g. (Form) Indenture
10000-0243\2392699v1.doc RWG DRAFT: __/__/2020
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INDENTURE
by and between the
ORANGE CITY PUBLIC FACILITIES FINANCING AUTHORITY
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
Dated as of ________ 1, 2020
Relating to
$________
Orange City Public Facilities Financing Authority
Lease Revenue Bonds
Series 2020A
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; EQUAL SECURITY ........................................................... 2
SECTION 1.01 Definitions..................................................................................... 2
SECTION 1.02 Rules of Construction. ................................................................ 12
SECTION 1.03 Equal Security. ............................................................................ 12
ARTICLE II AUTHORIZATION; GENERAL PROVISIONS ........................................ 12
SECTION 2.01 Authorization; Designation ......................................................... 12
SECTION 2.02 Terms of Bond ............................................................................ 13
SECTION 2.03 Redemption of Bonds. ................................................................ 14
SECTION 2.04 Form of Bonds ............................................................................ 16
SECTION 2.05 Execution of Bonds ..................................................................... 16
SECTION 2.06 Transfer of Bonds ....................................................................... 17
SECTION 2.07 Exchange of Bonds ..................................................................... 17
SECTION 2.08 Temporary Bonds........................................................................ 17
SECTION 2.09 Registration Books ...................................................................... 17
SECTION 2.10 Bonds Mutilated, Lost, Destroyed or Stolen ............................... 18
SECTION 2.11 Book-Entry System ..................................................................... 18
ARTICLE III ISSUANCE; DEPOSIT AND APPLICATION OF
PROCEEDS; VALIDITY ....................................................................... 20
SECTION 3.01 Issuance of Bonds ....................................................................... 20
SECTION 3.02 Application of Proceeds of Sale of Bonds .................................. 20
SECTION 3.03 Costs of Issuance Fund ............................................................... 20
SECTION 3.04 Validity of Bonds ........................................................................ 21
ARTICLE IV REVENUES; FLOW OF FUNDS ................................................................ 22
SECTION 4.01 Pledge of Revenues; Assignment of Rights ................................ 22
SECTION 4.02 Lease Revenue Fund ................................................................... 23
SECTION 4.03 Redemption Fund ........................................................................ 24
SECTION 4.04 Investments ................................................................................. 25
SECTION 4.05 Valuation and Disposition of Investments .................................. 25
ARTICLE V COVENANTS OF THE AUTHORITY ....................................................... 26
SECTION 5.01 Punctual Payment........................................................................ 26
SECTION 5.02 Extension of Payment of Bonds .................................................. 26
SECTION 5.03 Against Encumbrances................................................................ 26
SECTION 5.04 Power to Issue Bonds and Make Pledge and Assignment .......... 26
SECTION 5.05 Accounting Records and Financial Statements........................... 26
SECTION 5.06 Additional Obligations ................................................................ 27
SECTION 5.07 Sublease ...................................................................................... 27
SECTION 5.08 Tax Covenants ............................................................................ 27
SECTION 5.09 Continuing Disclosure ................................................................ 27
SECTION 5.10 Further Assurances...................................................................... 27
ARTICLE VI THE TRUSTEE ............................................................................................ 28
SECTION 6.01 Appointment of Trustee .............................................................. 28
SECTION 6.02 Acceptance of Trusts................................................................... 28
SECTION 6.03 Fees, Charges and Expenses of Trustee ...................................... 31
SECTION 6.04 Notice to Bond Owners of Default ............................................. 31
TABLE OF CONTENTS (cont.)
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SECTION 6.05 Intervention by Trustee ............................................................... 32
SECTION 6.06 Removal of Trustee ..................................................................... 32
SECTION 6.07 Resignation by Trustee ............................................................... 32
SECTION 6.08 Appointment of Successor Trustee ............................................. 32
SECTION 6.09 Merger or Consolidation ............................................................. 32
SECTION 6.10 Concerning any Successor Trustee ............................................. 32
SECTION 6.11 Appointment of Co-Trustee ........................................................ 33
SECTION 6.12 Indemnification; Limited Liability of Trustee ............................ 33
SECTION 6.13 Trustee Acceptance of Electronic Instructions ........................... 34
ARTICLE VII MODIFICATION AND AMENDMENT OF THE INDENTURE .............. 35
SECTION 7.01 Amendment of Indenture ............................................................ 35
SECTION 7.02 Effect of Supplemental Indenture ............................................... 36
SECTION 7.03 Endorsement or Replacement of Bonds after Amendment ......... 36
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS ........... 36
SECTION 8.01 Events of Default ........................................................................ 36
SECTION 8.02 Remedies; No Acceleration ........................................................ 37
SECTION 8.03 Application of Revenues and Other Funds after Default ............ 38
SECTION 8.04 Power of Trustee to Control Proceedings ................................... 38
SECTION 8.05 Appointment of Receivers .......................................................... 39
SECTION 8.06 Non-Waiver................................................................................. 39
SECTION 8.07 Rights of Bond Owners ............................................................... 39
SECTION 8.08 Termination of Proceedings ........................................................ 40
ARTICLE XI MISCELLANEOUS ..................................................................................... 40
SECTION 11.01 Limited Liability of Authority .................................................... 40
SECTION 11.02 Benefits of Indenture Limited ..................................................... 40
SECTION 11.03 Discharge of Indenture ................................................................ 40
SECTION 11.04 Trustee’s Additional Acknowledgment of Certain
Provisions of the Sublease .......................................................... 41
SECTION 11.05 Successor Is Deemed Included in All References to
Predecessor ................................................................................. 41
SECTION 11.06 Content of Certificates and Opinions .......................................... 41
SECTION 11.07 Execution of Documents by Bond Owners ................................. 42
SECTION 11.08 Disqualified Bonds...................................................................... 42
SECTION 11.09 Waiver of Personal Liability ....................................................... 42
SECTION 11.10 Partial Invalidity.......................................................................... 42
SECTION 11.11 Destruction of Canceled Bonds .................................................. 43
SECTION 11.12 Funds and Accounts .................................................................... 43
SECTION 11.13 Payment on Business Days ......................................................... 43
SECTION 11.14 Notices ........................................................................................ 43
SECTION 11.15 Unclaimed Moneys ..................................................................... 44
SECTION 11.16 Governing Law ........................................................................... 44
SECTION 11.17 Execution in Counterparts........................................................... 44
Exhibit A – Form of Bond
Exhibit B – Form of Requisition (Costs of Issuance Fund)
TABLE OF CONTENTS (cont.)
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Exhibit B – Form of Requisition (Project Fund)
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INDENTURE
This Indenture, dated as of ________ 1, 2020, is made and entered into by and between
the Orange City Public Facilities Financing Authority, a joint powers authority organized and
existing under the laws of the State of California (the “Authority”) and U.S. Bank National
Association, a national banking association duly organized and existing under the laws of the
United States of America, being qualified to accept and administer the trusts hereby created (the
“Trustee”).
RECITALS:
A. The Authority is a joint powers authority duly organized and existing under and
pursuant to that certain Joint Exercise of Powers Agreement, dated as of ________, 2020, by and
between the City and the California Municipal Finance Authority, and under the provisions of
Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the
Government Code of the State of California, and is authorized pursuant to Article 4 of the Act to
borrow money for the purpose of financing and refinancing public capital improvements.
B. The Authority has determined to issue its Lease Revenue Bonds, Series 2020A
(the “Bonds”) to assist the City with the financing of certain public capital improvements,
including the construction of a new Fire Station No. 1 Headquarters and roof improvements at
the City’s police station headquarters
C. In conjunction with the issuance of the Bonds, the Authority and the City are
entering into: (1) the Lease Agreement, dated as ________ 1, 2020, by and between the City, as
the lessor, and the Authority, as the lessee, and (2) the Sublease, dated as ________ 1, 2020 (the
“Sublease”), by and between the Authority, as the sublessor, and the City, as the sublessee.
D. The Authority has assigned, without recourse, all its rights to receive “Base
Rental” payments (the “Base Rental Payments”) to be paid by the City under and pursuant to the
Sublease and certain other rights to the Trustee pursuant to an Assignment Agreement, dated as
of even date herewith, by and between the Authority and the Trustee.
E. Subject to and in accordance with the terms of this Indenture, the Base Rental
Payments to be received by the Trustee shall be held in a special fund pledged to the payment of
the debt service of the Bonds.
F. The Bonds shall be issued pursuant to and secured by this Indenture in the manner
provided herein.
G. In order to provide for the authentication and delivery of the Bonds, to establish
and declare the terms and conditions upon which the Bonds are to be issued and to secure the
payment of the principal thereof and interest thereon, and premium, if any, the Authority has
authorized the execution and delivery of this Indenture.
H. The Authority has determined that all acts and proceedings required by law
necessary to constitute this Indenture a valid and binding agreement for the uses and purposes
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herein set forth in accordance with its terms, have been done and taken, and the execution and
delivery of the Indenture have been in all respects duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and premium (if any) 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
terms and conditions upon and subject to which the Bonds are to be issu ed 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 considerations, 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 and of
the Bonds and of any certificate, opinion, request or other document herein mentioned have the
meanings herein specified.
“Act” means Articles 1 through 4 (commencing with Section 6500), Chapter 5,
Division 7, Title 1 of the Government Code of the State, as in existence on the Closing Date or
as thereafter amended from time to time.
“Additional Rental Payments” means the additional rental payable by the City under and
pursuant to Section 3(b) of the Sublease.
“Annual Debt Service” means, with respect to any Bond Year, the sum obtained by
totaling the following:
(a) The principal amount of all Outstanding Bonds maturing in such Bond Year;
and
(b) The interest which would be due during such Bond Year on the aggregate
principal amount of Bonds which would be Outstanding in such Bond Year if the Bonds
Outstanding on the date of such computation were to mature in accordance with the applicable
maturity schedule. At the time and for the purpose of making such computation, the amount of
Bonds already retired in advance of the above- mentioned schedule or schedules shall be
deducted pro rata from the remaining amounts thereon.
“Assignment Agreement” means the Assignment Agreement, dated as of ________ 1,
2020, by and between the Authority and the Trustee (as described in Section 4.01), as the same
may be amended, supplemented or otherwise modified from time to time.
“Authority” means the Orange City Public Facilities Financing Authority, a joint powers
authority duly organized and existing under the JPA Agreement and the laws of the State.
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“Authority Governing Board” means the governing body of the Authority.
“Average Annual Debt Service” means the average Annual Debt Service over all Bond
Years.
“Base Rental” or “Base Rental Payments” means the base rental payable by the City
under and pursuant to Section 3(a) of the Sublease.
“Bond Counsel” means any attorney or firm of attorneys appointed by or acceptable to
the Authority of nationally recognized expertise in the issuance of obligations the interest on
which is excludable from gross income for federal income tax purposes under the Code.
“Bond Law” means the Marks-Roos Local Bond Pooling Act of 1985, constituting
Article 4 of the Act, as in existence on the Closing Date or as thereafter amended from time to
time.
“Bond Year” means each twelve-month period extending from November 2 in one
calendar year to November 1 of the succeeding calendar year, both dates inclusive, except that
the first Bond Year shall extend from the Closing Date to November 1, 2020.
“Bonds” means the Orange City Public Facilities Financing Authority, Lease Revenue
Bonds, Series 2020A, issued pursuant to this Indenture.
“Business Day” means a day other than (i) a Saturday or Sunday, (ii) a day on which
commercial banks in the city in which the Trustee maintains its Trust Office are authorized or
required by law or executive order to close or (iii) a day on which the New York Stock Exchange
is closed.
“Certificate of the Authority” means a certificate in writing signed by the Chair,
Executive Director, the Assistant Executive Director or the Controller of the Authority or by any
other officer of the Authority duly authorized for that purpose by a resolution adopted b y the
Authority Commission and filed with the Trustee.
“Certificate of the City” means a certificate in writing signed by the Mayor, the City
Manager, the Assistant City Manager, the Administrative Services Manager, the Finance
Director or by any other officer of the City duly authorized for that purpose.
“City” means the City of Orange, California.
“Closing Date” means __________, 2020.
“Code” means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.
“Continuing Disclosure Certificate” means the continuing disclosure undertaking of the
City relating to the Bonds in connection with Rule 15c2-12(b)(5) promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as origi nally executed
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and as the same may be amended and supplemented from time to time in accordance with the
terms thereof.
“Costs of Issuance” means all expenses incurred in connection with the authorization,
issuance, sale and delivery of the Bonds, including but not limited to all compensation, fees and
expenses (including but not limited to fees and expenses for legal counsel) of the Authority and
the Trustee, compensation to any financial consultants or underwriters, legal fees and expenses,
filing and recording costs, costs of obtaining title insurance with respect to the Leased Properties,
costs relating to conveyance of the Leased Properties, rating agency fees, costs of preparation
and reproduction of documents, costs of printing, bond insurance premiums and fees and costs
for any guaranty, surety bond, letter of credit or other credit facility.
“Costs of Issuance Fund” means the fund by that name established and held by the
Trustee pursuant to Section 3.03.
“Leased Properties” has the meaning given to such term in the Sublease.
“Depository” means The Depository Trust Company, New York, New York, and its
successors and assigns as securities depository for the Bonds, or any other securities depository
acting as Depository under Section 2.11.
“Event of Default” means any of the events described in Section 8.01.
“Federal Securities” means any direct, noncallable obligations of the United States of
America (including obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America), or other noncallable obligations for
which the faith and credit of the United States of America are pledged for the payment of
principal and interest.
“Fair Market Value” means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm’s length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding) if the investment is traded
on an established securities market (within the meaning of section 1273 of the Code) and,
otherwise, the term “fair market value” means the acquisition price in a bona fide arm’s length
transaction (as referenced above) if: (i) the investment is a certificate of deposit the value of
which is determined in accordance with applicable regulations under the Code, (ii) the
investment is an agreement with specifically negotiated withdrawal or reinvestment provisions
and a specifically negotiated interest rate (for example, a guaranteed investment contract, a
forward supply contract or other investment agreement) the value of which is determined in
accordance with applicable regulations under the Code, (iii) the investment is a United States
Treasury Security-State and Local Government Series that is acquired in accordance with
applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the
Local Agency Investment Fund of the State, but only if at all times during which the investment
is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably
comparable direct obligation of the United States of America.
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“Fiscal Year” means any twelve-month period extending from July 1 in one calendar year
to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month
period selected and designated by the Authority as its official fiscal year period.
“Indenture” means this Indenture, as originally executed or as it may from time to time be
amended or supplemented in accordance herewith.
“Independent Certified Public Accountant” means any certified public accountant or firm
of certified public accountants appointed and paid by the Authority, and who, or each of whom:
(i) is in fact independent and not under domination of the Authority or the City; (ii) does not
have any substantial interest, direct or indirect, in the Authority or the City; and (iii) is not
connected with the Authority or the City as an officer or employee of the Authorit y or the City
but who may be regularly retained to make annual or other audits of the books of or reports to
the Authority or the City.
“Information Services” means the Electronic Municipal Market Access System (referred
to as “EMMA”), a facility of the Municipal Securities Rulemaking Board, at
www.emma.msrb.org; provided, however, in accordance with then current guidelines of the
Securities and Exchange Commission, Information Services shall mean such other organizations
providing information with respect to called bonds as the Authority may designate to the Trustee
in writing.
“Interest Account” means the account by that name established and held by the Trustee
pursuant to Section 4.02(a).
“Interest Payment Date” means May 1 and November 1 of each year, commencing
November 1, 2020.
“JPA Agreement” means the Joint Exercise of Powers Agreement, dated as of ________,
2020, by and between the City and the California Municipal Finance Authority, together with
any amendments thereof and supplements thereto.
“Lease” means the Lease Agreement, dated as of even date herewith, by and between the
City, as the lessor, and the Authority, as the lessee, as the same may be amended, supplemented
or otherwise modified from time to time.
“Lease Revenue Fund” means the fund by that name established and held by the Trustee
pursuant to Section 4.02.
“Maximum Annual Debt Service” means, with respect to the Bonds, the largest Annual
Debt Service during the period from the date of calculation through the final maturity date of any
Outstanding Bonds.
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns , or if
such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, any other nationally recognized securities rating agency designated by
the Authority.
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“Nominee” means the nominee of the Depository, which initially will be Cede & Co., as
determined from time to time pursuant to Section 2.11.
“Original Purchaser” means, Raymond James & Associates, Inc.
“Outstanding,” when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 11.08) all Bonds theretofore executed, issued and delivered
by the Authority under this Indenture except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee
for cancellation;
(b) Bonds paid or deemed to have been paid within the meaning of Section
11.03; and
(c) Bonds in lieu of which or in substitution for which other Bonds shall have
been executed, issued and delivered pursuant to this Indenture or any Supplemental Indenture.
“Owner” or “Bond Owner,” when used with respect to any Bond, means the person in
whose name the ownership of such Bond shall be registered on the Registration Books.
“Participants” means those broker-dealers, banks and other financial institutions from
time to time for which the Depository holds Bonds as securities depository.
“Permitted Investments” mean any of the following obligations if and to the extent that
they are permissible investments of funds of the Authority and/or the City, as applicable
(provided, that the Trustee shall be entitled to rely upon a Certificate of the Authority as
conclusive certification to the Trustee that the investments described therein are permissible
investment of funds of the Authority):
(a) Direct obligations of the United States (including obligations issued or
held in book-entry form on the books of the Department of the Treasury) or obligations the
principal of and interest on which are unconditionally guaranteed by the United States of
America.
(b) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are backed by
the full faith and credit of the United States (stripped securities are only permitted if they have
been stripped by the agency itself):
(1) U.S. Export-Import Bank (Eximbank) – Direct obligations or fully
guaranteed certificates of beneficial ownership;
(2) Federal Financing Bank;
(3) Federal Housing Administration Debentures (FHA)
(4) General Services Administration – Participation certificates;
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(5) Government Mortgage Association – (A) GNMA-guaranteed
mortgage backed bonds, and (B) GNMA-guaranteed pass-through obligations;
(6) U.S. Department of Housing and Urban Development (HUD) –
(A) Project Notes, (B) Local Authority Bonds, (C) New Communities Debentures – U.S.
government guaranteed debentures, and (D) U.S. Public Housing Notes and Bonds – U.S.
government guaranteed public housing notes and bonds.
(c) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit United States government agencies
(stripped securities are only permitted if they have been stripped by the agency itself):
(1) Federal Home Loan Bank System – Senior debt obligations;
(2) Resolution Funding Corp. (REFCOPRP) obligations; and
(3) Farm Credit System – Consolidated system wide bonds and notes.
(d) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit United States government agencies
(stripped securities are only permitted if they have been stripped by the agency itself):
(1) Federal Home Loan Bank System – Senior debt obligations;
(2) Resolution Funding Corp. (REFCOPRP) obligations; and
(3) Farm Credit System – Consolidated system wide bonds and notes.
(e) U.S. Dollar-denominated certificates of deposit, bankers' acceptances or
interest-bearing time deposits that are made with the Trustee or with any member of the Federal
Deposit Insurance Corporation, provided that such investments are: (1) fully insured by the
Federal Deposit Insurance Corporation; (2) made with any bank (including the Trustee or any
Affiliate thereof) having undivided capital and surplus of at least $100,000,000, the debt
obligations (or in the case of the principal bank holding company, debt obligations of the bank
holding company) of which are rated in the top 2 tier categories by at least one of the recognized
rating agencies at the time of purchase; or (3) continuously secured as to principal , to the extent
not insured by the Federal Deposit Insurance Corporation, by items listed in (a) or (b) above, or
other marketable securities eligible as security for the deposit of trust funds under applicable
regulations of the Comptroller of the Currency of the United States of America, having a market
value (exclusive of accrued interest) not less than the amount of such deposit.
(f) Investments in money market mutual funds rated in the highest short-term
rating category for money market funds (without regard to qualifier) of at least one nationally
recognized rating agency including funds for which the Trustee and its affiliates provide
investment advisory or other services but excluding funds with a floating net asset value.
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(g) Federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation rating of Prime -1 or
A3 or better by Moody's and A-1 or A or better by S&P.
(h) Repurchase Agreements for 30 days or less, subject to the following
criteria:
(1) Repos must be between the municipal entity and a dealer bank or
securities firm;
(2) Primary dealers on the Federal Reserve reporting dealer list which
are rated A or better by S&P and Moody's; and
(3) Bank rated "A" or above by S&P and Moody's.
(i) “State Obligations,” which means:
(1) Bonds or notes issued by any state or municipality whose
underlying rating from Moody's or S&P is in the highest rating category assigned by such
agency;
(2) Direct general obligations of any state of the United States of
America or any subdivision or agency thereof to which is pledged the full faith and credit of a
state the unsecured general obligation debt of which is rated "A3" by Moody's and "A" by S&P,
or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or
agency whose unsecured general obligation debt is so rated;
(3) Direct general short-term obligations of any state agency or
subdivision or agency thereof described in (a) above and rated "A-1+" by S&P and "MIG-1" by
Moody's; and
(4) Special Revenue Bonds (as defined in the United States
Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated
"AA" or better by S&P and "Aa" or better by Moody's.
(j) Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s
meeting the following requirements:
(1) the municipal obligations are (A) not subject to redemption prior to
maturity or (B) the trustee for the municipal obligations has been given irrevocable instructions
concerning their call and redemption and the issuer of the municipal obligations has covenanted
not to redeem such municipal obligations other than as set forth in such instructions;
(2) the municipal obligations are secured by cash or direct obligations
(other than an obligation subject to variation in principal repayment) of the United States of
America ("United States Treasury Obligations") which may be applied only to payment of the
principal of, interest and premium on such municipal obligations;
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(3) the principal of and interest on the United States Treasury
Obligations (plus any cash in the escrow) has been verified by the report of independent certified
public accountants to be sufficient to pay in full all principal of, interest, and premium, if any,
due and to become due on the municipal obligations ("Verification");
(4) the cash or United States Treasury Obligations serving as security
for the municipal obligations are held by an escrow agent or trustee in trust for owners of the
municipal obligations;
(5) no substitution of a United States Treasury Obligation shall be
permitted except with another United States Treasury Obligation and upon delivery of a new
Verification; and
(6) the cash or United States Treasury Obligations are not available to
satisfy any other claims, including those by or against the trustee or escrow agent.
(k) Any state administered pool investment fund in which the Successor
Agency is statutorily permitted or required to invest will be deemed a permitted investment,
including, but not limited to the Local Agency Investment Fund in the treasury of the State.
“Principal Account” means the account by that name established and held by the Trustee
pursuant to Section 4.02(b).
“Project Costs” means, with respect to a Project, the costs, expenses and liabilities paid
or incurred or to be paid or incurred by the City or the Authority, all calculated in accordance
with generally accepted accounting principles, in connection with acquisition(s), financing,
planning, engineering, design, construction and installation(s) relating to such Project or any
portion thereof, and the obtaining of all governmental approvals, certificates, permits and
licenses with respect thereto, including but not limited to (a) the costs of acquisition, renovation
or construction of real or personal property or any interest therein, (b) any good faith or other
similar payment or deposits, (c) the costs of any demolitions or relocation necessary in
connection therewith, (d) costs of physical construction and costs incidental to such construction,
renovation or acquisition, (e) all costs relating to injury and damage claims, (f) the costs of any
indemnity or surety bonds and premiums on insurance, including obligations to a stock, mutual
or reciprocal insurance company or exchange, (g) preliminary investigation and development
costs, (h) engineering fees, contractors’ fees, legal fees and expenses, and any other fees and
expenses of professional consultants and (i) the costs of labor, materials, equipment and utility
services and supplies, (j) administrative and general overhead expenses and costs of keeping
accounts and making reports required by the Indenture or the Sublease prior to or in connection
with the completion of such Project, (k) all federal, state and local taxes and payments in lieu of
taxes legally required to be paid in connection with such Project prior to or in connection with
the completion of such Project. It is intended that this definition of Project Costs be broadly
construed to encompass all costs, expenses and liabilities of the City and the Authority which are
chargeable to the capital accounts of related Project in accordance with generally accepted
accounting principles.
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“Project Fund” means the fund by that name established and held by the Trustee pursuant
to Section 3.04.
“Projects” means the following City projects (all of which constitute “public capital
improvements” as defined in the Act): (i) the construction of the City Fire Station No.
Headquarters, (ii) roof improvement at the City’s police station headquarters, and (iii) such other
public infrastructure improvements to be determined by the City.
“Qualified Reserve Account Credit Instrument” means an irrevocable standby or direct-
pay letter of credit, surety bond or debt service reserve insurance policy issued by a commercial
bank or insurance company and deposited with the Trustee pursuant to Section 4.02(c)(2),
provided that all of the following requirements are met: (i) at the time of issuance of such
instrument, the long-term credit rating of such bank is within the two highest rating categories
(without regard to the numerical or plus/minus modifiers) of Moody’s or S&P, or the claims
paying ability of such insurance company is rated within the two highest rating categories
(without regard to the numerical or plus/minus modifiers) of S&P or A.M. Best & Company, or
if any of the Bonds are insured, the long-term credit rating of the claims paying ability of such
insurance company is at least as high as the insured rating of the Bonds; (ii) such letter of credit,
surety bond or insurance policy has a term which ends no earlier than the last Interest Payment
Date of the Bonds to which the Reserve Requirement applies; (iii) such letter of credit, surety
bond or insurance policy has a stated amount at least equal to the portion of the Reserve
Requirement with respect to which funds are proposed to be released pursuant to Section
4.02(c)(2); and (iv) the Trustee is authorized pursuant to the terms of such letter of credit, surety
bond or insurance policy to draw thereunder amounts necessary to carry out the purposes
specified in Section 4.02(c)(1), including the replenishment of the Interest Account or the
Principal Account.
“Record Date” means, with respect to any Interest Payment Date, the fifteenth calendar
day of the month immediately preceding such Interest Payment Date, whether or not such day is
a Business Day.
“Redemption Fund” means the fund by that name established and held by the Trustee
pursuant to Section 4.03.
“Registration Books” means the records maintained by the Trustee pursuant to Section
2.09 for the registration and transfer of ownership of the Bonds.
“Rental Payments” means collectively the Base Rental Payments and the Additional
Rental Payments.
“Representation Letter” means the Blanket Issuer Letter of Representations, dated
_____________, from the Authority to DTC, qualifying bonds issued by the Authority for the
Depository’s book-entry system, as originally executed or as it may be supplemented or revised
or replaced by a letter to a substitute depository.
“Request of the Authority” means a request in writing signed by the Chair, the Executive
Director, the Assistant Executive Director or the Controller of the Authority, or by any other
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officer of the Authority duly authorized for that purpose by a resolution adopted by the Authority
Commission and filed with the Trustee.
“Request of the City” means a request in writing signed by the Mayor, the City Manager,
Assistant City Manager, the Administrative Services Director or by any other officer of the City
duly authorized for that purpose.
“Reserve Account” means the account by that name established and held by the Trustee
pursuant to Section 4.02(c).
“Reserve Requirement” means as of any calculation date, an amount equal to the least of
(i) ten percent of the proceeds (within the meaning of Section 148 of the Code) of the Bonds
upon issuance; (ii) 125 percent of Average Annual Debt Service of the Bonds; or (iii) Maximum
Annual Debt Service of the Bonds. The amount of the Reserve Requirement on any date is
subject to confirmation by the Authority to the Trustee upon the Trustee’s request.
“Revenues” means (a) all Base Rental Payments payable by the City pursuant to the
Sublease (including prepayments); (b) any proceeds of Bonds originally deposited with the
Trustee and held by the Trustee in the Lease Revenue Fund and the accounts thereof;
(c) investment income with respect to any moneys held by the Trustee in the Lease Revenue
Fund and the accounts thereof (other than amounts payable to the United States of America
pursuant to Section 5.08); and (d) any insurance proceeds or condemnation awards received by
or payable to the Trustee with respect to the Leased Properties, including rental interruption
insurance.
“S&P” means S&P Global Ratings, its successors and assigns, or if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a securities rating
agency, any other nationally recognized securities rating agency designated by the Authority.
“Securities Depositories” means The Depository Trust Company, 55 Water Street, New
York, New York 10041, 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.
“State” means the State of California.
“Sublease” means the Sublease, dated as of ________ 1, 2020, with respect to the Leased
Properties, by and between the Authority as sublessor and the City as sublessee, as the same may
be amended, supplemented or otherwise modified from time to time.
“Supplemental Indenture” means any agreement supplemental to or amendatory of this
Indenture entered into in accordance with the provisions of Article VII.
“Tax Certificate” means the Certificate Regarding Compliance with Certain Tax Matters
(or similar instrument) dated the date of the original delivery date of the Bonds relating to the
requirements of certain provisions of the Code, as such certificate may from time to time be
modified or supplemented in accordance with the terms thereof.
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“Tax-Exempt” means, with respect to interest on any obligations of a state or local
government, that such interest is excluded from gross income for federal income tax purposes
whether or not such interest is an item of tax preference for purposes of the alternative minimum
tax under the Code or otherwise taken into account in calculating tax liabilities under the Code.
“Trust Office” means the corporate trust office of the Trustee at the address set forth in
Article XI, or such other office designated by the Trustee from time to time; provided, however,
for transfer, registration, exchange, payment and surrender of Bonds, such term means the
corporate trust operations office of U.S. Bank National Association in St. Paul, Minnesota, or
such other office designated by the Trustee from time to time.
“Trustee” means U.S. Bank National Association, and its successors and assigns, and any
other corporation or association that may at any time be substituted in its place as provided in
Article VI.
SECTION 1.02. Rules of Construction. All references in this Indenture to “Articles,”
“Sections,” and other subdivisions are to the corresponding Articles, Sections or subdivisions of
this Indenture; and the words “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.
SECTION 1.03. Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the
Authority and the Owners from time to time of the Bonds; and the covenants and agreements
herein set forth to be performed on behalf of the Authority shall be for the equal and
proportionate benefit, security and protection of all Owners of the Bonds without preference,
priority or distinction as to security or otherwise of any of the Bonds over any of the others by
reason of the number or date thereof or the time of sale, execution or delivery thereof, or
otherwise for any cause whatsoever, except as expressly provided therein or herein.
ARTICLE II
AUTHORIZATION; GENERAL PROVISIONS
SECTION 1.04. Authorization; Designation. The Authority has reviewed all
proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result
of such review, and hereby finds and determines that all things, conditions, and acts required by
law to exist, to happen and to be performed precedent to and in the issuance of the Bonds do
exist, have happened and have been performed in due time, form and manner as required by law,
and the Authority is now authorized under the JPA Agreement and the Bond Law and each and
every requirement of law, to issue the Bonds in the manner and form provided in this Indenture.
Accordingly, the Authority hereby authorizes the issuance of the Bonds pursuant to the Bond
Law and this Indenture for the purposes described in the recitals hereof.
The Bonds are authorized to be issued by the Authority under and subject to the Bond
Law and the terms of this Indenture and shall be designated the Orange City Public Facilities
Financing Authority Lease Revenue Bonds, Series 2020A, and shall be issued in the original
aggregate principal amount of _________________ Dollars ($_______).
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SECTION 1.05. Terms of Bonds. The Bonds shall be dated the Closing Date, shall
mature on the dates and in the amounts, and shall bear interest (calculated on the basis of a 360 -
day year of twelve 30-day months) at the rates, as follows:
Maturity Date
(November 1)
Principal
Amount
Interest Rate
Per Annum
Maturity Date
(November 1)
Principal
Amount
Interest Rate
Per Annum
__________________
* Insured Bonds
The Bonds shall be delivered in fully registered form, numbered from one upwards in
consecutive numerical order (with such alphabetical prefix as the Trustee shall determine). The
Bonds shall be executed and delivered in the denominations of $5,000 and any integral multiple
thereof.
Each Bond shall bear interest from the Interest Payment Date next preceding the date of
authentication thereof, unless (i) it is authenticated during the period from the day after the
Record Date for an Interest Payment Date to and including such Interest Payment Date, in which
event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or prior
to the Record Date for the first Interest Payment Date, in which event it shall bear interest fr om
its dated date; provided, however, that if, at the time of registration of any Bond, interest with
respect to such Bond is in default, such Bond shall bear interest from the Interest Payment Date
to which interest has been paid or made available for payment with respect to such Bond.
Interest with respect to any Bond shall be payable in lawful money of the United States of
America on each Interest Payment Date to the Owner thereof as of the close of business on the
Record Date. Subject to Section 2.11, interest on the Bonds shall be paid by check or draft of the
Trustee, mailed by first class mail no later than the Interest Payment Date to the Owner at such
Owner’s address as it appears, on such Record Date, on the Registration Books maintained by
the Trustee; provided, however, that at the written request of the Owner of at least $1,000,000 in
aggregate principal amount of Outstanding Bonds filed with the Trustee prior to any Record
Date, interest on such Bonds shall be paid to such Owner on each succeeding Interest Payment
Date (unless such request has been revoked in writing) by wire transfer of immediately available
funds to an account in the United States designated in such written request. Payments of
defaulted interest with respect to the Bonds shall be paid by check or draft to the Owners as of a
special record date to be fixed by the Trustee, notice of which special record date shall be given
to the Owners of the Bonds not less than ten days prior thereto. The principal of and premium, if
any, on the Bonds are payable by check when due upon surrender thereof at the Trust Office in
lawful money of the United States of America.
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SECTION 1.06. Redemption of Bonds.
(a) Extraordinary Redemption. The Bonds are subject to redemption prior to
their respective maturity dates, upon notice as provided below, as a whole or in part on a pro rata
basis (as much as practicable) among the maturities, on any date, from amounts on deposit in the
Redemption Fund pursuant to Section 9 of the Sublease (from Net Proceeds received by the City
from insurance payments or condemnation awards with respect to the Leased Properties or any
portion thereof under the circumstances and upon the conditions and terms prescribed in the
Sublease, together with additional money, if any, transferred by the City at its discretion for such
purpose).
Redemption pursuant to this subsection (a) shall be made at a redemption price
equal to the sum of the principal of the Bonds to be redeemed plus accrued interest thereon to the
date fixed for redemption, without premium.
(b) Redemption Resulting from Prepayments of Base Rental. The Bonds
maturing on or after November 1, 20__, shall be subject to redemption prior to their respective
maturity dates, as a whole or in part, from prepayments of Base Rental made at the option of the
City under Section 11(b) of the Sublease on any date with respect to which such prepayment
have been made (which shall be on or after November 1, 20__). The Bonds called for
redemption pursuant to this Section 2.03(b) shall be redeemed at a redemption price equal to 100
percent of the principal amount of the Bonds to be redeemed, without premium, plus accrued
interest thereon to the date of redemption.
(c) Redemption Resulting from Prepayments of Base Rental. The Bonds
maturing on November 1, 20__ are subject to redemption in part by lot from sinking account
payments made by the Authority, at a redemption price equal to the principal amount thereof to
be redeemed with accrued interest thereon to the redemption date, without premium, in the
aggregate respective principal amounts and on the respective dates as set forth in the following
table; provided, however, if some but not all of the term Bonds of a maturity have been
redeemed pursuant to Section 2.03(a) or 2.03(b), each future sinking account payment with
respect to such term Bonds will be reduced on a pro rata basis (as nearly as practicable) in
integral multiples of $5,000, so that the total amount of sinking account payments with respect to
such term Bonds to be made subsequent to a Section 2.03(a) extraordinary redemption or a
Section 2.03(b) optional redemption shall be reduced by an amount equal to the principal amount
of the term Bonds so redeemed, all as shall be designated pursuant to written notice filed by the
Authority with the Trustee:
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Bonds Maturing on November 1, 20__
Redemption Date
(November 1)
Principal Amount
to be Redeemed
______________
* maturity
In lieu of a redemption pursuant to this Section 2.03(c), the Trustee may
apply amounts in the Principal Account to purchase term Bonds at public or private sale, as and
when and at such prices (including brokerage and other charges, but excluding accrued interest,
which is payable from the Interest Account) as may be directed by the Authority, except that the
purchase price (exclusive of accrued interest) may not exceed the redemption price then
applicable to such Bonds, as set forth in writing by the Authority; provided, however, that no
term Bonds shall be purchased by the Trustee hereunder with a settlement date more than 60
days prior to the date on which the Authority would otherwise redeem such term Bonds pursuant
to this Section 2.03(c). The principal amount of any term Bonds so purchased by the Trustee
shall be credited towards and shall reduce the Principal Account payment otherwise required to
be made with respect to such term Bonds on the applicable redemption date
(d) Notice of Redemption. The Authority shall give written notice of its
intention to redeem Bonds under Section 2.03(a) to the Trustee at least 45 days before the
proposed redemption date; provided, that the Trustee may accept a shorter notice period or waive
such notice requirement at the Trustee’s sole discretion. The Trustee, on behalf and at the
expense of the Authority, shall send (by first class mail (or if the Owner of such Bonds is a
depository, by such method as acceptable to such depository) notice of any redemption to the
respective Owners of any Bonds designated for redemption at their respective addresses
appearing on the Registration Books, and to the Securities Depositories and to one or more
Information Services by such manner of delivery as then acceptable to such entities, at least 30
but not more than 60 days prior to the date fixed for redemption; provided, however, that neither
failure to receive any such notice so sent nor any defect therein shall affect the validity of the
proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon.
Such notice shall state the date of the notice, the redemption date, the redemption place and the
redemption price and shall specify the CUSIP numbers, the Bond numbers and the maturity or
maturities (in the event of redemption of all of the Bonds of such maturity or maturities in
whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the
Trust Office of the Trustee for redemption at the redemption price, giving notice also that further
interest on such Bonds will not accrue from and after the redemption date. Neither the Authority
nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on
any Bond or in any redemption notice with respect thereto, and any such redemption notice may
contain a statement to the effect that CUSIP numbers have been assigned by an independent
service for convenience of reference and that neither the Authority nor the Trustee shall be liable
for any inaccuracy in such numbers.
(e) Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to
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be redeemed from all Outstanding Bonds or such given portion thereof not previously called for
redemption, on a pro rata basis among the maturities (unless the maturity or maturities are
otherwise specified in this Indenture or in writing by the Authority) and by lot within a maturity
in any manner which the Trustee in its discretion shall deem appropriate. For purposes of such
selection, all Bonds shall be deemed to be comprised of separate $5,000 portions and such
portions shall be treated as separate Bonds, which may be separately redeemed.
(f) Partial Redemption of Bonds. In the event only a portion of any Bond is
called for redemption, then upon surrender of such Bond the Authority shall execute and the
Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a
new Bond or Bonds of the same maturity date, of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the Bond being redeemed. A partial
redemption shall be valid upon payment of the amount required to be paid to the Owner, and the
Authority and the Trustee shall be released and discharged from all liability to the extent of such
payment.
(g) Effect of Redemption. From and after the date fixed for redemption, if
funds available for the payment of the principal of and interest (and premium, if any) on the
Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease
to be entitled to any benefit under this Indenture other than the right to receive payment of the
redemption price, and no interest shall accrue thereon from and after the redemption date. All
Bonds redeemed pursuant to this Section 2.03 shall be canceled by the Trustee. All moneys held
by or on behalf of the Trustee for the payment of principal of or interest or premium on Bonds,
whether at redemption or maturity, shall be held in trust for the account of the Owners thereof
and the Trustee shall not be required to pay Owners any interest on, or be liable to Owners for
any interest earned on, moneys so held.
SECTION 1.07. Form of Bonds. The Bonds, the form of Trustee’s certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the
respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein,
with necessary or appropriate variations, omissions and insertions, as permitted or required by
this Indenture.
SECTION 1.08. Execution of Bonds. The Bonds shall be signed in the name and on
behalf of the Authority with the manual or facsimile signatures of its Chair or Vice Chair and
attested with the manual or facsimile signature of its Secretary or any Assistant Secretary duly
appointed by the Authority Governing Board, and shall be delivered to the Trustee for
authentication by it. In case any officer of the Authority who shall have signed any of the Bonds
shall cease to be such officer before the Bonds so signed shall have been authenticated or
delivered by the Trustee or issued by the Authority, such Bonds may nevertheless be
authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as
binding upon the Authority as though the individual who signed the same had continued to be
such officer of the Authority. Also, any Bond may be signed on behalf of the Authority by any
individual who on the actual date of the execution of such Bond shall be the proper officer
although on the nominal date of such Bond such individual shall not have been such officer.
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Only such of the Bonds as shall bear thereon a certificate of authentication, manually
executed on behalf of the Trustee, shall be valid or obligatory for any purpose or entitled to the
benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the
Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to
the benefits of this Indenture.
SECTION 1.09. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the Registration Books, by the person in whose name it is registered, in person
or by his duly authorized attorney, upon presentation and surrender of such Bond for
cancellation, accompanied by delivery of a written instrument of transfer in a form approved by
the Trustee, duly executed. Whenever any Bond shall be surrendered for transfer, the Authority
shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new
Bond or Bonds of like tenor, maturity and aggregate principal amount. The cost of printing any
Bonds and any services rendered or expenses incurred by the Trustee in connection with any
such transfer shall be paid by the Authority, except that the Trustee shall require the payment by
the Owner requesting such transfer of any tax or other governmental charge required to be paid
with respect to such transfer. The Trustee shall not be required to transfer, pursuant to this
Section, (a) any Bond during the period established by the Trustee for the selection of Bonds for
redemption or (b) any Bond selected for redemption pursuant to Section 2.03(e).
SECTION 1.010. Exchange of Bonds. Bonds may be exchanged at the Trust Office of
the Trustee for the same aggregate principal amount of Bonds of the same tenor and maturity and
of other authorized denominations. The cost of printing any Bonds and any services rendered or
expenses incurred by the Trustee in connection with any such exchange shall be paid by the
Authority, except that 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. The Trustee shall not be required to exchange, pursuant to this Section, (a) any Bond
during the period established by the Trustee for the selection of Bonds for redemption or (b) any
Bond selected for redemption pursuant to Section 2.03(e).
SECTION 1.011. Temporary Bonds. The Bonds may be issued initially 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 and may contain such reference to any of the provisions of this Indenture as may be
appropriate. Every temporary Bond shall be executed by the Authority and be registered and
authenticated by the Trustee upon the same conditions and in substantially the same manner as
the definitive Bonds. 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, in exchange therefor at the Trust Office of the Trustee, and the Trustee shall
authenticate and deliver in exchange for such temporary Bonds definitive Bonds of like tenor,
maturity and aggregate principal amount in authorized denominations. Until so exchanged, the
temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
SECTION 1.012. Registration Books. The Trustee will keep or cause to be kept at its
Trust Office sufficient records for the registration and transfer of the Bonds, which shall at all
times during regular business hours be open to inspection by the Authority with reasonable prior
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notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable
regulations as it may prescribe, register or transfer, or cause to be registered or transferred, on
said records, Bonds as provided herein.
SECTION 1.013. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like tenor, maturity and
aggregate principal amount in an authorized denomination in exchange and substitution for the
Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every
mutilated Bond so surrendered to the Trustee shall be canceled by it. If any Bond issued
hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be
submitted to the Trustee and, if such evidence shall be satisfactory to it and indemnity
satisfactory to it shall be given, the Authority, at the expense of the Bond Owner, shall execute,
and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and
in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured
or shall have been called for redemption, instead of issuing a substitute Bond the Trustee may
pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee).
The Authorit y may require payment of a reasonable fee for each new Bond issued under this
Section and of the expenses that may be incurred by the Authority and the Trustee. Any Bond
issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or
stolen shall constitute an original contractual obligation on the part of the Authority whether or
not the Bond alleged to be lost, destroyed or stolen shall be at any time enforceable by anyone,
and shall be equally and proportionately entitled to the benefits of this Indenture with all other
Bonds secured by this Indenture.
SECTION 1.014. Book-Entry System.
(a) Book-Entry System; Limited Obligation of Authority. The Bonds shall be
initially delivered in the form of a separate single fully registered Bond (which may be
typewritten) for each of the maturities of the Bonds. Upon initial delivery, the ownership of each
such Bond shall be registered in the registration books kept by the Trustee in the name of the
Nominee as nominee of the Depository. Except as provided in Section 2.11(c), all of the
Outstanding Bonds shall be registered in the registration books kept by the Trustee in the name
of the Nominee.
With respect to Bonds registered in the registration books kept by the Trustee in
the name of the Nominee, 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 the
Bonds. Without limiting the immediately preceding sentence, the Authority and the Trustee
shall have no responsibility or obligation with respect to (i) the accuracy of the records of the
Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds,
(ii) the delivery to any Participant or any other person, other than an Owner as shown in the
registration books kept by the Trustee, of any notice with respect to the Bonds, including any
notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial
interests in the Bonds to be redeemed in the event the Bonds are redeemed in part, or (iv) the
payment to any Participant or any other person, other than an Owner as shown in the registration
books kept by the Trustee, of any amount with respect to principal of, premium, if any, or
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interest due with respect to the Bonds. The Authority and the Trustee may treat and consider the
person in whose name each Bond is registered in the registration books kept by the Trustee as the
holder and absolute owner of such Bond for the purpose of payment of principal, premium, if
any, and interest with respect to such Bond, 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, and for all other purposes whatsoever. The Trustee shall pay all principal of,
premium, if any, and interest due with respect to the Bonds only to or upon the order of the
respective Owners, as shown in the registration books kept by the Trustee, or their respective
attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy
and discharge fully the Authority’s obligations with respect to payment of the principal,
premium, if any, and interest due with respect to the Bonds to the extent of the sum or sums so
paid. No person other than an Owner, as shown in the registration books kept by the Trustee,
shall receive a Bond evidencing the obligation of the Authority to make payments of principal,
premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the
Trustee and the Authority 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 new nominee of
the Depository.
(b) Representation Letter. In order to qualify the Bonds for the Depository’s
book-entry system, the Authority has previously executed and delivered to such Depository the
Representation Letter. The Representation Letter does not in any way impose upon the
Authority or the Trustee any obligation whatsoever with respect to persons having interests in the
Bonds other than the Owners, as shown on the registration books kept by the Trustee. The
Trustee agrees to take all action necessary to continuously comply with the Representation Letter
to the extent that such action is not inconsistent with this Indenture. In addition to the execution
and delivery of the Representation Letter, the Chair, the Executive Director, the Assistant
Executive Director and the Secretary and all other officers of the Authority are hereby authorized
to take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the
Depository’s book-entry program.
(c) Transfers Outside of Book-Entry System. In the event (i) the Depository
determines not to continue to act as securities depository for the Bonds, or (ii) the Authority
determines that the Depository shall no longer so act, then the Authority will discontinue the
book entry system with the Depository. If the Authority fails to identify another qualified
securities depository to replace the Depository, then the Bonds so designated shall no longer be
restricted to being registered in the registration books kept by the Trustee in the name of the
Nominee, but shall be registered in whatever name or names persons transferring or exchanging
Bonds shall designate, in accordance with the provisions of Section 2.09.
(d) Payments to Nominee. Notwithstanding any other provisions of this
Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all
payments with respect to principal, premium, if any, and interest due with respect to such Bond
and all notices with respect to such Bond shall be made and given, respectively, as provided in
the Representation Letter or as otherwise instructed by the Depository.
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(e) Initial Depository and Nominee. The initial Depository under this Article
shall be The Depository Trust Company, New York, New York. The initial Nominee shall be
Cede & Co., as Nominee of The Depository Trust Company, New York, New York.
ARTICLE III
ISSUANCE; APPLICATION OF PROCEEDS; VALIDITY; ADDITIONAL BONDS
SECTION 1.015. Issuance of Bonds. Upon the execution and delivery of this Indenture,
the Authority shall execute and deliver the Bonds to the Trustee for authentication and delivery
to or on the order of the Original Purchaser upon the Request of the Authority.
SECTION 1.016. Application of Proceeds of Sale of Bonds. On the Closing Date, the
Trustee shall receive, on behalf of the Authority, $_______ from the Original Purchaser
(representing the par amount of the Bonds, [plus/less] an original issue [premium/discount] of
$_______, less an underwriter’s discount of $_______). The Trustee shall apply the Bonds
proceeds as follows:
(a) Deposit $______ in the Costs of Issuance Fund;
(b) Deposit $______ in the Reserve Account; and
(c) Deposit the remaining $_________ in the Project Fund.
For record keeping purposes the Trustee may establish such funds and accounts as
may be necessary to reflect such deposits.
SECTION 1.017. Costs of Issuance Fund. The Trustee shall establish a fund known as
the “Costs of Issuance Fund.” Pursuant to Section 3.02(a), the Trustee shall deposit a portion of
the proceeds of the sale of the Bonds into the Costs of Issuance Fund. The moneys in the Costs
of Issuance Fund shall be used from time to time to pay Costs of Issuance with respect to the
Bonds and shall be disbursed by the Trustee upon delivery to the Trustee of a requis ition,
substantially in the form attached hereto as Exhibit B, executed by an authorized officer of the
Authority. Each such requisition 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.
On the date that is 180 days following the Closing Date, or upon the earlier receipt by the
Trustee of a Request of the Authority to do so, the Trustee shall transfer all remaining amounts in
the Costs of Issuance Fund to the Lease Revenue Fund.
SECTION 1.018. Project Fund. The Trustee shall establish and maintain a separate fund
to be known as the “Project Fund.” On the Closing Date, the Trustee shall deposit a portion of
the sale proceeds of the Bonds into the Project Fund pursuant to Section 3.02(d). The Trustee
shall disburse or transfer amounts from the Project Fund, as stated in a Request of the City,
substantially in the form attached hereto as Exhibit C, for the payment of the Project Costs
relating to the Projects (including reimbursement to the City for any such costs paid by it). Upon
receipt of each such Request of the City, the Trustee shall pay the amount set forth in such
Request as directed by the terms thereof. When the Projects, or the portions thereof det ermined
by the City to be financed hereunder, have been completed, the Authority shall deliver or shall
cause the City to deliver to the Trustee a Certificate of the City stating the fact and date of such
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completion. Following the delivery of such certificate, the Trustee shall transfer amounts then
on deposit in the Project Fund (or such portion thereof as may be specified in such Request of the
City) to the Lease Revenue Fund.
SECTION 1.019. Validity of Bonds. The validity of the authorization and issuance of
the Bonds shall not be affected in any way by any proceedings taken with respect to the
application of the proceeds of the Bonds, and the recital contained in the Bonds that the same are
issued pursuant to the Bond Law shall be conclusive evidence of their validit y and of the
regularity of their issuance.
SECTION 1.020. Additional Bonds.
(a) Subject to this Section 3.06, the Authority may from time to time issue
one or more series of Additional Bonds payable from and secured by Revenues on parity with all
other Outstanding Bonds. Bonds issued pursuant to this Section 3.06 shall be issued under and
pursuant to a Supplemental Indenture which shall specify:
(1) The maturity date or dates of such Additional Bonds, which shall
be November 1 in any given year;
(2) The interest payment dates, which shall be May 1 and
November 1;
(3) The terms, if any, for call and redemption of such Additional
Bonds prior to maturity; and
(4) The interest rate or rates on such Additional Bonds and any other
matters deemed appropriate or necessary and not inconsistent with the provisions of this
Indenture.
(b) All of the Additional Bonds shall be executed by the Authority for
issuance under the Indenture and delivered to the Trustee and thereupon shall be delivered by the
Trustee upon the Request of the Authority but only upon receipt by the Trustee of the following
documents or money or securities:
(1) A certified copy of the Supplemental Indenture authorizing the
issuance of such Additional Bonds;
(2) A Request of the Authority as to the delivery of such Additional
Bonds;
(3) An opinion of Bond Counsel substantially to the effect that (i) the
Authority has the right and power under the Act to execute and deliver such Supplemental
Indenture, and such Supplemental Indenture has been duly executed and delivered by the
Authority, and the Indenture and such Supplemental Indentures are in full force and effect and
are valid and binding upon the Authority and enforceable in accordance with their terms (except
as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws
relating to the enforcement of creditors’ rights and similar qualifications); (ii) such Additional
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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 enforcement of creditors’ rights) and are subject to the terms of
the Indenture and all Supplemental Indentures and entitled to the benefits of the Indenture and all
such Supplemental Indentures and the Act, and such Additional Bonds have been duly and
validly issued in accordance with the Act and the Indenture and all such Supplemental
Indentures; and (iii) the obligation of the City to make the Base Rental Pa yments during the term
of the Sublease as amended pursuant to subsection (b)(4) of this Section 3.06 is a valid and
binding obligation of the City.
(4) A Certificate of the Authority (i) certifying that the Authority is in
compliance in all material respects with all agreement and covenants contained herein and that
no Event of Default has occurred or is continuing; (ii) stating that the Authority and the City
have entered into an amendment to the Sublease pursuant to which the City is obligated to make
Base Rental Payments at times and in amounts sufficient to provide for payment of the principal
of and interest on the Bonds (including such Additional Bonds) which will be Outstanding
following the sale and delivery of such Additional Bonds; (iii) stating that provisions have been
made for the deposit into the Reserve Account of an amount, if any, necessary to increase the
balance therein to the Reserve Requirement, as calculated at the time such Additional Bonds are
issued; and (iv) containing such additional statements as may be reasonably necessary to show
compliance with the requirements of the Indenture;
(5) An executed copy of the amendment to the Sublease; and
Such further documents, money and securities as are required by the provisions of
the Indenture and the Supplemental Indenture providing for the issuance of such Additional
Bonds.
ARTICLE IV
REVENUES; FLOW OF FUNDS
SECTION 1.021. Pledge of Revenues; Assignment of Rights. Subject to the provisions
of Section 6.03 (certain Trustee fees), the Bonds shall be secured by a first lien on and pledge
(which shall be effected in the manner and to the extent hereinafter provided) of all of the
Revenues and a pledge of all the moneys in the Lease Revenue Fund, including all amounts
derived from the investments of such moneys. The Bonds shall be equally secured by a pledge,
charge and lien upon the Revenues and such moneys without priority for number, date of the
Bonds, date of execution or date of delivery; and the payment of the interest on and principal of
the Bonds and any premiums upon the redemption of any portion thereof shall be and are secured
by an exclusive pledge, charge and lien upon the Revenues and such moneys. So long as any of
the Bonds are Outstanding, the Revenues shall not be used for any other purpose; except that out
of the Revenues and such moneys there may be apportioned such sums, for such purposes, as are
expressly permitted by Section 4.02.
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Pursuant to the Assignment Agreement, the Authority has transferred in trust and
assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the
Revenues and all of the right, title and interest of the Authority in (but not of its obligations
under) the Lease and the Sublease (other than its rights to indemnification and payment or
reimbursement for any costs or expenses), including its rights to receive the Base Rental
scheduled to be paid by the City under and pursuant to the Sublease and any and all of the other
rights of the Authority under the Lease and the Sublease as may be necessary to enforce payment
of such Base Rental when due or otherwise to protect the interest of the Owners of the Bonds,
including its leasehold title to the Leased Properties leased to the City pursuant to the Sublease.
The Trustee accepts such assignments. The Trustee shall be entitled to 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 the agent of the Trustee and
shall promptly be paid by the Authority to the Trustee.
SECTION 1.022. Lease Revenue Fund. All Base Rental Payments shall be deposited by
the Trustee in a special fund designated as the “Lease Revenue Fund,” which the Trustee shall
establish, maintain and hold in trust hereunder.
On or before each Interest Payment Date, the Trustee shall transfer from the Lease
Revenue Fund and deposit into the following respective accounts (each of which the Trustee
shall establish and maintain within the Lease Revenue Fund), the following amounts in the
following order of priority, the requirements of each such account (including the making up of
any deficiencies in any such account resulting from lack of Revenues sufficient to make any
earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any
account subsequent in priority:
(a) Interest Account. On or before each Interest Payment Date, the Trustee shall
deposit in the Interest Account an amount required to cause the aggregate amount on deposit in
the Interest Account to equal the amount of interest becoming due and payable on such Interest
Payment Date on all Outstanding Bonds. No deposit need be made into the Interest Account if
the amount contained therein is at least equal to the interest becoming due and payable upon all
Outstanding Bonds on each succeeding Interest Payment Date within the then current Bond
Year. All moneys 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 and payable (including
accrued interest on any Bonds redeemed prior to maturity pursuant to Section 2.03).
(b) Principal Account. On or before each Interest Payment Date, the Trustee shall
deposit in the Principal Account an amount required to cause the aggregate amount on deposit in
the Principal Account to equal the principal amount of the Bonds maturing or required to be
redeemed through mandatory sinking account redemption on such Interest Payment Date
pursuant to Section 2.02 or Section 2.03 or pursuant to a Supplemental Indenture, as the case
may be. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely
for the purpose of paying the principal of the Bonds.
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(c) Reserve Account.
(1) On or before each Interest Payment Date, the Trustee shall deposit
in the Reserve Account such amount as may be necessary to maintain a balance therein equal to
the Reserve Requirement. No deposit need be made in the Reserve Account so long as there
shall be on deposit an amount equal to the Reserve Requirement. Except as otherwise provided
herein, money in (or available to) the Reserve Account shall be used and withdrawn by the
Trustee solely for the purpose of replenishing the Interest Account or the Principal Account in
such order, in the event of any deficiency at any time in either of such accounts, or for the
purpose of paying the interest on or principal of the Bonds, or for the retirement of all Bonds
then Outstanding. Any amount in the Reserve Account in excess of the Reserve Requirement
shall be determined and transferred in accordance with this Indenture, to the Interest Account to
be applied toward the interest payment of the Bonds, unless otherwise directed by a Request of
the City.
(2) The Reserve Requirement may be satisfied by crediting to the
Reserve Account moneys or one or more Qualified Reserve Account Credit Instruments or any
combination thereof, which in the aggregate make funds available in the Reserve Account in an
amount equal to the Reserve Requirement. Upon the deposit with the Trustee of such Qualified
Reserve Account Credit Instrument, the Trustee shall release moneys then on hand in the
Reserve Account to the City, to be used for any lawful purpose, in an amount equal to the face
amount of the Qualified Reserve Account Credit Instrument.
(d) Surplus. On or promptly after each Interest Payment Date, Trustee shall
determine the amount, if any, remaining in the Lease Revenue Fund after making the deposits
required by paragraphs (a) through (c) above and the transfers of investment earnings pursuant to
Section 4.04, and shall notify the City of the amount so determined. The Trustee shall apply
such amount as a credit against the next following Base Rental Payment; provided however, if
directed in a Request of the City, the Trustee shall, with respect to all or any portion of such
amount, pay, or set an amount aside for the payment of, any rebate requirement in accordance
with a computation made by the City pursuant to the Code.
SECTION 1.023. Redemption Fund. To the extent the Authority has provided the
Trustee with written notice of its intention to redeem Bonds in connection with an extraordinary
Redemption, the Trustee shall establish a fund known as “Redemption Fund.” At any time the
Trustee receives money from the City pursuant to Section 9 of the Sublease (Net Proceeds of
insurance payments or taking proceedings), the Trustee shall immediately deposit such money as
follows: (i) an amount equal to the interest on the Bonds to be redeemed pursuant to Section
2.03(a) accrued to the redemption date shall be deposited in the Interest Account; and (ii) the
balance of such moneys shall be deposited in the Redemption Fund. Amounts on deposit in the
Redemption Fund shall be applied solely for the purpose of paying the principal of the Bonds to
be redeemed pursuant to Section 2.03(a); provided, however, that at any time prior to giving
notice of redemption of any such Bonds, the Trustee may apply such amounts to the purchase of
Bonds at public or private sale, as and when and at such prices (including brokerage and other
charges, but excluding accrued interest, which is payable from the Interest Account) as shall be
directed in writing by the Authority, except that the purchase price (exclusive of accrued interest)
may not exceed the redemption price then applicable to the Bonds.
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SECTION 1.024. Investments. All moneys in any of the funds or accounts established
with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted
Investments pursuant to the written direction of the Authority given to the Trustee at least two
Business Days in advance of the making of such investments; which Permitted Investments shall,
as nearly as practicable, mature (or be subject to redemption or disposition by the Trustee) on or
before the dates on which such money is anticipated to be needed for disbursement hereunder.
In the absence of any such direction from the Authority, the Trustee shall invest any such
moneys in money market funds described in clause (d) of the definition of Permitted
Investments, so long as such money market funds contain only United States Treasury or United
States local government obligations; provided, however, that any such investment shall be made
by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall
have received a written request of the Authority specifying a specific money market fund and, if
no such request of the Authority is so received, the Trustee shall hold such moneys uninvested.
Obligations purchased as an investment of moneys in any fund or account shall be deemed to be
part of such fund or account.
The Trustee shall transfer at least semiannually all investment earnings on amounts in the
Principal Account, and the Interest Account to the Lease Revenue Fund. If the balance in the
Reserve Account is then at least equal to the Reserve Requirement, the Trustee immediately shall
transfer all investment earnings on amounts in the Reserve Account, which are in excess of the
Reserve Requirement, to the Lease Revenue Fund. Unless otherwise specified in this Indenture,
investment earnings on amounts in all other funds and accounts established and maintained
pursuant to this Indenture shall be retained in such respective funds and accounts. For purposes
of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder.
The Trustee or an affiliate of the Trustee may act as principal or agent in the acquisition or
disposition of any investment and may impose its customary charges therefor. The Trustee shall
incur no liability for losses arising from any investments made pursuant to this Section.
The Authority acknowledges that regulations of the Comptroller of the Currency or other
applicable regulatory entity grant the Authority the right to receive brokerage confirmations of
security transactions to be effected by the Trustee hereunder as they occur. The Authority
specifically waives the right to receive such notification to the extent permitted by applicable law
and agrees that it will instead receive periodic cash transaction statements which include detail
for the investment transactions effected by the Trustee hereunder; provided, however, that the
Authority retains its right to receive brokerage confirmation on any investment transaction
requested by the Authority.
SECTION 1.025. Valuation and Disposition of Investments. For the purpose of
determining the amount in any fund or account, Permitted Investments credited to such fund or
account shall be valued semiannually at the Fair Market Value thereof; provided that as to
certificates of deposits and banker acceptances, the value thereof shall equal the face amount,
plus accrued interest thereon. The Trustee shall have no duty in connection with the
determination of Fair Market Value other than to follow its normal practice in determining the
value of Permitted Investments, which may include utilizing computerized securities pricing
services that may be available to it including those available through its regular accounting
system.
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ARTICLE V
COVENANTS OF THE AUTHORITY
SECTION 1.026. Punctual Payment. The Authority shall punctually pay or cause to be
paid the principal and interest to become due in respect of all the Bonds, in strict conformity with
the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof,
but only out of Revenues and other assets pledged for such payment as provided in this
Indenture.
SECTION 1.027. Extension of Payment of Bonds. The Authority shall not directly or
indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of
payment of any claims for interest by the purchase of such Bonds or by any other arrangement,
and in case the maturity of any of the Bonds or the time of payment of any such claims for
interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any
default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of
the principal of all of the Bonds then Outstanding and of all claims for interest thereon which
shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the
Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance
shall not be deemed to constitute an extension of maturity of the Bonds.
SECTION 1.028. Against Encumbrances. The Authority shall not create, or permit the
creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets
pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the
pledge and assignment created by this Indenture. Subject to this limitation, the Authority
expressly reserves the right to enter into one or more other indentures for any of its corporate
purposes, including other programs under the Bond Law, and rese rves the right to issue other
obligations for such purposes.
SECTION 1.029. Power to Issue Bonds and Make Pledge and Assignment. The
Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture
and to pledge and assign the Revenues, the Lease, the Sublease and other assets purported to be
pledged and assigned, respectively, under this Indenture in the manner and to the extent provided
in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid
and binding special obligations of the Authority in accordance with their terms, and the
Authority and the Trustee (subject to the provisions of Section 6.02 hereof) shall at all times, to
the extent permitted by law, defend, preserve and protect said pledge and assignment of
Revenues and other assets and all the rights of the Bond Owners under this Indenture against all
claims and demands of all persons whomsoever.
SECTION 1.030. Accounting Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance with
corporate trust industry standards, in which complete and accurate entries shall be made of all
transactions by the Trustee relating to the proceeds of Bonds, the Revenues, the Sublease and all
funds and accounts established pursuant to this Indenture. Such books of record and account
shall be available for inspection by the Authority and the City during regular business hours with
reasonable prior notice.
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SECTION 1.031. Additional Obligations. The Authority covenants that no additional
bonds, notes or indebtedness shall be issued or incurred that are payable out of the Revenues in
whole or in part.
SECTION 1.032. Sublease. The Trustee, as assignee of the Authority’s rights under the
Sublease pursuant to Section 4.01 and under the Assignment Agreement, shall receive all
amounts due from the City pursuant to the Sublease.
The Authority will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms contained in the Sublease required to be complied with, kept,
observed and performed by it and, together with the Trustee, will enforce the Sublease against
the City in accordance with its terms.
The Authority will not alter, amend or modify the Sublease without the prior writte n
consent of the Trustee, which consent shall be given only: (i) if the Trustee receives an opinion
of Bond Counsel that such alteration, amendment or modification will not result in any material
impairment of the security given or intended to be given for the payment of the Base Rental
Payments, or (ii) if the Trustee first obtains the written consents of the Owners of at least a
majority in aggregate principal amount of the Bonds then Outstanding to such alteration,
amendment or modification. Prior to any amendment or modification of the Sublease pursuant
to this Section 5.07, the Trustee may require the Authority to deliver to the Trustee an opinion of
Bond Counsel to the effect that such amendment or modification has been adopted in accordance
with the requirements of this Indenture.
SECTION 1.033. Tax Covenants.
(a) The City shall not take any action, or fail to take any action, if any such action
or failure to take action would adversely affect the Tax -Exempt status of interest on the Bonds
under Section 103(a) of the Code or cause interest on the Bonds to be an item of tax preference
for purposes of the alternative minimum tax imposed on individuals and corporations under the
Code.
(b) In furtherance of the foregoing tax covenant, the Authority shall comply with
the provisions of the Tax Certificate, which is incorporated in this Indenture as if fully set forth
in this Indenture. These covenants shall survive payment in full or defeasance of the Bonds.
SECTION 1.034. Continuing Disclosure. In connection with the issuance of the Bonds,
the Authority shall cause the City to enter into a Continuing Disclosure Certificate. It is hereby
recognized that a failure of the City to comply with a Continuing Disclosure Certificate shall not
constitute a default under this Indenture or the Sublease; provided, however, the Original
Purchaser or the Owner or beneficial owner of the Bonds relating to such Continuing Disclosure
Certificate may take such actions as may be necessary and appropriate to compel performance,
including seeking mandate or specific performance by court order.
SECTION 1.035. Further Assurances. The Authority shall adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Indenture,
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and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits
provided in this Indenture.
ARTICLE VI
TRUSTEE
SECTION 1.036. Appointment of Trustee. U.S. Bank National Association, a national
banking association duly organized and existing under and by virtue of the laws of the United
States of America, is hereby appointed Trustee by the Authority for the purpose of receiving all
moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the
same as provided in this Indenture. The Authority agrees that, so long as any Bonds are
Outstanding, it will maintain a Trustee which is a bank, national banking association, banking
institution (state or federal) or trust company with a corporate trust office in California, having a
combined capital, exclusive of borrowed capital, and surplus (or whose parent holding company
has a combined capital, exclusive of borrowed capital, and surplus) of at least $75,000,000, and
subject to supervision or examination by federal or state authority. If such bank, banking
institution or trust company publishes a report of condition at least annually, pursuant to law or
to the requirements of any supervising or examining authority above referred to, then for the
purposes of this Section the combined capital and surplus of such bank, national banking
association, banking institution 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.
The Trustee is hereby authorized to pay the principal of and interest and redemption
premium (if any) on the Bonds when duly presented for payment at maturity, or on redemption
prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate
records of all funds and accounts administered by it and of all Bonds paid and discharged.
SECTION 1.037. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed
upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the
following express terms and conditions:
(a) The Trustee shall not be liable for any error of judgment made in good faith
by a responsible officer of the Trustee, unless the Trustee was negligent in ascertaining the
pertinent facts.
(b) Whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon a Certificate of the Authority.
(c) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to
this Indenture, unless such Owners shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(d) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
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request, direction, consent, facsimile transmission, electronic mail, order bond or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(e) The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture and no covenants of or
against the Trustee shall be implied in this Indenture. In case an Event of Default hereunder or
under the Sublease has occurred (which has not been cured or waived), the Trustee may exercise
such of the rights and powers vested in it by this Indenture and by the Sublease, and shall use the
same degree of care and skill in the exercise of such rights and powers as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own affairs.
(f) The Trustee may execute any of the trusts or powers hereunder and perform
the duties required of it hereunder either directly or by or through attorneys or agents, and shall
be entitled to advice of counsel concerning all matters of trust and its duty hereunder.
(g) The Trustee shall not be responsible for any recital herein, in the Sublease, or
in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the
sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and
makes no representation as to the validity or sufficiency of the Bonds, this Indenture or the
Sublease. The Trustee shall not be bound to ascertain or inquire as to the observance or
performance of an y covenants, conditions or agreements on the part of the Authority hereunder
or on the part of the Authority or the City under the Sublease. The Trustee shall not be
responsible for the application by the Authority or the City of the proceeds of the Bonds.
(h) The Trustee may become the Owner or pledgee of Bonds secured hereby with
the same rights it would have if not the Trustee; may acquire and dispose of other bonds or
evidences of indebtedness of the Authority with the same rights it would have if it were not the
Trustee; and may act as a 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 of Bonds, whether or not such committee shall represent the Owners of the majority
in aggregate principal amount of the Bonds then Outstanding.
(i) The Trustee may rely and shall be protected in acting or refraining from
acting, in good faith and without negligence, upon any notice, resolution, opinion, report,
direction, request, consent, certificate, order, affidavit, letter, telegram, 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 person or persons. Any action taken or omitted to be taken by the
Trustee in good faith and without negligence pursuant to this Indenture or the Sublease upon the
request or authority or consent of any person who at the time of making such request or giving
such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all
future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof.
The Trustee shall not be bound to recognize any person as an Owner of any Bond or to ta ke any
action at such person’s request unless the ownership of such Bond by such person shall be
reflected on the Registration Books.
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(j) The permissive right of the Trustee to do things enumerated in this Indenture
or in the Sublease shall not be construed as a duty and it shall not be answerable for other than its
negligence or willful misconduct. The immunities and exceptions from liability of the Trustee
shall extend to its officers, directors, employees and agents.
(k) The Trustee shall not be required to take notice or be deemed to have notice of
any Event of Default hereunder or under the Sublease except failure by the Authority or the City
to make any of the payments to the Trustee required to be made by the Authority or the City
pursuant hereto or thereto or failure by the Authority or the City to file with the Trustee any
document required by this Indenture or the Sublease to be so filed subsequent to the issuance of
the Bonds, unless the Trustee shall be specifically notified in writing of such default by the
Authority or by the Owners of at least 25 percent in aggregate principal amount of the Bonds
then Outstanding and all notices or other instruments required by this Indenture to be delivered
to the Trustee must, in order to be effective, be delivered at the Trust Office of the Trustee, and
in the absence of such notice so delivered the Trustee may conclusively assume there is no Event
of Default hereunder except as aforesaid.
(l) At any and all reasonable times the Trustee and its duly authorized agents,
attorneys, experts, accountants and representatives, shall have the right fully to inspect all books,
papers and records of the Authority pertaining to the Bonds, and to make copies of any of such
books, papers and records which are not privileged by statute or by law.
(m) The Trustee shall not be required to give any bond or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the premises hereof.
(n) Notwithstanding anything elsewhere in this Indenture with respect to the
execution of any Bonds, the withdrawal of any cash, the release of any property, or any action
whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be
required, to demand any showings, certificates, opinions, appraisals or other information, or
corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing
the right of the Authority to the execution of any Bonds, the withdrawal of any cash or the taking
of any other action by the Trustee.
(o) All moneys received by the Trustee shall, until used or applied or invested as
herein provided, be held in trust for the purposes for which they were received but need not be
segregated from other funds except to the extent required by law.
(p) Whether or not expressly provided therein, every provision of this Indenture
and the Sublease relating to the conduct or affecting the liability of the Trustee shall be subject to
the provisions of this Section 6.02.
(q) The Trustee shall not be considered in breach of or in default with respect to
any obligations created hereunder, in the event of an enforced 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, acts of a government, acts of
the other party hereto, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes,
earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing
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of labor, equipment, facilities, sources of energy, material or supplies in the open market,
litigation or arbitration involving a party or others relating to governmental action or inaction
pertaining to the Leased Properties, malicious mischief, condemnation, and unusually severe
weather or delays of suppliers or subcontractors due to such causes or any similar event and/or
occurrences beyond the control of the Trustee; provided, that in the event of any such enforced
delay, the Trustee shall notify the Authority in writing within five business days after (i) the
occurrence of the event giving rise to such delay, (ii) the Trustee’s actual knowledge of the
impending enforced delay, or (iii) the Trustee’s knowledge of sufficient facts under which a
reasonable person would conclude the enforced delay will occur.
(r) The Trustee shall have no responsibility or liability with respect to any
information, statements or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Bonds.
(s) The Trustee shall not be liable in connection with the performance of its
duties under this Indenture, except for its own negligence or willful misconduct.
(t) With respect to moneys have been released or withdrawn in accordance with
the provisions hereof, the Trustee shall not be responsible for or accountable to anyone for the
subsequent use or application of such moneys.
(u) To the extent that the Authority or the City has caused to be furnished to the
Trustee an opinion from Bond Counsel or other counsel of the Authority or the City, with regard
to legal questions, the opinion of such counsel shall be full and complete authorization and
protection to the Trustee in respect of any action taken or suffered by it hereunder in good faith
and in accordance therewith.
SECTION 1.038. Fees, Charges and Expenses of Trustee. The Trustee shall be entitled
to payment and reimbursement for reasonable fees for its services rendered hereunder and all
advances (with interest on such advances at the maximum rate allowed by law), counsel fees
(including expenses) and other expenses reasonably and necessarily made or incurred by the
Trustee in connection with such services. Upon the occurrence of an Event of Default
hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of
payment prior to payment of any Bond upon the amounts held hereunder for the foregoing fees,
charges and expenses incurred by it.
SECTION 1.039. Notice to Bond Owners of Default. If an Event of Default hereunder
or under the Sublease occurs with respect to any Bonds of which the Trustee has been given or is
deemed to have notice, as provided in Section 6.02(k) hereof, then the Trustee shall, within 30
days of the receipt of such notice, give written notice thereof by first class mail to the Owner of
each such Bond, unless such Event of Default shall have been cured before the giving of such
notice; provided, however, that unless such Event of Default consists of the failure by the
Authority to make any payment when due, the Trustee may elect not to give such notice if and so
long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not
to give such notice.
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SECTION 1.040. Intervention by Trustee. In any judicial proceeding to which the
Authority or the City is a party that, in the opinion of the Trustee and its counsel, has a
substantial bearing on the interests of Owners of any of the Bonds, the Trustee may intervene on
behalf of such Bond Owners, and subject to Section 6.02(c), shall do so if requested in writing by
the Owners of at least 25 percent in aggregate principal amount of such Bonds then Outstanding.
SECTION 1.041. Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing, filed with the Trustee and signed by the Owners
of a majority in aggregate principal amount of the Outstanding Bonds. The Authority may also
remove the Trustee at any time upon 30 days notice, except during the existence of an Event of
Default. The Trustee may be removed at any time for any breach of the Trustee’s duties set forth
herein.
SECTION 1.042. Resignation by Trustee. The Trustee and any successor Trustee may at
any time give written notice of its intention to resign as Trustee hereunder, such notice to be
given to the Authority and the City in the manner prescribed by Section 11.14. Upon receiving
such notice of resignation, the Authority shall promptly appoint a successor Trustee. Any
resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the
Authority shall cause notice thereof to be given by first class mail, postage prepaid, to the Bond
Owners at their respective addresses set forth on the Registration Books.
SECTION 1.043. Appointment of Successor Trustee. In the event of the removal or
resignation of the Trustee pursuant to Sections 6.06 or 6.07, respectively, the Authority shall
promptly appoint a successor Trustee. In the event the Authority shall for any reason whatsoever
fail to appoint a successor Trustee within 60 days following the delivery to the Trustee of the
instrument described in Section 6.06 or within 60 days following the receipt of notice by the
Authority pursuant to Section 6.07, the Trustee may, at the expense of the Authority, apply to a
court of competent jurisdiction for the appointment of a successor Trustee meeting the
requirements of Section 6.01. Any such successor Trustee appointed by such court shall become
the successor Trustee hereunder notwithstanding any action by the Authority purporting to
appoint a successor Trustee following the expiration of such 60-day period.
SECTION 1.044. 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 that
such company shall meet the requirements set forth in Section 6.01, shall be the successor to the
Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
SECTION 1.045. Concerning any Successor Trustee. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the
Authority an instrument in writing accepting such appointment hereunder and thereupon such
successor, without any further act, deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such
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predecessor shall, nevertheless, on the Request of the Authority, or of the Trustee’s successor,
execute and deliver an instrument transferring to such successor all the estates, properties, rights,
powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all
securities and moneys held by it as the Trustee hereunder to its successor. Should any
instrument in writing from the Authority be required by any successor Trustee for more fully and
certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended
to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request,
be executed, acknowledged and delivered by the Authority.
SECTION 1.046. Appointment of Co-Trustee. It is the purpose of this Indenture that
there shall be no violation of any law of any jurisdiction (including particularly the law of the
State) denying or restricting the right of banking corporations or associations to transact business
as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture,
and in particular in case of the enforcement of the rights of the Trustee on default, or in the case
the Trustee deems that by reason of any present or future law of any jurisdiction in may not
exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the
properties, in trust, as herein granted, or take any other action that may be desirable or necessary
in connection therewith, it may be necessary that the Trustee or the Authority appoint an
additional individual or institution as a separate trustee or co-trustee. The following provisions
of this Section 6.11 are adopted to these ends.
In the event that the Trustee or the Authority appoints an additional individual or
institution as a separate trustee or co-trustee, each and every remedy, power, right, claim,
demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be
exercisable by and vest in such separate trustee or co-trustee but only to the extent necessary to
enable such separate trustee or co-trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate trustee or co -trustee
shall run to and be enforceable by either of them.
Should any instrument in writing from the Authority be required by the separate trustee
or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming
to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the Authority. In case any
separate trustee or co-trustee, or a successor to either, shall become incapable of acting, shall
resign or shall be removed, all the estates, properties, rights, powers, trusts, duties and
obligations of such separate trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new trustee or successor to such separate
trustee or co-trustee.
SECTION 1.047. Indemnification; Limited Liability of Trustee. The Authority further
covenants and agrees, to the extent permitted by law, to indemnify and save the Trustee and its
officers, directors, agents and employees, harmless against any loss, expense (including
reasonable legal fees and expenses) and liabilities arising out of or in the exercise and
performance of its powers and duties hereunder, including the costs and expenses of defending
against any claim of liability, but excluding any and all losses, expenses and liabilities that are
due to the negligent or intentional act or omission of the Trustee, its officers, directors or
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employees. No provision in this Indenture shall require the Trustee to risk or expend its own
funds or otherwise incur any financial liability hereunder if it shall have reasonable grounds for
believing repayment of such funds or adequate indemnity against such liability or risk is not
assured to it. The Trustee shall not be liable for any action taken or omitted to be taken by it in
accordance with the direction of the Owners of at least 25 percent in aggregate principal amount
of Bonds Outstanding relating to the time, method and place of conducting any proceeding or
remedy available to the Trustee under this Indenture or exercising any power conferred upon the
Trustee under this Indenture. The obligations of the Authority under this Section shall survive
the resignation or removal of the Trustee under this Indenture.
SECTION 1.048. Trustee Acceptance of Electronic Instructions. 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 (being the following
communications methods: e-mail, facsimile transmission, secure electronic transmission
containing applicable authorization codes, passwords and/or authentication keys issued by the
Trustee, or another method or system specified by the Trustee as available for u se in connection
with its services hereunder); provided, however, that the Authority and the City, as applicable
shall provide to the Trustee an incumbency certificate listing officers with the authority to
provide such Instructions and containing specimen signatures of such officers, which
incumbency certificate shall be amended by the Authority or the City, as applicable, whenever a
person is to be added or deleted from the listing. If the Authority or the City elects to give the
Trustee Instructions using Electronic Means and the Trustee elects to act upon such Instructions,
the Trustee’s reasonable understanding of such Instructions shall be deemed controlling. The
Authority understands and agrees that the Trustee cannot determine the identity of the a ctual
sender of such Instructions and that the Trustee shall conclusively presume that directions that
purport to have been sent by an authorized officer listed on the incumbency certificate provided
to the Trustee have been sent by such authorized officer. The Authority and the City shall be
responsible for ensuring that only authorized officers transmit such Instructions to the Trustee
and that the Authority, 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 Authority and the City.
The Trustee shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Trustee’s reasonable reliance upon and compliance with such Instructions
notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
Subject to this Section 6.13 the Authority agrees: (i) to assume all risks arising out of the use of
Electronic Means to submit Instructions to the Trustee, including without limitation the risk of
the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third
parties; (ii) that the Authority has been informed of the protections and risks associated with the
various methods of transmitting Instructions to the Trustee and that there may be more secure
methods of transmitting Instructions than the method(s) selected by the Authority or 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 (iii) to notify the Trustee immediately upon learning of any
compromise or unauthorized use of the security procedures.
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In the event of an ambiguity or a contradiction in such Instructions as determined
by the Trustee in its reasonable discretion, the Trustee shall notify the Authority and request
clarification from the Authority, and the Trustee shall not be required to act on such ambiguous
or contradictory Instructions pending the Authority’s clarification.
The Trustee shall not be liable under this Section 6.13 except for its negligence or
willful misconduct.
ARTICLE VII
MODIFICATION AND AMENDMENT OF THE INDENTURE
SECTION 1.049. Amendment of Indenture. This Indenture and the rights and
obligations of the Authority and of the Owners of the Bonds may be modified or amended at any
time by a Supplemental Indenture which shall become binding upon adoption, without consent of
any Bond Owner, to the extent permitted by law but only for any one or more of the following
purposes:
(a) to add to the covenants and agreements of the Authority contained in this
Indenture, other covenants and agreements thereafter to be observed, or to limit or surrender any
rights or powers herein reserved to or conferred upon the Authority so long as such limitation or
surrender of such rights or powers shall not materially adversely affect the Owners of the Bonds;
(b) to cure any ambiguity, to supply any omission or to cure, correct or
supplement any defect or inconsistent provisions contained in the Indenture or in any
Supplemental Indenture;
(c) to grant to the Trustee for the benefit of the Owners additional rights,
remedies, powers or authority;
(d) to subject to the Indenture additional collateral or to add other agreements of
the Authority;
(e) to modify the Indenture or the Bonds to permit qualification under the Trust
Indenture Act of 1939, as amended, or any similar statute at the time in effect, or to permit the
qualification of the Bonds for sale under the securities laws of any state of the United States of
America;
(f) to maintain the exclusion of interest on the Bonds from gross income for
federal income tax purposes;
(g) to evidence the succession of a new Trustee; or
(h) for any other purpose that does not materially adversely affect the rights or
interests of the Owners.
Except as set forth in the preceding paragraph of this Section 7.01, this Indenture and the
rights and obligations of the Authority and of the Owners of the Bonds may only be modified or
amended at any time by a Supplemental Indenture which shall become binding when the written
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consent of the Owners of a majority in aggregate principal amount of the Bonds t hen
Outstanding are filed with the Trustee. No such modification or amendment shall (I) extend the
maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of
the Authority to pay the principal, interest or redemption premiums (if any) at the time and place
and at the rate and in the currency provided therein of any Bond without the express written
consent of the Owner of such Bond, (II) reduce the percentage of Bonds required for the written
consent to any such amendment or modification, or (III) modify any of the rights or obligations
of the Trustee without its written consent thereto.
In executing, or accepting the additional trusts created by, any Supplemental Indenture
permitted by this Article or the modification thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of
Bond Counsel stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and complies with the terms hereof.
SECTION 1.050. Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners of Outstanding Bonds, as the case may
be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to
such modification and amendment, and all the terms and conditions of any Supplemental
Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
Prior to entering into any Supplemental Indenture pursuant to this Section 7.02, the
Trustee may require the Authority to deliver to the Trustee an opinion of Bond Counsel to the
effect that such Supplemental Indenture has been adopted in accordance with the requirements of
this Indenture.
SECTION 1.051. 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 shall 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 Bond Outstanding at such effective
date and presentation of such Owner’s Bond for that purpose at the Trust Office of the Trustee, a
suitable notation as to such action shall be made on such Bond. If the Authority shall so
determine, new Bonds so modified as, in the opinion of the Authority, shall be necessary to
conform to such Bond Owners’ action, then new Bond certificates shall be prepared and
executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective
date such new Bonds shall be exchanged at the Trust Office of the Trustee, without cost to each
Bond Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 1.052. Events of Default. The following events shall be Events of Default
hereunder:
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(a) Default in the due and punctual payment of the principal of or premium on
any Bond when and as the same shall become due and payable, whether at maturity as therein
expressed, or by proceedings for redemption.
(b) Default in the due and punctual payment of any installment of interest on any
Bond when and as such interest installment shall become due and payable.
(c) Failure by the Authority to observe and perform any of the covenants,
agreements or conditions on its part in this Indenture or in the Bonds contained, other than as
referred to in the preceding clauses (a) and (b), for a period of 30 days after written notice,
specifying such failure and requesting that it be remedied has been given to the Authority by the
Trustee, or to the Authority and the Trustee by the Owners of not less than 25 percent in
aggregate principal amount of the Outstanding Bonds; provided, however, that if in the
reasonable opinion of the Authority, the failure stated in such notice can be corrected, but not
within such 30-day period, the Trustee and such Owners shall not unreasonably withhold their
consent to an extension of such time if corrective action is instituted by the Authority within such
30-day period and diligently pursued until such failure is corrected.
(d) The filing by the Authority of a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other applicable law of the United States
of America, or if a court of competent jurisdiction shall approve a petition, filed with or without
the consent of the Authority, seeking reorganization under the Federal bankruptcy laws or any
other applicable law of the United States of America, 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 the Leased Properties.
SECTION 1.053. Remedies; No Acceleration. Upon the occurrence of an Event of
Default the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the Authority or any member, officer or employee thereof, in order to
compel the Authority or any such member, officer or employee to perform and carry out its or
his or her duties under law and the agreements and covenants required to be performed by it or
him or her contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee; or
(c) by suit in equity upon the happening of an Event of Default to require the
Authority and its members, officers and employees to account as the trustee of an express trust.
If an Event of Default shall have occurred and be continuing and if requested so to do by
the Owners of at least 25 percent in aggregate principal amount of Outstanding Bonds and
indemnified as provided in Section 6.02(c), the Trustee shall be obligated to exercise such one or
more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by
counsel, shall deem most expedient in the interests of the Bond Owners.
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No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to
the Bond Owners) is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or
the Bond Owners hereunder or now or hereafter existing at law or in equity.
No delay or omission to exercise any right or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver or any such Event of
Default or acquiescence therein; such right or power may be exercised from time to time as often
as may be deemed expedient.
The Trustee shall have no right to declare the principal of or interest on the Bonds to be
due and payable immediately.
SECTION 1.054. Application of Revenues and Other Funds after Default. Following
the declaration of an Event of Default, all amounts then held or received by the Trustee pursuant
to any right given or action taken by the Trustee under the provisions of this Indenture shall be
applied by the Trustee, in the following order upon presentation of the several Bonds, and the
stamping thereon of the amount of the payment if only partially paid, or upon the surrender
thereof if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee, including reasonable
compensation to its agents, attorneys and counsel;
Second, to the payment of the whole amount of interest on and principal of the Bonds
then due and unpaid; provided, however, that in the event such amounts shall be insufficient to
pay in full the full amount of such interest and principal, then such amounts shall be applied to
the payment of such principal and interest without preference or priority of principal over
interest, or interest over principal, or of any installment of interest over any other installment of
interest, ratably to the aggregate of such principal and interest; and
Third, to replenish the Reserve Account to the Reserve Requirement.
SECTION 1.055. Power of Trustee to Control Proceedings. In the event that the
Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial
proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or
upon the request of the Owners of at least a majority in aggregate principal amount of the Bonds
then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of
the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that the Trustee
shall not, unless there no longer continues an Event of Default, discontinue, withdraw,
compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the
time there has been filed with it a written request signed by the Owners of a majority in
aggregate principal amount of the Outstanding Bonds hereunder opposing such discontinuance,
withdrawal, compromise, settlement or other disposal of such litigation and if the Trustee is
indemnified as provided in Section 6.02(c). Any suit, action or proceeding which any Owner of
Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by
the Trustee for the equal benefit and protection of all Owners of Bonds similarly situated and the
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Trustee is hereby appointed (and the successive respective Owners of the Bonds issued
hereunder by taking and holding the same, shall be conclusively deemed so to have appointed it)
the true and lawful attorney-in-fact of the respective Owners of the Bonds for the purpose of
bringing any such suit, action or proceeding and to do and perform any and all acts and things for
and on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or
advisable in the opinion of the Trustee as such attorney-in-fact.
SECTION 1.056. Appointment of Receivers. Upon the occurrence of an Event of
Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings
to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee
shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the
Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as
the court making such appointment shall confer.
SECTION 1.057. Non-Waiver. A waiver of any default or breach of duty or contract by
the Trustee or any Bond Owners shall not affect any subsequent default or breach of duty or
contract, or impair any rights or remedies on any such subsequent default or breach. No delay or
omission of the Trustee or any Owner of any of the Bonds to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver of any such default or an acquiescence therein; and every power and remedy conferred
upon the Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and
exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond
Owners, as the case may be.
SECTION 1.058. Rights of Bond Owners. No Owner of any Bond issued hereunder
shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy
under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee
written notice of the occurrence of an Event of Default; (b) the Owners of a majority in
aggregate principal amount of all the Bonds then Outstanding shall have made written request
upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity
reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in
compliance with such request; and (d) the Trustee shall have refused or omitted to comply with
such request for a period of 60 days after such written request shall have been received by, and
said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any
remedy hereunder; it being understood and intended that no one or more Owners of Bonds shall
have any right in any manner whatever by his or their action to enforce any right under this
Indenture, except in the manner provided herein, and that all proceedings at law or in equity to
enforce any provision of this Indenture shall be instituted, had and maintained in the manner
provided herein and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of and interest
and premium (if any) on such Bond as provided herein or to institute suit for the enforcement of
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any such payment, shall not be impaired or affected without the written consent of such Owner,
notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.
SECTION 1.059. Termination of Proceedings. In case the Trustee shall have proceeded
to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case, the Authority, the Trustee and the Bond
Owners shall be restored to their former positions and rights hereunder, respectively, with regard
to the Leased Properties subject to this Indenture, and all rights, remedies and powers of the
Trustee shall continue as if no such proceedings had been taken.
ARTICLE IX
MISCELLANEOUS
SECTION 1.060. Limited Liability of Authority. Notwithstanding anything contained in
this Indenture, the Authority shall not be required to advance any moneys derived from any
source of income other than the Revenues for the payment of the principal of or interest on the
Bonds, or any premiums upon the redemption thereof, or for the performance of any covenants
herein contained (except to the extent any such covenants are expressly payable hereunder from
the Revenues or otherwise from amounts payable under the Sublease). The Authority may,
however advance funds for any such purpose, provided that such funds are derived from a source
legally available for such purpose and may be used by the Authority for such purpose without
incurring indebtedness.
The Bonds shall be revenue bonds, payable exclusively from the Revenues and other
funds as provided in this Indenture. The general fund of the Authority is not liable, and the
credit of the Authority is not pledged, for the payment of the interest and premiums (if any) on or
principal of the Bonds. The Owners of the Bonds shall never have the right to compel the
forfeiture of any property of the Authority except the Revenues and other funds pledged to the
payment of the Bonds as provided in this Indenture. The principal of and interest on the Bonds,
and any premiums upon the redemption of any thereof, shall not be a legal or equitable pledge,
charge, lien or encumbrance upon any property of the Authority or upon any of its income,
receipts or revenues except the Revenues and other funds pledged to the payment thereof as
provided in this Indenture.
SECTION 1.061. Benefits of Indenture Limited. Nothing in this Indenture, expressed or
implied, is intended to give to any person other than the Authority, the Trustee, the City and the
Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture. Any
covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of
the Authority shall be for the sole and exclusive benefit of the Trustee, the City and the Owners
of the Bonds.
SECTION 1.062. Discharge of Indenture. If the Authority shall pay and discharge any
or all of the Outstanding Bonds in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and interest and
premiums (if any) on such Bonds, as and when the same become due and payable;
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(b) by irrevocably depositing with the Trustee, in trust, at or before maturity,
money which, together with the available amounts then on deposit in the funds and accounts
established with the Trustee pursuant to this Indenture, is fully sufficient to pay such Bonds,
including all principal, interest and redemption premiums (if any); or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
Federal Securities in such amount as an Independent Certified Public Accountant (defined
below) shall determine in a written report filed with the Trustee (upon which report the Trustee
may conclusively rely) will, together with the interest to accrue thereon and available moneys
then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture,
be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal,
interest and redemption premiums) at or before their respective maturity dates; and if such Bonds
are to be redeemed prior to the maturity thereof notice of such redemption shall have been sent
pursuant to Section 2.03(d) or provision satisfactory to the Trustee shall have been made for the
sending of such notice, then, at the Request of the Authority, and notwithstanding that any of
such Bonds shall not have been surrendered for payment, the pledge of the Revenues and other
funds provided for in this Indenture with respect to such Bonds, and all other pecuniary
obligations of the Authority under this Indenture with respect to all such Bonds, shall cease and
terminate, except only the obligation of the Authority to pay or cause to be paid to the Owners of
such Bonds not so surrendered and paid all sums due thereon from amounts set aside for such
purpose as aforesaid, and all amounts due the Trustee. Any funds held by the Trustee following
any payment or discharge of the Outstanding Bonds pursuant to this Section 11.03, which are not
required for said purposes, shall after payment of amounts due the Trustee hereunder be paid
over to the Authority.
SECTION 1.063. Trustee’s Additional Acknowledgment of Certain Provisions of the
Sublease. Without limiting any other provisions herein, the Trustee hereby acknowledges and
agrees to comply with Sections 8(e) and 9 of the Sublease.
SECTION 1.064. Successor Deemed Included in All References to Predecessor.
Whenever in this Indenture or any Supplemental Indenture the Authority is named or referred to,
such reference shall be deemed to include the successor to the powers, duties and functions, with
respect to the management, administration and control of the affairs of the Authority, that are
presently vested in the Authority, and all the covenants, agreements and provisions contained in
this Indenture by or on behalf of the Authority shall bind and inure to the benefit of its successors
whether so expressed or not.
SECTION 1.065. Content of Certificates and Opinions. Any certificate made or given
by an officer of the Authority may be based, insofar as it relates to legal ma tters, upon a
certificate or opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which his certificate
may be based, as aforesaid, are erroneous, or in the exercise of reasonable care should have
known that the same were erroneous. Any such certificate or opinion or representation made or
given by counsel may be based, insofar as it relates to factual matters, on information with
respect to which is in the possession of the Authority, or upon the certificate or opinion of or
representations by an officer or officers of the Authority, unless such counsel knows that the
certificate or opinion or representations with respect to the matters upon which his certificate,
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opinion or representation may be based, as aforesaid, are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
SECTION 1.066. Execution of Documents by Bond Owners. Any request, consent or
other instrument required by this Indenture to be signed and executed by Bond Owners may be in
any number of concurrent writings of substantially similar tenor and may be signed or executed
by such Bond Owners in person or by their agent or agents duly appointed in writing. Proof of
the execution of any such request, consent or other instrument or of a writing appointing any
such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor
of the Trustee and of the Authority if made in the manner provided in this Section 11.07.
The fact and date of the execution by any person of any such request, consent or other
instrument or writing may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof
to take acknowledgments of deeds, certifying that the person signing such request, consent or
other instrument or writing acknowledged to him the execution thereof.
The ownership of Bonds shall be proved by the Registration Books. Any request,
consent or vote of the Owner of any Bond shall bind every future Owner of the same Bond and
the Owner of any Bond issued in exchange therefor or in lieu thereof, in respect of anything done
or suffered to be done by the Trustee or the Authority in pursuance of such request, consent or
vote. In lieu of obtaining any demand, request, direction, consent or waiver in writing, the
Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance
with such rules and obligations as the Trustee considers fair and reasonable for the purpose of
obtaining any such action.
SECTION 1.067. Disqualified Bonds. In determining whether the Owners of the
requisite aggregate principal amount of Bonds have concurred in any demand, request, direction,
consent or waiver under this Indenture, Bonds which are owned or held by or for the account of
the City or the Authority (but excluding Bonds held in any employees’ retirement fund) shall be
disregarded and deemed not to be Outstanding for the purpose of any such determination,
provided, however, that for the purpose of determining whether the Trustee shall be protected in
relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee
knows to be so owned or held shall be disregarded. Upon the request of the Trustee, the
Authority and the City shall specify in a certificate to the Trustee those Bonds that are
disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate.
SECTION 1.068. Waiver of Personal Liability. No officer, agent or employee of the
Authority shall be individually or personally liable for the payment of the interest on or principal
of the Bonds; but nothing herein contained shall relieve any such officer, agent or employee from
the performance of any official duty provided by law.
SECTION 1.069. Partial Invalidity. If any one or more of the covenants or agreements,
or portions thereof, provided in this Indenture on the part of the Authority (or of the Trustee) to
be performed should be contrary to law, then such covenant or covenants, such agreement or
agreements, or such portions thereof, shall be null and void and shall be deemed separable from
the remaining covenants and agreements or portions thereof and shall in no way affect the
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validity of this Indenture or of the Bonds; but the Bond Owners shall retain all rights and benefits
accorded to them under the Bond Law or any other applicable provisions of law.
SECTION 1.070. Destruction of Canceled Bonds. Whenever in this Indenture provision
is made for the surrender of any Bonds which have been paid or canceled pursuant to the
provisions of this Indenture, the Trustee shall cancel and destroy such Bonds and upon Request
of the Authority furnish to the Authority a certificate of such destruction.
SECTION 1.071. Funds and Accounts. Any fund or account required by this Indenture
to be established and maintained by the Authority or the Trustee may be established and
maintained in the accounting records of the Authority or the Trustee, as the case may be, either
as a fund or an account, and may, for the purpose of such records, any audits thereof and any
reports or statements with respect thereto, be treated either as a fund or as an account. All such
records with respect to all such funds and accounts held by the Authority shall at all times be
maintained in accordance with generally accepted accounting principles and all such records
with respect to all such funds and accounts held by the Trustee shall be at all times maintained in
accordance with corporate trust industry practices; in each case with due regard for the protection
of the security of the Bonds and the rights of every Owner thereof.
SECTION 1.072. Payment on Business Days. Whenever in this Indenture any amount is
required to be paid on a day that is not a Business Day, such payment shall be required to be
made, without accruing additional interest thereby, on the Business Day immediately following
such day.
SECTION 1.073. Notices. Any notice, request, complaint, demand or other
communication under this Indenture shall be given by first class mail or personal delivery to the
party entitled thereto at its address set forth below, by overnight mail, as a .pdf attachment to
electronic mail, or by telecopy or other form of telecommunication, confirmed by telephone at its
number set forth below. Notice shall be effective either (i) upon transmission by telecopy or
other form of telecommunication, (ii) 48 hours after deposit in the United States mail, postage
prepaid, (iii) in the case of overnight mail, upon delivery to the addressed destination, or (iv) in
the case of personal delivery to any person, upon actual receipt. The Authority, the City or the
Trustee may, by written notice to the other party, from time to time modify the address, email
address, or number to which communications are to be given hereunder.
If to the Authority: Orange City Public Facilities Financing Authority
300 E. Chapman Avenue
Orange, CA 92866
Attention: Executive Director
Tel: (714) 744-2222
If to the City: City of Orange
300 E. Chapman Avenue
Orange, CA 92866
Attention: City Manager
Tel: (714) 744-2222
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If to the Trustee: U.S. Bank National Association
LM-CA-T24T
633 W. 5th Street, 24th Fl
Los Angeles, California 90017
Attention: Global Corporate Trust
Tel: (213) 615-6062
Any party listed above may designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
SECTION 1.074. Unclaimed Moneys. Anything in this Indenture to the contrary
notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of
the Bonds that remain 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 earlier redemption, if such moneys
were held by the Trustee at such date, or for two years after the date of deposit of such moneys if
deposited with the Trustee after said date when such Bonds become due and payable, shall be
repaid by the Trustee to the Authority, as its absolute property and free from trust, and the
Trustee shall thereupon be released and discharged with respect thereto and the Bond 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 mailed to the Owners of all such Bonds, at their respective addresses
appearing on the Registration Books, a notice that said moneys remain unclaimed and that, after
a date named in said notice, which date shall not be less than 30 days after the date of mailing of
such notice, the balance of such moneys then unclaimed will be returned to the Authority.
SECTION 1.075. Governing Law. This Indenture shall be construed and governed in
accordance with the laws of the State of California.
SECTION 1.076. Execution in Counterparts. This Indenture may be executed in any
number of counterparts. Each of such counterparts shall for all purposes be deemed to be an
original and all such counterparts shall together constitute but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be signed by
their respective authorized representatives, all as of the day and year first above written.
ORANGE CITY PUBLIC FACILITIES
FINANCING AUTHORITY
By:
Nancy Kerry, Executive Director
ATTEST:
Secretary
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
Print Name:
Title:
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EXHIBIT A
[FORM OF BOND]
[Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Authority or its agent for registration of
transfer, exchange, or payment, and any certificate 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.]
No. R-___ $_____________
ORANGE CITY PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BOND
Series 2020A
INTEREST RATE MATURITY DATE
ORIGINAL ISSUE
DATE CUSIP
% _______1, 20__ _______, 2020
REGISTERED OWNER: [CEDE & CO.]
PRINCIPAL AMOUNT: ______________________________ DOLLARS
The ORANGE CITY PUBLIC FACILITIES FINANCING AUTHORITY, a joint powers
authority organized and existing under the laws of the State of California (the “Authority”), for
value received, hereby promises to pay (but only out of the Revenues, as defined in the Indenture
hereinafter referred to, and certain other moneys) to the Registered Owner identified above or
registered assigns (the “Registered Owner”), on the Maturity Date identified above or any earlier
redemption date, the Principal Amount identified above in lawful money of the United States of
America; and to pay interest thereon at the Interest Rate identified above in like money from the
Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this
Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the
fifteenth calendar day of the month preceding such Interest Payment Date, in which event it shall
bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to
the fifteenth calendar day of the month preceding the first Interest Payment Date, in which event
it shall bear interest from the Original Issue Date identified above; provided, however, that if, at
the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear
interest from the Interest Payment Date to which interest hereon has previously been paid or
made available for payment), payable semiannually on ______ 1 and ____ 1 in each year,
commencing ______ 1, 2020 (each an “Interest Payment Date”) until payment of such Principal
Amount in full.
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The Principal Amount of this Bond is payable by check upon presentation hereof upon
maturity or earlier redemption at the principal corporate trust office of U.S. Bank National
Association, as trustee (the “Trustee”), in St. Paul, Minnesota, or at such other office as the
Trustee may designate (the “Trust Office”). Interest hereon is payable by check or draft of the
Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof
at the address of the Registered Owner as it appears on the registration books of the Trustee as of
the fifteenth calendar day of the month preceding such Interest Payment Date (except that in the
case of a Registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds,
such payment may, at such Registered Owner’s option, be made by wire transfer of immediately
available funds in accordance with written instructions provided by such Registered Owner prior
to the 15th calendar day of the month immediately preceding such Interest Payment Date).
This Bond is one of a duly authorized issue of bonds designated the Orange City Public
Facilities Financing Authority Lease Revenue Bonds, Series 2020A (the “Bonds”), limited in
principal amount to _________________ Dollars ($_______) secured by an Indenture, dated as
of ________ 1, 2020 (the “Indenture”), by and between the Authority and the Trustee.
Reference is hereby made to the Indenture and all indentures supplemental thereto for a
description of the rights thereunder of the owners of the Bonds, of the nature and extent of the
Revenues (as that term is defined in the Indenture), of the rights, duties and immunities of the
Trustee and of the rights and obligations of the Authority thereunder; and all of the terms of the
Indenture are hereby incorporated herein and constitute a contract between the Authority and the
Registered Owner hereof, and to all of the provisions of which Indenture the Registered Owner
hereof, by acceptance hereof, assents and agrees.
The Bonds are authorized to be issued pursuant to the provisions of the Marks-Roos
Local Bond Pooling Act of 1985, constituting Article 4, Chapter 5, Division 7, Title 1 of the
Government Code of the State of California (the “Act”). The Bonds are special obligations of
the Authority and, as and to the extent set forth in the Indenture, are payable solely from and
secured by a first lien on and pledge of the Revenues and certain other moneys and securities
held by the Trustee as provided in the Indenture. All of the Bonds are equally secured by a
pledge of, and charge and lien upon, all of the Revenues and such other moneys and securities,
and the Revenues and such other moneys and securities constitute a trust fund for the security
and payment of the principal of and interest on the Bonds. The full faith and credit of the
Authority are not pledged for the payment of the principal of or interest on the Bonds. The
Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon,
any of the property of the Authority or any of its income or receipts, except the Revenues and
such other moneys and securities as provided in the Indenture.
The Bonds have been issued for the purpose of assisting the City with the financing of
certain public capital projects. In connection with the issuance of the Bonds, the Authority has
entered into the Sublease, dated as of ________ 1, 2020 (the “Sublease”) with the City, under
which the City is obligated to pay amounts which are anticipated to be sufficient to enable the
Authority to pay the principal of and interest on the Bonds.
The Bonds are subject to redemption prior to their respective maturity dates, upon notice
as hereinafter provided, as a whole or in part, on any date, from prepaid Base Rental Payments
made by the City from funds received by the City due to a taking of the Leased Properties (as
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defined in the Sublease) or any portion thereof under the power of eminent domain or from net
proceeds of insurance received for material damage or destruction, defects in title to the Leased
Properties, under the circumstances and upon the conditions and terms prescribed in the
Indenture and in the Sublease, at a redemption price equal to the sum of the principal amount of
the Bonds to be redeemed plus accrued interest thereon to the date fixed for redemption, without
premium.
The Bonds maturing on or after _______ 1, 20__, shall be subject to redemption prior to
their respective maturity dates, as a whole or in part, from prepayments of Base Rental made at
the option of the City under the Sublease on any date with respect to which such prepayment
have been made (which shall be on or after ______ 1, 20__). The Bonds called for such optional
redemption shall be redeemed at a redemption price equal to 100 percent of the principal amount
of the Bonds to be redeemed, without premium, plus accrued interest thereon to the date of
redemption.
The Bonds maturing on ________ 1, 20__ are subject to redemption in part by lot from
sinking account payments made by the Authority, at a redemption price equal to the principal
amount thereof to be redeemed with accrued interest thereon to the redemption date, with out
premium, in the aggregate respective principal amounts and on the respective dates as set forth in
the following table; provided, however, if some but not all of the term Bonds of a maturity have
been redeemed pursuant to the extraordinary redemption or optional redemption described
above, each future sinking account payment with respect to such term Bonds will be reduced on
a pro rata basis (as nearly as practicable) in integral multiples of $5,000, so that the total amount
of sinking account payments with respect to such term Bonds to be made subsequent to an
extraordinary redemption or an optional redemption shall be reduced by an amount equal to the
principal amount of the term Bonds so redeemed, all as shall be designated pursuant to written
notice filed by the Authority with the Trustee:
Bonds Maturing on _______ 1, 20__
Redemption Date
( 1)
Principal Amount
to be Redeemed
______________
* maturity
The Trustee on behalf and at the expense of the Authority shall send by first class mail
(or if the registered owner of such Bond is a depository, by such method as acceptable to such
depository), notice of any redemption to the respective owners of any Bonds designated for
redemption, at their respective addresses appearing on the registration books maintained by the
Trustee, to the Securities Depositories and to one or more Information Services (as such terms
are defined in the Indenture), at least 30 but not more than 60 days prior to the redemption;
provided, however, that neither failure to receive any such notice so sent nor any defect therein
shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of
the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date,
the redemption place and the redemption price and shall designate the CUSIP numbers, the serial
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numbers of each maturity or maturities (except that if the event of redemption is of all of the
Bonds of such maturity or maturities in whole, the Trustee shall designate such maturities or the
maturity in whole without referencing each individual number) of the Bonds to be redeemed, and
shall require that such Bonds be then surrendered at the Trust Office of the Trustee for
redemption at the redemption price, giving notice also that further interest on such Bonds will
not accrue after the redemption date.
The Bonds may be issued in denominations of $5,000 or any integral multiple thereof.
Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, this
Bond may be exchanged at the Trust Office of the Trustee for a like aggregate principal amount,
interest rate and maturity of fully registered Bonds of other authorized denominations.
This Bond is transferable by the Registered Owner hereof, in person or by such
Registered Owner’s attorney duly authorized in writing, at the Trust Office of the Trustee, but
only in the manner, subject to the limitations and upon payment of the charges provided in the
Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully
registered Bond or Bonds, of authorized denomination or denominations, for the same aggregate
principal amount and of the same maturity will be issued to the transferee in exchange herefor.
The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner
hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to
the contrary. The Trustee shall not be required to register the transfer or exchange of any Bond
during the period in which the Trustee is selecting Bonds for redemption or any Bond selected
for redemption.
The Indenture and the rights and obligations of the Authority and of the owners of the
Bonds and of the Trustee may be modified or amended from time to time and at any time in the
manner, to the extent, and upon the terms provided in the Indenture; provided that no such
modification or amendment shall (a) extend the maturity of or reduce the interest rate on any
Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or
premiums at the time and place and at the rate and in the currency provided therein of any Bond
without the express written consent of the owner of such Bond, (b) reduce the percentage of
Bonds required for the written consent to any such amendment or modification, or (c) without its
written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully
set forth in the Indenture.
It is hereby certified that all things, conditions and acts required to exist, to have
happened and to have been performed precedent to and in the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required by the
Constitution and statutes of the State of California and by the Act and the amount of this Bond,
together with all other indebtedness of the Authority, does not exceed any limit prescribed by the
Constitution or statutes of the State of California or by the Act.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon shall have been signed
by the Trustee.
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IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name
and on its behalf, and attested, by the facsimile signatures of its Chair and Secretary as of the
Original Issue Date identified above.
ORANGE CITY PUBLIC FACILITIES
FINANCING AUTHORITY
By:
Chair
Attest:
Secretary
[TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Indenture and registered on
the Bond Registration Books.
Date: U.S. BANK 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, whose tax
identification number is _________________________, the within-mentioned registered 2020A
Bond and hereby irrevocably constitute(s) and appoint(s) attorney to transfer the same on the
books of the Trustee with full power of substitution in the premises.
Dated:
Signature guaranteed:
NOTE: The signature(s) on this Assignment
must correspond with the name(s) as written
on the face of the within 2020A Bond in
every particular without alteration or
enlargement or any change whatsoever.
NOTICE: Signature must be guaranteed by a
member of an institution which is a participant
in the Securities Transfer Agent Medallion
Program (STAMP) or such other similar
program approved by the Trustee.
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EXHIBIT B
[FORM OF REQUISITION (COSTS OF ISSUANCE)]
REQUISITION NO. __
(Costs of Issuance Fund)
with reference to
$________
Orange City Public Facilities Financing Authority
Lease Revenue Bonds
Series 2020A
[Date]
I. The Orange City Public Facilities Financing Authority (the “Authority”) hereby
requests U.S. Bank National Association, as trustee (the “Trustee”) pursuant to that certain
Indenture, dated as of ________ 1, 2020 (the “Indenture”), by and between the Authority and the
Trustee, under the terms of which the above-captioned bonds, to pay from the moneys in the
Costs of Issuance Fund established pursuant to the Indenture, the amounts shown on Schedule I
attached hereto to the parties indicated in Schedule I.
II. The payees, the purposes for which the costs have been incurred, and the amount
of the disbursements requested are itemized on Schedule I hereto.
III. Each obligation mentioned in Schedule I hereto has been properly incurred and is
a proper charge against the Costs of Issuance Fund. None of the items for which payment is
requested has been reimbursed previously from the Costs of Issuance Fund.
All capitalized terms not defined herein have the meanings ascribed to them in the
Indenture.
ORANGE CITY PUBLIC FACILITIES
FINANCING AUTHORITY
By:
[Name]
[Title]
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EXHIBIT C
[FORM OF REQUISITION (PROJECT FUND)]
REQUISITION NO. __
(Project Fund)
with reference to
$_________
Orange City Public Facilities Financing Authority
Lease Revenue Bonds
Series 2020A
[Date]
I. Pursuant to Section 3.06 of that certain Indenture, dated as of ________ 1, 2020
(the “Indenture”), by and between the Orange City Public Facilities Financing Authority (the
“Authority”) and U.S. Bank National Association, as trustee (the “Trustee”), under the terms of
which the above-captioned bonds were issued, the undersigned, City of Orange, hereby requests
the Trustee, to pay from the moneys in the Project Fund the amounts shown on Schedule I
attached hereto to the parties indicated in Schedule I.
II. The payees, the purposes for which the costs have been incurred, and the amount
of the disbursements requested are itemized on Schedule I hereto.
III. Each obligation mentioned in Schedule I hereto has been properly incurred and is
a proper charge against the Project Fund. None of the items for which payment is requested has
been reimbursed previously from the Project Fund.
All capitalized terms not defined herein have the meanings ascribed to them in the
Indenture.
CITY OF ORANGE
By:
[Name]
[Title]