55394.00068\42092121.3
BBK DRAFT – MAY 14, 2024
I
NDENTURE
between the
SANTA ANA PUBLIC FINANCING AUTHORITY
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee
Dated as of ______________, 2024
$______________
Santa Ana Public Financing Authority
Water Revenue Bonds, Series 2024
(Payable Solely from Installment Payments
Secured by Water System Net Revenues)
EXHIBIT 6
55394.00068\42092121.3
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; EQUAL SECURITY ............................................................ 2 Section 1.01. Definitions............................................................................................ 2 Section 1.02. Equal Security .................................................................................... 11 Section 1.03. Number, Gender and Variants ........................................................... 11 Section 1.04. Articles, Sections, Etc. ....................................................................... 11 ARTICLE II ISSUANCE OF 2024 BONDS; REGISTRATION AND TRANSFER OF BONDS .................................................................................................... 12 Section 2.01. Authorization and Purpose of 2024 Bonds ........................................ 12 Section 2.02. Execution of 2024 Bonds ................................................................... 12 Section 2.03. Transfer and Payment of Bonds ......................................................... 12 Section 2.04. Exchange of Bonds ............................................................................ 13 Section 2.05. Bond Registration Books ................................................................... 13 Section 2.06. Mutilated, Destroyed, Stolen or Lost Bonds ...................................... 13 Section 2.07. Temporary Bonds............................................................................... 14 Section 2.08. Validity of Bonds ............................................................................... 14 Section 2.09. Book-Entry System ............................................................................ 14 Section 2.10. Procedure for Issuance of 2024 Bonds .............................................. 17 ARTICLE III TERMS OF 2024 BONDS ............................................................................ 17 Section 3.01. Terms of 2024 Bonds ......................................................................... 17 Section 3.02. Redemption of 2024 Bonds ............................................................... 18 Section 3.03. Form of 2024 Bonds .......................................................................... 20 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS ..................................................... 20 Section 4.01. Conditions for the Issuance of Additional Bonds .............................. 20 Section 4.02. Procedure for the Issuance of Additional Bonds ............................... 21 ARTICLE V ESTABLISHMENT OF FUNDS; DEPOSIT AND APPLICATION OF PROCEEDS ............................................................................................. 23 Section 5.01. Establishment of Funds and Accounts ............................................... 23 Section 5.02. Application of Proceeds ..................................................................... 23 Section 5.03. Use of Moneys in the Acquisition Fund; Costs of Issuance Fund ................................................................................................... 23 ARTICLE VI REVENUES ................................................................................................... 24 Section 6.01. Pledge of Revenues ............................................................................ 24 Section 6.02. Receipt and Deposit of Revenues in the Payment Fund .................... 25 Section 6.03. Establishment and Maintenance of Accounts for Use of Money in the Payment Fund .......................................................................... 25 Section 6.04. Investment of Moneys in Funds and Accounts .................................. 27 55394.00068\42092121.3
TABLE OF CONTENTS
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ARTICLE VII COVENANTS OF THE AUTHORITY ........................................................ 27 Section 7.01. Punctual Payment and Performance .................................................. 27 Section 7.02. Tax Covenants; Rebate Fund ............................................................. 28 Section 7.03. Eminent Domain ................................................................................ 29 Section 7.04. Accounting Records and Reports....................................................... 29 Section 7.05. The City’s Budgets ............................................................................ 30 Section 7.06. Installment Purchase Agreement and Other Documents ................... 30 Section 7.07. Other Liens......................................................................................... 30 Section 7.08. Prosecution and Defense of Suits ...................................................... 31 Section 7.09. Further Assurances............................................................................. 31 Section 7.10. Continuing Disclosure ....................................................................... 31 ARTICLE VIII THE TRUSTEE ............................................................................................. 31 Section 8.01. Appointment and Acceptance of Duties ............................................ 31 Section 8.02. Duties, Immunities and Liabilities of Trustee.................................... 31 Section 8.03. Merger or Consolidation .................................................................... 33 Section 8.04. Compensation .................................................................................... 33 Section 8.05. Liability of Trustee ............................................................................ 34 Section 8.06. Right to Rely on Documents .............................................................. 35 Section 8.07. Preservation and Inspection of Documents........................................ 35 ARTICLE IX AMENDMENT OF THE INDENTURE ....................................................... 36 Section 9.01. Amendment of the Indenture ............................................................. 36 Section 9.02. Disqualified Bonds............................................................................. 37 Section 9.03. Endorsement or Replacement of Bonds After Amendment .............. 37 Section 9.04. Amendment by Mutual Consent ........................................................ 37 ARTICLE X EVENTS OF DEFAULT AND REMEDIES OF HOLDERS ....................... 37 Section 10.01. Events of Default and Acceleration of Maturities ............................. 37 Section 10.02. Proceedings by Trustee ...................................................................... 38 Section 10.03. Effect of Discontinuance or Abandonment........................................ 39 Section 10.04. Rights of Owners ............................................................................... 39 Section 10.05. Restriction on Owners’ Action .......................................................... 39 Section 10.06. Power of Trustee to Enforce .............................................................. 40 Section 10.07. Remedies Not Exclusive .................................................................... 40 Section 10.08. Waiver of Events of Default; Effect of Waiver ................................. 40 Section 10.09. Application of Moneys ...................................................................... 40 ARTICLE XI DEFEASANCE.............................................................................................. 42 Section 11.01. Discharge of Bonds ............................................................................ 42 Section 11.02. Unclaimed Money .............................................................................. 43 55394.00068\42092121.3
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ARTICLE XII MISCELLANEOUS ...................................................................................... 43 Section 12.01. Liability of Authority Limited to Revenues ....................................... 43 Section 12.02. Benefits of Indenture Limited to Parties ............................................ 44 Section 12.03. Successor Is Deemed Included In All References To Predecessor ........................................................................................ 44 Section 12.04. Execution of Documents by Owners ................................................. 44 Section 12.05. Waiver of Personal Liability .............................................................. 44 Section 12.06. Acquisition of Bonds by Authority .................................................... 44 Section 12.07. Destruction of Cancelled Bonds ........................................................ 45 Section 12.08. Content of Certificates ....................................................................... 45 Section 12.09. Accounts and Funds ........................................................................... 45 Section 12.10. Partial Invalidity................................................................................. 45 Section 12.11. Execution in Counterparts.................................................................. 46 Section 12.12. Law Governing .................................................................................. 46 Section 12.13. Notices ............................................................................................... 46
EXHIBIT A – FORM OF 2024 BOND ..................................................................................... A-1 55394.00068\42092121.3
1 INDENTURE
THIS INDENTURE, made and entered into as of __________ 1, 2024, by and between the SANTA ANA PUBLIC FINANCING AUTHORITY, a California joint exercise of powers authority and public entity duly organized and existing under and by virtue of the laws of the State of California (the “Authority”), and U.S. Bank Trust C ompany, National Association, a national banking association organized and existing under and by virtue of the laws of the United States, as trustee (the “Trustee”);
WITNESSETH:
WHEREAS, the Authority was incorporated to provide financial assistance to the City of Santa Ana (the “City”);
WHEREAS, the City desires from time to time to acquire, construct, install and improve its water system as more fully described in Exhibit A to the Master Installment Purchase Agreement, dated as of _____________, 2024 (the “Installment Purchase Agreement”), by and between the City and the Authority, and as modified in accordance with the provisions thereof (the “Project”);
WHEREAS, concurrently with the prepayment of the Prior Obligations defined herein, the City will reacquire the Project and will resell the Project to the Authority and then repurchase the Project from the Authority pursuant to the provisions of the Installment Purchase Agreement and First Supplement to Master Installment Purchase Agreement (the “First Supp lemental Agreement”), dated as of the date hereof;
WHEREAS, to provide funds for the purchase of the Project, in order that the Project or Components thereof may be sold to the City pursuant to the Installment Purchase Agreement, the Authority desires to issue its Water Revenue Bonds, Series 2024 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the “2024 Bonds”), in the aggregate principal amount of $___________________;
WHEREAS, the 2024 Bonds will be secured by the payments to be made by the City pursuant to the Installment Purchase Agreement as supplemented by the First Supplemental Agreement;
WHEREAS, in order to provide for the authentication and delivery of the 2024 Bonds and any additional bonds issued hereunder (the 2024 Bonds and any such additional bonds being collectively referred to as the “Bonds”), to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and
WHEREAS, the Authority has determined that all acts and proceedings required by law necessary to make the Bonds, when issued and executed by the Authority and authenticated and delivered by the Trustee, the valid, binding and legal limited obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes he rein set forth 55394.00068\42092121.3
2 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.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of the principal of, premium, if any, and interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the ter ms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall, for all purposes of this Indenture and of any Supplemental Indenture, have the meanings set forth below:
“Acquisition Costs” means all costs of acquiring, constructing, instal ling or improving the Project, including but not limited to:
(i) all costs which the Authority or the City shall be required to pay to a manufacturer, vendor or contractor or any other person under the terms of any contract or contracts for the acquisition, construction, installation or improvement of the Project; (ii) obligations of the Authority or the City incurred for labor and materials (including obligations payable to the Authority or the City for actual out-of-pocket expenses of the Authority or the City) in connection with the acquisition, construction, installation or improvement of the Project, including reimbursement to the Authority or the City for all advances and payments made in connection with the Project prior to or after delivery of the Bonds; (iii) the costs of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect during the course of acquisition, construction, installation or improvement of the Project; (iv) all costs of engineering and architectural services, including the actual out- of-pocket costs of the Authority or the City for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees and sales commissions, and for supervising acquisition, construction, installation and improvement, as well as for the performance of all other duties required by or consequent to the proper acquisition, construction, installation or improvement of the Project; and
(v) any sums required to reimburse the Authority or the City for advances made by the Authority or the City for any of the above items or for any other costs incurred and for work 55394.00068\42092121.3
3 done by the Authority or the City which are properly chargeable to the acquisition, construction, installation or improvement of the Project.
“Acquisition Fund” means the fund by that name established under Section 5.01(c) hereof.
“Additional Bonds” means all revenue bonds of the Authority which are secured by Installment Payments authorized by and a t any time Outstanding pursuant hereto and executed, issued and delivered in accordance with Article IV hereof. “Annual Debt Service” means, for any Fiscal Year, the sum of (1) the interest payable on all Outstanding Bonds in such Fiscal Year, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of the sale of any Bonds), (2) the principal amount of all Outstanding Serial Bonds maturing by their terms in such Fiscal Year, and (3) the principal amount of all Outstanding Term Bonds required to be redeemed or paid in such Fiscal Year (together with the redemption premiums, if any, thereon). “Authority” means the Santa Ana Public Financing Authority, a California joint exercise of powers authority and public entity duly organized and existing under and by virtue of the laws of the State, and its successors or assigns.
“Authorized Denominations” means $5,000 and any integral multiple thereof. “Beneficial Owners” means those individuals, partnerships, corporations or other entities for whom the Participants have caused the Depository to hold Book-Entry Bonds. “Board” means the Board of Directors of the Authority.
“Bond Counsel” means any attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the validity of, and exclusion from gross income for federal income tax purposes of interest on, bonds i ssued by states and political subdivisions and duly admitted to practice law before the highest court of any state of the United States and acceptable to the Authority.
“Bonds” means the 2024 Bonds and all Additional Bonds.
“Book-Entry Bonds” means any Bon ds which are then held in book- entry form by a Securities Depository as provided in Section 2.09.
“Business Day” means a day of the year which is not a Saturday or Sunday, or a day on which banking institutions located in California are required or authorized to remain closed, or on which the New York Stock Exchange is closed. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture, and, unless otherwise specifically provided this Indenture, no interest shall accrue for the period from and after such nominal date.
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4 “Certificate of Completion” means a Certificate of the City filed with the Trustee, stating that the Components of the Project being financed with the proceeds of Bonds have been acquired, constructed, installed and improved and that all Acquisition Costs have been paid or provided for. “Certificate of the Authority” means an instrument in writing signed by the Chair , the Vice Chair, the Secretary or any Assistant Secretary of the Authority, or by any other officer of the Authority duly authorized by the Authority for that purpose. “Certificate of the City” means an instrument in writing signed by the Mayor, City Manager, Assistant City Manager, or Treasurer of the City, or by any other official of the City duly authorized by the City for that purpose.
“Charter” means the Charter of the City as it now exists or may hereafter be amended, and any new or successor Charter.
“City” means the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution, the laws of the State and its Charter. “Closing Date” means ______________, 2024.
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder, and any successor laws or regulations.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated as of the date hereof, executed by the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Corporate Trust Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California or such other or additional offices as may be specified to the Authority by the Trustee in writing.
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City or the Authority relating to the issuance, sale and delivery of the Bonds and the execution and delivery of this Indenture, the Installment Purchase Agreement and the Supplement, filing and recording costs, settlement costs, printing costs, reproduction and binding costs, initial fees and charges of the Trustee (including legal fees), legal fees and charges, insurance fees and charges, financial and other professional consultant fees, fees and charges of rating agencies and/or for credit ratings and fees in connection with the foregoing. “Costs of Issuance Fund” shall have the meaning given to such term in Section 5.01. “Defeasance Securities” means, to the extent permitted by State law, the following obligations which may be used as permitted investments to defease Outstanding Bonds:
(1) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation).
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5 (2) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series — “SLGs”).
(3) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of Treasury) the United States of America. (4) The interest component of Resolution Funding Corporation (REFCORP) strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form.
(5) Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s Global Ratings. If the issue is rated solely by Standard & Poor’s Global Ratings, the pre-refunded bonds must have been pre -refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipal bonds. (6) Obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America. a. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financing Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
f. U.S. Department of Housing and Urban Development
Project Notes
Local Authority Bonds
New Communities Debentures
U.S. Public Housing Notes and Bonds
“Depository” means th e securities depository acting as Depository pursuant to “DTC” means The Depository Trust Company, New York, New York, and its successors. “Escrow Agent” means U.S. Bank Trust Company , National Association , or any successor thereto under the Escrow Agreement.
“Escrow Agreement” means that certain Escrow Agreement, dated as of ______________________, 2024, by and among the City, the Authority and the Escrow Agent, as the same may be amended from time to time, relating to the Santa Ana Public Financing 55394.00068\42092121.3
6 Authority Water Revenue Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues).
“Event of Default” shall have the meaning set forth in Section 10.01 hereof. “Financial Newspaper” means The Wall Street Journal or The Bond Buyer or any other newspaper or journal printed in the English language publishing financial news and selected by the Trustee, whose decision shall be final and conclusive. “Fiscal Year” means the fiscal year of t he Authority which, as of the date hereof, is the period from July 1 to and including the following June 30. “Indenture” means this Indenture, dated as of _____________, 2024, between the Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented by all Supplemental Indentures executed pursuant to the provisions hereof. “Information Services” means “EMMA” or the “Electronic Municipal Market Access” system of the Municipal Securities Rulemaking Board; 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 designate in a Written Certificate of the Autority delivered to the Trustee.
“Installment Payments” means the Installment Payments scheduled to be paid by the City under and pursuant to the Installment Purchase Agreement and any supplement thereto. “Installment Purchase Agreement” means the Master Installment Purchase Agreement, dated as of ____________, 2024, entered into between the Authority, as seller, and the City, as purchaser, as originally executed and as it may from time to time be amended or supplemented pursuant to the provisions hereof and thereof.
“Interest Account” means the account by that name established under Section 5.01(b) hereof.
“Interest Payment Date” means each March 1 and September 1, commencing September 1, 2024.
“Letter of Representations” means the letter of the Trustee and Authority delivered to and accepted by the Depository on or prior to the delivery of the 2024 Bonds or any Additional 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 to a substitute Depository.
“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the state of Delaware, and its successors and assigns, and, if such entity shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency (other than S&P) designated by the Authority.
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7 “Nominee” means the nominee of the Depository , which may be the Depository, as determined from time to time pursuant to Section 2.09 hereof. “Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.02) all Bonds theretofore or thereupon executed by the Authority and authenticated and delivered by the Trustee pursuant hereto, except -- (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation;
(2) Bonds paid or deemed to have been paid within the meanin g of Section
11.01 hereof;
(3) Bonds beneficially owned by the City or the Authority; and (4) Bonds in lieu of or in substitution for which other Bonds shall have been executed by the Authority and authenticated and delivered pursuant hereto. “Owner” means any person who shall be the registered owner of any Outstanding Bond, as shown on the registration books required to be maintained by the Trustee pursuant to Section
2.05 hereof.
“Participants” means those broker dealers, banks and other financial institutions from time to time for which the Depository holds Book Entry Bonds as securities depository. “Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Certificate.
“Payment Fund” means the fund by that name established under Section 5.01(b) hereof. “Permitted Investments” means any of the following to the extent then permitted by law and Section 6.04 hereof (provided that the Trustee shall be entitled to rely upon any investment directions from the Authority as conclusive certification to the Trustee that the investments described therein are so permitted by law and Section 6.05 hereof):
(1) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in the next paragraph). (2) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of Treasury) the United States of America. In the event these securities are used for defeasance, they shall be non-callable and non-prepayable. (3) Obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America. a. U.S. Export-Import Bank (Eximbank)
b. Farmers Home Administration (FmHA)
c. Federal Financing Bank
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8 d. General Services Administration
e. U.S. Maritime Administration
f. U.S. Department of Housing and Urban Development (PHAs) g. General Services Administration
h. Government National Mortgage Association (GNMA)
i. Federal Housing Administration Debentures (FHA)
(4) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America:
a. Senior debt obligations rated in the highes t long -term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC).
b. Senior debt obligations of the Federal Home Loan Bank System. c. Senior debt obligations of the Student Loan Marketing Association. d. Obligations of the Resolution Funding Corporation (REFCORP). e. Consolidated systemwide bonds and notes of the Farm Credit System.
(5) U.S. dollar denominated deposit accounts, feder al funds and bankers’ acceptances with domestic commercial banks (including the Trustee and any of its affiliates) which either (a) have a rating in one of the two highest short -term rating categories of at least two nationally recognized rating agencies, (b) are insured at all times by the Federal Deposit Insurance Corporation, or (c) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank). (6) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures not more than 270 days after the date of purchase.
(7) Investments in (a) money market funds rated in the highest short-term rating category of at least two nationally recognized rating agencies including such funds for which the Trustee, 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, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives fees from funds for services rendered, (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; and (b) public sector investment pools operated pursuant to SEC Rule 2a -7 in which the Issuer’s deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least two nationally recognized rating agencies. 55394.00068\42092121.3
9 (8) Pre-refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
a. which are rated, based on an irrevocable escrow account or fund (the “escrow”), in the highest long -term rating category of at least one nationally recognized rating agencies; or
b. (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and
(ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate.
(9) General obligations of states or political subdivisions of states with a short- term rating in one of the two highest rating categories and a long -term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually.
(10) Funds invested in the Local Ag ency Investment Fund (as that term is defined in Section 16429.1 of the California Government Code, as such section may be amended or recodified from time to time) to the extent deposits and withdrawals may be made by the Trustee.
(11) Certificates of deposit secured at all times by collateral described in (2) and/or (3) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks, including the Trustee and its affiliates. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral.
The value of the above investments, other than cash, shall be determined as follows:
“Value,” which shall be determined as of the end of the month, means “fair market value,” which may be determined using a computer pricing service including any service contained in the Trustee’s accounting system, provided that the Trustee shall not be liable for any error made by any such service. 55394.00068\42092121.3
10 “Principal Account” means the account of that name established under Section 5.01(a) hereof.
“Prior Obligations” means the $15,690,000 Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014.
“Rebate Fund” means the fund by that name established under Section 7.02(a) hereof. “Rebate Requirement” shall have the meaning set forth in the Tax Certificate. “Record Date” means the fifteenth (15) day preceding an Interest Payment Date, whether or not such day is a Business Day.
“Redemption Account” means the account by that name established under Section 5.01(a) hereof.
“Revenues” means all Installment Payments pursuant to the Installment Purchase Agreement, and the interest or profits from the investment of money in any account or fund (other than the Rebate Fund) pursuant to Section 6.05.
“S&P” means Standard & Poor’s Global Ratings, its successors and assigns, and if such entity shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody’s) designated by the Authority.
“Securities Depositories” means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York, 10041- 0099, Attn.: Call Notification Department, Fax (212) 855- 7232; 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 Certificate of the Authority delivered to the Trustee.
“Serial Bonds” means Bonds for which no sinking fund payments are provided. “Sinking Account” means the account by that name established under Sections 5.01(a) and 6.03(b) hereof.
“State” means the State of California.
“Supplemental Indenture” means any indenture then in full force and effect which has been duly executed and delivered by the Authority and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the certificate delivered with respect to the Bonds on which it is intended that interest thereon will be excluded from gross income pursuant to Section 103 of the Code.
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11 “Term Bonds” means Bonds which are payable on or before their specified maturity dates from sinking fund payments established for that purpose and calculated to retire such Bonds on or before their specified maturity dates.
“Treasurer” means the Treasurer of the City or the Treasurer of the Authority as appropriate.
“Trustee” means U.S. Bank Trust Company, National Association , a national banking association organized and existing under and by virtue of the laws of the United States, or any other association or corporation which may at any time be substituted in its place as provided in Section 8.02.
“2024 Bonds” means the Santa Ana Public Financing Authority Water Revenue Bonds, Series 2024 (Payable Solely from Installment Payments Secured by Water System Net Revenues) authorized by and at any time Outstanding pursuant hereto and executed, issued and de livered in accordance with Section 3.01, and any Bonds issued upon transfer thereof or in exchange therefor or in lieu thereof in accordance with the provisions hereof. “Written Request of the Authority” means an instrument in writing signed by the Chair, the Vice Chair, the Secretary or any Assistant Secretary of the Authority, or by any other officer of the Authority duly authorized by the Authority for that purpose. “Written Request of the City” means an instrument in writing signed by the Mayor, City Manager, Assistant City Manager or City Treasurer, or by any other official of the applicable administrative departments of the City duly authorized by the City for that purpose.
SECTION 1.02. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract between the Authority and the Trustee for the benefit of the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to se cure the full and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.
SECTION 1.03. Number, Gender and Variants . The singular form of any word used herein, including the terms defined in Section 1.01, shall include the plural, and vice versa.
The use herein of a word of any gender shall include all genders. The definition of a word or term shall include all variants of such word or term.
SECTION 1.04. Articles, Sections, Etc. . All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture as originally executed, as such Articles, Sections or subdivisions may be amended and supplemented from time to time in accordance with the provisions hereof; and the words 55394.00068\42092121.3
12 “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof unless the context otherwise requires. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture.
ARTICLE II
ISSUANCE OF 2024 BONDS;
REGISTRATION AND TRANSFER OF BONDS
SECTION 2.01. Authorization and Purpose of 2024 Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the 2024 Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the 2024 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and that the Authority is now duly authorized to issue the 2024 Bonds in the form and manner provided herein for the purpose of providing funds to finance or refinance the costs of acquisition, construction, installation and improvement of the Project, and that the 2024 Bonds shall be entitled to the benefit, protection and security of the provisions hereof.
SECTION 2.02. Execution of 2024 Bonds. The Chairman of the Authority is hereby authorized and directed to execute each of the 2024 Bonds on behalf of the Authority and the Secretary of the Authority is hereby authorized and directed to countersign each of the 2024 Bonds on behalf of the Authority and to impress the seal of the Authority thereon. The signatures of such Chairman and Secretary may be by printed, lithographed or engraved by facsimile reproduction.
In case any officer whose signature appears on the 2024 Bonds shall cease to be such officer before the delivery of the 2024 Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the 2024 Bonds.
Only those 2024 Bonds bearing thereon a certificate of authentication and registration in substantially the forms set forth in Exhibit A hereto, executed manually and dated by the Trustee, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the 2024 Bonds so authenticated and registered have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection and security hereof.
SECTION 2.03. Transfer and Payment of Bonds . Any Bond may, in accordance with its terms, be transferred in the books required to be kept pursuant to the provisions of Section
2.08 by the person in whose name it is registered, in person or by his duly autho rized attorney, upon surrender, at the Corporate Trust Office of the Trustee, of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Trustee. Whenever any Bond or Bonds shall be sur rendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of a like aggregate principal amount of the same maturity and series. The Trustee shall require the payment by the 55394.00068\42092121.3
13 Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege.
The Authority and the Trustee may deem and treat the Owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment thereof and for all other purposes, whether such Bond shall be overdue or not, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on such Bond shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge liability on such Bond to the extent of the sum or sums so paid.
The transfer of any Bond is limited as described in the following Section.
SECTION 2.04. Exchange of Bonds . Bonds may be exchanged at the Corporate Trust Office of the Trustee for a like aggregate principal amount of Bonds of the same series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange as a condition precedent to the exercise of such privilege.
The Trustee shall not be requir ed to register the transfer or the exchange of any Bond (i) during any period commencing with the close of business on the fifteenth (15) day next preceding any interest payment date and ending on such interest payment date, (ii) during the period established for selection of Bonds for redemption, or (iii) which has been selected for redemption in whole or in part.
SECTION 2.05. Bond Registration Books . The Trustee will keep at its office sufficient books for the registration and transfer of the Bonds which shall at al l times be open to inspection by the Authority during normal business hours with reasonable prior notice, and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Bonds in such books as hereinabove provided.
SECTION 2.06. Mutilated, Destroyed, Stolen or Lost Bonds . If any Bond shall become mutilated, the Trustee, at the expense of the Owner thereof, shall thereupon authenticate and deliver a new Bond of like series, maturity and Authorized Denomination in exchange and substitution for the Bond so mutilated, but only upon surrender, at the Corporate Trust Office of the Trustee, of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by the Trustee and delivered to, or upon the order of, the Authority.
If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner, shall thereupon authenticate and deliver a new Bond of like series, maturity and Authorized Denomination in lieu of and in substitution for the Bond so lost, destroyed or stolen.
The Trustee may require payment of a reasonable sum for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this 55394.00068\42092121.3
14 Indenture with all other Bonds secured by this Indenture. Neither the Authority nor the Trustee shall be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same.
SECTION 2.07. Temporary Bonds. The Bonds issued under this Indenture may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority, shall be in fully registered form and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed and au thenticated in accordance with the terms hereof . If the Authority issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, at the Corporate Trust Office of t he Trustee, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of Authorized Denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds delivered hereunder.
SECTION 2.08. Validity of Bonds . From and after the issuance of the Bonds the findings and determinations of the Authority respecting the Bonds shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of the Bonds shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the proceeds of sale of the Bonds. The validity of the issuance of the Bonds shall not be dependent on or affected in any way by the proceedings taken by the Authority for the financing of refinancing of the Project or by any contracts made by the Authority or its agents in connection therewith, and shall not be dependent upon the completion of the acquisition or installation of the Project or upon the performance by any person, firm or authority of his or its obligation with respect thereto. The recital contained in the Bonds that the same are issued pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance, and all Bonds shall be incontestable from and after their issuance. The Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) shall have been delivered to the purchaser thereof and the proceeds of sale thereof received.
SECTION 2.09. Book-Entry System.
(a) Prior to the e xecution and delivery of the 2024 Bonds or any Additional Bonds executed and delivered hereunder, the Authority may provide that such Bonds shall be initially executed and delivered as Book -Entry Bonds, and in such event, the Bonds for each principal payment date of such Bonds shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial execution and delivery, the ownership of each such Bond shall be registered in the bond register in the name of the Nominee, as nominee of the Depository.
Payment of principal or interest for any Book-Entry Bonds registered in the name of the Nominee shall be made on the payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments 55394.00068\42092121.3
15 shall be made to the Nominee at the address which is, on the regular Record Date or special record date, as the case may be, shown for the Nominee in the bond register of the Trustee. (b) With respect to Book-Entry Bonds, the City, the Authority and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such Book- Entry Bonds. Without limiting the immediately preceding sentence, the City, 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 Bonds, (ii) the delivery to any Participant or any other person, other than an Owner as shown in the bond register, of any notice with respect to Book-Entry Bonds, including any notice of prepayment, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds to be redeemed in the event the Authority redeems Bonds in part, (iv) the payment to any Participant or any other person, other than an Owner as shown in the bond register, of any amount with respect to principal, premium, if any, or interest evidenced and represented by Book -Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The City, the Authority and the Trustee may treat and consider the person in whose name each Book-Entry Bond is registered in the bond register as the absolute Owner of such Book- Entry Bond for the purpose of payment of principal, redemption premium, if any, and interest with respect to such Bond, for the purpose of selecting any Bonds, or portions thereof to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever and the City, the Authority and the Trustee shall not be affected by any notice to the contrary. (d) In the event of a redemption or any other early withdrawal (e.g., tenders made and accepted in response to the Trustee’s invitation at the direction of the Authority) necessitating a reduction in aggregate principal amount of Bonds Outstanding, or a redemption of part of the Bonds Outstanding, the Depository, in its discretion, (i) may request the Trustee to ex ecute and deliver a new Bond or (ii) if DTC is the sole owner of the Bonds, shall make an appropriate notation on the Bond indicating the date and amounts of such reduction in principal except in the case of final maturity, in which case the Bond must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal, premium, if any, and interest evidenced and represented by the Bonds only to the respective Owner, as shown in the bond register, or his or her attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of principal, redemption premium, if any, and interest evidenced and represented by the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the bond register, shall receive a Bond evidencing the obligation to make payments of principal, redemption premium, if any, and interest evidenced and represented by the Bonds. Upon delivery by the Depository to the Owner, the Trustee, the Authority and the City 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 this Indenture shall refer to such nominee of the Depository.
55394.00068\42092121.3
16 (f) In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Trustee shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Authority, the City or the Trustee any obligation whatsoever with respect to persons having interests in such Book-Entry Bonds other than the Owners, as shown on the bond register of the Trustee. Such Letter of Representations may provide the time, form, content, and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the Trustee, the Author ity and the Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book- Entry Bonds for the Depository’s book-entry program.
(g) In the event the Authority determines that it is in the best interest of the Beneficial Owners that they be able to obtain certificated Bonds and that such Bonds should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Bonds. In such event, the Trustee shall transfer and exchange certificated Bonds as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as Depository for Book- Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Authority will discontinue the Book- Entry system with the Depository. If the Authority determines to replace the Depository with another qualified Depository, the Authority shall prepare or direct the preparation of a new single, separate, fully registered Bond for each of the Principal Payment Dates of such Book-Entry Bonds, registered in the name of such successor or substitute qualified Depository or its nominee. If the Authority fails to identify another qualified Depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in such bond register in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such bonds shall designate, in accordance with the provisions of Sections 2.06, 2.07 and 2.08 hereof.
Whenever the Depository requests the Authority to do so, the Authority will cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate Bonds evidencing the Book- Entry Bonds to any Participant having Book- Entry Bonds credited to its account with the Depository, and (ii) to arrange for another Depository to maintain custody of Bonds evidencing the Book-Entry Bonds.
(h) Notwithstanding any other provision of this Indenture to the contrary, so long as any Book-Entry Bond is registered in the name of DTC, or its nominee, all payments with respect to principal, redemption premium, if any, and interest evidenced and represented by such Bond and all notices with respect to such Bonds shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. (i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Authority or the Trustee, at the direction of the Authority, with respect to any consent or other action to be taken by the Owners, the Authority or the Trustee, as the case may be, shall establish a record date for such consent or other action and give the Depository notice of such record date not less than fifteen ( 15) calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Bonds. If the Authority determines to invite Owners of Bonds to tender Bonds, and will pay for the same with funds other than moneys in a Sinking Account as hereinafter 55394.00068\42092121.3
17 defined, the Authority shall give the Trustee not less than fourteen ( 14) days’ advance notice of such invitation to tender, together with a copy of the tender notice to be distributed to the Owners.
Such notice shall specify the terms of the tender and the publication date of notice of such tender.
The Trustee shall send such notice to DTC by a secure means (e.g., legible facsimile transmission, registered or certified mail, overnight express delivery) in a timely manner designed to assure that such notice is in DTC’s possession no later than the close of business on the Business Day before the date for mailing of such notice. (The Trustee shall have a method to verify subsequently the use of such means a nd timeliness of the notice.) The Trustee shall credit any Bonds so tendered against such of the mandatory sinking account payments of the maturity tendered as shall be designated by the Authority.
SECTION 2.10. Procedure for Issuance of 2024 Bonds. The Authority may, at any time, execute the 2024 Bonds for issuance hereunder and deliver them to the Trustee, and thereupon the 2024 Bonds shall be authenticated and delivered by the Trustee to the purchasers thereof upon the Written Request of the Authority and upon recei pt of payment therefor from the purchasers thereof.
ARTICLE III
TERMS OF 2024 BONDS
SECTION 3.01. Terms of 2024 Bonds.
(a) The 2024 Bonds shall be designated “Santa Ana Public Financing Authority Water Revenue Bonds, Series 2024 (Payable Solely from Installment Payments Secured by Water System Net Revenues)” and shall be in the aggregate principal amount of $___________. The 2024 Bonds shall be dated their date of delivery, shall be issued only in fully registered form in Authorized Denominations (not exceeding the principal amount of 2024 Bonds maturing at any one time), and shall mature on the dates and in the principal amounts and shall bear interest at the rates as set forth in the following schedule:
Maturity Date
(September 1)
Principal
Amount
Interest
Rate
55394.00068\42092121.3
18 Subject to the Letter of Representations, the principal of and redemption premiums, if any, on the 2024 Bonds shall be payable in lawful money of the United States of America at the Corporate Trust Office of the Trustee upon presentation and surrender of such 2024 Bonds. (b) (i) The 2024 Bonds shall bear interest at the rates set forth in Section
3.01(a) above, payable on the Interest Payment Dates in each year, commencing on March 1, 2025.
Each 2024 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless such date of authentication is during the period commencing after a Record Date through and including the next succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless such date of authentication is on or before the first Record Date, in which event it shall bear interest from its date of delivery; provided, however, that if on the date of authentication of any 2024 Bonds, interest is then in default on the Outstanding 2024 Bonds, such 2024 Bonds shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding 2024 Bonds.
(ii) Payment of interest on the 2024 Bonds due on or before the maturity or prior redemption thereof shall be made to the person in whose name such 2024 Bonds is registered, as of the Record Date preceding the applicable Interest Payment Date, on the registration books kept by the Trustee pursuant to Section 2.05 hereof, such interest to be paid by check mailed by first class mail on such Interest Payment Date to such Owner at his address as it appears on such books; provided, that in the event the ownership of such 2024 Bonds is no longer maintained in book-entry form by the Depository, such payment shall be made by wire transfer to any Owner of at least $1,000,000 in aggregate principal amount of 2024 Bonds, in immediately available funds to an account in the United States de signated in writing by such Owner to the Trustee prior to the applicable Record Date. Interest on the 2024 Bonds shall be payable in lawful money of the United States of America and shall be calculated on the basis of a 360 day year consisting of twelve 30 day months.
SECTION 3.02. Redemption of 2024 Bonds.
(a) Optional Redemption. 2024 Bonds maturing on or after September 1, _____, shall be subject to redemption, at the option of the Authority, upon at least 45 days prior written notice to the Trustee specifying the date and amount of such redemption, in whole or in part, on any date on or after September 1, ____ (by lot within any maturity and among maturities as specified by the Authority) at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest to the date of redemption without premium. (b) Mandatory Sinking Fund Redemption.
The 2024 Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on September 1, 20__, and on each September 1 thereafter to maturity by lot, from sinking fund payments at a redemption price equal to the principal amount of such 2024 Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:
55394.00068\42092121.3
19 Bonds Maturing on September 1, 20__
Redemption Date
(September 1)
Sinking Fund Payment
$
(final maturity)
The amounts in the foregoing schedule shall be reduced in any manner selected by the Authority, as a result of any prior or partial redemption of the Bonds pursuant to subsections (a) of this section.
(c) In lieu of payment at maturity or redemption under this Section 3.02, moneys in the Bond Fund may be used and withdrawn by the Trustee for purchase of Outstanding Bonds, upon the filing with the Trustee of a Certificate of the City requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Certificate of the City may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase. (d) Notice of redemption shall be given by the Trustee, not less than 30 nor more than 60 days prior to the redemption date to (i) the respective Owners of the 2024 Bonds designated for redemption at their addresses appearing on the registration books of the Trustee by first class mail and (ii) the Securities Depositories and the Information Services by certified or registered mail or overnight delivery. Each notice of redemption shall state the date of such 2024 Bonds the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the 2024 Bonds of such maturity, to be redeemed and, in the case of 2024 Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said 2024 Bonds thereof and in the case of a 2024 Bond to be redeemed in part only, the specified portion of the principal amount thereof to be redeemed, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such 2024 Bonds be then surrendered at the address of the Trustee specified in the redemption notice. (e) If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the 2024 Bonds called for redemption is held by the Trustee , then on the redemption date designated in such notice 2024 Bonds shall become due and payable, and from and after the date so designated interest on the 2024 Bonds so called for redemption shall cease to accrue, and the Owners of such 2024 Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof.
(f) Failure by the Trustee to give notice pursuant to this Section to any one or more of the Information Services or Securities Depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. Failure by the Trustee to mail notice of redemption pursuant to this Section to any one or more of the respective Owners of any 2024 55394.00068\42092121.3
20 Bonds designated for redemption shall not affect the of the proceedings for redemption with the Owners to whom such notice was mailed.
(g) With respect to any notice of optional redemption of the 2024 Bonds, such notice shall 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 2024 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 2024 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.
(h) All 2024 Bonds redeemed pursuant to the provisions of this Section or Section
6.03(b) shall be cancelled by the Trustee and shall not be reissued, and the Trustee shall deliver a certificate of cancellation to the Authority. In the event of an optional redemption pursuant to Section 3.02(a), the Authority shall provide the Trustee with a revised sinking fund schedule giving effect to the optional redemption so completed.
SECTION 3.03. Form of 2024 Bonds. The 2024 Bonds and the authentication and registration endorsement and assignment to appear thereon shall be substantially in the form set forth on Exhibit A.
ARTICLE IV
ISSUANCE OF ADDITIONAL BONDS
SECTION 4.01. Conditions for the Issuance of Additional Bonds. The Authority may at any time issue Additional Bonds payable from the Revenues as provided herein and secured by a pledge of the Revenues as provided herein equal to the pledge securing the Outstanding Bonds theretofore issued hereunder, but only subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Additional Bonds:
(a) The Authority shall be in compliance with all agreements a nd covenants contained herein and all agreements and covenants contained in the Installment Purchase Agreement.
(b) The Authority shall have satisfied the requirements set forth in Section 5.03 of the Installment Purchase Agreement.
(c) The issuance of suc h Additional Bonds shall have been authorized by the Authority and shall have been provided for by Supplemental Indenture which shall specify the following:
(1) The purpose for which such Additional Bonds are to be issued; provided that such Additional Bonds shall be applied solely for the purpose of (i) financing or refinancing additional improvements to the Project, including payment 55394.00068\42092121.3
21 of all costs incidental to or connected with such financing or refinancing, and/or (ii) refunding any Bonds then Outstanding;
(2) The authorized principal amount and designation of such Additional Bonds;
(3) The dated date and the maturity dates of, and the sinking fund payment dates, if any, for such Additional Bonds;
(4) The interest payment dates for such Additional Bonds, which shall be Interest Payment Dates;
(5) That such Additional Bonds shall be issued only in Authorized Denominations;
(6) The redemption premiums, if any, and the redemption terms, if any, for such Additional Bonds;
(7) The amount; if any, to be deposited from the proceeds of sale of such Additional Bonds in the Interest Account;
(8) The amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in an acquisition fund or construction fund to be established; (9) The Authority may but shall not be required to fund a reserve fund or obtain a reserve fund surety or instrument with respect to any Parity Obligations.
If a reserve fund is funded for any Additional Bonds or a qualified reserve fund surety or instrument is obtained with respect to any Additional Bonds, such funded reserve fund or qualified reserve fund surety or instrument shall secure only the related Additional Bonds and shall not support the 2024 Bonds or any other Additional Bonds;
(10) The forms of such Additional Bonds; and
(11) Such other provisions as are necessary or appropriate and not inconsistent herewith.
(d) The Installment Purchase Agreement shall have been amended so as to increase the Installment Payments by the City thereunder by an amount at least sufficient to pay the interest on and principal of such Additional Bonds as the same become due.
Nothing contained herein shall limit the issuance of any revenue bonds of the Authority payable from the Revenues and secured by a pledge of the Revenues if after the issuance and delivery of such revenue bonds none of the Bonds theretofore issued hereunder will be Outstanding.
SECTION 4.02. Procedure for the Issuance of Additional Bonds . The Authority may, at any time, execute Additional Bonds for issuance hereunder and deliver them to the Trustee, 55394.00068\42092121.3
22 and thereupon such Additional Bonds shall be authenticated and delivered by the Trustee to the purchaser thereof upon the Written Request of the Authority, but only upon receipt by the Trustee of the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Additional Bonds by the Trustee (unless the Authority shall accept any of such documents bearing a prior date):
(a) An executed copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds;
(b) A Written Request of the Authority as to the delivery of such Additional Bonds; (c) An opinion of Bond Counsel to the effect that (1) the Authority and the Trustee have the right and power to execute and deliver the Supplemental Indenture and the Supplemental Indenture has been duly and lawfully executed and delivered by the Authority and the Trustee, is in full force and effect and is valid and binding upon the Authority and the Trustee and enforceable in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights and by equitable principles) and no other authorization for the execution and delivery thereof is required, (2) the Supplemental Indenture creates the valid pledge of the Revenues which it purports to create as provided therein, subject to the application thereof to the purposes and on the conditions permitted hereby, (3) such Additional Bonds are valid and binding special obligations of the Authority, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforce ment of creditors’ rights and by equitable principles) and the terms hereof and entitled to the benefits hereof, and such Additional Bonds have been duly and validly authorized, executed, issued and delivered in accordance herewith, (4) the amendment to the Installment Purchase Agreement required by Section 4.01(d) has been duly authorized, executed and delivered and is valid and binding upon the Authority and the City and enforceable in accordance with its terms (except as enforcement may be limited by ban kruptcy insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights and by equitable principles), and (5) the issuance of such Additional Bonds will not adversely affect the exclusion from gross income for federal tax purposes of interest on any Outstanding Bonds which purport to bear interest which is excluded from gross income pursuant to Section 103 of the Code;
(d) A Certificate of the Authority containing such statements as may be reasonably necessary to show compliance with the conditions for the issuance of such Additional Bonds contained herein; and
(e) Such further documents, opinions, money or securities as are required by the provisions of the Supplemental Indenture providing for the issuance of such Additional Bonds. 55394.00068\42092121.3
23 ARTICLE V
ESTABLISHMENT OF FUNDS; DEPOSIT AND
APPLICATION OF PROCEEDS
SECTION 5.01. Establishment of Funds and Accounts.
(a) The Trustee shall establish and maintain a special trust fund to be held by the Trustee called the “City of Santa Ana Water System I mprovement Project Payment Fund” (the “Payment Fund”). Within the Payment Fund, the Trustee shall establish and maintain an Interest Account (the “Interest Account”), a Principal Account (the “Principal Account”), a Sinking Account (the “Sinking Account”), and a Redemption Account (the “Redemption Account”). (b) The Trustee shall establish and maintain a special trust fund to be held by the Trustee called the “City of Santa Ana Costs of Issuance Fund” (the “Costs of Issuance Fund”). (c) The Authority shall establish and maintain a special trust fund to be held by the Treasurer called the “City of Santa Ana Acquisition Fund” (the “Acquisition Fund”).
SECTION 5.02. Application of Proceeds. Upon the receipt of payment for the 2024 Bonds on the Closing Date, the Trustee and the Authority shall apply the proceeds thereof as follows:
(i) The Trustee shall transfer $______________ to the Escrow Agent for deposit in the escrow fund established under the Escrow Agreement; (ii) The Trustee shall transfer to the Treasurer the amoun t of $_______________ for deposit in the Acquisition Fund; and (iii) The Trustee shall deposit the amount of $__________ to the Costs of Issuance Fund.
For record keeping purposes, the Trustee may establish such accounts as may be necessary to reflect such transfer of proceeds.
SECTION 5.03. Use of Moneys in the Acquisition Fund; Costs of Issuance Fund. (a) The Treasurer shall hold the moneys in the Acquisition Fund and shall disburse such moneys therefrom to pay Acquisition Costs. Such disbursements shall be made from time to time upon receipt of a Written Request of the City on behalf of the Authority which: (a) states with respect to each disbursement to be made: (i) the requisition number, (ii) the name and address of the person, firm or authority to whom payment i s due, (iii) the amount to be disbursed, and (iv) that each obligation therein has been properly incurred, and is a proper charge against the Acquisition Fund and has not been the basis of any previous disbursement; (b) specifies in reasonable detail the n ature of the obligation; and (c) is accompanied by a bill or statement of account for each obligation.
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24 (b) If, after payment by the Treasurer of all Written Requests of the City on behalf of the Authority theretofore tendered to the Treasurer under the provisions of this Section and delivery to the Treasurer and the Trustee of a Certificate of Completion, there shall remain any balance of money in the Acquisition Fund, all money so remaining shall be transferred to the Trustee and deposited to the accounts of the Payment Fund as directed by the Authority. (c) The moneys in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance. The Trustee shall disburse moneys in the Costs of Issuance Fund from time to time upon receipt by the Trustee of a Written Request of the Authority which: (a) states with respect to each disbursement to be made: (i) the requisition number, (ii) the name and address of the person, firm or corporation to whom payment is due, (iii) the amount to be disbursed, and (iv) that each obligation therein has been properly incurred, and is (a) a proper charge against the Costs of Issuance Fund and has not been the basis of any previous disbursement; (b) specifies in reasonable detail the nature of the obligation; a nd (c) is accompanied by a bill or statement of account for each obligation. Each such Written Request of the Authority 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.
The Trustee shall hold the moneys in the Costs of Issuance Fund and disburse such moneys therefrom in accordance with this Section.
Upon the earlier of the date six months after the Closing Date for the related Series of Bonds or the date of receipt of a Certificate of the Authority stating that all Costs of Issuance have been paid, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to the Acquisition Fund; provided that investment earnings may be transferred to the Rebate Fund as provided in Section 7.02.
ARTICLE VI
REVENUES
SECTION 6.01. Pledge of Revenues. All Revenues and amounts on deposit in the funds and accounts established hereunder (other than amounts on deposit in the Costs of Issuance Fund under Section 5.02 hereof and the Rebate Fund created pursuant to Section 7.02) are hereby irrevocably pledged to the payment of the interest on and principal of the Bonds as provided herein, and the Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding; provided, however, that out of the Revenues there may be allocated such sums for such purposes as are expressly permitted by Section 6.03.
In order to secure the pledge of the Revenues contained in this Section 6.01, the Authority hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Authority’s rights under the Installment Purchase Agreement (excepti ng its right to indemnification thereunder), including the right to receive Installment Payments from the City, the right to receive any proceeds of insurance maintained thereunder or any condemnation award rendered with respect to the Project and the right to exercise any remedies provided therein in the event of a default by the City thereunder. The Trustee hereby accepts said assignment for the benefit of the Owners of the Bonds subject to the provisions of this Indenture. 55394.00068\42092121.3
25 The Trustee shall be entitled t o and shall receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as agent of the Trustee and shall forthwith be paid by the Authority to the Trustee.
SECTION 6.02. Receipt and Deposit of Revenues in the Payment Fund. In order to carry out and effectuate the pledge contained herein, the Authority agrees and covenants that all Revenues when and as received shall be received in trust hereunder for the benef it of the Owners and shall be deposited when and as received in the Payment Fund. Subject to Section 6.05 hereof, all Revenues shall be accounted for through and held in trust in the Payment Fund, and the Authority shall have no beneficial right or interes t in any of the Revenues except only as herein provided. All Revenues, whether received by the Authority in trust or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely to the purposes and uses hereinafter set forth in this Article, and shall be accounted for separately and apart from all other accounts, funds, money or other assets of the Authority.
SECTION 6.03. Establishment and Maintenance of Accounts for Use of Money in the Payment Fund. Subject to Section 7.02, all money in the Payment Fund shall be deposited by the Trustee in the following respective special accounts within the Payment Fund (each of which is hereby created and each of which the Trustee hereby covenants and agrees to maintain) in the following order of priority:
(a) Interest Account,
(b) Principal Account, and
(c) Redemption Account.
All money in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section. (a) Interest Account. On or before each Interest Payment Date, the Trustee shall transfer from the Payment Fund and deposit in the Interest Account that amount of money which, together with any money contained in the Interest Account, is equal to the aggregate amount of interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date. No deposit need be made in the Interest Account if the amount contained in the Interest Account is at least equal to the aggregate amou nt of interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date.
All money in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due a nd payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Principal Account . On or before September 1 of each year, beginning September 1, 2024, the Trustee shall transfer from the Payment Fund and deposit in the Principal Account that amount of money which, together with any money contained in the Principal Account, is equal to the aggregate principal amount of all Outstanding Serial Bonds maturing on such September 1 plus the aggregate principal amount of all sinki ng 55394.00068\42092121.3
26 fund payments required to be made with respect to Bonds on such September 1. No deposit need be made in the Principal Account if the amount contained therein is at least equal to the aggregate amount of the principal of all Outstanding Serial Bonds maturing by their terms on such September 1 plus the aggregate amount of all sinking fund payments required to be made on such September 1 for all Outstanding Term Bonds.
The Trustee shall establish and maintain within the Principal Account a separate subaccount for Bonds of each series and maturity, designated as the “Sinking Account” (the “Sinking Account”), inserting therein the series and maturity (if more than one such subaccount is established for such series) designation of such Bonds. With respect to each Sinking Account, on each mandatory sinking account payment date established for such Sinking Account, the Trustee shall apply the mandatory sinking account payment required on that date to the redemption (or payment at maturity, as the case may be) of Term Bonds of the series and maturity for which such Sinking Account was established, upon the notice and in the manner provided herein or in the Supplemental Indenture pursuant to which such series of Bonds were issued; provided that, at any time prior to the selection of Bonds for such redemption, at the written direction of the City or the Authority, the Trustee may apply moneys in such Sinking Account to the purchase of Term Bonds of such series and maturity 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 determined by the Authority, except that the purchase price (excluding accrued interest) shall not exceed the redemption price that would be payable for such Bonds upon redemption by application of such mandatory sinking account payment. If, during the twelve month period immediately preceding the selection of Bonds for redemption, the Trustee has purchased Term Bonds of such series and maturity with moneys in such Sinking Account, such Bonds so purchased shall be applied, to the extent of the full principal amount thereof, to reduce said mandatory Sinking Account payment.
All money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds as they shall become due and payable, except that any money in any Sinking Account shall be used and withdrawn by the Trustee only to purchase or to redeem or to pay Term Bonds for which such Sinking Account was created.
(c) Redemption Account. In addition to the above accounts, the Trustee shall establish and maintain within the Payment Fund a special account designated the “Redemption Account.” All money in the Redem ption Account shall be held in trust by the Trustee and shall be applied, used and withdrawn either to redeem bonds pursuant to Article 3 or for the purposes authorized in this subsection (c). Any moneys which, pursuant to Section 7.01 of the Installment P urchase Agreement, are to be used to redeem Bonds shall be deposited by the Trustee in the Redemption Account. The Trustee shall, on the scheduled redemption date, withdraw from the Redemption Account and pay to the Owners entitled thereto an amount equal to the redemption price of the Bonds to be redeemed on such date.
(d) Any delinquent Installment Payments with respect to the Project shall be applied first to the Interest Account for the immediate payment of interest payments past 55394.00068\42092121.3
27 due and then to the Pri ncipal Account for immediate payment of principal payments past due according to the tenor of any Bond. Any remaining money representing delinquent Installment Payments shall be deposited in the Payment Fund to be applied in the manner provided therein.
SECTION 6.04. Investment of Moneys in Funds and Accounts . Moneys in the Acquisition Fund shall be accounted for and invested by the Treasurer in any legally permitted investment. Moneys in the Costs of Issuance Fund and the Payment Fund and any accounts therein shall, upon the Written Request of the City, on behalf of the Authority, be invested by the Trustee in Permitted Investments. In the absence of a Written Request of the City, the Trustee shall hold such funds uninvested pending the receipt of a Written Request of the City. The obligations in which moneys in the said funds and accounts are invested shall mature prior to the date on which such moneys are estimated to be required to be paid out hereunder. Prior to the completion of the acquisition, construction, ins tallation and improvement of the Project, any interest, income or profits from the deposits or investments of all funds and accounts (except the Rebate Fund) shall be retained in such fund or account. After the completion of the acquisition, construction, installation and improvement of the Project, any interest, income or profits from the deposits or investments of all funds and accounts (except the Rebate Fund) shall be deposited to the Interest Account of the Payment Fund. The Trustee shall semiannually, on or about March 1 and September 1 of each year, commencing on September 1, _____, and at such times as the Authority shall deem appropriate, value the investments in the funds and accounts hereunder. Except as otherwise provided in this Section, Permitted Investments representing an investment of moneys attributable to any fund or account hereunder and all investment profits or losses thereon shall be deemed at all times to be a part of said fund or account. The Trustee may act as principal or agent in t he acquisition or disposition of investments. For investment purposes only, the Trustee may commingle the funds and accounts established hereunder, except the Rebate Fund and any fund or account established pursuant to Article 11 hereof.
The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority specifically waives rece ipt of such confirmations to the extent permitted by law. The Trustee will furnish the Authority periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.
ARTICLE VII
COVENANTS OF THE AUTHORITY
SECTION 7.01. Punctual Payment and Performance . The Authority will punctually pay the interest on and the principal of and redemption premiums, if any, to become due on every Bond issued hereunder in strict conformity with the te rms hereof and of the Bonds, and will faithfully observe and perform all the agreements and covenants contained herein and in the Bonds.
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28 SECTION 7.02. Tax Covenants; Rebate Fund.
(a) In addition to the other funds and accounts created pursuant hereto, the Trustee shall establish and maintain a fund separate from any other fund or account established and maintained hereunder designated the “Rebate Fund” (the “Rebate Fund”). Within the Rebate Fund, the Trustee shall maintain such accounts or subaccounts as are specified in a Written Request of the City to the Truste e pursuant to the Tax Certificate. The Trustee shall deposit moneys in the Rebate Fund made available by the Authority pursuant to a Written Request of the City. Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as such term is defined in the Tax Certificate), for payment to the federal government of the United States of America, and none of the City, the Authority, the Trustee nor the Owners of the Bonds shall have any right in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with the provisions of this Section 7.02 and the Tax Certificate if it follows the Written Request of the City, including supplying all necessary information in the manner provi ded in the Tax Certificate, and except as otherwise expressly provided herein, shall not be required to take any actions hereunder in the absence of written directions by the City, and shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate or this Section. The Trustee agrees to comply with all Written Requests of the City given in accordance with the Tax Certificate.
(b) Upon a Written Request of the City, an amount shall be deposited into the Rebat e Fund by the Trustee from deposits by the City, if and to the extent required, so that the balance of the amount on deposit thereto shall be equal to the Rebate Requirement. Computations of the Rebate Requirement shall be furnished by or on behalf of the City in accordance with the Tax Certificate.
(c) The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the funds and accounts created hereunder or from other moneys provided to it by the City or the Authority. (d) The Trustee shall invest all amounts held in the Rebate Fund in Permitted Investments as directed by a Written Request of the City, which directions shall be subject to the restrictions set forth in the Tax Certif icate. Money, including investment earnings, shall not be transferred from the Rebate Fund except as provided in paragraph (e) below. (e) Upon receipt of a Written Request of the City, the Trustee shall remit part or all of the amounts in the Rebate Fund to the United States of America, as so directed. In addition, if the City so directs, the Trustee will deposit moneys into or transfer moneys out of the Rebate Fund from or into such accounts or fund as directed by the Written Request of the City. Any amounts remaining in the Rebate Fund after payment or prepayment of all of the Bonds and payment and satisfaction of any Rebate Requirement, or provision made therefor satisfactory to the Trustee, shall, after payment all fees and expenses of the Trustee, be withdrawn and remitted to the City. 55394.00068\42092121.3
29 (f) Notwithstanding any other provision hereof, including, in particular, Article 12, the obligation to remit the Rebate Requirement to the United States and to comply with all other requirements of this Section and the Tax Certificate shall survive the defeasance or payment in full of the Bonds.
(g) The Authority shall not use or permit any proceeds of the 2024 Bonds or any funds of the Authority, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any 2024 Bonds to be an “arbitrage bond” within the meaning of the Code or “federally guaranteed” within the meaning of Section 149(b) of the Code and any such applicable regulat ions promulgated from time to time thereunder and under Section 103(c) of the Code. The Authority shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Authority shall comply with all requirements of Sections 148 and 149(b) of the Code to the extent applicable to the 2024 Bonds.
(h) The Authority specifically covenants to comply with the provisions and procedures of the Tax Certificate.
(i) The Authority shall not use or permit the use of any proceeds of the 2024 Bonds or any funds of the Authority, directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the 2024 Bonds to be treated as an obligation not described in Section 103(a) of the Code.
(j) Notwithstanding any provisions of this Section 7.02, if the Authority shall provide to the Trustee an opinion of Bond Counsel to the effect that any specified action required under this Section 7.02 is no longer required or that some further or different action is required to maintain the exclusion from gross income for federal income tax purposes of interest with respect to the 2024 Bonds, the Trustee, the Authority and the City may conclusively rely on such opinion in complying with the requirements of this Section and, notwithstanding Article 8 hereof, the covenants hereunder shall be deemed to be modified to that extent.
SECTION 7.03. Eminent Domain. If the whole of the Project or so much thereof as to render the remainder unusable for the purposes for which it was used or intended to be used by the City shall be taken under the power of eminent domain, the Installment Purchase Agreement shall cease as of the day that possession shall be so taken. The Authority shall take or cause to be taken such action as is reasonably necessary to obtain compensation at least equal to the value of the Project or portion thereof taken by eminent domain. If less than the whole of the Project shall be taken under the power of eminent domain and the remainder is usable for the purposes for which it was used by the City at the time of such taking, then the Installment Purchase Agreement shall continue in full force and effect as to such remainder, and the parties thereto waive the benefits of any law to the contrary. So long as any of the Bonds shall be Outstanding, the net proceeds of any award made in eminent domain proceedings for taking the Project or any portion thereof shall be transferred to the Payment Fund. Any such award made after all of the Bonds have been fully paid and retired and all fees and expenses of the Trustee have been fully paid shall be paid to the City.
SECTION 7.04. Accounting Records and Reports . The Authority will keep or cause to be kept proper books of record and accounts in which complete and correct entries shall 55394.00068\42092121.3
30 be made of all transactions relating to the receipts, disbursements, allocation and application of the Revenues, and such books shall be available for inspection by the Trustee, at reasonable hours and under reasonable conditions. Not more than 270 days after the close of each Fiscal Year, the Authority shall furnish or cause to be furnished to the Trustee a complete financial statement covering receipts, disbursements, allocation and application of Revenues for such Fiscal Year, and including a statement of ne t position and a statement of net activities . The Authority shall also keep or cause to be kept such other information as is required under the Tax Certificate.
SECTION 7.05. The City’s Budgets. The Authority will supply to the Trustee, as soon as practicable after the beginning of each Fiscal Year but in any event no later than September 1 of each Fiscal Year, a Certificate of the City certifying that the City has made adequate provision in its annual budget for such Fiscal Year for the payment of all installments due under the Installment Purchase Agreement in such Fiscal Year. If the amounts so budgeted are not adequate for the payment of all installments due under the Installment Purchase Agreement in such Fiscal Year, the Authority will take such action as may be n ecessary and within its power to cause such annual budget to be amended, corrected or augmented so as to include therein the amounts required to be paid by the City in such Fiscal Year for the payment of all installments due under the Installment Purchase Agreement in such Fiscal Year, and will notify the Trustee of the proceedings then taken or proposed to be by the Authority.
SECTION 7.06. Installment Purchase Agreement and Other Documents . The Authority will at all times maintain and vigorously enforce all of its ri ghts under the Installment Purchase Agreement, and will promptly collect all installments due for the purchase of the Project as the same become due under the Installment Purchase Agreement, and will promptly and vigorously enforce its rights against any person who does not pay such installments as they become due under the Installment Purchase Agreement. The Authority will not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be a ground for cancellation or termination of the Installment Purchase Agreement by the purchaser thereunder.
SECTION 7.07. Other Liens . The Authority will keep the Project free from judgments, mec hanics’ and materialmen’s liens (except those arising from the acquisition, construction and installation of the Project) and free from all liens, claims, demands and encumbrances of whatsoever prior nature or character to the end that the security for the Bonds provided herein will at all times be maintained and preserved free from any claim or liability which, in the judgment of the Trustee (whose determination shall be final), might hamper the Authority in conducting its business or interfere with the Ci ty’s operation of the Project, and the Trustee at its option (after first giving the Authority ten days’ written notice to comply therewith and failure of the Authority to so comply within such period) may (but shall not be obligated to) defend against any and all actions or proceedings in which the validity hereof is or might be questioned, or may pay or compromise any claim or demand asserted in any such action or proceeding; provided, however, that in defending such actions or proceedings or in paying or compromising such claims or demands the Trustee shall not in any event be deemed to have waived or released the Authority from liability for or on account of any of its agreements and covenants contained herein, or from its liability hereunder to defend the validity hereof and the pledge of the Revenues made herein and to perform such agreements and covenants. 55394.00068\42092121.3
31 SECTION 7.08. Prosecution and Defense of Suits . The Authority will promptly from time to time take or cause to be taken such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Project, whether now existing or hereafter developing, and shall prosecute or cause to be prosecuted all such suits, actions and other proceedings as may be appropriate for such purpose and s hall indemnify and hold the Trustee harmless from all loss, cost, damage and expense, including attorney’s fees, which it may incur by reason of any such defect, cloud, suit, action or proceeding.
The Authority will defend against every suit, action or proceeding at any time brought against the Trustee upon any claim arising out of the receipt, application or disbursement of any of the Revenues or involving the rights of the Trustee hereunder; provided that the Trustee at its election may appear in and defend any such suit, action or proceeding.
SECTION 7.09. Further Assurances. Whenever and so often as requested to do so by the Trustee, the Authority will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments, and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Owners all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them hereby.
SECTION 7.10. Continuing Disclosure. The Authority will comply with and carry out all of the provisions of the Continuing Disclosure Certificate . Notwithstanding any other provision of this Indenture, failure of the Authority to comply with the Continuing Disclosure Certificate shall not constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written directio n of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Bonds, and upon being indemnified to its reasonable satisfaction therefor, shall) or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Appointment and Acceptance of Duties . The Trustee hereby accepts and agrees to the trusts hereby created to all of which the Authority agrees and the respective owners of the Bonds, by their purchase and acceptance thereof, agree.
SECTION 8.02. Duties, Immunities and Liabilities of Trustee. (a) The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture and no implied duties or obligations shall be read into this Indenture against the Trustee. The Trustee shall, during the e xistence of any Event of Default (which has not been cured), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
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32 (b) So long as no Event of Default has occurred and is continuing, the Authority may remove the Trustee at any time and shall remove the Trustee if at any time requested to do so by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or, regardless of the occurrence and continuance of an Event of Default, if at any time the Trustee shall be in breach of the trusts set forth in this Indenture, or shall cease to be eligible in accordance with subsection (e) of this Section, or shall become incapable of acting, or shall commence a case under any bankruptcy, insolvency or similar law, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take control or charge of the Trustee or 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 appoint a successor Trustee by an instrument in writing. (c) The Trustee may resign by giving written notice of such resignation to the Authority and by giving notice of such resignation by mail, first class postage prepaid, to the Owners at the addresses listed in the bond register. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee; provided that no removal or resignation of the Trustee shall take effect until a successor shall be appointed. If no successor Trustee shall have been appointed and shall have ac cepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee, at the expense of the Authority, or any Owner (on behalf of himself and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the 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 written request of the Authority or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the succ essor 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, such successor Trustee shall mail a notice of the succession of such Trustee to the trusts hereunder by first class mail, postage prepaid, to the Owne rs at their addresses listed in the bond register.
(e) Any Trustee appointed under the provisions of this Indenture shall be a trust company, national banking association or bank having trust powers, having a corporate trust office in California, having (or whose parent holding company shall have) a combined capital and surplus 55394.00068\42092121.3
33 of at least two-hundred million ($200,000,000), subject to supervision or examination by federal or state authority. If such bank, national banking association or trust company publi shes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank, national banking association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e) the Trustee shall resign immediately in the manner and with the effect specified in this Section.
(f) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. (g) The Trustee shall not be responsible for the sufficiency, timeliness or enforceability of the Revenues.
(h) The Trustee shall not be accountable for the use or application by the Authority, the City or any other party of any funds which the Trustee has released under this Indenture. (i) The Trustee may employ attorneys, agents or receivers in the performance of any of its duties hereunder and shall not be answerable for the misconduct of any such attorney, agent or receiver selected by it with reasonable care.
(j) Notwithstanding any other provision of this Indenture, in determining whether the rights of the Owners will be adversely affected by any action taken pursuant to the terms and provisions of this Indenture, the T rustee shall consider the effect on the Owners as if there were no policy or policies of municipal bond insurance.
SECTION 8.03. Merger or Consolidation . Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business provided such company shall be eligible under subsection ( e) of Section 8.02 shall succeed to the rights and obligations of such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
SECTION 8.04. Compensation. The Authority shall pay the Trustee, or cause t he Trustee to be paid, reasonable compensation for its services rendered hereunder and shall reimburse the Trustee for reasonable expenses incurred by the Trustee in the performance of its obligations hereunder.
The Authority agrees, to the extent permitted by law, to indemnify the Trustee and its respective officers, directors, members, employees, attorneys and agents for, and to hold them harmless against, any loss, liability or expense including legal fees and expenses incurred without negligence or willful misconduct on their part arising out of or in connection with the acceptance or administration of the trusts imposed by this Indenture, including performance of their duties hereunder, including the costs and expenses of defending themselves against any claims or liability in connection with the exercise or performance of any of their powers or duties hereunder. Such 55394.00068\42092121.3
34 indemnity shall survive the termination or discharge of the Indenture and resignation or removal of the Trustee.
SECTION 8.05. Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee assumes no responsibility for the correctness of the same, and makes no representations as to the validity or sufficiency of this Ind enture, the Installment Purchase Agreement or of the Bonds, and shall incur no responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless the Trustee shall have been 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 accordance with the directi on of the Owners of not less than 25% in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (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 rights or powers conferred upon it by this Indenture, except for actions arising from the negligence or intentional misconduct of the Trustee.
The permissive right of the Trustee to do things enumerated hereunder shall not be construed as a mandatory duty.
(e) The Trustee shall not be deemed to have knowledge of any Event of Defa ult hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof at the Corporate Trust Office of the Trustee. Except as otherwise expressly provided herein, and subject to Section 8.02, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default hereun der or thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee shall not be responsible for reviewing the contents of any financial statements furnished to the Trustee pursuant to Section 7.04 and may rely conclusively on the certificates provided hereunder to establish compliance with its duties. 55394.00068\42092121.3
35 (f) The Trustee shall not be considered in breach or in default of its obligations hereunder or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the P roject, malicious mischief, condemnation and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and or occurrence beyond the control of the Trustee; provided, however, that the Trustee shall provide notice of any such unavoidable delay to the Authority. (g) 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 these Bonds. (h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Owners pursuant to the provisions of this Indenture unless such Owners shal l have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby.
SECTION 8.06. Right to Rely on Documents . The Trustee shall be protected in acting upon any notice, resolution, request, requisition, consent, order, certificate, report, opinion, bond, 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. The Trustee may consult with counsel, who may be counsel but need not 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.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the Authority, and such Certificate shall be full warrant to the Trustee for any a ction taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
SECTION 8.07. Preservation and Inspection of Documents . All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject at all reasonable times to the inspection of the Authority and any Owner, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions.
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36 The Trustee shall have 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” shall mean the following communications methods: S.W.I.F.T., e -mail, facsimile transmission, secure electronic transmission containing applicable authorization code s, 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 City 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 City whenever a person is to be added or deleted from the listing. If the City 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 City 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 City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Trustee shall not be liable for any losses, costs or expenses arising directly or ind irectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electroni c Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, 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 City; (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 its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
ARTICLE IX
AMENDMENT OF THE INDENTURE
SECTION 9.01. Amendment of the Indenture . The Indenture and the rights and obligations of the Authority and of the Owners may be amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.02, are filed with the Trustee. No such amendment shall (1) extend the maturity of or reduce the interest rate on or otherwise alter or impair the obligation of the Authority to pay the interest on or principal of or redemption premium, if any, on any Bond at the time and place and at the rate and in the currency provided herein without t he express written consent of the Owner of such Bond, (2) except as provided in Sections 4.01 and 4.02 hereof, permit the creation by the Authority of any pledge of the Revenues as provided herein superior to or on a 55394.00068\42092121.3
37 parity with the pledge created hereby f or the benefit of the Bonds, or (3) modify any rights or obligations of the Trustee without its prior written assent thereto.
The Indenture and the rights and obligations of the Authority and of the Owners may also be amended at any time by a Supplemental Indenture which shall become binding upon adoption without the consent of any Owners, but only to the extent permitted by law and after receipt of an approving opinion of Bond Counsel and only for any one or more of the following purposes:
(a) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein regard to questions arising hereunder which the Authority may deem desirable or necessary and not inconsistent herewith and which shall not adversely affect the interests of the Owners; (b) to make any other change or addition hereto which shall not materially adversely affect the interests of the Owners, or to surrender any right or power reserved herein to or conferred herein on the Authority; or
(c) to provide for the issuance of any Additional Bonds and to provide the terms of such Additional Bonds, subject to the conditions and upon compliance with the procedure set forth in Article 4.
SECTION 9.02. Disqualified Bonds. Bonds owned or held by or for the account of the Authority or the City shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds provided in this A rticle, and shall not be entitled to consent to or take any other action provided in this Article.
SECTION 9.03. Endorsement or Replacement of Bonds After Amendment .
After the effective date of any action taken as hereinabove provided, the Authority may determine that the Bonds may bear a notation by endorsement in form approved by the Authority as to such action, and in that case upon demand of the Owner of any Outstanding Bond and presentation of his Bond for such purpose at the Corporate Trust Office of the Trustee a suitable notation as to such action shall be made on such B ond. If the Authority shall so determine, new Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond such new Bonds shall be exchanged at the Corporate Trust Office of the Trustee without cost to each Owner for Bonds then Outstanding upon surrender of such Outstanding Bonds.
SECTION 9.04. Amendment by Mutual Consent . The provisions of this A rticle shall not prevent any Owner from accepting any amendment as to the particular Bonds owned by him, provided that due notation thereof is made on such Bonds.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
SECTION 10.01. Events of Default and Acceleration of Maturities. If one or more of the following events (herein called “Events of Default”) shall happen, that is to say:
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38 (a) failure in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable;
(b) failure in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed or by proceedings for redemption; (c) failure by the Authority in the performance of any of the other agreements or covenants required herein to be performed by the Authority, and such default shall have continued for a period of 30 days after the Authority shall have been given notice in writing of such default by the Trustee, or to the Authority and the Trustee by Owne rs of not less than 25% of the Bonds; or
(d) if any event of default shall have occurred and be continuing under Section
8.01 of the Installment Purchase Agreement; or
(e) if 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 substantial part of its property; then and in each and every such case during the continuance of such event of default the Trustee may, upon the written request of the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding by notice in writing to the Authority, declare the principal of all Bonds then Outstanding and the interest accrued thereon to be due and payable immediately, and upon any such declaration the s ame shall become due and payable, anything contained herein or in the Bonds to the contrary notwithstanding. This subsection is subject to the condition that if at any time after the entire principal amount of the unpaid Bonds and the accrued interest ther eon shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay the unpaid principal amount of the Bonds due prior to such declaration and the accrued interest thereon, with interest such overdue installments at the rate or rates applicable thereto in accordance with their terms, and the reasonable fees and expenses of the Trustee, and any and all other def aults known to the Trustee (other than in the payment the entire principal amount of the unpaid Bonds and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then and in every such case the Trustee, by written notice to the City, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon.
SECTION 10.02. Proceedings by Trustee. Upon the happening and continuance of any Event of Default the Trustee in its discretion may, and at the written request of the Owners of 55394.00068\42092121.3
39 not less than 25% in aggregate principal amount of Bonds Outstanding shall (but only to the extent indemnified to its satisfaction from fees and expenses, including attorneys’ fees), do the following:
(a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Owners and require the Authority to enforce all rights of the Owners of Bonds, including the right to require the Authority to receive and collect Revenues and to enforce its rights under the Installment Purchase Agreement and to require the Authority to carry out any other covenant or agreement with Owners of Bonds and to perform its duties hereunder;
(b) bring suit upon the Bonds;
(c) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners; and
(d) as a matter of right, have receivers appointed for the Revenues and the issues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer.
SECTION 10.03. Effect of Discontinuance or Abandonment . In case any proceeding taken by the Trustee on account of any default or Event of Default shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Authority, the Trustee and the Owners shall be restored to their former positions and rights under this Indenture, respectively, and all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken.
SECTION 10.04. Rights of Owners . Anything in this Indenture to the contrary notwithstanding subject to the limitations and restrictions as to the rights of the Owners in Sections
10.01 and 10.02 above and 10.05 below, upon the happening and continuance of any Event of Default, the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall have the right upon providing the Trustee security and indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, by an instrument in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee under this Indenture.
The Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is prejudicial to rights of other Owners or would subject the Trustee to personal liability.
SECTION 10.05. Restriction on Owners’ Action . In addition to the other restrictions on the rights of Owners to request action upon the occurrence of an Event of Default and to enforce remedies set forth in this Article 1 0, no Owner of any of the Bonds shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of any trust under this Indenture, or any other remedy under this Indenture or on said Bonds, unless such Owner previously shall have given to the Trustee written notice of an Event of Default as hereinabove provided and unless the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall have made written request of the Trustee to institute any such suit, action, proceeding or other remedy, after the right to exercise such powers or rights of action, as the case 55394.00068\42092121.3
40 may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers in this Indenture granted, or to institute such action, suit or proceeding in its or their name; nor unless there also shall have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall not have complied with such request w ithin a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the trusts of this Indenture or for any other remedy under t his Indenture; it being understood and intended that no one or more Owners of the Bonds secured by this Indenture shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture, or to enfor ce any right under this Indenture or under the Bonds, except in the manner in this Indenture provided, and that all proceedings at law or in equity shall be instituted, and maintained in the manner in this Indenture provided, and for the equal benefit of all Owners of Outstanding Bonds.
SECTION 10.06. Power of Trustee to Enforce. All rights of action under this Indenture or under any of the Bonds secured by this Indenture which are enforceable by the Trustee may be enforced by it without the possession of any of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceedings instituted by the Trustee shall be brought in its own name, as Trustee, for the equal and ratable benefit of the Owners of the Bonds subject to the provisions of this Indenture.
SECTION 10.07. Remedies Not Exclusive. No remedy in this Indenture conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every su ch remedy shall be cumulative, and shall be in addition to every other remedy given under this Indenture or now or hereafter existing at law or in equity or by statute.
SECTION 10.08. Waiver of Events of Default; Effect of Waiver. The Trustee shall waive any Event of Default hereunder and its consequences and rescind any declaration of acceleration, upon the written request of the Owners of at least a majority in aggregate principal amount of all Outstanding Bonds. If any Event of Default shall have been waived as here in provided, the Trustee shall promptly give written notice of such waiver to the Authority and shall give notice thereof by first class mail, postage prepaid to all Owners of Outstanding Bonds if such Owners had previously been given notices of such Event of Default whether or not exhausted; but no such waiver, rescission and annulment shall extend to or affect any subsequent Event of Default, or impair any right or remedy consequent thereon.
No delay or omission of the Trustee or any Owner of the Bonds to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default, or an acquiescence therein; and every power and remedy given by th is Article 10 to the Trustee or the Owners of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient.
SECTION 10.09. Application of Moneys . Any moneys received by the Trustee pursuant to this Article 10, together with any moneys which upon the occurrence of an Event of Default are held by the Trustee in any of the funds and accounts hereunder (other than the Rebate 55394.00068\42092121.3
41 Fund and other than moneys held for Bonds not presented for payment) shall, after payment of all fees and expenses of the Trustee, and the fees and expenses of its counsel, be applied as follows:
(a) unless the principal of all of the Outstanding Bonds shall be due and payable,
FIRST - To the payment of the Owners of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Owners, without any discrimination or privilege; SECOND - To the payment of the Owners of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates and, if the amount available shall not be sufficient to pay in full the principal of and premium, if any, on such Bonds due on any particular date, then to the pay ment ratably, according to the amount due on such date, to the Owners without any discrimination;
THIRD - To be held for the payment to the Owners as the same shall become due of the principal of, interest, and premium, if any, on the Bonds, which may thereafter become due either at maturity or upon call for redemption prior to maturity and, if the amount available shall not be sufficient to pay in full such principal and premium, if any, due on any particular date, together with interest then due and owing thereon, payment shall be made in accordance with the FIRST and SECOND paragraphs hereof.
(b) if the principal of all of the Outstanding Bonds shall be due and payable, to the payment of the principal, and premium, if any, and interest then due and unpaid upon the Outstanding Bonds without preference or priority of any of principal, premium or interest over the others or of any installment of interest, or of any Outstanding Bond over any other Outstanding Bond, ratably, according to the amounts due respect ively for principal, premium and interest, to the Owners without any discrimination or preference except as to any difference in the respective amounts of interest specified in the Outstanding Bonds.
Whenever moneys are to be applied pursuant to the provisions of this Section 10.09, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future.
The Trustee shall give, by mailing by first class mail as it may deem appropriate, such notice of the deposit with it of any such moneys.
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42 ARTICLE XI
DEFEASANCE
SECTION 11.01. Discharge of Bonds.
(a) If the Authority shall pay or cause to be paid to the Owners of all Outstanding Bonds the interest thereon and the principal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such Bonds shall cease to be entitled to the pledge of the Revenues as provided herein, and all agreements, covenants and other obligations of the Authority to the Owners of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, 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 or deliver to the Authority all moneys held by it pursuant hereto which are not required for the payment of the interest on and principal of and redemption premiums, if any, on such Bonds.
Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid and if, at the time of such payment, the Authority shall have kept, performed and observed all the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by the Authority or on its part on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to be entitled to the lien of this Indenture and such lien and all covenants, agreements and other obligations of the Authority hereunder shall cease, terminate , become void and be completely discharged as to such Bonds.
Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, tender and exchange provisions, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, nonpresentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of, redemption premium, if any, and interest on the Bonds, to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture contained in Section 8.04 relating to the compensation of the Trustee shall remain in effect and shall be binding upon the Trustee and the Authority.
(b) Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) or this Section if (1) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail notice of redemption of such Bonds on said redemption date, said notice to be given in accordance with Section 3.02 hereof, (2) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient or (B) Defeasance Securities which are 55394.00068\42092121.3
43 not subject to redemption prior to maturity (including any such Defeasance Securities issued or held in book entry form on the books of the Department of the Treasury of the United States of America) or tax exempt obligations of a state or political substitution thereof which have been defeased under irrevocable escrow instructions by the deposit of such money or Defeasance Securities and which are then rated in the highest rating category by the rating agency, the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with the Trustee at the same time, shall, as ver ified by an independent certified public accountant or other financial consultant acceptable to the Trustee, be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and redemption premiums, if any, on such Bonds, and (3) in the event such Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Authority shall have given the Trustee in form satisfact ory to it irrevocable instructions to mail as soon as practicable, a notice to the Owners of such Bonds that the deposit required by clause (2) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and redemption premiums, if any, on such Bonds.
SECTION 11.02. Unclaimed Money . Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds which remains unclaimed for two years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee shall at the Written Request of the Authority be repaid by the Trustee to the Authority as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Authority for the payment of such Bonds; provided, however, that before being required to make any such payment to the Authority, the Trustee shall, at the expense of the Authority, cause to be published once a week for two successive weeks in a Financial Newspaper, a notice that such money remains unclaimed and that, after a date named in such notice, which date shal l not be less than 30 days after the date of the first publication of each such notice, the balance of such money then unclaimed will be returned to the Authority.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Liability of Authority Limited to Revenues . Notwithstanding anything contained herein, the Authority shall not be required to advance any money derived from any source of income other than the Revenues as provided herein for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds or for the pe rformance of any agreements or covenants herein contained. The Authority may, however, advance funds for any such purpose so long as such funds are derived from a source legally available for such purpose without incurring an indebtedness.
The Bonds shall be limited obligations of the Authority and shall be payable solely from the Revenues and amounts on deposit in the funds and accounts established hereunder (other than 55394.00068\42092121.3
44 amounts on deposit in the Rebate Fund created pursuant to Section 7.02) . The Bonds do not constitute a debt or liability of the City or of the State of California and neither the faith and credit of the City nor of the State are pledged to the payment of the principal of or interest on the Bonds.
SECTION 12.02. Benefits of Indenture Limited to Parties . Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Authority, the Trustee and the registered Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof; and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Authority, the Trustee and the registered Owners of the Bonds.
SECTION 12.03. Successor Is Deemed Included In All References To Predecessor. Whenever herein either the Authority or any member, officer or employee thereof is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions with respect to the administration, control and management of the Project that are presently vested in the Authority or such member, officer or employee, and all agreements and covenants required hereby to be performed by or on behalf of the Authority or any member, officer or employee thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
SECTION 12.04. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and da te of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to make acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof; or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership of any Bonds and the amount, maturity, number and date of holding the same may be proved by the registration books relating to the Bonds at the office of the Trustee.
Any declaration, request or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority in good faith and in accordance therewith.
SECTION 12.05. Waiver of Personal Liability. No member, officer or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds by reason of their issuance, but nothing herein contained shall relieve any member, offi cer or employee of the Authority from the performance of any official duty provided by any applicable provisions of law or hereby.
SECTION 12.06. Acquisition of Bonds by Authority . All Bonds acquired by the Authority, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation.
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45 SECTION 12.07. Destruction of Cancelled Bonds. Whenever provision is made for the return to the Authority of any Bonds which have been cancelled pursuant to the provisions hereof, the Trustee shall destroy such Bonds and fur nish to the Authority a certificate of such destruction.
SECTION 12.08. Content of Certificates . Every Certificate of the Authority with respect to compliance with any agreement, condition, covenant or provision provided herein shall include (a) a statement that the person or persons making or giving such certificate have read such agreement, condition, covenant or provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such agreement, condition, covenant or provision has been complied with; and (d) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant or provision has been complied with.
Any Certificate of the Authority may be base d, insofar as it relates to legal matters, upon an opinion of Bond Counsel unless the person making or giving such certificate knows that the opinion of Bond Counsel with respect to the matters upon which his certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any opinion of Bond Counsel may be based, insofar as it relates to factual matters information with respect to which is in the possession of the Authority, upon a r epresentation by an officer or officers of the Authority unless the counsel executing such opinion of Bond Counsel knows that the representation with respect to the matters upon which his opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous.
SECTION 12.09. Accounts and Funds . Any account or fund required herein to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to all such accounts and funds shall at all times be maintained in accordance with sound corporate trust industry practice and with due regard for the protection of the security of the Bonds and the rights of the Owners.
SECTION 12.10. Partial Invalidity . If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Authority or the Trustee shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them hereunder or any applic able provisions of law. The Authority and the Trustee hereby declare that they would have executed and delivered the Indenture and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. 55394.00068\42092121.3
46 SECTION 12.11. Execution in Counterparts . This 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 12.12. Law Governing and Venue . This Indenture shall be governed exclusively by the provisions hereof and by the laws of the State as the same from time to time exist. Venue shall be held exclusively in the County of Orange.
SECTION 12.13. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the Authority: Santa Ana Public Financing Authority 20 Civic Center Plaza
Santa Ana, CA 92701
Attn: Executive Director
If to the City: City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92701
Attn: Department of Finance
If to the Trustee: U.S. Bank Trust Company, National Association 633 West 5
th St., 24th Floor
Los Angeles, CA 90071
(Signature page follows)
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S-1
IN WITNESS WHEREOF , the SANTA ANA PUBLIC FINANCING
AUTHORITY has caused this Indenture to be signed in its name by its Executive Director and attested by its Secretary and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION in token of its acceptance of the trusts created hereund er, has caused this Indenture to be signed by one of the officers thereunder duly authorized, all as of the day and year first above written.
SANTA ANA PUBLIC FINANCING
AUTHORITY
By:
Executive Director
ATTEST:
Secretary
APPROVED AS TO FORM:
Authority Counsel
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
-Signature Page-
Indenture
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EXHIBIT A
FORM OF 2024 BOND
No. _____ $_______________
SANTA ANA PUBLIC FINANCING AUTHORITY
WATER REVENUE BOND, SERIES 2024
(PAYABLE SOLELY FROM INSTALLMENT PAYMENTS
SECURED BY WATER SYSTEM NET REVENUES)
INTEREST
RATE
MATURITY
DATE
DATED
DATE
CUSIP
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: ___________________________________________ DOLLARS
Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York Corporation (“DTC”), to the issuer or its agent 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 DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), 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.
The SANTA ANA PUBLIC FINANCING AUTHORITY, a California joint exercise of powers authority, duly organized and validly existing under and pursuant to the laws of the State of California (the “Authority”), for value received, hereby promises to pay (but only out of the maturity date specified above (subject to any right of prior redemption provided for) the principal sum specified above, together with interest thereon from the interest payment date next preceding the date of authentication hereof (unless such date of authentication is during t he period commencing after the fifteenth day preceding an interest payment date (the “Record Date”) through and including the next succeeding interest payment date, in which event this Bond shall bear interest from such interest payment date, or unless such date of authentication is on or before the first Record Date, in which event it shall bear interest from _________________, 2024 until the principal hereof shall have been paid at the interest rate per annum specified above, payable on March 1, 2025 and semiannually thereafter on September 1 and March 1 in each year; provided, however, that if on the date of authentication of this Bond, interest is then in default on this Bond, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment, or if no interest has been paid, from the date of delivery hereof. 55394.00068\42092121.3
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The principal of this Bond shall be payable in lawful money of the United States of America at the corporate trust office of U.S. Ba nk Trust Company, National Association, as Trustee (the “Trustee”) in Los Angeles, California upon presentation and surrender of this Bond.
Payment of interest on this Bond due on or before the maturity or prior redemption, thereof shall be made to the per son in whose name such Bond is registered, as of the Record Date preceding the applicable interest payment date, on the registration books kept by the Trustee at its corporate trust office, such interest to be paid by check mailed by first class mail (or p aid as otherwise specified in the Indenture) on such interest payment date to the registered owner at his address as it appears on such books. Interest on this Bond shall be payable in lawful money of the United States of America and shall be calculated on the basis of a 360 day year consisting of twelve 30 day months.
It is hereby certified that all acts and proceedings required by law necessary to make this Bond, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligation of the Authority have been done and taken, and have been in all respects duly authorized.
This Bond is one of a duly authorized issue of bonds of the Authority designated as its “Santa Ana Public Financing Authority Water Revenue Bonds, Series 2024 (Payable Solely From Installment Payments Secured by Water System Net Revenues)” (the “Bonds”) in the aggregate principal amount of $_____________, all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers, maturities and interest rates), and is issued under and pursuant to the provisions of an indenture, dated as of __________, 2024 (the “Indenture”), between the Authority and the Trustee (copies of which are on file at the office of the Secretary of the Authority and at the corporate trust office of the Trustee).
The Bonds are issued to provide funds to finance and refinance the cost of constructing and improving certain improvement of the water system (the “Proj ect”) of the City of Santa Ana (the “City”). The Bonds are limited obligations of the Authority and are payable, as to interest thereon and principal thereof, solely from the revenues derived from installment payments paid by the City for the purchase of the Project (the “Revenues”). All the Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture by a pledge of the Revenues, which Revenues shall be held in trust for the security and payment of the interest on, principal of and redemption premiums, if any, on the Bonds as provided in the Indenture.
The Bonds shall be limited obligations of the Authority and shall be payable solely from the Revenues and amounts on deposit in the funds and accounts established under the Indenture (other than amounts on deposit in the Rebate Fund). The Bonds do not constitute a debt or liability of the City or of the State of California and neither the faith and credit of the City nor of the State of California are pledged to the payment of the principal of or interest on the Bonds.
Additional revenue bonds payable from the Revenues may be issued which will rank equally as to security with the Bonds, but only subject to the conditions and upon compliance with the procedures set forth in t he Indenture. Reference is hereby made to the Indenture and any and all amendments thereof and supplements thereto for a description of the terms under which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the 55394.00068\42092121.3
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rights of the registered owners of the Bonds. All of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Authority and the registered owner of this Bond, to all the provisions of which the registered owner of this Bond, by acceptance hereof, agrees and consents. Each registered owner hereof shall have recourse to all of the provisions of the Indenture and shall be bound by all of the terms and conditions thereof.
The Authority has agreed and covenanted that, for the payment of the interest on, the principal of and redemption premium, if any, on this Bond and all other Bonds of this issue authorized by the Indenture when due, there has been created and will be maintained by the Trustee a special fund into which all Revenues (other than deposits to the Rebate Fund created by the Indenture) shall be deposited, and the Authority has allocated such Revenues solely to the payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and the Authority will pay promptly when due the interest on and the principal of and redemption premium, if any, on this Bonds and all other Bonds of this issue authorized by the Indenture out of said special fund, all in accordance with the terms and provisions set forth in the Indenture. 2024 Bonds maturing on or after September 1, ____, shall be subject to redemption, at the option of the Authority, upon at least 45 days prior written notice to the Trustee specifying the date and amount of such redemption, in whole or in part , on any date on or after September 1, _____ (by lot within any maturity and among maturities as specified by the Authority) at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest to the date of redemption without premium.
The Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on September 1, 20__, and on each September 1 thereafter to maturity by lot, from sinking fund payments at a redemption price equal to the principal amount of such Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as shown in the Indenture. As provided in the Indenture, notice of redemption of this Bond shall be given by first class mail not less than 30 days nor more than 60 days before the redemption date to the registered owner hereof. If notice of redemption has been duly given and money for the payment of the redemption price is held by the Trustee, then on the redemption date designated in such notice, this Bond shall become due and payable, and from and after the date so designated, interest on this Bond shall cease to accrue and the registered owner of this Bond shall have no rights with respect hereto except to receive payment of the redemption price hereof.
If an Event of Default (as defined in the Indenture) shall occur, the principal of all outstanding Bonds may be declared immediately due and payable upon the conditions, in the manner and with the effect provided in the Indenture; except that the Indenture provides that in certain events such declaration and its consequences may be rescinded by the registered owners of at least a majority in aggregate principal amount of the Bonds then outstanding.
This Bond is transferable only on the books required to be kept for that purpose at the office of the Trustee by the registered owner hereof in person or by his duly authorized attorney upon payment of the charges provided in the Indenture and upon surrender of this Bond together with a written instrument of transfer in a form approved by the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount will be issued to the transferee in exchange therefor. The Trustee 55394.00068\42092121.3
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shall not be required to register the transfer of or exchange any Bond (1) during the period commencing with the close of business on the fifteenth day next preceding any interest payme nt date and ending on such interest payment date, (2) during the period commencing 15 days before the mailing of any notice of redemption and ending on the day of such mailing, or (3) which has been selected for redemption in whole or in part.
The Authorit y and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of the interest hereon and principal hereof and for all other purposes, whether or not this Bond shall be overdue, and neithe r the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of this Bond shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability on this Bond to the extent of the sum or sums so paid.
The rights and obligations of the Authority and of the registered owners of the Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such amendment shall (1) extend the maturity of this Bond or reduce the interest rate hereon or otherwise alter or impair the obligation of the Authority to pay the interest hereon or principal hereof at the time and place and at the rate and in the currency provided herein without the express written consent of the registered owner of this Bond, (2) except as otherwise provided in the Indenture, permit the creation by the Authority of any pledge of the Revenues superior to or on a parity with the pledge created by the Indenture for the benefit of the Bonds, and (3) modify any rights or obligations of the Trustee without its prior written assent thereto, all as more fully set forth in the Indenture.
If the Authority shall pay or cause to be pai d or there shall otherwise be paid to the registered owners of all outstanding Bonds the interest thereon, the principal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated herein and in the indenture, then the registered owners of such Bonds shall cease to be entitled to the pledge of the Revenues as provided in the Indenture, and all agreements, covenants and other obligations of the Authority to the registered owners of such Bonds under the Indenture shall there upon cease, terminate and become void and be discharged and satisfied.
This Bond shall not be entitled to any benefit, protection or security under the Indenture or become valid or obligatory for any purpose until the certificate of authentication and regi stration hereon endorsed shall have been manually executed and dated by the Trustee. (Balance of this page intentionally left blank.)
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IN WITNESS WHEREOF, the Santa Ana Public Financing Authority has caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Chair and attested to by the facsimile signature of its Secretary, and has caused this Bond to be dated ___________, 2024.
SANTA ANA PUBLIC FINANCING
AUTHORITY
By:
Chair
Attest:
Secretary
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CERTIFICATE OF AUTHENTICATION AND
REGISTRATION
This is one of the Bonds described in the within- mentioned Indenture which has been authenticated and registered on ________________, 2024.
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By:
Authorized Signatory
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[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto_________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint ______________________ _________________________________________ attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises.
Dated: _______________________
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.
Note: The signature(s) on this Assignment
must correspond with the name(s) as
written on the face of the within Bond
in every particular, without alteration
or enlargement or any change
whatsoever.