documents.
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Section 5.11. No Immunity. The City is not entitled to raise the defense of sovereign or governmental immunity (or immunity on other similar grounds) in connection with any legal proceedings to enforce or collect upon this Agreement , the other Related Documents or the transactions contemplated thereby, including the payment of the Obligations.
Section 5.12. Litigation. There is no action, suit, inquiry, investigation or proceeding at law or in equity pending, or to the best knowledge of the City, threatened, against or affecting the City or the Property before any court, governmental agency, authority, arbitrator or administrative or governmental body which (i) could result in any material adverse change in the condition (financial or otherwise), results of operations or projections or availability for beneficial use of the Property, (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Related Document, the pledge of the Property or the priority of any lien in favor of the Assignee, (iii) which in any way affects the existence, organization or powers of the City or any elected official thereof to execute and deliver any of this Agreement or the other Related Documents or perform the obligations thereunder or contemplated thereby, (iv) affects the title of any official of the City to such Person’s office, (v) seeks to restrain or enjoin the collection or the pledge of the Property to pay the Obligations at the times and in the manner set forth in the Related Documents, (vi) in any way contests or affects the validity or enforceability of any of this Agreement or the other Related Documents , (vii) contests in any way the powers or authority of the City with respect to any of this Agreement or the other Related Documents , or (viii) which could materially adversely affect the ability of the City to comply with its obligations under or in respect of any of this Agreement or the other Related Documents or in connection with the transactions contemplated hereby or thereby.
Section 5.13. Tax Status. The City has not taken any action or omitted to take any action, and knows of no action taken or omitted to be taken by any other Person, which action, if taken or omitted, would adversely affect the exclusion of interest on the Advances from gross income for federal income tax purposes of the Assignee or the exemption of such interest from State of California personal income taxes.
Section 5.14. Disclosure. Neither the Related Document s nor any other document, certificate or statements (including the unaudited financial statements, budgets, projections and cash flows) of the City furnished to the Assignee by or on behalf of the City in connection with the transactions contemplated hereby, or thereby contains any untrue statement of any material fact or omits to state any material fact necessary so as to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.
Section 5.15. Financial Information. The City has delivered to the Assignee a copy of the audited financial statements for the City for the most recently completed Fiscal Year. These together with related notes, fairly present the condition (financial or otherwise), results of operations or projections of revenues of the City as of the date and for the periods therein set forth.
All such financial statements have been prepared in accordance with generally accepted accounting principles for government entities consistently applied. There has been no material adverse change in the condition (financial or otherwise), results of operations or projections of revenues of the City since the last day of the Fiscal Year set forth in such financial statements.
The City has no material contingent liabilities or other material contracts or commitments which
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are not reflected in such financial statements or in the notes thereto. The annual operating budget of the City and any supplements thereto for the current Fiscal Year, a true and complete copy of which has been delivered to the Assignee, fairly presents the anticipated income and expenses of the City for such Fiscal Year.
Section 5.16. Official Signatures. The Authorized Representative, on behalf of the City , has full power and authority to execute, deliver and perform under each of the Related Documents.
Any agreement, certificate or request signed by or on behalf of any Authorized Representative and delivered to the Assignee shall be deemed a representation and warranty by the City to the Assignee as to the truth, accuracy and completeness of the statements made by the City therein.
Section 5.17. Incorporation of Representations and Warranties by Reference. The City hereby makes to the Assignee the same representations and warranties made by the City in each Related Document, which representations and warranties, as well as the related defined terms contained therein, are hereby incorporated by reference for the benefit of the Assignee with the same effect as if each and every such representation and warranty and defined term were set forth herein in its entirety. No amendment to such representations and warranties or defined terms made pursuant to any Related Document shall be effective to amend such representations and warranties and defined terms as incorporated by reference herein without the prior written consent of the Assignee.
Section 5.18. Swap Contracts. The City has not entered into any Swap Contract under which a termination payment would be required to be secured by the Property or wherein any termination payment thereunder has a lien on the Property.
Section 5.19. Insurance. The City currently maintains insurance with respect to the Property of such type and in such amounts or in excess of such amounts as are customarily carried by, and insures against such risks as are customarily insured against by, public agencies with similar public sanitary sewer collection systems. The City maintains with responsible insurers all such insurance on the Property required by Section 6.13 hereof.
Section 5.20. Usury. The terms of this Agreement and the other Related Documents regarding the calculation and payment of interest and fees do not violate any applicable usury laws.
Section 5.21. Reserved.
Section 5.22. Investment Policy . The City has delivered to the Assignee a true and complete copy of its investment policy. All investments of the City have been and are made substantially in accordance with such investment policy. Only the City Council of the City may amend, rescind or otherwise modify the City’s investment policy.
Section 5.23. Property. The City has maintained the Property in good working order and repair, and there have been no changes to and no event has occurred which has had, or may result in, any material adverse change in the condition (financial or otherwise), results of operations or projections of revenues of the Property.
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Section 5.24. Environmental Matters . In the ordinary course of its business, the City conducts an ongoing review of Environmental Laws on the business, operations and properties of the City, in the course of which it identifies and evaluates associated liabilities and costs (including, without limitation, any capital or operating expenditures required for cleanup or closure of properties presently 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, including employees, and any related costs and expenses). On the basis of such review the City has reasonably concluded that Environmental Laws are unlikely to have a material adverse effect on the City or the Property, or on its ability to make any payments in respect of the Obligations or any of its obligations hereunder , under the Lease Agreement or under any other Related Document.
Section 5.25. Federal Reserve Board Regulations . The City will not use any part of the proceeds of the Advances and has not incurred any indebtedness to be reduced, retired or purchased by the City out of such proceeds, for the purpose of purchasing or carrying any Margin Stock, and the City does not own and will not acquire any such Margin Stock.
Section 5.26. Investment Company Act . The City is not an “investment company” or a company “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.
Section 5.27. Patriot Act R epresentation. (a) Neither the City , the Authority, nor any of their respective Affiliates is in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the USA Patriot Act. (b) Neither the City, the Authority , nor any of their respective Affiliates is any of the following:
(i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(iii) a Person with which the Assignee is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or
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(v) a Person that is named as a “ specially designated national and blocked person” on the most current list published by OFAC or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publication of such list.
(c) Neither the City, the Authority, nor any of their respective Affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in subsection (b)(ii) above, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
Section 5.28. Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions. (a) None of (i) the City , any Subsidiary or, to the knowledge of the City or such Subsidiary, any of their respective directors, officers, employees or Affiliates, or (ii) to the knowledge of the City , any agent or representative of the City or any Subsidiary that will act in any capacity in connection with or benefit from this Agreement, (A) is a Sanctioned Person or currently the subject or target of any Sanctions, (B) has its assets located in a Sanctioned Country, (C) is under administrative, civil or criminal investigation for an alleged violation of, or received notice from or made a voluntary disclosure to any governmental entity regarding a possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions by a governmental authority that enforces Sanctions or any Anti-Corruption Laws or Anti-Money Laundering Laws, or (D) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons.
(b) [ Reserved.]
(c) Each of the City and its Subsidiaries, and to the knowledge of the City , director, officer, employee, agent and Affiliate of the City and each such Subsidiary, is in compliance with all Anti-Corruption Laws, Anti -Money Laundering Laws in all material respects and applicable Sanctions.
(d) No proceeds of any Advance have been used, directly or indirectly, by the City , any of its Subsidiaries or any of its or their respective directors, officers, employees and agents in violation of Section 6.32(b).
Section 5.29. Right to Accelerate . The City has not entered into any Bank Agreement, which Bank Agreement (or any amendment, supplement or modification thereto) includes the right to accelerate the payment of the principal of or interest on the related Debt upon the occurrence and continuation of an “ event of default” or “event of termination” under such Bank Agreement or which includes the right to cause the redemption or mandatory tender of the related Debt prior to its maturity as a result of the occurrence of an “event of default” or “event of termination” under such Bank Agreement.
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Section 5.30. Most Favored Nations Provision. T he City is not a party to or bound by a Bank Agreement that contains a Most Favored Nations Provision.
ARTICLE 6
COVENANTS
While the Revolving Commitment is outstanding and until all of the Obligations shall have been paid in full, t he City covenants and agrees, unless the Assignee shall otherwise consent in writing, that:
Section 6.01. Maintenance of Existence. The City shall maintain the City’s existence as a charter city and municipal corporation under its Charter and the Constitution and laws of the State of California and its rights, franchises and privileges material to the ownership and operation of the Property.
Section 6.02. Reports, Certificates and Other Information. The City shall furnish or cause to be furnished to the Assignee copies of:
(a) Annual Report. As soon as available, and in any event within 210 days after the end of the Fiscal Year, the annual audited financial statements of the City and the Property, together with (1) the opinion of the City ’s independent accountants and (2) a Compliance Certificate signed by the chief financial officer of the City stating that no Event of Default or Default has occurred, or if such Event of Default or Default has occurred, specifying the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and any remedial steps taken or proposed to correct such Event of Default or Default.
(b) As soon as available for each Fiscal Year, and in any event no later than 60 days following the beginning of each such Fiscal Year, a copy of all resolutions or proceedings taken by the City adopting, and the City Council of the City approving, a balanced operating budget for the City for such Fiscal Year and a certificate of a City Representative to the effect that such operating budget includes all amounts reasonably anticipated to be necessary to make all payments in respect of the Obligations due in such Fiscal Year, and as soon as available for each such Fiscal Year, and in any event no later than 60 days following the beginning of each such Fiscal Year, a copy of such operating budget;
(c) reserved;
(d) Promptly upon obtaining knowledge of any Default or Event of Default, or notice thereof, and in any event within five (5) days thereafter, a certificate signed by a City Representative specifying in reasonable detail the nature and period of existence thereof and what action the City has taken or proposes to take with respect thereto; (ii) promptly following a written request of the Assignee , a certificate of a City Representative as to the existence or absence, as the case may be, of a Default or an Event
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of Default under this Agreement ; and (iii) promptly upon obtaining knowledge of any “default” or “event of default” as defined under any Bank Agreement, notice specifying in reasonable detail the nature and period of existence thereof and what action the City has taken or proposes to take with respect thereto;
(e) As soon as practicable, written notice to the Assignee of all litigation , actions, suits or proceedings pending or threatened against the City, the Property or relating to Property in court or before any arbitrator of any kind or before any governmental authority and all proceedings before any court or governmental authority which, in each case, which could reasonably be expected to result in a Material Adverse Effect or directly or indirectly relates to the enforceability of this Agreement or any of the other Related Documents or could have a material adverse effect on the condition (financial or otherwise), results of operations or projections of revenues of the City or the Property and promptly upon obtaining knowledge thereof, written notice to the Assignee of the occurrence of any other event which could have a material adverse effect on the condition (financial or otherwise), results of operations or projections of revenues of the City or the Property or the enforceability of any of the Related Documents; (f) As soon as available, written notice to the Assignee of all changes to the City’s investment policy; and
(g) promptly after knowledge thereof shall have come to the attention of any responsible officer of the City, written notice to the Assignee of any change in a Rating; (h) Offering Memorandum and Material Event Notices. (A) Within ten (10) days after the issuance of any Lease Revenue Debt payable by the City with respect to which a final official statement or other offering or disclosure document has been prepared by the City, (1) a copy of such official statement or offering circular or (2) notice that such information has been filed with EMMA and is publicly available; and (B) during any period of time the City is subject to continuing disclosure requirements under Rule 15c2-12 promulgated pursuant to the Securities Exchange Act of 1934, as amended (17 C.F.R. Sec. 240-15c2-12), or any successor or similar legal requirement, immediately following any dissemination, distribution or provision thereof to any Person, (1) a copy of any reportable event notice (as described in b(5)(i)(C) of Rule 15c2- 12) disseminated, distributed or provided in satisfaction of or as may be required pursuant to such requirements or (2) notice that such event notice has been filed with EMMA and is publicly available; and (i) Other Information. Such other information regarding the business affairs, financial condition and/or operations of the City or the Property as the Assignee may from time to time reasonably request.
Section 6.03. Maintenance of Books and Records . The City shall keep proper books of record and account in which full, true and correct entries in accordance with the City ’s budget basis accounting principles and reporting practices shall be made of all dealings or transactions in relation to its activities.
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Section 6.04. Access to Books and Records . To the extent permitted by law, the City shall permit any Person designated by the Assignee to visit any of the offices of the City to examine the books and financial records, including minutes of meetings of any relevant governmental committees or agencies, and make copies thereof or extracts therefrom, and to discuss the affairs, finances and accounts of the City with its principal officials, all at such reasonable times and as often as the Assignee may reasonably request.
Section 6.05. Compliance with Documents. The City shall perform and comply with each and every covenant and agreement required to be performed or observed by it herein and in the Lease Agreement and in each of the other Related Documents, which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety all of which shall be deemed to be made for the benefit of the Assignee and shall be enforceable against the City. To the extent that any such incorporated provision permits the City or any other party to waive compliance with such provision or requires that a document, opinion or other instrument or any event or condition be acceptable or satisfactory to the City or any other party, for purposes of this Agreement, such provision shall be complied with only if it is specifically waived by the Assignee in writing and such document, opinion or other instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Assignee which shall only be evidenced by the Assignee’s written approval of the same. No termination or amendment to such covenants and agreements or defined terms or release of the City with respect thereto made pursuant to the Related Documents shall be effective to terminate or amend such covenants and agreements and defined terms or release of the City with respect thereto as incorporated by reference herein without the prior written consent of the Assignee . Notwithstanding any termination or expiration of any such Related Document, the City shall continue to observe the covenants therein contained for the benefit of the Assignee until the termination of this Agreement. All such incorporated covenants shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such incorporated covenants be a limitation on the express covenants contained herein.
Section 6.06. Environmental Compliance. The City shall comply with all Environmental Laws applicable to the construction, ownership or use of the Property and shall cause, to the extent possible, its tenants and other Persons occupying or using its facilities to comply with such Environmental Laws, shall timely pay or cause to be paid all costs and expenses incurred in such compliance, and shall keep or cause to be kept all of its facilities free and clear of any liens imposed pursuant to such Environmental Laws, unless the same are being contested in good faith and by appropriate legal proceedings and such contest shall operate to stay the material adverse effect of any such non- compliance. The City shall also immediately notify the Assignee of any actual or alleged material failure to so comply with or perform, or any material breach, violation or default under any Environmental Law.
Section 6.07. Further Assurances . From time to time hereafter, the City shall execute and deliver such additional instruments, certificates or documents, and shall take all such actions as the Assignee may reasonably request for the purposes of implementing or effectuating the provisions of the Related Documents or for the purpose of more fully perfecting or renewing the Assignee’s rights with respect to the rights, properties or assets subject to such documents (or with
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respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by the City which may be deemed to be a part thereof). Upon the exercise by the Assignee of any power, right, privilege or remedy pursuant to the Related Documents which requires any consent, approval, registration, qualification or authorization of any governmental authority or instrumentality, the City shall, to the extent permitted by law, execute and deliver all necessary applications, certifications, instruments and other documents and papers that the Assignee may be required to obtain for such governmental consent, approval, registration, qualification or authorization.
Section 6.08. Application of Proceeds of Advances. The City shall cause the proceeds from Advances made hereunder to be applied only for capital expenditures and other general municipal purposes of the City permitted by the Tax Certificate or costs of issuance in connection with this Agreement or the other Related Documents and in any event, in compliance in all respects with the Tax Certificate.
Section 6.09. Payment of Obligations ; Removal of Liens . The City shall pay (a) all amounts due or related to any Lease Revenue Debt in accordance with the terms thereof and (b) all assessments or other governmental charges as the same respectively become due, all taxes, assessments (general or special) and governmental charges of any kind whatsoever that may be at any time lawfully assessed or levied against or with respect to the Property or any interest thereon and promptly discharge or cause to be discharged all liens, encumbrances and charges on such property and assets. The City shall include in each of the annual budgets of the City all amounts reasonably anticipated to be necessary to make payments due to the Assignee hereunder, under the Lease Agreement and under the other Related Documents.
Section 6.10. Compliance with Law; Employee Benefit Plan Compliance . The City shall comply with and observe the obligations and requirements set forth in the Constitution of the State of California and in all statutes and regulations binding upon it relating to the Property and the Related Documents. The City shall in a timely fashion, comply, in all material respects with all requirements under any employee benefit plan in which the City or any of its employees participate.
Section 6.11. Reserved.
Section 6.12. Reserved.
Section 6.13. Insurance; Eminent Domain. The City shall at all times maintain with responsible insurers all such insurance on the Property as required by Article V of the Lease Agreement and as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties. If any material useful part of the Property is damaged or destroyed, such material part will be restored for use or will be replaced.
The money collected from insurance against accident to or destruction of the Property will be used for repairing or rebuilding or replacing the damaged or destroyed Property , and to the extent not so applied, will be applied as set forth in the Lease Agreement . The provisions of the Lease Agreement and the other Related Documents, as well as the related defined terms contained therein, are hereby incorporated by reference for the benefit of the Assignee with the same effect
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as if each such provision and defined term were set forth herein in its entirety. No amendment to such provisions or defined terms made pursuant to any amendment or supplement to the Related Documents shall be effective to amend such provisions and defined terms as incorporated by reference herein without the prior written consent of the Assignee.
Section 6.14. Investment Policy. The City shall comply with its investment policy in effect from time to time.
Section 6.15. Reserved.
Section 6.16. Most Favored Nations Provisions. In the event the City has or shall, directly or indirectly, be a party to or be bound by any Bank Agreement which contains a Most Favored Nations Provision, the City shall provide the Bank with a copy of such Bank Agreement and such Most Favored Nations Provision shall automatically be deemed to be incorporated into this Agreement and the Bank shall have the benefits of such Most Favored Nations Provision as if specifically set forth herein. The City shall promptly enter into an amendment to this Agreement to include such Most Favored Nations Provision; provided that the Bank shall have and maintain the benefit of such Most Favored Nations Provision even if the City fails to provide such amendment.
Section 6.17. Preservation of Lien. The City shall take all necessary action to maintain and preserve the lien on and security interest in the Property securing the Obligations and the payment and performance of the City’s obligations hereunder and under the Lease Agreement and the other Related Documents.
Section 6.18. Sovereign Immunity. The City agrees not to assert any defense of sovereign immunity or immunity on other similar grounds (including, without limitation, governmental immunity), if available, in any proceeding initiated by the Assignee to enforce any of the obligations of the City hereunder or under any other Related Document. To the extent that the City has or hereafter may acquire under any applicable law any right to immunity from set off or legal proceedings, including but not limited to a writ of mandamus ordering a levy of taxes by the City, on the grounds of sovereignty or otherwise, the City, to the extent permitted by law, hereby irrevocably waives such rights to immunity for itself and agrees not to invoke any defense of immunity in respect of its obligations arising under or related to this Agreement or the other Related Documents.
Section 6.19. Maintenance of Property. The City shall at all times operate or cause to be operated the Property properly and in an efficient and economical manner, and shall maintain, preserve, reconstruct and keep the same or cause the same to be so maintained, preserved, reconstructed and kept, with the appurtenances and every part and parcel thereof, in good repair, working order and condition, and shall from time to time make, or cause to be made, all necessary and proper repairs, replacements and renewals so that at all times the operation of the Property may be properly and advantageously conducted. The City shall pay (a) all indebtedness and obligations of the City in accordance with the terms thereof and (b) all assessments or other governmental charges as the same respectively become due, all taxes, assessments (general or special) and governmental charges of any kind whatsoever that may be at any time lawfully
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assessed or levied against or with respect to the Property or any interest thereon and promptly discharge or cause to be discharged all liens, encumbrances and charges on such property and assets.
Section 6.20. Changes in Obligations . The City shall not waive, repeal, modify, amend , replace, supplement or terminate any Related Document.
Section 6.21. Additional Debt. The City shall not issue or incur any Debt which is payable from and/or secured by lease revenue rental payments related to the Property.
Section 6.22. Swap Termination Payments . The City shall not enter into any Swap Contract under which a termination payment would be required to have a lien on the Property.
Section 6.23. No Impairment . The City will neither take any action, nor cause or permit any other Person to take any action, under the Related Document s inconsistent with the rights of the Assignee under this Agreement including, without limitation, the Obligations and pledge of the Property. The City will neither agree to any amendment, modification or supplement to any Related Document to which it is a party without the prior written consent of the Assignee, nor shall the City waive or consent to any waiver of any condition under any Related Document.
Section 6.24. Tax Status. The City shall take no action which could reasonably be expected to result in interest on the Advances becoming included in gross income of the Assignee for purposes of federal income taxation or no longer exempt from State of California personal income taxes.
Section 6.25. References to the Assignee. Except as may be required by law (including, but not limited to, federal and state securities laws), the City shall not use the Assignee’s name in any published materials (other than the City ’s staff reports, annual statements, audited financial statements and rating agency presentations) without the prior written consent of the Assignee (which consent shall not be unreasonably withheld); provided that, without the prior written consent of the Assignee, the City may identify the Assignee as a party to this Agreement and the Assignment Agreement , the stated amount of the Available Commitment, the Commitment Termination Date, so long as no other information relating to this Agreement and the Assignment Agreement or the Assignee is disclosed in such offering documents without the prior written consent of the Assignee.
Section 6.26. Only Authorized Uses of Property by the City. The City shall not transfer, or allow the transfer or other disposition, of any Property , without the Assignee ’s prior written consent.
Section 6.27. No Sale, Assignment, Transfer or Pledge . The City shall not sell, mortgage or otherwise dispose of the Property or any portion thereof essential to the proper operation of the Property or to the maintenance of Property . The City shall not enter into any lease or agreement which materially impairs the operation of the Property or any part thereof necessary to secure adequate Property for the payment of Obligations or payment and performance of the City’s obligations under this Agreement or the other Related Documents.
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Section 6.28. Consolidation or Merger. The City shall not consolidate with or merge into another Person or permit one or more other Persons to consolidate with or merge into it or acquire all or substantially all of the property and assets of any other Person.
Section 6.29. Accounting Methods and Fiscal Year . The City shall not adopt, permit or consent to any change in accounting practices other than as required by GAAP and will not adopt, permit or consent to any change in its Fiscal Year.
Section 6.30. No Priority Claim . The City shall not incur, assume or permit any pledge, lien, charge or encumbrance on the Property with a claim to payment of higher priority than the claim of the Obligations or any of the City’s obligations under the Related Documents.
Section 6.31. Incorporation of Covenants by Re ference. The City agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by it in the Related Documents, which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety all of which shall be deemed to be made for the benefit of the Assignee and shall be enforceable by the Assignee against the City, which covenants, agreements, definitions and provisions shall continue in effect with regard to the Assignee without regard or giving effect to any amendment or modification of such provisions or any waiver of compliance therewith unless consented to in writing by the Assignee.
Section 6.32. Use of Proceeds. (a) The City shall not use any part of the Advances (i) for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any M argin Stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time) or to extend credit for other purposes of purchasing or carrying any margin stock or (ii) for the purpose of supporting commercial paper notes or for any other form of liquidity support
(b) The City shall not request any Advance, and the City shall not use, and shall ensure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Advance, directly or indirectly, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws or Anti-Money Laundering Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
Section 6.33. Ratings . The City shall at all times maintain a Rating from at least one Rating Agency. The City covenants and agrees that it shall not at any time withdraw any Rating from any of Fitch, Moody’s or S&P if the effect of such withdrawal would be to cure a Default or an Event of Default under this Agreement or reduce the Applicable Spread or the Commitment Fee Rate.
Section 6.34. Setoff Provisions in Other Documents . The City shall not, directly or indirectly, enter into or otherwise consent to any Bank Agreement, which such Bank Agreement (i) provides the counterparty thereto with any right of set -off or (ii) fails to restrict such
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counterparty’s statutory or common law right of setoff, in each case, without the prior written consent of the Assignee. Notwithstanding the foregoing sentence, in the event that the City directly or indirectly, enters into or otherwise consents to any Bank Agreement which (x) includes the right of set-off or (y) fails to prohibit the exercise of the related provider’s statutory or common law rights of setoff, then the Assignee shall have, as a remedy under Section 7.02 hereof, the right to exercise any set-off with respect to any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies at any time held and other Debt at any time owing by the Assignee to or for the account of the City (irrespective of the currency in which such accounts, monies or Debt may be denominated and the Assignee are authorized to convert such accounts, monies and Debt into U.S. dollars) against any and all of the obligations of the City under this Agreement, whether or not the Assignee shall have made any demand with respect thereto.
Section 6.35. Acceleration. (a) The City shall not grant the right of acceleration to any other holder of Debt or under any Bank Agreement.
(b) Notwithstanding the foregoing, in the event that the City shall, directly or indirectly, enter into or otherwise consent to any Bank Agreement which includes the right to accelerate the payment of the principal of or interest on any Bonds or other Debt of the City or the right to cause the redemption or mandatory tender of any Bonds or other Debt of the City prior to its maturity as a result of the occurrence of an “ event of default ” or “event of termination” under such Bank Agreement (herein referred to as “Acceleration Provisions” ), then such Acceleration Provisions shall automatically be deemed incorporated herein and the Bank shall automatically have the benefit of such Acceleration Provisions, and further the Bank shall have the right, upon the occurrence of an Event of Default, to declare all O bligations payable hereunder to be, and such amounts shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the City; provided that upon the occurrence of an Event of Default under Section 7.01(j) hereof, such prepayment obligation or acceleration shall automatically become due and payable or automatically occur, as applicable, and without any notice. The City shall promptly, upon the occurrence of the City entering into any Bank Agreement (or amendment thereto) which provides for Acceleration Provisions, enter into an amendment to this Agreement to include such Acceleration Provisions; provided that the Bank shall maintain the benefit of such Acceleration Provisions even if the City fails to execute such amendment.
Section 6.36. Swap Contracts . Without the prior written consent of the Assignee, the City shall not enter into any Swap Contracts relating to Lease Revenue Debt wherein any termination payments thereunder are senior to or on parity with the payment of the Advance s or the other Obligations.
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ARTICLE 7
DEFAULTS
Section 7.01. Events of Default. The occurrence of any of the following events (whatever the reason for such event and whether voluntary, involuntary, or effected by operation of Law) shall be an “Event of Default” hereunder, unless waived in writing by Assignee:
(a) The City fails to pay, or cause to be paid, when due (i) any Lease Payment or Advance or interest thereon, or (ii) any Obligation or other amount due hereunder or under any other Related Document due to the Assignee; or (b) (i) The City fails to perform or observe any term, covenant or agreement contained in Section 6.01, 6.12, 6.13, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.26, 6.27,
6.28, 6.29, 6.30, 6.32, 6.33, 6.34, 6.35(a) or 6.36 hereof or (ii) the City fails to perform or observe any term, covenant or agreement contained in this Agreement or any other Related Document (other than those referred to in any other Event of Default under this Section 7.01) and any such failure is irremediable or, if remediable, remains unremedied for 30 days after the earlier to occur of (A) actual knowledge thereof by the City or (B) notice thereof from the Assignee to the City;
(c) A n “Event of Default” as defined in the Lease Agreement or any other “event of default” under any other Related Document shall have occurred and be continuing; or
(d) The City has taken or permitted to be taken any action which would materially adversely affect the enforceability of this Agreement or any other Related Document against the City or the legal ability of the City to pay Obligations when due; or (e) A court of competent jurisdiction shall enter a final, nonappealable order or judgment to the effect that any Related Document is illegal or unenforceable; or (f) The execution, delivery or performance of any Related Document shall result in a violation by the City of any material law, rule or regulation, or any order of any court, governmental agency or regulatory body, or any indenture or loan or credit agreement (including this Agreement) or any other agreement or instrument, applicable to the City; or
(g) Any representation or warranty on the part of the City herein or in any other Related Document or in any certificate, letter or other writing or instrument furnished or delivered by the City to the Assignee pursuant hereto or thereto or in connection herewith or therewith, shall at any time prove to have been incorrect in any material respect when made or deemed made or when effective or when reaffirmed, as the case may be, whether by misstatement or omission or otherwise; or
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(h) Any material provision of this Agreement or the other Related Documents shall at any time for any reason cease to be valid and binding on the City or shall be declared to be null and void by any court or governmental authority or agency having jurisdiction over the City , or the validity or the enforceability of any material provision of this Agreement, the Lease Agreement or the other Related Document s shall at any time be contested by the City in a judicial or administrative proceeding or the City shall deny that it has any or further liability or obligation under any material provision of this Agreement, the Lease Agreement or the other Related Document s, or the validity or enforceability of any material provision of this Agreement , the Lease Agreement or the other Related Documents shall be contested by any governmental agency or authority having jurisdiction over the City; or
(i) A final, nonappealable judgment or order for the payment of money in excess of $7,500,000 shall be rendered against the City or the Property and such judgment or order shall continue unstayed, undischarged, unbonded or unsatisfied for a period of sixty (60) days; or
(j) (i) A debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed by the City or any Governmental Authority on the repayment when due and payable of the principal of or interest on any Debt of the City , or (ii) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, the City seeks to have an order for relief entered with respect to it or the Property or seeking to adjudicate it or the Property insolvent or bankrupt or seeking reorganization, arrangement, adjustment, winding- up, liquidation, dissolution, composition or other relief with respect to it or the Property or its debts or those of the Property, or (iii) a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for the City or the Property or for any substantial part of the City’s property, or the City shall make a general assignment for the benefit of its creditors, or (iv) there shall be commenced against the City or the Property any case, proceeding or other action of a nature referred to in clause (ii) and the same shall remain undismissed, or (v) there shall be commenced against the City or the Property any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal, within sixty (60) days from the entry thereof, or (vi) the City takes action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii), (iv), (v) above, or (vii) the City or the Property shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or
(k) The Assignee fails to have an enforceable lien on and security interest in the Property with the priority as contemplated by the Related Documents; or (l) Any funds or investments on deposit in, or otherwise to the credit of, any of the funds or accounts established hereunder or under the Related Documents shall become subject to any writ, judgment, warrant or attachment, execution or similar process; or
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(m) D issolution or termination of the existence of the City or the Property; or the City’s accountant delivers a qualified opinion with respect to the City; or (n) (i) (A) A default occurs with respect to the payment of (x) any Lease Revenue Debt or any interest or premium thereon as and when the same shall become due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or (y) any amount due in respect of any other obligation owed to the Assignee as and when the same shall become d ue (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or (B) a default occurs under any mortgage, agreement or other instrument relating to any Lease Revenue Debt or any other obligation payable from or secured by a lien on any portion of the Property, and continuance of such default beyond the period of grace, if any, allowed with respect thereto, or the occurrence of any act or omission by the City under any such mortgage, agreement or other instrument which results in such Lease Revenue Debt or obligation becoming, or being capable of becoming, immediately due and payable or any such Lease Revenue Debt or other obligation is otherwise required to be prepaid (other than by a regularly scheduled required prepayment or an optional prepayment) prior to the stated maturity thereof; or (ii) (A) a default occurs with respect to the payment of (x) any Material Debt or any interest or premium thereon as and when the same shall become due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or (y) any amount due in respect of any other obligation owed to the Assignee as and when the same shall become due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or (B) a default occurs under any mortgage, agreement or other instrument relating to any Material Debt or any other obligation payable from or secured by a lien on any portion of the Property, and continuance of such default beyond the period of grace, if any, allowed with respect thereto, or the occurrence of any act or omission by the City under any such mortgage, agreement or other instrument which results in such Material Debt or obligation becoming, or being capable of becoming, immediately due and payable or any such Material Debt or other obligation is otherwise required to be prepaid (other than by a regularly scheduled required prepayment or an optional prepayment) prior to the stated maturity thereof; or
(o) The occurrence of any event which has had, or may result in, any material adverse change in the condition (financial or otherwise), results of operations or projections of revenues of the City, the Property or the ability of the City to comply with its obligations under or in respect of any of this Agreement or the other Related Document s or in connection with the transactions contemplated hereby or thereby; or (p) A ny of Fitch, Moody’s or S&P shall have downgraded its Rating to below “BBB” (or its equivalent), “ Baa2” (or its equivalent), or “ BBB” (or its equivalent) respectively, or suspended or withdrawn its rating of the same.
Section 7.02. Consequences of an Event of Def ault. If an Event of Default specified in Section 7.01 hereof shall occur and be continuing, the Assignee may take one or more of the
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following actions at any time and from time to time (regardless of whether the actions are taken at the same or different times):
(a) declare the Revolving Commitment of the Assignee to make Advances to be terminated by written notice to the City , whereupon such Revolving Commitment and obligation shall be terminated;
(b) petition a court of competent jurisdiction to issue a mandamus order to the City to compel specific performance of the covenants of the City contained in any of the Related Documents;
(c) either personally or by attorney or agent without bringing any action or proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding, may take whatever action at law or in equity may appear necessary or desirable to collect the amounts due and payable under this Agreement and the other Related Documents or to enforce performance or observance of any obligation, agreement or covenant of the City under this Agreement and the other Related Documents, whether for specific performance of any agreement or covenant of the City or in aid of the execution of any power granted to the Assignee in this Agreement or the other Related Documents; and/or
(d) exercise, or cause to be exercised, any and all remedies as it may have under this Agreement and the other Related Documents.
Except as expressly provided in this Section 7.02, procurement, demand, protest and all other notices of every kind are hereby expressly waived.
In each case, the Obligations of the City shall, from and after the occurrence of an Event of Default, bear interest at the Default Rate until such time as the Assignee shall have waived same or said Event of Default shall have been cured.
Notwithstanding anything set forth herein to the contrary, upon the occurrence of an Event of Default under Section 7.01(j) hereof, the Revolving Commitment shall terminate immediately and automatically without notice or further action on the part of the Assignee.
Section 7.03. Remedies Cumulative; Solely for the Benefit of the Assignee . (a) To the extent permitted by, and subject to the mandatory requirements of, Applicable Law, each and every right, power and remedy herein specifically given to the Assignee in this Agreement and the other Related Documents shall be cumulative, concurrent and nonexclusive and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy (whether specifically herein given or otherwise existing) may be exercised from time to time and as often and in such order as may be deemed expedient by the Assignee , and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.
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(b) The rights and remedies of the Assignee specified herein are for the sole and exclusive benefit, use and protection of the Assignee, and the Assignee is entitled, but shall have no duty or obligation to the City or any other Person or otherwise, to exercise or to refrain from exercising any right or remedy reserved to the Assignee hereunder or under any of the other Related Documents.
Section 7.04. Waivers or Omissions. No delay or omission by the Assignee in the exercise of any right, remedy or power or in the pursuit of any remedy shall impair any such right, remedy or power or be construed to be a waiver of any default on the part of the Assignee or to be acquiescence therein. No express or implied waiver by the Assignee of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
Section 7.05. Discontinuance of Proceedings. In case the Assignee shall proceed to invoke any right, remedy or recourse permitted under this Agreement or the other Related Documents and shall thereafter elect to discontinue abandon the same for any reason, the Assignee shall have the unqualified right so to do and, in such event, the City and the Assignee shall be restored to their former positions with respect to the Obligations, this Agreement and the other Related Documents and otherwise, and the rights, remedies, recourse and powers of the Assignee hereunder shall continue as if the same had never been invoked.
Section 7.06. Injunctive R elief. The City recognizes that in the event the City fails to perform, observe or discharge any of its obligations or liabilities under this Agreement or any other Related Document, any remedy of law may prove to be inadequate relief to the Assignee; therefore, the City agrees that the Assignee, if the Assignee so requests, shall be entitled to temporary and permanent injunctive relief in any such case.
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MISCELLANEOUS
Section 8.01. Amendments, Etc.; Amendments and Wai vers. The Assignee and the City may from time to time enter into agreements amending, modifying or supplementing this Agreement or the other Related Documents or changing the rights of the Assignee or the City hereunder or thereunder, and the Assignee may from time to time grant waivers or consents to a departure from the due performance of the obligations of the City hereunder or thereunder. Any such agreement, waiver or consent must be in writing and shall be effective only to the extent specifically set forth in such writing . In the case of any such waiver or consent relating to any provision hereof, any Default or Event of Default so waived or consented to shall be deemed to be cured and not continuing, but no such waiver or consent shall extend to any other or subsequent Default or Event of Default or impair any right consequent thereto.
Section 8.02. Notices; Effectiveness; Electronic Communication. (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand
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or overnight courier service, mailed by certified or registered mail or sent by fax transmission or e-mail transmission as follows, and all notices and other communications expressly permitted hereunder or under any other Related Document to be given by telephone shall be made to the applicable telephone number, to the address, fax number, e -mail address or telephone number specified for the City or the Assignee on Schedule 8.02.
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by fax transmission shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b). (b) Electronic C ommunications. Notices and other communications to the Assignee hereunder or under the Lease Agreement may be delivered or furnished by electronic communication (including e-mail, FPML messaging and Internet or intranet websites) pursuant to procedures approved by the Assignee. The Assignee or the City may each, in its discretion, agree to accept notices and other communications to it hereunder or under any other Related Document by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
Unless the Assignee otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “ return receipt requested ” function, as available, return e-mail or other written acknowledgement), and (ii) notices and other communications posted to an Internet or intranet website shall be deemed received by the intended recipient upon the sender ’s receipt of an acknowledgement by the intended recipient (such as by the “return receipt requested” function, as available, return email address or other written acknowledgement) indicating that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient. (c) Change of Address, Etc. Each of the City and the Assignee may change its address, fax number or telephone number or e -mail address for notices and other communications hereunder by notice to the other parties hereto.
(d) Reliance by Assignee. The Assignee shall be entitled to rely and act upon any notices (including, without limitation, telephonic or electronic notices, Advance Request s and Notice of Advance Prepayment) purportedly given by or on behalf of the City even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as reasonably understood by the recipient, varied from any confirmation thereof. The City shall, to the extent permitted by law, indemnify the Assignee and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or
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on behalf of the City . All telephonic notices to and other telephonic communications with the Assignee may be recorded by the Assignee, and each of the parties hereto hereby consents to such recording.
Section 8.03. No Waiver; Cumulative Remedies; Enforcement. No failure by the Assignee to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Related Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Related Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Related Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
Section 8.04. Costs and Expenses; Damage Waiver.
(a) Costs and Ex penses. The City shall pay (i) all reasonable out -of-pocket expenses incurred by the Assignee and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Assignee ), in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the other Related Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), including, without limitation, any fees payable to the California Debt and Investment Advisory Commission by the Assignee with respect to the Related Documents , and (ii) all out -of-pocket expenses incurred by the Assignee (including the fees, charges and disbursements of any counsel for the Assignee ), and shall pay all fees and time charges for attorneys who may be employees of the Assignee , in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Related Documents, including its rights under this Section, or (B) in connection with Advances made, including all such out -of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Advances. (b) Indemnification by the City . In addition to any and all rights of reimbursement, indemnification, subrogation or any other rights pursuant hereto or under law or equity, the City hereby agrees, to the extent permitted by law, to indemnify and hold harmless the Assignee and its officers, directors and agents and each Participant (the “Indemni tees”) from and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever (including reasonable attorneys’ fees) which the Assignee and each Participant may incur (or which may be claimed against the Assignee and each Participant by any Person or entity whatsoever) by reason of or in connection with the transactions contemplated by this Agreement , including, without limitation (a) the execution and delivery or transfer of, or failure to pay Lease Payments and other Obligations (b) the use of the proceeds of the Advances; or (c) the use or occupancy of the Project by any Person; provided, however, that the City shall not be required to indemnify the Assignee for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, that any such claim, damage, loss, liability, cost or expense shall be caused by the Assignee’s gross negligence or willful misconduct in connection with the Advances as determined in a final non - appealable judgment by a court of competent jurisdiction. If any proceeding shall be brought or threatened against an Indemnitee by reason of or in connection with the events described in clause
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(a), (b) or (c), the Assignee shall promptly notify the City in writing. The Assignee shall have the right to employ its own counsel and to determine its own defense of such action in any such case, and the fees and expenses of such counsel shall be at the expense of the City. (c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the City shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Related Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or the use of the proceeds thereof.
(d) Payments. All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor.
(e) Survival. The agreements in this Section and the indemnity provisions of Section 8.02(d) shall survive the termination of the Revolving Commitment and the repayment, satisfaction or discharge of all the other Obligations.
Section 8.05. Payments Set Aside. To the extent that any payment by or on behalf of the City is made to the Assignee, a nd such payment or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Assignee in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made.
Section 8.06. Successors and Assigns; P articipations. (a) Participations. The Assignee may grant participations herein or in any of its rights and security hereunder , provided that any such participation shall grant to the City the right to continue dealing solely with the Assignee .
Any such participant is referred to in this agreement as a “ Participant”; provided, however, that (i) no such participation by any such participant shall in any way affect the obligations of the Assignee hereunder, and (ii) the City shall be required to deal only with the Assignee, with respect to any matters under this Agreement and the other Related Documents and no such participant shall be entitled to enforce any provision hereunder against the City . The City agrees that each participant shall be entitled to the benefits of Sections 3.01, 3.02 and 8.04 hereof to the same extent as if it were an Assignee hereunder; provided, however, that a participant shall not be entitled to receive any greater payment under Sections 3.01 and 3.02 than the Assignee would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with the City’s prior written consent. In connection with any proposed participation, the Assignee may disclose to the proposed Participant any information that the City is required to deliver to the Assignee pursuant to this Agreement. (b) Successors and Assigns Generally. This Agreement and each Related Document is a continuing obligation and shall be binding upon the City, its successors, transferees and assigns and shall inure to the benefit of the owners of the Lease Payments and the other Obligations and
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their respective permitted successors, transferees and assigns. The City may not assign or otherwise transfer any of its rights or obligations hereunder or under the other Related Documents without the prior written consent of the Assignee. Each holder of an Assigned Interest may, in its sole discretion and in accordance with applicable law, from time to time assign, sell or transfer in whole or in part, its interest in an Assigned Interest in accordance with the provisions of paragraph (c) or (d) of this Section. Each holder of an Assigned Interest may at any time and from time to time enter into participation agreements in accordance with the provisions of paragraph (a) of this Section. Each holder of an Assigned Interest may at any time pledge or assign a security interest subject to the restrictions of paragraph (e) of this Section. (c) Sales and Transfers by an Assignee to an Assignee Transferee. Without limitation of the foregoing generality, the Assignee may at any time sell or otherwise transfer to one or more transferees all or a portion of an Assigned Interest to a Person that is (i) an Affiliate of the Assignee or (ii) a trust or other custodial arrangement established by the Assignee or an Affiliate of the Assignee, the owners of any beneficial interest in which are limited to “qualified institutional buyers” as defined in Rule 144A promulgated under the Securities Act of 1933, as amended (each, a “Assignee Transferee”). From and after the date of such sale or transfer, Wells Fargo Bank, National Association (and its successors) shall continue to have all of the rights of the Assignee hereunder and under the other Related Documents as if no such transfer or sale had occurred; provided, however, that (A) no such sale or transfer referred to in clause (c)(i) or (c)(ii) hereof shall in any way affect the obligations of the Assignee hereunder, (B) any such sale or transfer referred to in clause (e)(i) or (e)(ii) hereof shall be in a minimum amount of $250,000, (C) the City shall be required to deal only with the Assignee with respect to any matters under this Agreement, and (D) in the case of a sale or transfer referred to in clause ( c)(i) or (c)(ii) hereof, only the Assignee shall be entitled to enforce the provisions of this Agreement against the City. Upon the request of the City, the Assignee shall provide the addresses and related information with respect to the Assignee Transferee to the City.
Anything herein to the contrary notwithstanding, if any Assignee Transferee shall incur increased costs or capital adequacy requirements as contemplated by Section 3.02 hereof, and such increased costs or capital adequacy requirements are greater than those that the Assignee would have incurred had it not sold or otherwise transferred all or a portion of an Assigned Interest to such Assignee Transferee provided for in this Section 8.06(c), then the City shall not be obligated to pay to such Assignee Transferee any portion of the cost greater than that which the City would have paid under the provisions of Section 3.02 hereof had the Assignee not sold or otherwise transferred all or a portion of an Assigned Interest to an Assignee Transferee. (d) Sales and Transfers by an Assignee to a Non -Assignee Transferee. Without limitation of the foregoing generality, a holder of an Assigned Interest may at any time sell or otherwise transfer all or a portion of an Assigned Interest to one or more transferees which are not Assignee Transferees but each of which constitutes (i) a “qualified institutional buyer” as defined in Rule 144A promulgated under the 1933 Act or (ii) a commercial bank organized under the laws of the United States, or any state thereof, or any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country or an affiliate of such a commercial bank having a combined capital and surplus of $5,000,000,000 or more (each a “Non-Assignee Transferee”), if written notice of such sale or
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transfer, including that such sale or transfer is to a Non -Assignee Transferee, together with addresses and related information with respect to the Non -Assignee Transferee, shall have been given to the City by such selling holder of an Assigned Interest and Non-Assignee Transferee; provided, however, that any such sale or transfer shall be in a minimum amount of $250,000.
From and after the date the City has received written notice, (A) the Non-Assignee Transferee thereunder shall be a party hereto and shall have the rights and obligations of the Assignee (other than its obligation to fund Advance s) hereunder and under the other Related Documents, and this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to effect the addition of the Non -Assignee Transferee, and any reference to the assigning holder of an Assigned Interest hereunder and under the other Related Documents shall thereafter refer to such transferring holder of an Assigned Interest and to the Non-Assignee Transferee to the extent of their respective interests, and (B) if the transferring holder of an Assigned Interest no longer owns any portion of the Assigned Interest, then it shall relinquish its rights and be released from its obligations hereunder and under the other Related Documents (other than its obligation to fund Advances).
Anything herein to the contrary notwithstanding, if any Non-Assignee Transferee shall incur increased costs or capital adequacy requirements as contemplated by Section 3.02 hereof, and such increased costs or capital adequacy requirements are greater than those that the Assignee would have incurred had all or a portion of the Assigned Interest not been sold or otherwise transferred to such Non -Assignee Transferee provided for in this Section 8.06(d), then the City shall not be obligated to pay to such Non-Assignee Transferee any portion of the cost greater than that which the City would have paid under the provisions of Section 3.02 hereof had all or a portion of the Assigned Interest(s) not been sold or otherwise transferred to such Assignee Transferee. (e) Certain Pledges. The Assignee may at any time pledge or grant a security interest in all or any portion of its rights unde r the Lease Agreement, this Agreement and the other Related Documents and any Assigned Interest to secure obligations of the Assignee, including any pledge or assignment to secure obligations to a Federal Reserve Bank, the United States Treasury or to any state or local governmental entity or with respect to public deposits ; provided that no such pledge or assignment shall release the Assignee from any of its obligations hereunder or substitute any such pledgee or assignee for the Assignee as a party hereto.
Section 8.07. Counterparts; Integration; Effect iveness. This Agreement and each of the other Related Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Related Documents, and any separate letter agreements with respect to fees payable to the Assignee , c onstitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Assignee and when the Assignee shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any other Related Document, or any certificate delivered thereunder, by fax transmission or e -mail transmission ( e.g., “pdf” or “tif”) shall be
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effective as delivery of a manually executed counterpart of this Agreement or such other Related Document or certificate. Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Related Document, upon the request of any party, such fax transmission or e -mail transmission shall be promptly followed by such manually executed counterpart.
Section 8.08. Survival of Representations and War ranties. All representations and warranties made hereunder and in any other Related Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Assignee , regardless of any investigation made by the Assignee or on its behalf and notwithstanding that the Assignee may have had notice or knowledge of any Default or Event of Default at the time of the funding of any Advance, and shall continue in full force until the Commitment Termination Date.
Section 8.09. Severability. If any provision of this Agreement or the other Related Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Related Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 8.10. Governing Law; Jurisdiction E tc. (a) T
HIS AGREEMENT AND ANY OTHER
DOCUMENTS TO WHICH THE ASSIGNEE SHALL BECOME A PARTY SHALL BE GOVERNED BY , AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. (b) T O THE EXTENT PERMITTED BY APPLICABLE LAW, THE CITY AND THE ASSIGNEE
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY AND ALL CLAIM OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER RELATED DOCUMENTS.
IF AND TO THE EXTENT THAT THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS
UNENFORCEABLE FOR ANY REASON IN SUCH FORUM , EACH OF THE PARTIES HERETO HEREBY
CONSENTS TO THE ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, AND THE JUDICIAL REFEREE SHALL BE EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE , WHETHER FACT OR LAW .
EACH OF THE PARTIES HERETO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND CONSENT
AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL REFERENCE FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS. IN THE
EVENT OF LITIGATION , A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AS PROVIDED HEREIN.
(c) E ACH PARTY HERETO CONSENTS TO AND SUBMITS TO IN PERSONAM JURISDICTION AND
VENUE IN THE STATE OF CALIFORNIA AND IN THE FEDERAL DISTRICT COURTS WHICH ARE LOCATED IN THE STATE OF CALIFORNIA. EACH PARTY ASSERTS THAT IT HAS PURPOSEFULLY AVAILED ITSELF
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OF THE BENEFITS OF THE LAWS OF THE STATE OF CALIFORNIA AND WAIVES ANY OBJECTION TO IN
PERSONAM JURISDICTION ON THE GROUNDS OF MINIMUM CONTACTS , WAIVES ANY OBJECTION TO VENUE, AND WAIVES ANY PLEA OF FORUM NON CONVENIENS. THIS CONSENT TO AND SUBMISSION TO JURISDICTION IS WITH REGARD TO ANY ACTION RELATED TO THIS AGREEMENT. REGARDLESS OF WHETHER THE PARTY’S ACTIONS TOOK PLACE IN THE STATE OF CALIFORNIA OR ELSEWHERE IN THE
UNITED STATES, THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE , AND DOES NOT PRECLUDE
EITHER PARTY FROM OBTAINING JURISDICTION OVER THE OTHER IN ANY COURT OTHERWISE HAVING JURISDICTION.
Section 8.11. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof , the Lease Agreement or any other Related Document), the City acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) the services regarding this Agreement provided by the Assignee and any Affiliate thereof are arm’s -length commercial transactions between the City, on the one hand, and the Assignee and its Affiliates, on the other hand, (ii) the City has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the City is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Related Documents; (b) (i) the Assignee and its Affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor (municipal, financial or otherwise), agent or fiduciary, for the City, or any other Person and (ii) neither the Assignee nor any of its Affiliates has any obligation to the City with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Related Documents ; and (c) the Assignee and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the City, and neither the Assignee nor any of its Affiliates has any obligation to disclose any of such interests to the City . To the fullest extent permitted by law, the City , hereby waives and releases any claims that it may have against the Assignee or any of its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby.
Section 8.12. Electronic Execution of Certain Docume nts. The words “delivery,” “execute,” “execution,” “signed,” “signature,” and words of like import in any Related Document or any other document executed in connection herewith shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Assignee , 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 use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 8.13. USA Patriot A ct. The Assignee hereby notifies City that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107- 56 (signed into law October 26, 2001)) (the “USA Patriot Act” ), it is required to obtain, verify and record information that
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identifies City, which information includes the name and address of City and other information that will allow the Assignee to identify the City in accordance with the USA Patriot Act.
The City shall (a) ensure that neither the City nor any of its respective officers and directors is or will be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by OFAC or the Department of the Treasury or included in any Executive Order that prohibits or limits the Assignee from providing any funding or extending any credit to the City or from otherwise conducting business with the City and (b) ensure that the proceeds of any advance or extension of credit under any Related Document will not be used to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto.
Section 8.14. Time of the Essence. Time is of the essence in this Agreement and the other Related Documents.
Section 8.15. Reserved.
Section 8.16. EMMA Postings. Except as otherwise required by the federal securities laws, the City shall not file or submit or permit the filing or submission, of all or any portion of this Agreement, or any document (or any summary thereof) entered into in connection with this Agreement or the other Related Documents (or any default, event of acceleration, termination event, modification of terms or other similar events relating to this Agreement or the other Related Documents) with the Municipal Securities Rulemaking Board ’s Electronic Municipal Market Access system (or any successor continuing disclosure vehicle) unless such document or portion thereof (or summary thereof), as applicable, to be so filed or submitted (i) has been provided to the Assignee for review in advance of such filing or submission, and (ii) shall have been redacted to the extent reasonably required by the Assignee with respect to notice addresses, signatories, wiring information and similar confidential information, provided that such redaction may be no greater than permitted under applicable federal securities law guidance, if any. The City acknowledges and agrees that although the Assignee may request review, edits or redactions of such materials prior to filing, the Assignee is not responsible for the City ’s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with any continuing disclosure undertaking, similar agreement or applicable securities or other laws, including but not limited to those relating to SEC Rule 15c2-12.
Section 8.17. US QFC Stay Rules.
(a) Recognition of U.S. Resolution Regimes. In the event that any party that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of this Agreement or any other Related Document (and any interest and obligation in or under this Agreement or any other Related Document and any property securing this Agreement or any other Related Document) from such Covered Entity will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement or any other Related Document (and any such interest, obligation and property) were governed by the laws of the United States or a state of the United States. In the event that any party that is a Covered Entity
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or a BHC Act Affiliate of such party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights against such party with respect to this Agreement or any other Related Document are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement or any other Related Document were governed by the laws of the United States or a state of the United States.
The requirements of this paragraph (a) apply notwithstanding the provisions of paragraph (b). (b) Limitation on the Exercise of Certain Rights Related to Affiliate Insolvency Proceedings. Notwithstanding anything to the contrary in this Agreement or any other Related Document, but subject to the requirements of paragraph (a), no party to this Agreement or any other Related Document shall be permitted to exercise any Default Right against a party that is a Covered Entity with respect to this Agreement or any other Related Document that is related, directly or indirectly, to a BHC Act Affiliate of such Covered Entity becoming subject to Insolvency Proceedings, except to the extent the exercise of such Default Right would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable. After a BHC Act Affiliate of a party that is a Covered Entity has become subject to Insolvency Proceedings, any party that seeks to exercise a Default Right against such Covered Entity with respect to this Agreement or any other Related Document shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder or thereunder. “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Covered Entity” means any of the following:
(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar proceeding.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd -Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder. [S
IGNATURE PAGES TO FOLLOW]
ATTACHMENT E
[Signature Page to Letter Agreement to Purchase]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
CITY OF LONG BEACH
By:________________________________
Hank Kim
City Treasurer
Attest:
Monique De La Garza
City Clerk
W
ELLS FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Its: _________________________________
ATTACHMENT E
SCHEDULE 8.02
BANK’S LENDING OFFICE,
CERTAIN ADDRESSES FOR NOTICES
ISSUER:
City of Long Beach
411 West Ocean Boulevard, 6th Floor
Long Beach, CA 90802
Attention: City Treasurer
Phone: (562) 570-[_____]
E-mail: [_________]@longbeach.gov]
ASSIGNEE:
Wells Fargo Bank, National Association
___________________
ATTACHMENT E
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to Wells Fargo Bank, National Association (the “Assignee”), pursuant to that certain Letter Agreement for Purchase dated as of September __, 2026 (the “Agreement”), between the City of Long Beach, a charter city and municipal corporation duly organized and existing under its charter and the Constitution and laws of the State of California (the “City”) and the Assignee. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly appointed chief financial officer of the City ;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the City during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and
4. The financial statements required by Section 6.02 of the Agreement and being furnished to you concurrently with this certificate fairly represent the financial condition of the City in accordance with GAAP (subject to year end adjustments) as of the dates and for the periods covered thereby;
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Corporation has taken, is taking, or proposes to take with respect to each such condition or event:
______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
ATTACHMENT E
III-2
The foregoing certifications, together with the computations set forth in the Attachment hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this _________ day of _______________, 20__.
CITY OF LONG BEACH
By:________________________________
Name: _________________________
Title: _________________________
ATTACHMENT E