Stradling Yocca Carlson & Rauth
Draft of 4/22/26
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INDENTURE OF TRUST
Dated as of ______ 1, 2026
By and between
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
and the
MORENO VALLEY PUBLIC FINANCING AUTHORITY
Relating to
$_____________
MORENO VALLEY PUBLIC FINANCING AUTHORITY
ELECTRIC SYSTEM REVENUE BONDS, SERIES 2026A
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS .................................................. 3 Section 1.01. Definitions .............................................................................................................. 3 Section 1.02. Content of Certificates and Opinions.................................................................... 12 Section 1.03. Interpretation......................................................................................................... 13
ARTICLE II
THE 2026A BONDS ........................................................................................................................... 13 Section 2.01. Authorization of 2026A Bonds ............................................................................. 13 Section 2.02. Terms of the 2026A Bonds ................................................................................... 13 Section 2.03. Transfer of 2026A Bonds ..................................................................................... 14 Section 2.04. Exchange of 2026A Bonds ................................................................................... 15 Section 2.05. Registration Books ................................................................................................ 15 Section 2.06. Form and Execution of 2026A Bonds .................................................................. 15 Section 2.07. 2026A Bonds Mutilated, Lost, Destroyed or Stolen ............................................. 16 Section 2.08. Book Entry System ............................................................................................... 16
ARTICLE III
ISSUANCE OF 2026A BONDS; APPLICATION OF PROCEEDS .................................................. 19 Section 3.01. Issuance of the 2026A Bonds ............................................................................... 19 Section 3.02. Application of Proceeds of the 2026A Bonds ...................................................... 19 Section 3.03. Establishment and Application of Costs of Issuance Fund ................................... 20 Section 3.04. Establishment and Application of Acquisition Fund ............................................ 20 Section 3.05. Validity of 2026A Bonds ...................................................................................... 20
ARTICLE IV
REDEMPTION OF BONDS ............................................................................................................... 20 Section 4.01. Terms of Redemption ........................................................................................... 20 Section 4.02. Selection of 2026A Bonds for Redemption .......................................................... 21 Section 4.03. Notice of Redemption ........................................................................................... 21 Section 4.04. Partial Redemption of 2026A Bonds .................................................................... 22 Section 4.05. Effect of Redemption ............................................................................................ 22
ARTICLE V
REVENUES, FUNDS AND ACCOUNTS;
PAYMENT OF PRINCIPAL AND INTEREST ................................................................................. 22 Section 5.01. Pledge and Assignment; Revenue Fund ............................................................... 22 Section 5.02. Allocation of Authority Revenues ........................................................................ 23
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Section 5.03. Application of Interest Account ............................................................................ 23 Section 5.04. Application of Principal Account ......................................................................... 24 Section 5.05. Application of Redemption Fund ......................................................................... 24 Section 5.06. Investments ........................................................................................................... 24 Section 5.07. Reserve Fund ........................................................................................................ 25 Section 5.08. Rebate Fund .......................................................................................................... 25 Section 5.09. Application of Funds and Accounts When No 2026A Bonds are Outstanding .... 27
ARTICLE VI
PARTICULAR COVENANTS ........................................................................................................... 27 Section 6.01. Punctual Payment ................................................................................................. 27 Section 6.02. Extension of Payment of 2026A Bonds ................................................................ 27 Section 6.03. Against Encumbrances ......................................................................................... 27 Section 6.04. Power to Issue 2026A Bonds and Make Pledge and Assignment ........................ 27 Section 6.05. Accounting Records and Financial Statements .................................................... 27 Section 6.06. Tax Covenants ...................................................................................................... 28 Section 6.07. Payments Under Installment Purchase Agreement ............................................... 28 Section 6.08. Waiver of Laws ..................................................................................................... 29 Section 6.09. Further Assurances ............................................................................................... 29 Section 6.10. Eminent Domain ................................................................................................... 29
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS .................................................. 29 Section 7.01. Events of Default .................................................................................................. 29 Section 7.02. Remedies Upon Event of Default ......................................................................... 30 Section 7.03. Application of Authority Revenues and Other Funds After Default .................... 30 Section 7.04. Trustee to Represent 2026A Bond Owners .......................................................... 31 Section 7.05. 2026A Bond Owners’ Direction of Proceedings .................................................. 31 Section 7.06. Suit by Owners ..................................................................................................... 32 Section 7.07. Absolute Obligation of the Authority ................................................................... 32 Section 7.08. Remedies Not Exclusive ....................................................................................... 32 Section 7.09. No Waiver of Default ........................................................................................... 32
ARTICLE VIII
THE TRUSTEE ................................................................................................................................... 33 Section 8.01. Duties, Immunities and Liabilities of Trustee ...................................................... 33 Section 8.02. Merger or Consolidation ....................................................................................... 34 Section 8.03. Liability of Trustee ............................................................................................... 34 Section 8.04. Right to Rely on Documents ................................................................................. 38 Section 8.05. Preservation and Inspection of Documents .......................................................... 38 Section 8.06. Compensation and Indemnification ...................................................................... 38
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ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE ........................................................ 39 Section 9.01. Amendments Permitted ........................................................................................ 39 Section 9.02. Effect of Supplemental Indenture ......................................................................... 40 Section 9.03. Endorsement of 2026A Bonds; Preparation of New 2026A Bonds ..................... 40 Section 9.04. Amendment of Particular 2026A Bonds ............................................................... 40
ARTICLE X
DEFEASANCE .................................................................................................................................... 41 Section 10.01. Discharge of Indenture ......................................................................................... 41 Section 10.02. Discharge of Liability on 2026A Bonds ............................................................... 41 Section 10.03. Deposit of Money or Securities with Trustee ....................................................... 41 Section 10.04. Payment of 2026A Bonds After Discharge of Indenture ...................................... 42
ARTICLE XI
MISCELLANEOUS ............................................................................................................................ 43 Section 11.01. Liability of Authority Limited to Authority Revenues ......................................... 43 Section 11.02. Successor Is Deemed Included in All References to Predecessor ........................ 43 Section 11.03. Limitation of Rights to Parties and 2026A Bond Owners .................................... 43 Section 11.04. Waiver of Notice; Requirement of Mailed Notice ................................................ 43 Section 11.05. Destruction of 2026A Bonds ................................................................................ 43 Section 11.06. Entire Agreement; Severability of Invalid Provisions .......................................... 43 Section 11.07. Notices .................................................................................................................. 44 Section 11.08. Evidence of Rights of 2026A Bond Owners ........................................................ 44 Section 11.09. Disqualified 2026A Bonds ................................................................................... 44 Section 11.10. Money Held for Particular 2026A Bonds ............................................................. 45 Section 11.11. Funds and Accounts .............................................................................................. 45 Section 11.12. Waiver of Personal Liability ................................................................................. 45 Section 11.13. Execution in Several Counterparts ....................................................................... 45 Section 11.14. CUSIP Numbers ................................................................................................... 45 Section 11.15. Choice of Law....................................................................................................... 45 Section 11.16. Notice to Rating Agencies .................................................................................... 46
Exhibit A Form of 2026A Bond .......................................................................................... A-1
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INDENTURE OF TRUST
THE INDENTURE OF TRUST, made and entered into and dated as of _________ 1, 2026, by and between the MORENO VALLEY PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States (the “Trustee”); W I T N E S S E T H:
WHEREAS, the City of Moreno Valley (the “City”) and the former Community Redevelopment Agency of the City of Moreno Valley (the “Agency”) have heretofore executed a Joint Exercise of Powers Agreement, dated as of October 28, 1997 (the “Joint Powers Agreement”), by and between the City and the Agency, which Joint Powers Agreement creates and establishes the Authority; WHEREAS, pursuant to the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”) and the Joint Powers Agreement, the Authority is authorized to issue bonds for the purposes of financing and refinancing public capital improvements whenever there are significant public benefits to be realized; WHEREAS, the Authority desires to assist the City and provide for the issuance of the 2026A Bonds (defined below) in the aggregate principal amount of $__________ to provide for the funds necessary to (i) finance cer tain improvements to the City’s Electric System (as defined in the Installment Purchase Agreement ); (ii) cause the refunding of the 2019 Bonds (as defined herein) to refinance certain improvements to the City’s Electric System ; (iii) cause the refunding of the 2021 Bonds (as defined herein) to refinance certain improvements to the City’s Electric System ; and (iv) prepay the 2021 Equipment Lease ( as defined herein) to refinance the City’s acquisition of certain streetlight improvements pursuant to the 2021 Equipment Lease; and WHEREAS, the Authority hereby finds, pursuant to Section 6586 of the California Government Code, that the issuance of the bonds authorized pursuant to Section 2.01 hereof (the “2026A Bonds”) to finance and refinance the Projects will have demonstrable savings in the effective interest rate on the 2026A Bonds; and
WHEREAS, in order to provide for the authentication and delivery of the 2026A Bonds, to establish and declare the terms and conditions upon which the 2026A Bonds are to be iss ued and secured and to secure the payment of the principal thereof and interest and premium, if any, thereon, the Authority has authorized the execution and delivery of the Indenture; and WHEREAS, the Authority has determined that all acts and proceedings required by law necessary to make the 2026A Bonds, when executed by the Authority, authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute the Indenture a valid and b inding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized;
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NOW, THEREFORE, THE INDENTURE WITNESSETH:
GRANTING CLAUSES
The Authority, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the mutual covenants herein contained and of the purchase and acceptance of the 2026A Bonds by the owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, in order to secure the payment of the principal of and the interest and premium (if any) on the 2026A Bonds at any time issued and Outstanding under the Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, does hereby assign and pledge unto, and grant a security interest in, the following (the “Trust Estate”) to the Trustee, and its successors in trust and assigns forever, for the securing of the performance of the obligations of the Authority to the 2026A Bond Owners hereinafter set forth:
GRANTING CLAUSE FIRST
All right, title and interest of the Authority in and to the Authority Revenues (as defined herein), including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive and receipt for any Authority Revenues payable to or receivable by the Authority under the Constitution of this State and the Indenture and any other applicable laws of this State or otherwise, to bring actions and proceedings thereunder for the enforcement thereof, and to do any and all things which the Authority is or may become entitled to do thereunder, subject to the terms hereof.
GRANTING CLAUSE SECOND
All moneys and securities held in funds and accounts of the Indenture, except amounts held in the Rebate Fund, and all other rights of every name and nature from tim e to time herein or hereafter by delivery or by writing of any kind pledged, assigned or transferred as and for additional security hereunder to the Trustee by the Authority or by anyone on its behalf, or with its written consent, and to hold and apply the same, subject to the terms hereof.
GRANTING CLAUSE THIRD
All of the rights, title, and interest of the Authority in the Installment Purchase Agreement, including all rights of the Authority to receive payments thereunder and all rights of the Authority thereunder as may be necessary to enforce compliance with said provisions (including enforcement of payment obligations and rate covenants, if any, contained in the Installment Purchase Agreement) or otherwise to protect the interest of the Owners of the 2026A Bonds, subject to the terms hereof, and excepting therefrom any rights to indemnification or to receive notices thereunder.
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or hereafter acquired, unto Trustee and its respective successors in trust and assigns forever for the benefit of the Owners and such pledge shall constitute a lien on and security interest in such Trust Estate; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all present and future owners of the 2026A Bonds issued under and secured by the Indenture without privilege, priority or distinction as to the lien or otherwise of any of the 2026A Bonds over any of the other 2026A Bonds;
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PROVIDED, HOWEVER, that if the Authority, its successors or assigns shall well and truly pay, or cause to be paid, the principal of and interest and any redemption premium on the 2026A Bonds due or to become due thereon, at the times and in the manner provided in the 2026A Bonds according to the true intent and meaning thereof, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of the Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, then upon such final payments or deposits as herein provided, the Indenture and the rights hereby granted shall cease, terminate and be void; otherwise the Indenture shall remain in full force and effect.
THE INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all 2026A Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all sold property, rights and interests, including, without limitation, the Authority Revenues, hereby assigned and pledged, are to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and the Authority has agreed and covenanted and does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the 2026A Bonds, as follows:
ARTICLE I
DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of the Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless the context otherwise requires, all capitalized terms used herein and not defined have the meanings ascribed thereto in the Installment Purchase Agreement.
Acquisition Fund. The term “Acquisition Fund” means the fund by that name established pursuant to Section 3.04.
Act. The term “Act” means the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code.
Agency. The term “Agency” means the former Community Redevelopment Agency of the City.
Authority. The term “Authority” means the Moreno Valley Public Financing Authority, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California.
Authority Revenues. The term “Authority Revenues” means: (a) all Series 2026A Installment Payments received by the Authority or the Trustee pursuant to or with respect to the Installment Purchase Agreement; and (b) all interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder.
Authorized Representative. The term “Authorized Representative” means with respect to the Authority, the Chair person, the Vice -Chairperson, the Executive Director, the Treasurer or the
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Secretary of the Authority, or any other person authorized by the Authority Board to ac t on behalf of the Authority under or with respect to this Indenture.
Bond Counsel. The term “Bond Counsel” means Stradling, Yocca, Carlson & Rauth LLP, or another firm of nationally recognized attorneys experienced in the issuance of obligations the interest on which is excludable from gross income under Section 103 of the Code.
Bond Year. The term “Bond Year” will have the meaning set forth in the Tax Certificate.
Business Day. The term “Business Day” means: (i) a day which is not a Saturday, Sunday o r legal holiday on which banking institutions or trust companies in the State, Wilmington, Delaware, New York, New York, or in any other state in which the Office of the Trustee is located, are authorized or required by law, regulation or executive order to close or be closed; or (ii) a day on which the New York Stock Exchange or the Federal Reserve Bank of New York is not closed.
City. The term “City” means the City of Moreno Valley, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California.
Certificate; Direction; Request; Requisition. The terms “Certificate,” “Direction,” “Request” or “Requisition” of the Authority mean a written certificate, direction, request or requisition signed in the name of the Authority by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or represen tation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02, each such instrument shall include the statements provided for in Section 1.02.
Closing Date . The term “Closing Dat e” means the date on which the 2026A Bonds are delivered to the original purchaser thereof.
Code. The term “Code” means the Internal Revenue Code of 1986, as amended.
Costs of Issuance . The term “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the Authority and related to the authorization, issuance, sale and delivery of the 2026A Bonds, including but not limited to costs of preparation and reproduction of documents, printing expenses, filing and recording fees, initial fees and charges of the Trustee and counsel to the Trustee, legal fees and charges, including but not limited to the legal fees and charges of Bond Counsel, fees and dis bursements of consultants and professionals, Rating Agency fees, title insurance premiums, letter of credit fees and bond insurance premiums (if any), fees and charges for preparation, execution and safekeeping of the 2026A Bonds and any other cost, charge or fee in connection with the original issuance of the 2026A Bonds.
Costs of Issuance Fund . The term “Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.03.
Depository; DTC. The terms “Depository” or “DTC” mean The Depo sitory Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York in its capacity as Securities Depository for the 2026A Bonds.
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Escrow Agent. The term “Escrow Agent” means Computershare Trust Compa ny, National Association, as escrow agent under the 2019 Escrow Agreement and 2021 Escrow Agreement.
Event of Default. The term “Event of Default” means any of the events specified in Section
7.01. Federal Securities . The term “Federal Securities” “means (1) cash, (2) non -callable direct obligations of the United States of America (“Treasuries”), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodi an may be obligated, (4) subject to pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody's, respectively, or (5) securities eligible for “AAA” defeasance under then existing criteria of S&P or any combination thereof, shall be used to effect defeasance of the 2026A Bonds.
Government Code. The term “Government Code” means the Government Code of the State.
Indenture. The term “Indenture” means this Indenture of Trust, dated as of ______ 1, 2026, by and between the Authority and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture.
Information Services . The term “Information Services” means the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System; or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the Authority may specify in a Certificate to the Authority and the Trust ee as the Trustee may select.
Installment Purchase Agreement . The term “Installment Purchase Agreement” means the Installment Purchase Agreement, dated as of _________ 1, 2026, by and between the Authority and the City, as amended from time to time.
[Insurance Policy. The term “Insurance Policy” means the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal o f and interest on the 2026A Bonds when due.]
[Insurer. The term “Insurer” means ___________, or any successor thereto or assignee thereof.]
Interest Account. The term “Interest Account” means the account by that name in the Revenue Fund established pursuant to Section 5.01.
Interest Payment Date. The term “Interest Payment Date” means May 1 and November 1 of each year, commencing ________ 1, 2026.
Investment Agreement. The term “Investment Agreement” means an investment agreement supported by appropriate opinions of counsel, provided that the guarantor thereof is rated at the time of issuance, at least “AA” by S&P.
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Joint Powers Agreement . The term “Joint Powers Agreement” means that certain Joint Exercise of Powers Agreement, dated as of October 28, 1997, by and between the City and the Agency, which Joint Powers Agreement creates and establishes the Authority.
Letter of Representations . The term “Letter of Representations” means the letter of the Authority and the Trustee delivered to and accepted by the Depository on or prior to delivery of the 2026A Bonds as book entry bonds setting forth the basis on which the Depository serves as depository for such book entry bonds, as originally executed or as it may be supplemented or revised or replaced by a letter from the Authority and the Trustee delivered to and accepted by the Depository.
Nominee. The term “Nomine e” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.08 hereof.
Office. The term “Office” means with respect to the Trustee, the principal corporate trust office of the Trustee located at 650 Town Center Drive, Suite 800, Costa Mesa , California , Attention:
Corporate Trust Services, or at such other or additional offices as may be specified in writing by the Trustee to the Authority, except that with respect to presentation of 2026A Bonds for payment or for registration of transfer and exchange such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted.
Opinion of Counsel . The term “Opinion of Cou nsel” means a written opinion of counsel (including but not limited to counsel to the City or the Authority) selected by the Authority. If and to the extent required by the provisions of Section 1.02, each Opinion of Counsel shall include the statements provided for in Section 1.02.
Outstanding. The term “Outstanding,” when used as of any particular time with reference to 2026A Bonds, means (subject to the provisions of Section 11.09) all 2026A Bonds theretofore, or thereupon being, authenticated and deli vered by the Trustee under the Indenture except: (i) 2026A Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (ii) 2026A Bonds with respect to which all liability of the Authority shall have been discharged in accorda nce with Section 10.02, including 2026A Bonds (or portions thereof) described in Section 11.10; and (iii) 2026A Bonds for the transfer or exchange of or in lieu of or in substitution for which other 2026A Bonds shall have been authenticated and delivered by the Trustee pursuant to the Indenture.
Owner; 2026A Bond Owner. The term “Owner” or “ 2026A Bond Owner,” whenever used herein with respect to a 2026A Bond, means the person in whose name the ownership of such 2026A Bond is registered on the Registration Books.
Participants. The term “Participants” means those broker -dealers, banks and other financial institutions from time to time for which the Depository holds book -entry certificates as securities depository.
Permitted Investments . The term “Permitted Investments” means any of the following obligations if and to the extent that they are permissible investments of funds of the City (provided that the Trustee shall be entitled to rely upon any investment directions from the City as conclusive certification to the Trustee that the investments described therein are permissible investment of funds of the City):
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(a) Direct obligations of the United States (including obligations issued or held in book-entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and p rovided such obligations are backed by the full faith and credit of the United States (stripped securities are only permitted if they have been stripped by the agency itself):
1. U.S. Export-Import Bank (“Eximbank”)
Direct obligations or fully guaranteed certificates of beneficial ownership
2. Farmers Home Administration (“FmHA”)
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures (“FHA”)
5. General Services Administration
Participation certificates
6. Government National Mortgage Association (“GNMA”)
GNMA - guaranteed mortgage-backed bonds
GNMA - guaranteed pass-through obligations (not acceptable for certain cash-flow sensitive issues)
7. United States Maritime Administration
Guaranteed Title XI financing
8. United States Department of Housing and Urban Development (“HUD”)
Project Notes
Local Authority Bonds
New Communities Debentures
United States government guaranteed debentures
United States Public Housing Notes and Bonds
United States government guaranteed public housing notes and bonds (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non -full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself):
1. Federal Home Loan Bank System
Senior debt obligations
2. Federal Home Loan Mortgage Corporation (“FHLMC”)
Participation Certificates
Senior debt obligations
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3. Federal National Mortgage Association (“FNMA”)
Mortgage-backed securities and senior debt obligations
4. Student Loan Marketing Association (“SLMA”)
Senior debt obligations
5. Resolution Funding Corporation obligations
6. Farm Credit System
Consolidated system-wide bonds and notes
(d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of “AAAm-G,” “AAA-m” or “AA -m” and if rated by Moody’s rated “Aaa,” “Aa1” or “Aa2,” including such funds for which the Trustee (including as transfer agent, custodian), its affiliates or subsidiaries provide investment advisory or other management services or for which the Trustee or an affiliate of the Trustee serves as investment administrator, share holder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives and retains a fee from funds for services provided to the fund, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee. (e) Certificates of deposit secured at all times by collateral described in clauses (a) and/or (b) above. Such certificates must be issued by commercial banks (including affiliates of the Trustee), savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits (including those of the Trustee and its affiliates) which are fully insured by FDIC, or secured at all times by collateral described in clauses (a) and/or (b) above. (g) Investment Agreements, including guaranteed investment contracts, forward purchase agreements and reserve fund put agreements.
(h) Commercial paper rated, at the time of purchase, “Prime -1” by Moody’s and “A-1” or better by S&P.
(i) Bonds or notes issued by any state or municipality which are rated by Moody’s and S&P in one of the two highest Rating Categories assigned by such agencies. (j) Bank deposit products, trust funds, trust accounts, certificates of deposit (including those placed by a third party pursuant to an agreement between the Authority and the Trustee), overnight bank deposits, interest bearing deposits, in terest bearing money market accounts, Federal funds or bankers acceptances with a maximum term of one year of any bank (including those of the Trustee and its affiliates) which (i) has an unsecured, uninsured and unguaranteed obligation rating of “Prime-1” or “A3” or better by Moody’s and “A-1” or “A” or better by S&P or (ii) are fully insured by the Federal Deposit Insurance Corporation.
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(k) Repurchase or reverse repurchase agreements for 30 days or less must follow the following criteria. Repurchase agreements which provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee (buyer/lender) (including those of the Trustee or any of its affiliates), and the transfer of cash from the Trustee to the dealer b ank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in exchange for the securities at a specified date; and:
1. Repurchase agreements must be between the Trustee and a dealer bank or securities firm;
A. Primary dealers on the Federal Reserve reporting dealer list which are rated “A” or better by S&P and Moody’s; or
B. Banks rated “A” or above by S&P and Moody’s.
2. The written repurchase agreements contract must include the following:
A. Securities which are acceptable for transfer are:
(l) Direct United States governments, or
(2) Federal agencies backed by the full faith and credit of the United States government (and FNMA & FHLMC)
B. The term of a repurchase agreement may be up to 30 days.
C. The collateral must be delivered to the Trustee (if trustee is not supplying the collateral) or third party acting as agent for the Trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities).
D. Valuation of Collateral
(l) The securities must be valued weekly, marked to
market at current market price plus accrued interest.
(2) The value of collateral must be equal to 104% of the amount of cash transferred by the Trustee to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below l04% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%.
(3) A legal opinion must be delivered to the Trustee to the effect that the repurchase agreement meets guidelines under state law for legal investment of public funds.
(l) Any pooled investment fund administrated by Riverside County in which the City is statutorily permitted or required to invest.
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(m) Any state administered pooled investment fund in which the City is statutorily permitted or required to invest will be deemed a permitted investment, including, but not limited to the Local Agency Investment Fund in the treasury of the State. (n) Local Government Investment Pools (LGIP). Shares of beneficial interest issued by a joint powers authority organized pursuant to Government Code § 6509.7. To be eligible for purchase, the pool must meet the requirements of Government Code § 53601(p).
Principal Account . The term “Principal Account” means the account by that name in the Revenue Fund established pursuant to Section 5.01.
Rating. The term “Rating” means any currently effective rating on the 2026A Bonds issued by a Rating Agency.
Rating Agency. The term “Rating Agency” means S&P.
Rebate Fund. The term “Rebate Fund” means the fund by that name established pursuant to Section 5.08.
Record Date. The term “Record Date” means, with respect to any Interest Payment Date, the fifteenth (15th) day of the calendar month preceding such Interest Payment Date, whether or not such day is a Business Day.
Redemption Date . The term “Redemption Date” means the date fixed for an optional redemption prior to maturity of the 2026A Bonds.
Redemption Fund. The term “Redemption Fund” means the fund by that name established pursuant to Section 5.05.
Redemption Price. The term “Redemption Price” means, with respect to any 2026A Bond (or portion thereof), the principal amount of such 2026A Bond (or portion) plus the interest accrued to the applicable Redemption Date and the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of the 2026A Bonds and the Indenture.
Registration Books . The term “Registration Books” means the records m aintained by the Trustee for the registration of ownership and registration of transfer of the 2026A Bonds pursuant to Section 2.05.
Reserve Fund. The term “Reserve Fund” means the fund by that name established pursuant to Section 5.07 hereof.
Reserve Requirement. The term “Reserve Requirement” means $________________. [Reserve Surety Policy . The term “Reserve Surety Policy” means the municipal bond debt service reserve policy No. ___ issued by the Insurer and deposited in the Reserve Fund to satisfy the Reserve Requirement.]
Responsible Officer of the Trustee. The term “Responsible Officer of the Trustee” means any officer within the corporate trust division (or any successor group or department of the Trustee) including any vice president, assistant vice president, assistant secretary or any other officer or assistant
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officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, with responsibility for the administration of th is Indenture.
Revenue Fund. The term “Revenue Fund” means the fund by that name established pursuant to Section 5.01(c).
S&P. The term “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
Securities Depositories . The term “Securities Depositories” means The Depository Trust Company; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Request of the Authority deliver to the Trustee.
State. The term “State” means the State of California.
Supplemental Indenture. The term “Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending the Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
Tax Certificate. The term “Tax Certificate” means the Tax Certificate dated the Closing Date, concerning certain matters pertaining to the use and investment of proceeds of the 2026A Bonds issued by the Authority on the date of issuance of the 2026A Bonds, including any and all exhibits attached thereto.
Trustee. The term “Trustee” means Wilmington Trust, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States , or its successor, as Trustee hereunder as provided in Section 8.01. 2019 Bonds. The term “2019 Bonds” means the Lease Revenue Bonds, Series 2019 (Taxable) issued by the Authority.
2019 Escrow Agreement. The term “2019 Escrow Agreement” means the Escrow Agreement by and among the Authority, the City and the Escrow Agent, with respect to the refunding of the 2019 Bonds.
2019 Escrow Fund. The term “2019 Escrow Fund” means the fund by that name established and held by the Escrow Agent under the 2019 Escrow Agreement with respect to the refunding of the 2019 Bonds.
2021 Bonds. The term “2021 Bonds” means the Lease Revenue Bonds, Series 2021 (Taxable) issued by the Authority.
2021 Equipment Lease. The term “2021 Equipment Lease” means the Amended and Restated Equipment Lease/Purchase Agreement, dated as of August 10, 2021, between Banc of America
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Leasing & Capital, LLC (together with its successors, assigns and transferees), as lessor, and the City, as lessee.
2021 Escrow Agreement. The term “2021 Escrow Agreement” means the Escrow Agreement by and among the Authority, the City and the Escrow Agent, with respect to the refunding of the 2021 Bonds.
2021 Escrow Fund. The term “2021 Escrow Fund” means the fund by that name established and held by the Escrow Agent under the 2021 Escrow Agreement with respect to the refunding of the 2021 Bonds.
2026A Bonds. The term “ 2026A Bonds” means the Electric System Revenue Bonds, Series 2026A issued by the Authority and at any time Outstanding pursuant to the Indenture.
Value. The term “Value” which shall be determined as of the end of each month, means that the value of any investments shall be calculated as follows:
(a) For the purpose of determining the amo unt of any fund, all Permitted Investments credited to such fund shall be valued at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers.
Accepted industry providers shall include, but are not limited to, pricing services provided by Financial Times Interactive Data Corporation, Bank of America Merrill Lynch and Morgan Stanley Smith Barney.
(b) As to certificates of deposit and bankers’ acceptances, the face amount thereof, plus accrued interest.
(c) As to any investment not specified above, the market value, or, if the market value is not ascertainable by the City or the Trustee, the value thereof shall be established by prior agreement among the City, the Authority and the Trustee.
Section 1.02. Content of Certificates and Opinions. Every certificate or opinion provided for in the Indenture except the certificate of destruction provided for in Section 11.05 hereof, with respect to compliance with any provision hereof shall include: (a) a statement that the person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon wh ich the certificate or opinion is based; (c) a statement that, in the opinion of such person he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (d) a statement of the assumptions upon which such certificate or opinion is based, and that such assumptions are reasonable; and (e) a statement as to whether, in the opinion of such person, such provision has been complied with.
Any such certificate or opinion made or given by an officer of the Authority may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an Independent Certified Public Accountant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an Independent Certified Public Accountant may be
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based, insofar as it relates to factual matters (with respect to which information is in the possession of the Authority) upon a certificate or opinion of or representation by an officer of the Authority, unless such counsel or Independent Certified Public Accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or represent ation with respect to the matters upon which such person’s certificate or opinion or representation may be based, as aforesaid, is erroneous.
The same officer of the Authority, or the same counsel or Independent Certified Public Accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of the Indenture, but different officers, counsel or Independent Certified Public Accountants may certify to different matters, respectively.
Section 1.03. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender , as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of the Indenture; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to the Indenture as a whole and not to any particular Article, Section or subdivision hereof.
ARTICLE II
THE 2026A BONDS
Section 2.01. Authorization of 2026A Bonds. The Authority hereby authorizes the issuance hereunder from time to time of the 2026A Bonds, which shall constitute special obligations of the Authority, for the purpose of financing the 2026A Project. The 2026A Bonds are hereby designated the “Moreno Valley Public Financing Authority Electric System Revenue Bonds, Series 2026A” in the aggregate principal amount of $________. The Indenture constitutes a continuing agreement with the Owners from time to time of the 2026A Bonds to secure the full payment of the principal of and interest and premium (if any) on all the 2026A Bonds, subject to the covenants, provisions and conditions herein contained.
Section 2.02. Terms of the 2026A Bonds. The 2026A Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof.
The 2026A Bonds shall mature on May 1 in each of the years and in the amounts set forth below and shall bear interest on each Interest Payment Date at the rates set forth below:
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Maturity Date
(May 1) Principal Amount Interest Rate
Interest on the 2026A Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee sent by first class mail on the applicable Interest Payment Date to the Owner at the address of such Owner as it appears on the Registration Books (except that in the case of an Owner of one million dollars ($1,000,000) or more in principal amount, such payment may, at such Owner’s option, be made by wire transfer of immediately available funds to an account in the United States in accordance with written instructions provided to the Trustee by such Owner prior to the Record Date). Principal of and premium (if any) on any 2026A Bond shall be paid by check of the Trustee upon presentation and surrender thereof at maturity or upon the prior redemption thereof, at the Office of the Trustee. Both the principal of and interest and premium (if any) on the 2026A Bonds shall be payable in la wful money of the United States of America.
Each 2026A Bond shall be dated the date of initial delivery, and shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless: (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) unless it is authenticated on or before _______ 15, 2026, in which event it shall bear interest from the date of initial delivery; provided, however, that if, as of the date of authentication of any 2026A Bond, interest thereon is in default, such 2026A Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.
Interest on the 2026A Bonds shall be calculated on the basis of a 360 -day year composed of twelve 30-day months.
Section 2.03. Transfer of 2026A Bonds. Any 2026A Bond may, in accordance with its terms, be transferred on the Registration Books by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such 2026A Bond at the Office of the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. The Trustee shall not be required to register the transfer of any 2026A Bond
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during the period in which the Trustee is selecting 2026A Bonds for redemption and any 2026A Bond that has been selected for redemption.
Whenever any 2026A Bond or 2026A Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new 2026A Bond or 2026A Bonds of authorized denomination or denominations for a like series and aggregate principal amount of the same maturity. The Trustee shall require the 2026A Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid w ith respect to such transfer. Following any transfer of 2026A Bonds, the Trustee will cancel and destroy the 2026A Bonds it has received.
Section 2.04. Exchange of 2026A Bonds. 2026A Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of other authorized denominations of the same series and maturity. The Trustee shall not be required to exchange any 2026A Bond during the period in which the Trustee is selecting 2026A Bonds for redemption and any 2026A Bond that has been selected for redemption. The Trustee shall require the 2026A Bond Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. Following any exchange of 2026A Bonds, the Trustee will cancel and destroy the 2026A Bonds it has received.
Section 2.05. Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the 2026A Bonds, which shall upon reasonable notice and at reasonable times be open to inspection during regular business hours by the Authority, the City and the Owners; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the 2026A Bonds as hereinbefore provided.
The person in whose name any 2026A Bond shall be registered shall be deemed the Owner thereof for all purpos es hereof, and payment of or on account of the interest on and principal and Redemption Price of by such 2026A Bonds shall be made only to or upon the order in writing of such registered Owner, which payments shall be valid and effectual to satisfy and dis charge liability upon such 2026A Bond to the extent of the sum or sums so paid.
Section 2.06. Form and Execution of 2026A Bonds. The 2026A Bonds shall be in substantially the form set forth in Exhibit A hereto. The 2026A Bonds shall be executed in the name and on beha lf of the Authority with the manual or facsimile signature of its of an Authorized Representative of the Authority attested by the manual or facsimile signature of the Secretary of the Authority. The 2026A Bonds may carry a seal, and such seal may be in the form of a facsimile of the Authority’s seal and may be reproduced, imprinted or impressed on the 2026A Bonds. The 2026A Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or atteste d any of the 2026A Bonds shall cease to be such officer or officers of the Authority before the 2026A Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such 2026A Bonds may nevertheless be au thenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any 2026A Bonds may be signed and attested on behalf of the Authority by such persons as at the actual date of execution of such 2026A Bonds shall be the proper officers of the Authority although at the nominal date of such 2026A Bonds any such person shall not have been such officer of the Authority.
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Only such of the 2026A Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in Exhibit A hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of the Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the 2026A Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of the Indenture.
Section 2.07. 2026A Bonds Mutilated, Lost, Destroyed or Stolen. If any 2026A Bond shall become mutilated, the Authority, at the expense of the Owner of said 2026A Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2026A Bond of like tenor, series and authorized denomination in exchange and substitution for the 2026A Bonds so mutilated, but only upon surrender to the Trustee of the 2026A Bond so mutilated. Every mutilated 2026A Bond so surrendered to the Trustee shall be canc eled by it and upon the written request of the Authority delivered to, or upon the order of, the Authority. If any 2026A Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evid ence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2026A Bond of like tenor, series and au thorized denomination in lieu of and in substitution for the 2026A Bond so lost, destroyed or stolen (or if any such 2026A Bond shall have matured or shall be about to mature, instead of issuing a substitute 2026A Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each new 2026A Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee in the premises. Any 2026A Bond issued under the provisions of this Section in lieu of any 2026A Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the 2026A Bond so alleged to be lost, destroyed, or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of the Indenture with all other 2026A Bonds secured by the Indenture.
Notwithstanding any other provision of this Section, in lieu of deliver ing a new 2026A Bond for a 2026A Bond which has been mutilated, lost, destroyed or stolen and which has matured or has been selected for redemption, the Trustee may make payment of such 2026A Bond upon receipt of indemnity satisfactory to the Trustee.
Section 2.08. Book Entry System.
(a) Election of Book Entry System. Prior to the issuance of the 2026A Bonds, the Authority may provide that such 2026A Bonds shall be initially issued as book entry 2026A Bonds.
If the Authority shall elect to deliver any 2026A Bonds in book entry form, then the Authority shall cause the delivery of a separate single fully registered bond (which may be typewritten) for each maturity date of such 2026A Bonds in an authorized denomination corresponding to that total principal amount of the 2026A Bonds designated to mature on such date. Upon initial issuance, the ownership of each such 2026A Bond shall be registered in the 2026A Bond Registration Books in the name of the Nominee, as nominee of the Depository, and ownership of the 2026A Bonds, or any portion thereof may not thereafter be transferred except as provided in Section 2.08(e).
With respect to book entry 2026A Bonds, the Authority and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of wh ich such a Participant holds an interest in such book entry 2026A Bonds. Without limiting the immediately preceding sentence, the Authority and the Trustee shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in book entry 2026A Bonds; (ii) the delivery to any Participant or any other person,
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other than an Owner as shown in the 2026A Bond Registration Books, of any notice with respect to book entry 2026A Bonds, including any notice of redemption; (iii) the selection by the Depository and its Participants of the beneficial interests in book entry 2026A Bonds to be redeemed in the event the Authority redeems the 2026A Bonds in part; or (iv) the payment by the Depository or any Participant or any other person, of any amount of principal of, premium, if any, or interest on book entry 2026A Bonds. The Authority and the Trustee may treat and consider the person in whose name each book entry 2026A Bond is registered in the 2026A Bond Registration Books as the absolute Owner of such book entry 2026A Bond for the purpose of payment of principal of, premium and interest on such 2026A Bond, for the purpose of giving notices of redemption and other matters with respect to such 2026A Bond, for the purpose of regi stering transfers with respect to such 2026A Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the 2026A Bonds only to or upon the order of the respective Owner, as shown in the 2026A Bond Registration Books, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to payment of principal of, premium, if any, and interest on the 2026A Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the 2026A Bond Registration Books, shall receive a 2026A Bond evidencing the obligation to make payments of principal of, premium, if any, and interest on the 2026A Bonds. Upon delivery by the Depository to the Authority and the Trustee, of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in the Indenture shall refer to such nominee of the Depository. (b) Delivery of Letter of Representations. In order to qualify the book entry 2026A Bonds for the Depository’s book entry system, the Authority and the Trust ee shall execute and deliver to the Depository a Letter of Representations, if required by the Depository. The execution and delivery of a Letter of Representations shall not in any way impose upon the Authority or the Trustee any obligation whatsoever with respect to persons having interests in such book entry 2026A Bonds other than the Owners, as shown on the 2026A Bond Registration Books. By executing a Letter of Representations, the Authority shall agree to cause the Trustee to take all action necessary at all times so that the Authority will be in compliance with all representations of the Authority in such Letter of Representations. In addition to the execution and delivery of a Letter of Representations, the Authority and the Trustee shall take suc h other actions, not inconsistent with the Indenture, as are reasonably necessary to qualify book entry 2026A Bonds for the Depository’s book entry program.
(c) Selection of Depository. In the event that: (i) the Depository determines not to continue to act as securities depository for book entry 2026A Bonds; or (ii) the Authority determines that continuation of the book entry system is not in the best interest of the beneficial owners of the 2026A Bonds or the Authority, then the Authority will discontinue th e book entry system with the Depository. If the Authority determines to replace the Depository with another qualified securities depository, the Authority shall prepare or direct the preparation of a new single, separate, fully registered 2026A Bond for each of the maturity dates of such book entry 2026A Bonds, registered in the name of such successor or substitute qualified securities depository or its Nominee as provided in subsection (e) hereof. If the Authority fails to identify another qualified secu rities depository to replace the Depository, then the 2026A Bonds shall no longer be restricted to being registered in such 2026A Bond Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such 2026A Bonds shall designate, in accordance with the provisions of Sections 2.03 and 2.04 hereof.
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(d) Payments To Deposi tory. Notwithstanding any other provision of the Indenture to the contrary, so long as all Outstanding 2026A Bonds are held in book entry form and registered in the name of the Nominee, all payments of principal of, redemption premium, if any, and interest on such 2026A Bond and all notices with respect to such 2026A Bond shall be made and given, respectively to the Nominee, as provided in the Letter of Representations or as otherwise instructed by the Depository and agreed to by the Trustee notwithstandin g any inconsistent provisions herein.
(e) Transfer of 2026A Bonds to Substitute Depository.
(i) The 2026A Bonds shall be initially issued as provided in Section 2.01 hereof. Registered ownership of such 2026A Bonds, or any portions thereof, may not thereafter be transferred except:
(A) to any successor of DTC or its nominee, or of any substitute depository designated pursuant to clause (B) of subsection (i) of this Section 2.08(e) (“Substitute Depository”); provided that any successor of DTC or Substitute Depository s hall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any Substitute Depository, upon: (1) the resignation of DTC or its successor (or any Substitute Depository or its successor) from its functions as depository; or (2) a determination by the Authority that DTC (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (C) to any person as provided below, upon: (1) the resignation of DTC or its successor (or any Substitute Depository or its successor) from its functions as depository; or (2) a determination by the Authority that DTC or its successor ( or Substitute Depository or its successor) is no longer able to carry out its functions as depository. (ii) In the case of any transfer pursuant to clause (A) or clause (B) of subsection (i) of this Section 2.08(e), upon receipt of all Outstanding 2026A Bonds by the Trustee, together with a written request of the Authority to the Trustee designating the Substitute Depository, a single new 2026A Bond, which the Authority shall prepare or cause to be prepared, shall be issued for each maturity of 2026A Bonds then Outstanding, registered in the name of such successor or such Substitute Depository or their Nominees, as the case may be, all as specified in such written request of the Authority. In the case of any transfer pursuant to clause (C) of subsection (i) of this Section 2.08(e), upon receipt of all Outstanding 2026A Bonds by the Trustee, together with a written request of the Authority to the Trustee, new 2026A Bonds, which the Authority shall prepare or cause to be prepared, shall be issued in such denominations and registered in the names of such persons as are requested in such written request of the Authority, subject to the limitations of Section 2.01 hereof, provided that the Trustee shall not be required to deliver such new 2026A Bonds within a period of less than sixty (60) days from the date of receipt of such written request from the Authority. (iii) In the case of a partial redemption or an advance refunding of any 2026A Bonds evidencing a portion of the principal maturing in a particular year, DTC or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such 2026A Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee, all in accordance with the Letter of Represen tations. The Trustee shall not be liable for such
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Depository’s failure to make such notations or errors in making such notations and the records of the Trustee as to the outstanding principal amount of such 2026A Bonds shall be controlling. (iv) The Authority and the Trustee shall be entitled to treat the person in whose name any 2026A Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Authority; and the Authority and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the 2026A Bonds. Neither the Authority nor the Trustee shall have any res ponsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including DTC or its successor (or Substitute Depository or its successor), except to the Owner of any 2026A Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the 2026A Bonds.
ARTICLE III
ISSUANCE OF 2026A BONDS; APPLICATION OF PROCEEDS
Section 3.01. Issuance of the 2026A Bonds. At any time after the execution of the Indenture, the Authority may execute and the Trustee shall authenticate and, upon Request of the Authority, deliver the 2026A Bonds in the aggregate principal amount of $_________.
Section 3.02. Application of Proceeds of the 2026A Bonds. The proceeds received from the sale of the 2026A Bonds received by the Trustee, $__________ (being the principal amount of $_________, [plus/less] [net] original issue [premium/discount] of $__________, less an underwriter’s discount of $__________, [and less $__________ paid by the participating underwriter of the Series 2026A Bonds on behalf of the Authority directly to the Insurer ]), shall be deposited in trust with the Trustee, who shall apply such proceeds as follows:
(a) The Trustee shall de posit the amount of $ _______ from the proceeds of the 2026A Bonds in the Costs of Issuance Fund.
(b) The Trustee shall deposit the amount of $__________ from the proceeds of the 2026A Bonds in the Acquisition Fund.
(c) The Trustee shall transfer the amount of $_________ from the proceeds of the 2026A Bonds to the Escrow Agent for deposit in the 2019 Escrow Fund pursuant to the 2019 Escrow Agreement.
(d) The Trustee shall transfer the amount of $_________ from the proceeds of the 2026A Bonds to the Escrow Agent for deposit in the 2021 Escrow Fund pursuant to the 2021 Escrow Agreement.
(e) The Trustee shall transfer the amount of $_________ from the proceeds of the 2026A Bonds to Banc of America Leasing & Capital, LLC for the prepayment of the 2021 Equipment Lease.
The Trustee may establish temporary funds and accounts to record and facilitate such deposits and transfers.
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Section 3.03. Establishment and Application of Costs of Issuance Fund . The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund.” The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance upon submission of Requisitions of the Authority stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred, that such payment is a proper charge against said fund and that payment for such charge has not previously been made.
Each such Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the six month anniversary of the issuance of the 2026A Bonds, or upon the earlier Request of the Authority, all amounts remaining in the Costs of Issuance Fund shall be transferred by the Trustee to the Interest Account and the Costs of Issuance Fund shall be closed. Investment earnings on amounts on deposit in t he Cost of Issuance Fund shall be applied in accordance with Section 5.06 hereof.
Section 3.04. Establishment and Application of Acquisition Fund . There is hereby established with the Trustee a fund known as the “Acquisition Fund,” which the Trustee shall maintain and hold in trust separate and apart from other funds held by it. Amounts shall be disbursed by the Trustee on behalf of the City from the Acquisition Fund or the accounts therein as specified in a Requisition of the City in the form attached as Exhibit C to the Installment Purchase Agreement. Each Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts.
Notwithstanding anything to the contrary se t forth in herein or in the Installment Purchase Agreement, upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Acquisition Fund shall not be disbursed, but shall instead be applied to the payment of principal and interest or redemption price with respect to the 2026A Bonds.
Section 3.05. Validity of 2026A Bonds. The validity of the authorization and issuance of the 2026A Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the Authority, the City or the Trustee with respect to or in connection with the Installment Purchase Agreement. The recital contained in the 2026A Bonds that the same are issued pursuant to the Constitution and laws of the State shall be conclusive evidence of the validity and of compliance with the provisions of law in their issuance.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Terms of Redemption.
(a) The 2026A Bonds shall be subject to extr aordinary redemption prior to their respective stated maturities, as a whole or in part on any date in the order of maturity and within maturities as directed by the City in a written request to the Trustee at least 35 days (or such lesser number of days a cceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) prior to such date and by lot within each maturity in integral multiples of $5,000 from Net Proceeds, upon the terms and conditions of, and as provided for in, Section 6.10 of the Installment Purchase Agreement, at a Redemption Price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.
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(b) The 2026A Bonds with stated maturities on or af ter May 1, 20 __ shall be subject to redemption prior to their respective stated maturities, as a whole or in part on any date as directed by the Authority in a written request to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the sole convenience of the Trustee) prior to such date and by lot within each maturity in integral multiples of $5,000, on or after May 1, 20__, at a price equal to the principal amount there of plus accrued interest thereon to the date fixed for redemption, without premium. (c) The 2026A Bonds with stated maturities on May 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each May 1 on and after May 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:
Redemption Date
(May 1)
Principal
Amount
* Final Maturity.
In the event of a redemption pursuant to Section 4.01(a) or (b) above, the City shall provide the Trustee with a revised sinking fund schedule giving effect to the redemption so completed.
Section 4.02. Selection of 2026A Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the 2026A Bonds, the Trustee shall select the 2026A Bonds for redemption as a whole or in part on any date as directed by the Authority and, upon an extraordinary redemption pursuant to Section 4.01(a) above, by lot within each maturity in integral multiples of $5,000 in accordance with Section 4.01 hereof. The Trustee will promptly notify the Authority in writing of the numbers of the 2026A Bonds or portions thereof so selected for redemption.
Section 4.03. Notice of Redemption. Notice of redemption pursuant to Section 4.01(a) or (b) shall be mailed by first class mail not less than twenty (20) days before any Redemption Date, to the respective Owners of any 2026A Bonds designated for redemption at their addresses appearing on the Registration Books and to the Securities Depositories and the Information Services; provided, however, that so long as the 2026A Bonds are registered in the name of the Nominee, notices of redemption shall be provided in such manner as complies with the requirements of DTC; and, provided further, that such notice may be cancelled by the Authority upon written request delivered to t he Trustee not less than five (5) days prior to such Redemption Date. Each notice of redemption shall state the date of notice, the redemption date, the place or places of redemption, the Redemption Price, will designate the maturities, CUSIP numbers, if any, and, if less than all 2026A Bonds of any such maturity are to be redeemed, the serial numbers of the 2026A Bonds of such maturity to be redeemed by giving the individual number of each 2026A Bond or by stating that all 2026A Bonds between two stated numbers, both inclusive, have been called for redemption and, in the case of 2026A Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date ther e will become due and payable on each of
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said 2026A Bonds or parts thereof designated for redemption the Redemption Price thereof or of said specified portion of the principal thereof in the case of a 2026A Bond to be redeemed in part only, together with, interest accrued thereon to the redemption date, and that (provided that moneys for redemption have been deposited with the Trustee) from and after such redemption date interest thereon shall cease to accrue, and shall require that such 2026A Bonds be then surrendered to the Trustee.
Neither the failure to receive such notice nor any defect in the notice or the provision thereof will affect the validity of the redemption of any 2026A Bond. Notice of redemption of 2026A Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.
With respect to any notice of optional redemption of 2026A Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such 2026A Bonds to be redeemed and that, if such moneys shall not have been so received, said notice shall be of no force and effect and the Trustee shall not be required to redeem such 2026A Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.
Section 4.04. Partial Redemption of 2026A Bonds. Upon surrender of any 2026A Bond redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new 2026A Bond or 2026A Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the 2026A Bonds surrendered and of the same series, interest rate and maturity.
Section 4.05. Effect of Redemption . Notice of redemption having been duly given as aforesaid, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on, the 2026A Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the 2026A Bonds (or portions thereof) so called for redemption shall become due and payable, interest on the 2026A Bonds so called for redemption shall cease to accrue, said 2026A Bonds (or portions thereof) shall cease to be entitled to any benefit or security under the Indenture, and the Owners of said 2026A Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. The Trustee shall, upon surrender for payment of any of the 2026A Bonds to be redeemed on their Redemption Dates, pay such 2026A Bonds at the Redemption Price.
All 2026A Bonds redeemed pursuant to the provisions o f this Article shall be canceled upon surrender thereof.
ARTICLE V
REVENUES, FUNDS AND ACCOUNTS;
PAYMENT OF PRINCIPAL AND INTEREST
Section 5.01. Pledge and Assignment; Revenue Fund.
(a) All of the Authority Revenues and any other amounts (including proceeds of the sale of the 2026A Bonds) held in any fund or account established pursuant to the Indenture (except the Rebate Fund) are hereby irrevocably pledged to secure the payment of the principal of and interest, and the premium, if any, on the 2026A Bonds in accordance with their terms and the
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provisions of the Indenture, subject only to the provisions of the Indenture permitting the terms and conditions set forth herein. Said pledge shall constitute a lien on and security interest in such amounts and shall attach, be perfected and be valid and binding from and after the Closing Date, without any physical delivery thereof or further act and shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the Authority, irrespective of whether such parties have notice hereof.
(b) The Authority, for good and valuable consideration in hand received, does hereby irrevocably assign and transfer to the Trustee without recourse, for the benefit of the Owners of the 2026A Bonds as set forth herein , all of its rights, title, and interest in all Series 2026A Installment Payments payable by the City pursuant to the Installment Purchase Agreement, including all rights of the Authority thereunder as may be necessary to enforce compliance with said provisions (including enforcement of payment obligations and rate covenants, if any, contained in the Installment Purchase Agreement, or otherwise to protect the interest of the Owners of the 2026A Bonds. Such assignment shall be subject to and limited by the terms of the Indenture. (c) There is hereby established with the Trustee the Revenue Fund, which the Trustee covenants to maintain and hold in trust separate and apart from other funds held by it so long as any Series 2026A Installment Payments remain unpaid. Except as directed in Section 5.06 and
5.09, all Authority Revenues shall be promptly deposited by the Trustee upon receipt thereof into the Revenue Fund; except that all moneys received by the Trustee and required hereunder to be deposited in the Redempt ion Fund shall be promptly deposited therein. All Authority Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture. The Trustee shall also create and maintain an Interest Accou nt and a Principal Account within the Revenue Fund.
Section 5.02. Allocation of Authority Revenues. The Trustee shall transfer from the Revenue Fund and deposit into the following respective accounts, the following amounts in the following order of priority and at the following times, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Authority Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied befo re any transfer is made to any account subsequent in priority:
(a) Not later than the Business Day preceding each date on which the interest on the 2026A Bonds shall become due and payable hereunder, the Trustee shall deposit in the Interest Account that sum, if any, required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such date on all 2026A Bonds then Outstanding.
(b) Not later than the Business Day preceding each date on which the principal of the 2026A Bonds shall become due and payable hereunder, the Trustee shall deposit in the Principal Account that sum, if any, required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the 2026A Bonds coming due and payable on such date or subject to mandatory sinking fund redemption on such date.
Section 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the 2026A Bonds as it shall become due and payable (including accrued interest on any 2026A Bonds purchased or accelerated prior to maturity pursuant to the Indenture).
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Section 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the 2026A Bonds at maturity, mandatory sinking fund redemption, purchase or acceleration; provided, however, that at any time prior to selection for redemption of any such 2026A Bonds, upon written direction of the City, the Trustee shall apply such amounts to the purchase of 2026A Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as s hall be directed pursuant to a w ritten request of the City, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to the 2026A Bonds.
Section 5.05. Application of Redemption Fund. There is hereby established with the Trustee a special fund designated as the “Redempt ion Fund.” All amounts in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of and accrued interest on the 2026A Bonds to be redeemed on any Redemption Date pursuant to Section 4.01 ; provided, however, that at any time prior to selection for redemption of any such 2026A Bonds, upon written direction of the City, the Trustee shall apply such amounts to the purchase of 2026A Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed pursuant to a written request of the City, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to the 2026A Bonds.
Section 5.06. Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to the Indenture shall be invested by the Trustee solely in Permitted Investments which will, as nearly as possib le, mature on or before the dates when such moneys are anticipated to be needed for disbursement. Such investments shall be directed by the Authority pursuant to a Request of the Authority filed with the Trustee at least two (2) Business Days in advance of the making of such investments (which directions shall be promptly confirmed to the Trustee in writing). In the absence of any such directions from the Authority, the Trustee shall invest any such moneys in Permitted Investments; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a written direction from the City specifying a specific money market fund and, if no such written direction from the City is so received, the Trustee shall hold such moneys uninvested. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account.
All interest or gain derived from the investment of amounts in a ny of the funds or accounts established hereunder shall be deposited in the Interest Account unless otherwise provided in the Indenture. For purposes of acquiring any investments hereunder, the Trustee may commingle funds (other than the Rebate Fund) held by it hereunder upon the Request of the Authority. The Trustee may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section 5.06. The Trustee may rely conclusively upon the investment direction of the Authority or the City as to the suitability and legality of the directed investments.
The City acknowledges that to the extent that r egulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Trustee and brokers selected by the City.
Upon the City’s election, such statements will be de livered via the Trustee’s online service and upon
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electing such service; paper statements will be provided only upon request. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.
The Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or an affiliate. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee under the Indenture. The parties acknowledge that the Trustee is not providing investment supervision, recommendations, or advice.
The City shall invest, or cause to be invested, all moneys in any fund or accounts esta blished with the Trustee as provided in the Tax Certificate.
The Authority shall invest, or cause to be invested, all monies in any fund or accounts established with the Trustee as provided in the Tax Certificate.
For investment purposes, the Trustee may c ommingle the funds and accounts established hereunder, but shall account for each separately. In determining the market value of Permitted Investments, the Trustee may use and rely conclusively and without liability upon any generally recognized pricing information service (including brokers and dealers in securities) available to it.
Section 5.07. Reserve Fund. The Trustee shall establish and hold in trust the Reserve Fund. [The City shall cause the Reserve Surety Policy to be deposited in the Reserve Fund and the Trustee shall draw upon the Reserve Surety Policy in accordance with this Section 5.07.] Section 5.08. Rebate Fund.
(a) Establishment. The Trustee shall establish a separate fund for the 2026A Bonds designated the “Rebate Fund.” Absent an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest with respect to the 2026A Bonds will not be adversely affected, the Authority shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited there in pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the 2026A Bonds shall be governed by this Section and the Tax Certificate, unless and to the extent that the Authority delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest with respect to the 2026A Bonds will not be adversely affected if such requirements are not satisfied. Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee: (i) shall be deemed conclusively to have complied with the provisions thereof if it follows all Requests of the Authority; and (ii) shall have no liability or responsibility to enforce compliance by the Authority with the terms of the Tax Certificate; and (iii) may rely conclusively on the Authority’s calculations and determinations and certifications relating to rebate matters; and (iv) shall have no responsibility to independently make any calculations or determinations or to review the Authority’s calculations or determinations thereunder. (i) Annual Computation. Within 55 days of the en d of every fifth Bond Year (as such term is defined in the Tax Certificate), the Authority shall calculate or cause to be
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calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Reg ulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “Rebatable Arbitrage”). The Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (ii) Annual Transfer. Within 55 days of the end of each Bond Year, upon the written Request of the Authority, an amount shall be deposited to the Rebate Fund by the Trustee from any Authority Revenues legally available for such purpose (as specified by the Authority in the aforesaid written Request), if and to the extent required so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon written Request of the Authority, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Revenue Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by Request of the Authority, to the United States Treasury, out of amounts in the Rebate Fund:
(A) Not later than 60 days after the end of: (X) the fifth Bond Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (B) Not later than 60 days after the payment of all the 2026A Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.
In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T (prepared by the Authority), or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the 2026A Bonds and the payments described in subsection (a) above being made may be withdrawn by the Authority and utilized in any manner by the Authority. (c) Survival of Defeasance . Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the 2026A Bonds.
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Section 5.09. Application of Funds and Accoun ts When No 2026A Bonds are Outstanding.
On the date on which all 2026A Bonds shall be retired hereunder or provision made therefor pursuant to Article X and after payment of all amounts due the Trustee hereunder, all moneys then on deposit in any of the funds or accounts (other than the Rebate Fund) established with the Trustee pursuant to the Indenture shall be withdrawn by the Trustee and paid to the Authority for distribution in accordance with the Installment Purchase Agreement.
ARTICLE VI
PARTICULAR COVENANTS
Section 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal and interest to become due in respect of all the 2026A Bonds, in strict conformity with the terms of the 2026A Bonds and of the Indenture, according to the true intent and meaning thereof, but only out of Authority Revenues and other assets pledged for such payment as provided in the Indenture.
Section 6.02. Extension of Payment of 2026A Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the ma turity of any of the 2026A Bonds or the time of payment of any claims for interest by the purchase of such 2026A Bonds or by any other arrangement, and in case the maturity of any of the 2026A Bonds or the time of payment of any such claims for interest shall be extended, such 2026A Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of the Indenture, except subject to the prior payment in full for the principal of all of the 2026A Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended.
Section 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrances upon the Authority Revenues and other assets pledged or assigned under the Indenture while any of the 2026A Bonds are Outstanding, except the pledge and assignment created by the Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Joint Powers Agreement, and reserves the right to issue other obligations for such purposes.
Section 6.04. Power to Issue 2026A Bonds and Make Pledge and Assignment. The Authority is duly authorized p ursuant to law to issue the 2026A Bonds and to enter into the Indenture and to pledge and assign the Authority Revenues and other assets purported to be pledged and assigned under the Indenture in the manner and to the extent provided in the Indenture. Th e 2026A Bonds and the provisions of the Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Authority Revenues and other assets and all the rights of the 2026A Bond Owners under the Indenture against all claims and demands of all persons whomsoever.
Section 6.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of 2026A Bonds, the Authority Revenues and all funds and accounts established by it pursuant to the Indenture. Such books of record and account shall be available for
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inspection by the Authority and the City upon reasonable prior notice during business hours and under reasonable circumstances.
Section 6.06. Tax Covenants. Notwithstanding any other provision of the Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of the portion of interest on the 2026A Bonds will not be adversely affected for federal income tax purposes, the Authority covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income with respect to the 2026A Bonds and specifically covenants, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The Authority will take no action or refrain from taking any action or make any use of the proceeds of the 2026A Bonds or of any other moneys or property which would cause the 2026A Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
(b) Arbitrage. The Authority will make no use of the proceeds of the 2026A Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the 2026A Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(c) Federal Guarantee. The Authority will make no use of the proceed s of the 2026A Bonds or take or omit to take any action that would cause the 2026A Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) Information Reporting . The Authority will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code necessary to preserve the exclusion of interest on the 2026A Bonds pursuant to Section 103(a) of the Code;
(e) Hedge Bonds. The Authority will make no use of the proceeds o f the 2026A Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause either the 2026A Bonds to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the Authority takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the 2026A Bonds for federal income tax purposes; and (f) Miscellaneous. The Authorit y will take no action or refrain from taking any action inconsistent with its expectations stated in that certain Tax Certificate executed by the Authority in connection with the issuance of the 2026A Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein.
This Section and the covenants that are set forth herein shall not be applicable to, and nothing that is contained herein shall be deemed to prevent the Authority from issuing revenue bonds or executing and delivering contracts that are payable on a parity with the 2026A Bonds, the interest with respect to which has been determined to be subject to federal income taxation.
Section 6.07. Payments Under Installment Purchase Agreement . The Authority shall promptly collect all Series 2026A Installment Payments due from the City pursuant to the Installment Purchase Agreement and, subject to the provisions of Article VIII, shall enforce, and take all steps,
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actions and proceedings which the Authority or the Trustee determines to be reasonably necessary for the enforcement of all of the obligations of the City thereunder.
The Authority shall not enter into any amendments to the Installment Purchase Agreement except as permitted therein. The Trustee shall give written conse nt only if: (a) such amendment, modification or termination will not materially adversely affect the interests of the 2026A Bond Owners; or (b) the Trustee first obtains the written consent of the Owners of a majority in aggregate principal amount of the 2026A Bonds then Outstanding to such amendment, modification or termination.
Section 6.08. Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in the Indenture or in the 2026A Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.
Section 6.09. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture and for th e better assuring and confirming unto the Owners of the 2026A Bonds of the rights and benefits provided in the Indenture.
Section 6.10. Eminent Domain. If all or any part of the 2026A Project shall be taken by eminent domain proceedings (or sold to a government entity threatening to exercise the power of eminent domain), the Net Proceeds therefrom shall be applied in the manner specified in Section 6.16 of the Installment Purchase Agreement.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 7.01. Events of Default. The following events shall be Events of Default hereunder:
(a) Default by the Authority in the due and punctual payment of the principal of any 2026A Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise. (b) Default by the Authority in the due and punctual payment of any installment of interest on any 2026A Bonds when and as the same shall become due and payable. (c) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in the Indenture or in the 2026A Bonds contained, if such default shall have continued for a period of thirty (30) days after written notice thereof specifying such default and requiring the same to be remedied shall have been given to the Authority by the Trustee or by the Owners of not less than a majority in aggregate principal amount of 2026A Bonds Outstanding; provided, however, that if in the reasonable opinion of the Authority the default stated in the notice can be corrected, but not within such thirty (30) day period, and corrective action is instituted by the Authority , within such thirty (30) day period and diligently pursued in good faith until the default is corrected, such default shall not be an Event of Default hereunder.
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(d) The Authority shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Authority seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any su bstantial part of its property.
(e) An Event of Default shall occur under the Installment Purchase Agreement.
Section 7.02. Remedies Upon Event of Default . If any Event of Default shall occur, then, and in each and every such case during the continuance of such Event of De fault, the Trustee may, declare the principal of all of the 2026A Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, any thing in the Indenture or in the 2026A Bonds contained to the contrary notwithstanding.
Nothing contained in the Indenture shall permit or require the Trustee or the Authority to accelerate payments due under the Installment Purchase Agreement if the City, which is a party to such Installment Purchase Agreement, is not in default of its obligation thereunder.
Any such declaration is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Authority or the City shall deposit with the Trustee a sum sufficient to pay all the principal of and installments of interest on the 2026A Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the respective 2026A Bonds to the extent permitted by law, and the reasonable charges and expenses of the Trustee, and any and all other Events of Default known to the Trustee shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case the Trustee shall on behalf of the Owners of all of the 2026A Bonds, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon.
Section 7.03. Application of Authority Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Authority Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of the Indenture (other than amounts held in the Rebate Fund) shall be applied by the Trustee as follows and in the following order:
(i) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the 2026A Bonds and payment of reasonable fees and expenses of the Trustee (inclu ding reasonable fees and disbursements of accountants and counsel) incurred in and about the performance of its powers and duties under the Indenture; (ii) To the payment of the principal of and interest then due on the 2026A Bonds (upon presentation of the 2026A Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of the Indenture, in the following order of priority:
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First: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal of any 2026A Bonds which shall have become due, whether at maturity or by acceleration or redemption, with interest on the overdue principal at the rate of eight percent (8%) per annum, and, if the amount available shall not be sufficient to pay in full all the 2026A Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference; and Third: If there shall exist any remainder after the foregoing payments, such remainder shall be paid to the Authority.
Section 7.04. Trustee to Represent 2026A Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the 2026A Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney in fact of the Owners of the 2026A Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the 2026A Bonds or the Indenture and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the 2026A Bond Owners, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of the 2026A Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specifi c performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under the 2026A Bonds or the Indenture or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Authority Revenues and other assets pledged under the Indenture, pending such proceedings. All rights of action under the Indenture or the 2026A Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the 2026A Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such 2026A Bonds, subject to the provisions of the Indenture. Except to the extent provided in the Section 7.10 , nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment, or composition affecting the 2026A Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.
Section 7.05. 2026A Bond Owners’ Direction of Proceedings. Anything in the Indenture to the contrary notwithstanding, the Ow ners of a majority in aggregate principal amount of the 2026A Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonabl e satisfaction to direct the method of conduct in all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of
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the Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to 2026A Bond Owners not parties to such direction.
Section 7.06. Suit by Owners. No Owner of any 2026A Bonds shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under the Indenture, the Installment Purchase Agreement, the Joint Powers Agreement or any other applicable law with respect to such 2026A Bonds, unless: (a) such Owners shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of not less than twenty five percent (25%) in aggregate principal amount of the 2026A Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have failed to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such sixty (60) day period by the Owners of a majority in aggregate principal amount of the 2026A Bonds then Outstanding.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of 2026A Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of 2026A Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of the Indenture or the rights of any other Owners of 2026A Bonds, or to enforce any right under the 2026A Bonds, the Indenture, th e Installment Purchase Agreement, the Joint Powers Agreement or other applicable law with respect to the 2026A Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding 2026A Bonds, subject to the provisions of the Indenture.
Section 7.07. Absolute Obligation of the Authority . Nothing in this Section 7.07 or in any other provision of the Indenture or in the 2026A Bonds contained shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest on the 2026A Bonds to the respective Owners of the 2026A Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Authority Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the 2026A Bonds.
Section 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the 2026A Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.
Section 7.09. No Waiver of Default. No delay or omission of the Trustee or of any Owner of the 2026A Bonds to exercise any right or power arising upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein.
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ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties, Immunities and Liabilities of Trustee. (a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such d uties and only such duties as are expressly and specifically set forth in the Indenture. These duties shall be deemed purely ministerial in nature, the Trustee shall not be liable except for the performance of such duties , and no implied covenants or duties shall be read into the Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(b) The Authority may remove the Trustee at any time, unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the 2026A Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee and thereupon shall promptly appoint a successor Trustee by an instrument in writing. (c) The Trustee may at any time resign and be discharged from its duties and obligations hereunder by giving thirty (30) calendar days’ written notice of such resignati on to the Authority and by giving the 2026A Bond Owners notice of such resignation (which notice may be by electronic means) . Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. (d) Any removal or resignation upon thirty (30) calendar days’ prior notice of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty five (45) calendar days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee (at the sole cost and expense of the Authority, including with respect to reasonable attorneys’ fee s and expenses) or any 2026A Bond Owner (on behalf of himself and all other 2026A Bond Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee and for other appropriate relief , and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee and grant such other relief. Any successor Trustee appointed under the Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyanc e or further
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assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under the Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the Authority shall mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which is then rating the 2026A Bonds and to the 2026A Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority. (e) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a trust company, banking association or bank having the powers of a trust company, having a combined capital and surplus of at leas t Seventy Five Million Dollars ($75,000,000), and subject to supervision or examination for federal or state authority. If such bank, banking association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such trust company, banking association or bank shall be deemed to be its combined capital and surplus as set for th in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section.
Section 8.02. Merger or Consolidation. Any trust company, banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such trust company, banking association or bank shall be eligible under subsection (e) of Section 8.01, shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
Section 8.03. Liability of Trustee.
(a) The recitals of facts herein and in the 2026A Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of the Indenture, the 2026A Bonds or the Installment Purchase Agreement, nor shall the Trustee incur any responsibility in respect thereof, other than as specifically and expressly stated herein in connection with the respective duties or obligations herein or in the 2026A Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the 2026A Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct , as finally adjudicated by a court of competent jurisdiction. The Trustee may become the Owner of 2026A Bonds with the same rights it would have if it were not Trustee, and, to the extent permitte d by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect
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to, any committee formed to protect the rights of 2026A Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the 2026A Bonds then Outstanding.
(b) The Trustee shall not be liable for any action taken or error of judgment made in good faith by it or any of its directors, officers, employees, attorneys or agents , unless it shall be finally adjudicated by a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordanc e with the direction of the Owners of not less than a majority (or such other percentage provided for herein) in aggregate principal amount of the 2026A Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for a ny remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under the Indenture.
(d) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or ri ghts or powers conferred upon it by the Indenture.
(e) The Trustee shall not be deemed to have knowledge of any default or Event of Default hereunder or under the Installment Purchase Agreement or any other event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default hereunder or under the Installment Purchase Agreement unless and until a Responsible Officer of the Trustee shall have actual knowledge of such event or the Trustee shall have been notified in writing, in accordance with Section 11.07, of such event by the Authority or the Owners of not less than twenty five percent (25%) of the 2026A Bonds then Outstanding. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or in quire as to the performance or observance by the Authority or the City of any of the terms, conditions, covenants or agreements herein, or under the Installment Purchase Agreement, of any of the documents executed in connection with the 2026A Bonds, or as to the existence of an Event of Default thereunder or an event which would, with the giving of notice, the passage of time, or both, constitute an Event of Default thereunder. The Trustee shall not be responsible for the validity, effectiveness or priority of any collateral given to or held by it.
(f) No provision of the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of any of its rights or powers.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of Owners pursuant to the Indenture, unless such Owners shall have furnished to the Trustee security or indemnity (satisfactory to the Trustee in its sole and absolute discretion) against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. No permissive power, right or remedy conferred upon the Tr ustee hereunder shall be construed to impose a duty to exercise such power, right or remedy and the Trustee shall not be answerable for other than its negligence or willful misconduct , as finally adjudicated by a court of competent jurisdiction.
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(h) Whether or not herein expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VIII.
(i) The Trustee shall have no re sponsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the 2026A Bonds. (j) The immunities extended to the Trustee also extend to its directors, officers, employees and agents.
(k) The Trustee may execute any of the trusts or powers of the Indenture and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of the same if appointed by it with reasonable care. (l) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in the performance of such obligations due to caus es beyond its control which affect the Trustee’s ability to perform its obligation hereunder, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quaranti ne restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the 2026A Project, malicious mischief, condemnation, unusually severe weather or delays of suppliers or subcontractors due to such causes, the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other event and/or occurrences similar to any of the foregoing beyond the control of the Trustee.
(m) The Trustee shall be entitled to request and receive writt en instructions from Authority and shall have no responsibility or liability for any losses or damages of any nature that may arise from any action taken or not taken by the Trustee in accordance with the written direction of Authority. The Trustee shall h ave the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means (“Electronic Means” means the following communications methods: e-mail, facsimil e transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Authority shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority, whenever a person is to be added or deleted from the listing. If the Authority elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Authority understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Authority shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Authority and all
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Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication ke ys upon receipt by the Authority. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Authority agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Ins tructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of it s particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
(n) Notwithstanding the effective date of this Indenture or anything to the contrary in this Indenture, the Trustee shall have no liability or responsibility for any act or event relating to this Indenture which occurs prior to the date the Trustee formally executes this Indenture and commences acting as Trustee hereunder.
(o) The Trustee shall not be conc erned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
(p) The permissive right of the Trustee to do things enumerated herein shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct, as finally adjudicated by a court of competent jurisdiction. (q) The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the 2026A Bonds. (r) In no event shall the Trustee be responsible or liable for special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood o f such loss or damage and regardless of the form of action. (s) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder either directly or by or through attorneys or agents and shall be entitled to rely on and shall not be liable for any action taken or omitted to be taken by the Trustee in accordance with the advice of counsel or other professionals retained or consulted by the Trustee concerning all matters of trust and its duties hereunder and shall be absolutely protected in relying thereon. The Trustee shall not be responsible for the acts or omissions of such attorneys or agents selected by it with due care. The Trustee may, at the expense of Authority, request, rely on and act in accordance with officer’s certificates and/or opinions of counsel, and shall incur no liability and shall be fully protected in acting or refraining from acting in accordance with such officer’s certificates and opinions of counsel.
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(t) Neither the Trustee nor any of its directo rs, officers, employees, agents or affiliates shall be responsible for nor have any duty to monitor the performance or any action of the Authority, or any of their directors, members, officers, agents, affiliates or employee, nor shall it have any liabilit y in connection with the malfeasance or nonfeasance by such party. The Trustee may assume performance by all such Persons of their respective obligations. The Trustee shall have no enforcement or notification obligations relating to breaches of representa tions or warranties of any other Person.
Section 8.04. Right to Rely on Documents . The Trustee shall be protected in acting upon any notice, resolution, requisition, request, consent, order, judgment, decree, certificate, report, opinion, notes, direction, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties , not only as to due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein. The Trustee may consult with counsel, who may be counsel of or to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.
The Trustee may treat the Owners of the 2026A Bonds appearing in the Trustee’s Registration Books as the absolute owners of the 2026A Bonds for all purposes and the Trustee shall not be affected by any notice to the contrary.
Whenever in the administration of the trusts imposed upon it by the Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action h ereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate, Request or Requisition of the Authority, and such Certificate, Request or Requisiti on shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of the Indenture in reliance upon such Certificate, Request or Requisition, but in its discretion the Trustee may, in lieu thereof, accept other evi dence of such matter or may require such additional evidence as it may deem reasonable.
Section 8.05. Preservation and Inspection of Documents . All documents received by the Trustee under the provisions of the Indenture shall be retained in their respective possession and shall be subject at all reasonable times to the inspection of the Authority, the City and any 2026A Bond Owner, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions.
Section 8.06. Compensation and Indemnification. The Authority and the City shall pay to the Trustee from time to time all reasonable compensation for all services rendered under the Indenture, and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under the Indenture.
The Authority and the City shall indemnify, defend and hold harmless the Trustee, its officers, employees, directors, attorneys and agents from and against any loss, costs, claims, liability or expense (including fees, costs and expenses of its attorneys and advisors) incurred without negligence or willful misconduct on its part (as finally adjudicated by a court of competent jurisdiction), arising out of or in connection with the execution of the Indenture, acceptance or administration of this trust, including
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costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder. The rights of the Trustee and the obligations of the Authority under this Section 8.06 shall survive removal or resignation of the Trustee hereunder or the discharge of the 2026A Bonds and the Indenture.
ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE
Section 9.01. Amendments Permitted.
(a) The Indenture and the rights and obligations of the Authority and of the Owners of the 2026A Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental thereto, which the Authority and the Trustee may enter into with the written consent of the Owners of a majority in aggregate principal amount of 2026A Bond Outstanding, shall have been filed with the Trustee. No such modification or amendment shall: (1) extend the fixed maturity of any 2026A Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the rate of interest or the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each 2026A Bond so affected; or (2) reduce the aforesaid percentage of 2026A Bonds the consent of the Owners of which is requ ired to effect any such modification or amendment, or permit the creation of any lien on the Authority Revenues and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture except as permitted herein, or depr ive the Owners of the 2026A Bonds of the lien created by the Indenture on such Authority Revenues and other assets except as permitted herein, without the consent of the Owners of all of the 2026A Bonds then Outstanding. It shall not be necessary for the consent of the 2026A Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Authority and the Trustee of any Supplemental Indenture pursuant to this subsection (a), the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture, to each Rating Agency and the Owners of the 2026A Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. (b) The Indenture and the rights and obligations of the Authority, the Trustee and the Owners of the 2026A Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any 2026A Bond Owners, if the Trustee shall receive an opinion o f Bond Counsel to the effect that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Outstanding 2026A Bonds, including, without limitation, for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Authority contained in the Indenture other covenants and agreements thereafter to be observed, to pledge or assign additional security for the 2026A Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority;
(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in the
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Indenture, or in regard to matters or questions arising under the Indenture, as the Authority may deem necessary or desirable;
(3) to modify, amend or supplement the Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or an y similar federal statute hereunder in effect, and to add such other terms conditions and provisions as may be permitted by said act or similar federal statute; and
(4) to modify, amend or supplement the Indenture in such manner as to cause interest on the 2026A Bonds to remain excludable from gross income under the Code. (c) The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture authorized by subsections (a) or (b) of this Section which materially adversely affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise. (d) Prior to the Trustee entering into any Supplemental Indenture hereunder, there shall be delivered to the Trustee an opinion of Bond Counsel stating, in substance, th at such Supplemental Indenture has been adopted in compliance with the requirements of the Indenture and that the adoption of such Supplemental Indenture will not, in and of itself, adversely affect the exclusion of interest on the 2026A Bonds from federal income taxation and from state income taxation.
Section 9.02. Effect of Supplemental Indenture . Upon the execution of any Supplemental Indenture pursuant to this Article, the Indenture shall be deemed to be modified and amended in accordance therewith, and the respect ive rights, duties and obligations under the Indenture of the Authority, the Trustee , and all Owners of 2026A Bonds Outstanding shall thereafter be determined, exercised and enforced thereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of the Indenture for any and all purposes.
Section 9.03. Endorsement of 2026A Bonds; Preparation of New 2026A Bonds. 2026A Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Trustee so determines, shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any 2026A Bonds Outstanding at the time of such execution and presentation of his or her 2026A Bonds for the purpose at the Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such 2026A Bonds. If the Supplemental Indenture shall so provide, new 2026A Bonds so modified as to conform, in the opinion of the Authority and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand on the Owners of any 2026A Bonds then Outstanding shall be exchang ed at the Office of the Trustee, without cost to any 2026A Bond Owner, for 2026A Bonds then Outstanding, upon surrender for cancellation of such 2026A Bonds, in equal aggregate principal amount of the same maturity.
Section 9.04. Amendment of Particular 2026A Bonds. Th e provisions of this Article shall not prevent any 2026A Bond Owner from accepting any amendment as to the particular 2026A Bonds held by him.
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ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Indenture . The 2026A Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority:
(a) by paying or causing to be paid the principal of and interest and redemption premiums (if any) on the 2026A Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem all 2026A Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, all of the 2026A Bonds then Outstanding.
If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority, then and in that case, at the election of the Authority (as evidenced by a Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and the Indenture), and notwithstanding that any 2026A Bonds shall not have been surrendered for payment, the Indenture and the pledge of Authority Revenues and other assets made under the Indenture and all covenants, agreements and other obligations of the Authority under the Indenture shall cease, terminate, become void and be completely discharge d and satisfied. In such event, upon the Request of the Authority, the Trustee shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver all moneys or securities or other property held by it pursuant to the Indenture which are not required for the payment or redemption of 2026A Bonds not theretofore surrendered for such payment or redemption to the Authority.
Section 10.02. Discharge of Liability on 2026A Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section
10.03) to pay or redeem any Outstanding 2026A Bonds (whether upon or prior to the maturity or the redemption date of such 2026A Bonds), provided that, if such Outstanding 2026A Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provisions satisfactory to the Trustee s hall have been made for the giving of such notice, then all liability of the Authority in respect of such 2026A Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject however, to the provisions of Section 10.04.
The Authority may at any time surrender to the Trustee for cancellation by it any 2026A Bonds previously issued and delivered, wh ich the Authority may have acquired in any manner whatsoever, and such 2026A Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
Section 10.03. Deposit of Money or Securities with Trustee . Whenever in the Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any 2026A Bonds, the money or securities so to be deposited
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or held may inclu de money or securities held by the Trustee in the funds and accounts established pursuant to the Indenture and shall be:
(a) lawful money of the United States of America in an amount equal to the principal amount of such 2026A Bonds and all unpaid interest thereon to maturity, except that, in the case of 2026A Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provisions satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such 2026A Bonds and all unpaid interest and premium, if any, thereon to the redemption date; or
(b) Federal Securities the principal of and interest on which when due will, in the written opinion of an Independent Certified Public Accountant filed with the Authority and the Trustee, provide money sufficient to pay the principal of and all unpaid interest to maturity, or to the redemption date (with premium, if any), as the case may be, on the 2026A Bonds to be paid or redeemed, as such principal, interest and premium, if any, become due, provided that in the case of 2026A Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice;
provided, in each case, that: (i) the Trustee shall have been irrevocably instructed (by the terms of the Indenture or by Written Request of the City) to apply such money to the payment of such principal, interest and premium, if any, with respect to such 2026A Bonds as directed by the City; (ii) the City shall have delivered to the Trustee an opinion of Bond Counsel addressed to the City and the Trustee to the effect that such 2026A Bonds have been discharged in accordance with the Indenture (which opinion may rely upon and assume the accuracy of the Independent Certified Public Accountant’s or Independent Financial C onsultant’s opinion referred to above); (iii) the City shall have delivered an escrow agreement; and (iv) the City shall have delivered a certificate of discharge of the Trustee with respect to the 2026A Bonds. The opinion of Bond Counsel and Independent Certified Public Accountant’s or Independent Financial Consultant’s opinion referred to above shall be acceptable in form and substance, and addressed, to the City and Trustee.
The 2026A Bonds shall be deemed Outstanding under this Indenture unless and until they are in fact paid and retired or the above criteria are met.
Section 10.04. Payment of 2026A Bonds After Discharge of Indenture. Notwithstanding any provisions of the Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any 2026A Bonds and remaining unclaimed for two (2) years after the principal of all of the 2026A Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in the Indenture), if such moneys were so held at such date, or two (2) years after the date of deposit of such moneys if deposited after said date when all of the 2026A Bonds became due and payable, shall be repaid to the Authority (without liability for interest) free from the trusts cre ated by the Indenture upon receipt of an indemnification agreement acceptable to the Authority and the Trustee indemnifying the Trustee with respect to claims of Owners of 2026A Bonds which have not yet been paid, and all liability of the Trustee with resp ect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall at the written direction of the Authority (at the cost of the Authority) first mail to the Owners of 2026A Bonds which have not yet been paid, at the addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect
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to the 2026A Bonds so payable and not presented and with respect to the provisions r elating to the repayment to the Authority of the moneys held for the payment thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Liability of Authority Limited to Authority Revenues . Notwithstanding anything in the Indenture or the 2026A Bonds, the Authority shall not be required t o advance any moneys derived from any source other than the Authority Revenues and other moneys pledged under the Indenture for any of the purposes in the Indenture mentioned, whether for the payment of the principal of or interest on the 2026A Bonds or for any other purpose of the Indenture. Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes.
The 2026A Bonds are not a debt of the members of the Authority, the State or any of its political subdivisions (other than the Authority) and neither the members of the Authority, said State nor any of its political subdivisions (other than the Authority) is liable herein. The City shall have no liability or obligation herein except with respect to Series 2026A Installment Payments payable under the Installment Purchase Agreement.
Section 11.02. Successor Is Deemed Included in All References to Predecessor. Whenever in the Indenture either the Authority or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in the Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to t he benefit of the respective successors and assigns thereof whether so expressed or not.
Section 11.03. Limitation of Rights to Parties and 2026A Bond Owners. Nothing in the Indenture or in the 2026A Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City, the Insurer and the Owners of the 2026A Bonds, any legal or equitable right, remedy or claim under or in respect of the Indenture or any covenant, condition or provision therein or herein contai ned; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City, the Insurer and the Owners of the 2026A Bonds.
Section 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in the Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condit ion precedent to the validity of any action taken in reliance upon such waiver.
Whenever in the Indenture any notice shall be required to be given by mail, such requirement shall be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail.
Section 11.05. Destruction of 2026A Bonds. Whenever in the Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any 2026A Bonds, the Trustee shall destroy such 2026A Bonds as may be allowed by law, and deliver a certificate of such destruction to the Authority.
Section 11.06. Entire Agreement; Severability of Invalid Provisions. This Indenture and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction
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and supersedes all prior agreements and understandings, oral or written . If any one or more of the provisions contained in the Indenture or in the 2026A Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in the Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of the Indenture, and the Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority hereby declares that it would have entered into the Indentu re and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the 2026A Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of the Indenture may be held illegal, invalid or unenforceable.
Section 11.07. Notices. Any notice to or demand upon the Authority or the Trustee shall be deemed to have been sufficiently given or served for all purposes by being sent by telex or by being deposited, first class mail, postage prepaid, in a post office letter box, addressed, as the case may be, to the Authority, c/o City or Moreno Valley, 14177 Frederick Street, Moreno Valley, California 92552, Attention: Executive Director (or such other address as may have been filed in writing by the Authority with the Trustee), to the Trustee at its Office by first class mail. Notwithstanding the foregoing provisions of this Section 11.07, the Trustee shall not be deemed to have received, and shall not be liable for failing to act upon the contents of, any notice unless and until the Trustee actually receives such notice.
Section 11.08. Evidence of Rights of 2026A Bond Owners. Any request, consent or other instrument required or permitted by the Indenture to be signed and executed by 2026A Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such 2026A Bond Owners in person or by an agent or agents duly appointed in writing.
Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of 2026A Bonds transferable by delivery, shall be sufficient for any purpose of the Indenture and shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section.
The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, author ized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such n otary public or other officer.
The Ownership of 2026A Bonds shall be proved by the Registration Books.
Any request, consent, or other instrument or writing of the Owner of any 2026A Bond shall bind every future Owner of the same 2026A Bond and the Owner of every 2026A Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon.
Section 11.09. Disqualified 2026A Bonds. In determining whether the Owners of the requisite aggregate principal amount of 2026A Bonds have concurred in any demand, request, direction, consent or waiver under the Indenture, 2026A Bonds which are known by the Trustee to be owned or held by or for the account of the Authority, or by any other obligor on the 2026A Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the
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Authority or any other obligor on the 2026A Bonds, shall be disregarded and de emed not to be Outstanding for the purpose of any such determination. 2026A Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such 2026A Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or any other obligor on the 2026A Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request, the Authority shall certify to the Trustee those 2026A Bonds that are disqualified pursuant to this Section 11.09 and the Trustee may conclusively rely on such certificate.
Section 11.10. Money Held for Particular 2026A Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular 2026A Bonds (or portions of 2026A Bonds in the case of registered 2026A Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the 2026A Bonds entitled thereto, subject, however, to the provisions of Section
10.04 hereof but without any liability for interest thereon.
Section 11.11. Funds and Accounts . Any fund or account required by the Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate trust industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the 2026A Bonds and the rights of every Owner thereof.
Section 11.12. Waiver of Personal Liability. No member, officer, agent, employee, consultant or attorney of the Authority or the City shall be individually or personally liable for the payment of the principal of or premium or interest on the 2026A Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent, employee, consultant or attorney from the performance of any official d uty provided by law or by the Indenture.
Section 11.13. Execution in Several Counterparts . The Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
Section 11.14. CUSIP Numbers. Neither the Trustee nor the Authority shall be liable for any defect or inaccuracy in the CUSIP number that app ears on any 2026A Bond or in any redemption notice. The Trustee may, in its discretion, include in any redemption notice a statement to the effect that the CUSIP numbers on the 2026A Bonds have been assigned by an independent service and are included in s uch notice solely for the convenience of the 2026A Bondholders and that neither the Authority nor the Trustee shall be liable for any inaccuracies in such numbers.
Section 11.15. Choice of Law . THE INDENTURE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.
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Section 11.16. Notice to Rating Agencies . The Trustee shall provide any Rating Agency rating the 2026A Bonds with written notice of each amendment to the Indenture and a copy thereof at least 15 days in advance of its execution.
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IN WITNESS WHEREOF, the Authority has caused the Indenture to be signed in its name by its Executive Director and attested by its Secretary, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused the Indenture to be signed in its corporate name by its officers thereunto duly authorized, all as of the day and year first above written.
MORENO VALLEY PUBLIC FINANCING
AUTHORITY
By:
Its: Executive Director
Attest:
Secretary
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:
Its: Authorized Officer
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EXHIBIT A
FORM OF 2026A BOND
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AS DEFINED IN THE INDENTURE) TO TH E TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO S UCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. ____ $__________
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
MORENO VALLEY PUBLIC FINANCING AUTHORITY
ELECTRIC SYSTEM REVENUE BOND, SERIES 2026A
INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE CUSIP
____% May 1, 20____ ____ ___, 20___ _____
REGISTERED OWNER CEDE & CO.
PRINCIPAL AMOUNT: _________________________________________ DOLLARS
The MORENO VALLEY PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this 2026A Bond (unless: (i) this 2026A Bond is authenticated after the fifteenth day of the calendar month preceding an interest payment date, whether or not such day is a business day, and on or before the following interest payment date, in which event it shall bear interest from such interest payment date; or (ii) this 2026A Bond is authenticated on or before _______ 15, 20__, in which event it shall bear interest from the Original Issue Date identified above; provided, however, that if as of the date of authentication of this 2026A Bond, interest is in default on this 2026A Bond, this 2026A Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on this 2026A Bond), at the Interest Rate per annum specified above, payable se miannually on May 1 and November 1 in each year, commencing _____ 1, 20__, calculated on the basis of a 360-day year composed of twelve 30-day months. Principal hereof and premium, if any, upon early redemption hereof are payable by check of the Trustee u pon presentation and surrender hereof at the Office (as defined in the hereinafter described Indenture) of
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Wilmington Trust, National Association, as trustee (the “Trustee”). Interest hereon is payable by check of the Trustee sent by first class mail on the applicable interest payment date to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fifteenth day of the month preceding each interest payment date ( except that in the case of a registered owner of one million dollars ($1,000,000) or more in principal amount, such payment may, at such registered owner’s option, be made by wire transfer of immediately available funds to an account in the United States i n accordance with written instructions provided to the Trustee by such registered owner prior to the fifteenth (15th) day of the month preceding such interest payment date).
This 2026A Bond is not a debt of the members of the Authority, the State of California, or any of its political subdivisions (other than the Authority), and neither the members of the Authority or said State, nor any of its political subdivisions (other than the Authority), is liable hereon, nor in any event shall this 2026A Bond be payable out of any funds or properties of the Authority other than the Authority Revenues (as such term is defined in the Indenture of Trust, dated as of _____ 1, 2026 (the “Indenture”), by and between the Authority and the Trustee) and other moneys pledged therefor under the Indenture. The obligation of the City to make payments in accordance with the Installment Purchase Agreement is a limited obligation of the City as set forth in the Installment Purchase Agreement (as such terms are defined in the Indenture) on a parity with other Bonds and Contracts (as such terms are defined in the Installment Purchase Agreement) of the City, and the City shall have no liability or obligation in connection herewith except with respect to such Series 2026A Installment Payments to be made pursuant to the Installment Purchase Agreement. The 2026A Bonds do not constitute an indebtedness of the Authority in contravention of any constitutional or statutory debt limitation or restriction.
This 2026A Bond is one of a duly authorized issue of bonds of the Authority designated as the “Moreno Valley Public Financing Authority Electric System Revenue Bonds, Series 2026A” (the “2026A Bonds”), of an aggregate principal amount of __________ Dollars ($________), all of li ke tenor and date (except for such variation, if any, as may be required to designate varying series, numbers or interest rates) and all issued pursuant to the Indenture and the resolution authorizing the issuance of the 2026A Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the 2026A Bonds are issued, the provisions with regard to the nature and extent of the Authority Revenues, and the rights thereunder of the Owners of the 2026A Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority hereunder, to all of the provisions of which the Registered Owner of this 2026A Bond, by accept ance hereof, assents and agrees. The 2026A Bonds have been issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof.
The 2026A Bonds have been issued by the Authority to finance and refinance certain public capital improvements and related costs, as more fully described in the Indenture.
This 2026A Bond and the interest, premium, if any, hereon and all other 2026A Bonds and the interest and premium, if any, thereon (to the extent set forth in the Indenture) are special obligations of the Authority, and are payable from, and are secured by a pledge and lien on the Authority Revenues, including all Series 2026A Installment Payments received from the City by the Authority or the Trustee, and any other amounts on deposit in certain funds and accounts created under the Indenture.
As and to the extent set forth in the Indenture, all of the Authority Revenues are exclusively and
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irrevocably pledged in accordance with the terms hereof and the provisions of the In denture, to the payment of the principal of and interest and premium (if any) on the 2026A Bonds.
The Indenture and the rights and obligations of the Authority and the Owners of the 2026A Bonds and the Trustee may be modified or amended from time to time . No such modification or amendment shall: (i) extend the fixed maturity of any 2026A Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon , or extend the time of payment of interest thereon, without the consent of the owner of each 2026A Bond so affected; or (ii) permit the creation of any lien on the Authority Revenues and other assets pledged under the Indenture prior to or on a parity wit h the lien created by the Indenture except as permitted in the Indenture, or deprive the Owners of the 2026A Bonds of the lien created by the Indenture on such Authority Revenues and other assets, except as expressly provided in the Indenture.
The Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of the 2026A Bonds may also be modified or amended for certain purposes described more fully in the Indenture at any time in the manner, to the extent and upon the terms provided in the Indenture by a supplemental indenture, which the Authority and the Trustee may enter into without the consent of any 2026A Bond Owners, if the Trustee shall receive an opinion of Bond Counsel to the effect that the provisions of such supplemental indenture will not materially adversely affect the interests of the Owners of the Outstanding 2026A Bonds.
The 2026A Bonds with stated maturities on or after May 1, 20__, shall be subject to redemption prior to their respective stated maturities, as a whole or in part on any date as directed by the Authority upon written Request to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the sole convenience of the Trustee) prior to such date and by lot within each maturity in integral multiples of $5,000, on or after May 1, 20__, at a redemption price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.
The 2026A Bonds with stated maturities on May 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each May 1 on and after May 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof pl us accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:
Redemption Date
(May 1)
Principal
Amount
* Final Maturity.
The 2026A Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any date in the order of maturity as directed by the Authority in a written request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in its sole discretion) prior to such date and by lot within each maturity in integral multiples of $5,000 from
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prepaid Series 2026A Installment Payments made by the City from Net Proceeds, upon the terms and conditions of, and as provided for in, the Installment Purchase Agreement, at a Redemption Price equal to the principal amount thereof and accrued interest thereon to the redemption date without premium.
As provided in the Indenture, notice of redemption shall be given by the Trustee not less than twenty (20) days prior to the redemption date to the respective Owners of any 2026A Bonds designated for redemption at their addresses appearing on the registration books of the Trustee; provided, however, that so long as the 2026A Bonds are registered in the name of the Nominee, notices of redemption shall be provided in such manner as complies with the requirements of DTC . Neither the failure to receive such notice nor any defect in the notice or the provision thereof shall a ffect the validity of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption.
If this 2026A Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
If an Event of Default, as defined in the Indenture, shall occur, the principal of all of the 2026A Bonds and the interest accrued thereon may be declared due and payab le upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.
This 2026A Bond is transferable by the Registered Owner hereo f, in person or by his or her duly authorized attorney in writing, at said office of the Trustee but only in the manner subject to the limitations and upon payment of the taxes and charges provided in the Indenture and upon surrender and cancellation of this 2026A Bond. Upon registration of such transfer, a new 2026A Bond or 2026A Bonds of the same series, of authorized denomination or denominations, for the same aggregate principal amount of the same maturity will be issued to the transferee in exchange therefor. 2026A Bonds may be exchanged at said office of the Trustee for a like aggregate principal amount of 2026A Bonds of other authorized denominations of the same series and same maturity, but only in the manner, subject to the limitations and upon pay ment of the taxes and charges provided in the Indenture.
The Trustee shall not be required to register the transfer or exchange of any 2026A Bond during the period in which the Trustee is selecting 2026A Bonds for redemption or any 2026A Bond that has been selected for redemption.
The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this 2026A Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Joint Powers Agreement, and the laws of the State of California and that the amount of this 2026A Bond, together with all other indebtedness of the Authority, does not exceed any limit under any laws of the State of California, and is not in excess of the amount of 2026A Bonds permitted to be issued under the Indenture.
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This 2026A Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee.
A-6
4902-1916-0721v6/022432-0050
IN WITNESS WHEREOF, the Authority has caused this 2026A Bond to be executed in its name and on its behalf by the facsimile signatures of its Executive Director and Acting Secretary , all as of this ____ day of _______, 2026.
MORENO VALLEY PUBLIC FINANCING
AUTHORITY
By:
Its: Executive Director
Attest:
Secretary
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
TO APPEAR ON BONDS]
This is one of the 2026A Bonds described in the within-mentioned Indenture.
Dated: ________, 2026
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:
Its: Authorized Signatory
A-7
4902-1916-0721v6/022432-0050
[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or
Social Security Number of Assignee)
the within registered 2026A Bond and hereby irrevocably constitute(s) and appoint(s) ______________________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated:
Note: The signature( s) on this Assignment must
correspond with the name(s) as written on the
face of the within 2026A Bond in every
particular without alteration or enlargement or
any change whatsoever.
Signature Guaranteed:
Note: Signature guarantee shall be made by a
guarantor institution participating in the
Securities Transfer Agents Medallion Program
or in such other guarantee program acceptable
to the Trustee.