HomeMy WebLinkAboutA07 IndentureQuint & Thimmig LLP
INDENTURE OF TRUST
Dated as of February 1, 2024
by and between the
TUSTIN PUBLIC FINANCING AUTHORITY
and
12/18/23
01/03/24
01/10/24
01/22/24
01/26/24
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
$4,125,000
Tustin Public Financing Authority
Water Revenue Bonds, Series 2024
(Subordinate Lien)
20027.04
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
Section1.01. Definitions................................................................................................................................................................. 3
Section1.02. Interpretation..........................................................................................................................................................12
ARTICLE II
010121-10
Section2.01. Authorization of Bonds.........................................................................................................................................
14
Section2.02. Terms of the Bonds................................................................................................................................................
14
Section2.03. Form of Bonds.........................................................................................................................................................
15
Section2.04. Execution of Bonds.................................................................................................................................................
15
Section2.05. Transfer of Bonds...................................................................................................................................................
15
Section2.06. Exchange of Bonds.................................................................................................................................................
16
Section2.07. Registration Books..................................................................................................................................................
16
Section2.08. Temporary Bonds...................................................................................................................................................
16
Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen......................................................................................................
16
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
Section 3.01. Issuance of the Bonds............................................................................................................................................18
Section 3.02. Application of Proceeds of the Bonds.................................................................................................................18
Section 3.03. Establishment and Application of Costs of Issuance Fund..............................................................................18
Section 3.04. Establishment and Application of 2024 Project Fund.......................................................................................18
Section3.05. Validity of Bonds....................................................................................................................................................19
ARTICLE IV
REDEMPTION OF BONDS
Section4.01. Terms of Redemption............................................................................................................................................ 20
Section4.02. Notice of Redemption............................................................................................................................................ 20
Section 4.03. Partial Redemption of Bonds................................................................................................................................ 21
Section4.04. Effect of Redemption............................................................................................................................................. 21
ARTICLE V
REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.01. Pledge and Assignment; Bond Fund................................................................................................................... 22
Section 5.02. Allocation of Revenues.......................................................................................................................................... 22
Section 5.03. Application of Interest Account........................................................................................................................... 23
Section 5.04. Application of Sinking Account and Principal Account.................................................................................. 23
Section5.05. Investments............................................................................................................................................................. 23
Section 5.06. Valuation and Disposition of Investments......................................................................................................... 24
ARTICLE VI
PARTICULAR COVENANTS
Section6.01. Punctual Payment..................................................................................................................................................
25
Section 6.02. No Extension of Payment of Bonds.....................................................................................................................
25
Section 6.03. Against Encumbrances..........................................................................................................................................
25
Section 6.04. Power to Issue Bonds and Make Pledge and Assignment...............................................................................
25
Section 6.05. Accounting Records and Financial Statements..................................................................................................
25
Section 6.06. No Additional Obligations...................................................................................................................................
25
Section6.07. Tax Covenants........................................................................................................................................................
25
Section 6.08. Installment Sale Agreement..................................................................................................................................
26
Section6.09. Waiver of Laws.......................................................................................................................................................
26
Section 6.10. Further Assurances................................................................................................................................................
26
Section 6.11. Continued Existence of the Authority.................................................................................................................
26
-i-
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section7.01. Events of Default....................................................................................................................................................
28
Section 7.02. Remedies Upon Event of Default.........................................................................................................................
28
Section 7.03. Application of Revenues and Other Funds After Default................................................................................
29
Section 7.04. Trustee to Represent Bond Owner.......................................................................................................................
29
Section 7.05.Owner Direction of Proceedings..........................................................................................................................
30
Section 7.06. Limitation on Owner's Right to Sue....................................................................................................................
30
Section 7.07. Absolute Obligation of Authority ........................................................................................................................
30
Section 7.08. Termination of Proceedings..................................................................................................................................
30
Section 7.09. Remedies Not Exclusive........................................................................................................................................
30
Section7.10. No Waiver of Default............................................................................................................................................. 30
Section 7.11. Parties Interested Herein....................................................................................................................................... 31
ARTICLE VIII
THE TRUSTEE
Section8.01. Appointment of Trustee.......................................................................................................................................
Section 8.02. Acceptance of Trustee...........................................................................................................................................
Section 8.03. Fees, Charges and Expenses of Trustee.............................................................................................................
Section 8.04. Notice to Owner of Default..................................................................................................................................
Section 8.05. Intervention by Trustee........................................................................................................................................
Section8.06. Removal of Trustee...............................................................................................................................................
Section8.07. Resignation by Trustee.........................................................................................................................................
Section 8.08. Appointment of Successor Trustee.....................................................................................................................
Section 8.09. Merger or Consolidation......................................................................................................................................
Section 8.10. Concerning any Successor Trustee.....................................................................................................................
Section 8.11. Appointment of Co-Trustee.................................................................................................................................
Section 8.12. Indemnification; Limited Liability of Trustee...................................................................................................
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS INDENTURE
32
32
35
35
36
36
36
36
36
37
37
37
Section9.01. Amendments Permitted........................................................................................................................................ 39
Section 9.02. Effect of Supplemental Indenture........................................................................................................................ 40
Section 9.03. Endorsement of Bonds; Preparation of New Bonds......................................................................................... 40
Section 9.04. Amendment of Particular Bonds......................................................................................................................... 40
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Indenture........................................................................................................................................ 41
Section 10.02. Discharge of Liability on Bonds......................................................................................................................... 41
Section 10.03. Deposit of Money or Securities with Trustee................................................................................................... 41
Section10.04. Unclaimed Funds................................................................................................................................................. 42
ARTICLE XI
MISCELLANEOUS
Section 11.01. Liability of Authority Limited to Revenues..................................................................................................... 43
Section 11.02. Limitation of Rights to Parties and Owner....................................................................................................... 43
Section11.03. Funds and Accounts............................................................................................................................................ 43
Section 11.04. Waiver of Notice; Requirement of Mailed Notice........................................................................................... 43
Section11.05. Destruction of Bonds........................................................................................................................................... 43
Section 11.06. Severability of Invalid Provisions...................................................................................................................... 43
Section11.07. Notices................................................................................................................................................................... 44
Section 11.08. Evidence of Rights of Owner.............................................................................................................................. 44
Section11.09. Disqualified Bonds............................................................................................................................................... 45
Section 11.10. Money Held for Particular Bonds...................................................................................................................... 45
Section 11.11. Waiver of Personal Liability ............................................................................................................................... 45
Section 11.12. Successor Is Deemed Included in All References to Predecessor................................................................. 45
Section 11.13. Execution in Several Counterparts.................................................................................................................... 45
Section11.14. Governing Law..................................................................................................................................................... 45
EXHIBIT A FORM OF BOND
EXHIBIT B FORM OF PURCHASER LETTER
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, made and entered into and dated as of February 1, 2024,
is by and between the TUSTIN PUBLIC FINANCING AUTHORITY, a joint exercise of powers
entity duly organized and existing under and by virtue of the laws of the State of California (the
"Authority"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national
banking association organized and existing under the laws of the United States of America with
a corporate trust office in Los Angeles, California, being qualified to accept and administer the
trusts hereby created (the "Trustee");
WITNESSETH:
WHEREAS, the City of Tustin (the "City") and the former Tustin Community
Redevelopment Agency (the "Agency") have heretofore entered into a joint exercise of powers
agreement (the "Agreement") establishing the Authority for the purpose, among others, of
issuing its bonds to be used to provide financial assistance to the City;
WHEREAS, the Successor Agency to the Tustin Community Redevelopment Agency
succeeded to the Agency and the Agreement remains in effect so long as obligations of Agency
remain outstanding, ending in 2040;
WHEREAS, the Authority is a joint powers authority duly organized and existing under
and pursuant to that certain Joint Exercise of Powers Agreement, dated May 1, 1995, by and
between the City of Tustin (the "City") and the former Tustin Community Redevelopment
Agency;
WHEREAS, under Article 4 (commencing with section 6584) of Chapter 5 of Division 7
of Title 1 of the California Government Code (the "Bond Law") the Authority is authorized to
borrow money for the purpose of financing the acquisition of bonds, notes and other obligations
of, or for the purpose of making loans to, public entities including the City, and to provide
financing for public capital improvements of public entities including the City;
WHEREAS, the City has determined that, due to prevailing financial market conditions,
it is in the best interests of the City to finance the acquisition and construction of certain
improvements and facilities (the "2024 Project") which constitute part of the City's municipal
water enterprise (the "Enterprise");
WHEREAS, for the purpose of raising funds necessary to provide such financial
assistance to the City, the Authority proposes to authorize the issuance of its revenue bonds
under the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of
Title 1 of the California Government Code (the "Act"), designated as the Tustin Public
Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), all
pursuant to and secured by this Indenture of Trust;
WHEREAS, in order to provide for the repayment of the Bonds, the Authority will sell
the 2024 Project to the City pursuant to an installment sale agreement, under which the City will
agree to make installment payments to the Authority (the "Installment Payments") which will
be calculated to be sufficient to enable the Authority to pay the principal of and interest on the
Bonds when due and payable;
WHEREAS, the City's obligation to make Installment Payments will be payable from a
pledge of the net revenues of the Enterprise, in all respects, junior, subordinate and inferior to
the City's obligations with respect to the payment of debt service on its City of Tustin (Orange
County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange
County, California) Taxable Water Refunding Revenue Bonds, Series 2020;
WHEREAS, the Authority has determined that 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 secured and to secure the payment of the principal thereof and
interest thereon, the Authority has authorized the execution and delivery of this Indenture; and
WHEREAS, the Authority hereby certifies that all acts and proceedings required by law
necessary to make the Bonds, when executed by the Authority, authenticated and delivered by
the Trustee, and duly issued, the valid, binding and legal special obligations of the Authority,
and to constitute this Indenture a valid and binding agreement for the uses and purposes herein
set forth in accordance with its terms, have been done and taken, and the execution and
delivery of this 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 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 issued and received, and in
consideration of the premises and of the mutual covenants herein contained and of the purchase
and acceptance of the Bonds by the owners thereof, and for other valuable 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:
-2-
ARTICLE I
DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this
Section 1.01 shall, for all purposes of this Indenture and of any indenture supplemental hereto
and of any certificate, opinion or other document herein mentioned, have the meanings herein
specified, to be equally applicable to both the singular and plural forms of any of the terms
herein defined. In addition, all capitalized terms used herein and not otherwise defined in this
Section 1.01 shall have the respective meanings given such terms in the Installment Sale
Agreement.
"Acquisition and Construction" means, with respect to any portion of the 2024 Project, the
acquisition, construction, improvement, equipping, renovation, remodeling or reconstruction
thereof.
"Act" means Articles 1 through 4 (commencing with section 6500) of Chapter 5, Division
7, Title 1 of the California Government Code, as in existence on the Closing Date or as thereafter
amended from time to time.
"Additional Payments" means the payments so designated and required to be paid by the
City pursuant to Sections 4.9 and 4.10 of the Installment Sale Agreement.
"Annual Debt Service" means, for each Fiscal Year, the aggregate amount (without
duplication) of principal and interest with respect to the Installment Payments and all Parity
Obligations.
"Authority" means the Tustin Public Financing Authority, a joint powers authority duly
organized and existing under the laws of the State.
"Authorized Representative" means: (a) with respect to the Authority, its Chairman, Vice
Chairman, Executive Director, Assistant Executive Director, Treasurer or any other person
designated as an Authorized Representative of the Authority by a Written Certificate of the
Authority signed by its Chairman and filed with the City and the Trustee; and (b) with respect
to the City, its Mayor, City Manager, Treasurer, Finance Director or any other person
designated as an Authorized Representative of the City by a Written Certificate of the City
signed by its Mayor and filed with the Trustee.
"Board of Directors" means the governing body of the Authority.
"Bond Counsel" means (a) Quint & Thimmig LLP, or (b) any other attorney or firm of
attorneys appointed by or acceptable to the Authority of nationally recognized experience in the
issuance of obligations the interest on which is excludable from gross income for federal income
tax purposes under the Code.
"Bond Fund" means the fund by that name established and held by the Trustee pursuant
to Section 5.01.
"Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, constituting Article
4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California
Government Code, as in existence on the Closing Date or as thereafter amended from time to
time.
-3-
"Bond Year" means each twelve-month period extending from April 2 in one calendar
year to April 1 of the succeeding calendar year, both dates inclusive; provided that the first
Bond Year shall begin on the Closing Date and shall end on April 1, 2025.
"Bonds" means the $4,125,000 aggregate principal amount of Tustin Public Financing
Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), authorized by and at any time
Outstanding pursuant to the Bond Law and this Indenture.
"Business Day" means any day, other than a Saturday or Sunday or a day on which
commercial banks in New York, New York, Los Angeles, California, or San Francisco,
California, or the Trust Office, are required or authorized by law to close or a day on which the
New York Stock Exchange is closed.
"City" means the City of Tustin, a municipal corporation and general law city organized
under the laws of the State.
"Closing Date" means February 14, 2024, being the date of delivery of the Bonds to the
Original Purchaser.
"Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of
the Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the Bonds, together with applicable proposed,
temporary and final regulations promulgated under the Code.
"Completion Date" means, with respect to any component of the 2024 Project, the date on
which the Authority files a Written Certificate with the City and the Trustee stating that the
Acquisition and Construction of such component of the 2024 Project has been completed
pursuant to Article III.
"Costs of Issuance" means all expenses incurred in connection with the authorization,
issuance, sale and delivery of the Bonds and the application of the proceeds 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, initial fees and expenses of the Trustee
and its counsel, compensation to any financial consultants or underwriters, legal fees and
expenses, filing and recording costs, costs of preparation and reproduction of documents and
costs of printing.
"Costs of Issuance Fund" means the fund by that name established and held by the
Trustee pursuant to Section 3.03.
"County" means the County of Orange, a public body corporate and politic organized
under the laws of the State.
"Date of Taxability" means the date from and for which interest on the Bonds is subject to
federal income taxation as a result of a Determination of Taxability.
"Debt Service" means, during any period of computation, the amount obtained for such
period by totaling the following amounts:
(a) The principal components of the Installment Payments and of payments with respect
to Parity Obligations coming due and payable by their terms in such period; and
-4-
(b) The interest component of the Installment Payments and of payments with respect to
Parity Obligations which would be due during such period on the aggregate principal amount
of the Installment Payments and payments with respect to Parity Obligations that would be
unpaid in such period if the Installment Payments and payments with respect to Parity
Obligations are retired as scheduled, but deducting and excluding from such aggregate amount
the amount of Installment Payments and payments with respect to Parity Obligations no longer
unpaid.
"Default Rate" means the rate of 7.820% per annum.
"Defeasance Obligations" means (a) cash, (b) direct non -callable obligations of the United
States of America, (c) securities fully and unconditionally guaranteed as to the timely payment
of principal and interest by the United States of America, to which direct obligation or
guarantee the full faith and credit of the United States of America has been pledged, (d) Refcorp
interest strips, (e) CATS, TIGRS, STRPS, and (f) defeased municipal bonds rated AAA by S&P or
Aaa by Moody's (or any combination of the foregoing).
"Determination of Taxability" means any determination, decision, or decree made by the
Commissioner or any District Director of the Internal Revenue Service, or by any court of
competent jurisdiction, that as a result of any actions or omissions of the Authority or the City
with respect to the Bonds the interest payable on the Bonds is includable in the gross income for
federal income tax purposes of the Owner, provided, however, that no such Determination of
Taxability shall be deemed to have occurred if the Authority and the City are contesting such
determination in good faith and is diligently proceeding to prosecute such contest until the
earliest of (a) a final determination from which no appeal may be taken with respect to such
determination, or (b) abandonment of such appeal by the Authority and the City.
"Enterprise" means any and all facilities, properties and improvements at any time
controlled or operated by the City used or pertaining to the supply of water, consisting of the
entire water production and distribution enterprise of the City, including all additions,
extensions, expansions, improvements and betterments thereto and equippings thereof and any
necessary lands, rights of way and other real and personal property useful in connection
therewith, but exclusive of any portion of the existing system not required for the continued
operation thereof; provided, however, that to the extent the City is not the sole owner of an
asset or property, or lessee thereof from the City, only the City's ownership interest in such
asset or property or leasehold interest therein from the City, shall be considered a part of the
Enterprise.
"Event of Default" means, (a) with respect to the Bonds, any of the events described in
Section 7.01 of this Indenture, and (b) with respect to the Installment Sale Agreement, any of the
events described in Section 8.1 of the Installment Sale Agreement.
"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 that is acquired
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) that is acquired in accordance with applicable
regulations under the Code, (iii) the investment is a United States Treasury Security --State and
-5-
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.
"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.
"Government Obligations" means, with respect to the Bonds: (a) direct obligations (other
than an obligation subject to variation in principal repayment) of the United States of America
("U.S. Treasury Obligations"), (b) obligations fully and unconditionally guaranteed as to timely
payment of principal and interest by the United States of America, (c) obligations fully and
unconditionally guaranteed as to timely payment of principal and interest by any agency or
instrumentality of the United States of America when such obligations are backed by the full
faith and credit of the United States of America, or (d) evidence of ownership of proportionate
interests in future interest and principal payments on obligations described above held by a
bank or trust company as custodian, under which the owner of the investment is the real party
in interest and has the right to proceed directly and individually against the obligator and the
underlying government obligations are not available to any person claiming through the
custodian or to whom the custodian may be obligated.
"Gross Revenues" means all gross charges received for, and all other gross income and
revenues derived by the City from, the operation of the Enterprise or otherwise arising from the
Enterprise, including but not limited to (a) all fees and charges received by the City for the
services of the Enterprise, (b) charges received by the City for water connections, (c) capital
charges, and (d) all receipts derived from the investment of such income or revenues, but
excluding customer deposits. "Gross Revenues" also include amounts transferred from the Rate
Stabilization Fund to the Bond Fund during any Fiscal Year in accordance with Section 4.11 of
the Installment Sale Agreement. "Gross Revenues" do not include amounts which are
transferred from the Rate Stabilization Fund pursuant to Section 4.11 of the Installment Sale
Agreement that are in excess of twenty percent (20%) of the amounts payable under paragraphs
(b) and (c) of Section 4,.7 of the Installment Sale Agreement in such Fiscal Year.
"Indenture" means this Indenture of Trust, as originally executed or as it may from time
to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the
provisions hereof.
"Independent Accountant" means any certified public accountant or firm of certified
public accountants, appointed and paid by the Authority or the City, and who, or each of whom
(a) is in fact independent and not under domination of the Authority or the City; (b) does not
have any substantial interest, direct or indirect, in the Authority or the City; and (c) is not
connected with the Authority or the City as an officer or employee of the Authority 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.
"Independent Counsel" means an attorney duly admitted to the practice of law before the
highest court of the state in which such attorney maintains an office and who is not an
employee of the Authority, the Trustee or the City.
1.1
"Installment Payment Date" means the twenty-fifth (25th) day of each March and
September during the Term of the Installment Sale Agreement, commencing September 25,
2024.
"Installment Payments" means the amounts payable by the City pursuant to Section 4.4 of
the Installment Sale Agreement, including any prepayments thereof pursuant to Article IX of
the Installment Sale Agreement.
"Installment Sale Agreement" means that certain Installment Sale Agreement by and
between the Authority as seller and the City as purchaser of the 2024 Project, dated as of
February 1, 2024, as originally executed and as it may from time to time be supplemented,
modified or amended in accordance with the terms thereof and of this Indenture.
"Interest Account" means the account by that name established in the Bond Fund
pursuant to Section 5.02.
"Interest Payment Date" means each April 1 and October 1, commencing October 1, 2024.
"Maintenance and Operation Costs" means (a) the reasonable and necessary costs of
maintaining and operating the Enterprise, calculated based upon accounting principles
consistently applied, including (among other things) the reasonable expenses of management,
personnel, services, equipment, repair and other expenses necessary to maintain and preserve
the Enterprise in good repair and working order, and reasonable amounts for administration,
overhead, insurance, taxes (if any) and other similar costs, and (b) all costs of water purchased
or otherwise acquired for delivery by the Enterprise (including any interim or renewed
arrangement therefor), but excluding in all cases depreciation and obsolescence charges or
reserves therefor and amortization of intangibles or other bookkeeping entries of a similar
nature.
"Material Adverse Effect" means an event or occurrence which adversely affects in a
material manner (a) the ability of the City to carry out its business in the manner conducted as
of the date of the Installment Sale Agreement or to meet or perform its obligations under the
Installment Sale Agreement on a timely basis, (b) the validity or enforceability of the Installment
Sale Agreement, or (c) the exclusion of the interest component of the Installment Payments from
gross income for federal income tax purposes or the exemption of such interest for state income
tax purposes.
"Material Litigation" means any action, suit, proceeding, inquiry or investigation against
the Authority or the City in any court or before any arbitrator of any kind or before or by any
Governmental Authority, (i) if determined adversely to the City, may have a Material Adverse
Effect, (ii) seek to restrain or enjoin any of the transactions contemplated by the Installment Sale
Agreement, or (iii) may adversely affect (A) the exclusion of the interest component of the
Installment Payments from gross income for federal income tax purposes or the exemption of
such interest for state income tax purposes or (B) the ability of the City to perform its
obligations under the Installment Sale Agreement.
"Maximum Aggregate Annual Debt Service" means, as of the date of calculation, the
maximum amount of debt service for the current or any future Bond Year with respect to the
Senior Obligations, the Installment Sale Agreement and all Parity Obligations outstanding.
"Moody's" means Moody's Investors Service, its successors and assigns.
-7-
"Net Revenues" means, for any period, an amount equal to all of the Gross Revenues
received during such period minus the amount required to pay all Maintenance and Operation
Costs becoming payable during such period.
"Original Purchaser" means Capital One Public Funding, LLC, the first purchaser of the
Bonds upon their authentication and delivery by the Trustee on the Closing Date.
"Outstanding," when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 11.10) all Bonds theretofore, or thereupon being,
authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore
canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to
which all liability of the Authority shall have been discharged in accordance with Section 10.02,
including Bonds (or portions thereof) described in Section 11.10; and (c) Bonds for the transfer
or exchange of or in lieu of or in substitution for which other Bonds shall have been
authenticated and delivered by the Trustee pursuant to this Indenture.
"Owner," whenever used herein with respect to a Bond, means the person in whose
name the ownership of such Bond is registered on the Registration Books.
"Parity Obligations" means any leases, loan agreements, installment sale agreements,
bonds, notes, interest rate swap agreements, currency swap agreements, forward payment
agreements, futures, or contracts providing for payments based on levels of, or changes in,
interest rates, currency exchange rates, stock or other indices, or contracts to exchange cash
flows or a series of payments, or contracts, including, without limitation, interest rate floors or
caps, options, puts or calls to hedge payment, currency, rate, spread, or similar exposure (except
termination payments relating thereto which shall be payable on a subordinate basis) or other
obligations of the City payable from and secured by a pledge of and lien upon any of the
Pledged Net Revenues on a parity with the Installment Payments, entered into or issued
pursuant to and in accordance with Section 4.8(b) of the Installment Sale Agreement.
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein,
but only to the extent that the same are acquired at Fair Market Value (provided the Trustee
may rely upon the Request of the Authority directing investment under the Indenture as a
determination that such investment is a Permitted Investment):
(a) Government Obligations.
(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 of America (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. U.S. Farmers Home Administration (FmHA)
Certificates of Beneficial Ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures (FHA)
0
5. General Services Administration
Participation Certificates
6. Government National Mortgage Association (GNMA or Ginnie Mae)
GNMA—guaranteed mortgage -backed bonds
GNMA—guaranteed pass -through obligations
7. U.S. Maritime Administration
Guaranteed Title XI financing
8. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed debentures
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 federal agencies which are not backed by the full faith and credit of the
United States of America (stripped securities are only permitted if they have been stripped by
the agency itself):
1. Federal Home Loan Bank System
Senior debt obligations
2. Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac)
Participation Certificate
Senior debt obligations
3. Federal National Mortgage Association (FNMA or Fannie Mae)
Mortgage -backed securities and senior debt obligations
4. Student Loan Marketing Association (SLMA or Sallie Mae)
Senior debt obligations
5. Resolution Funding Corp. (REFCORP) obligations
6. Farm Credit System
Consolidated systemwide bonds and notes
(d) Money market funds registered under the Federal Investment Company Act of 1940,
whose shares are registered under the Federal Securities Act of 1933, which invest solely in
Federal Securities, if rated by S&P, having a rating at the time of investment of AAAm-G; and if
rated by Moody's having a rating at the time of investment of Aaa, including such funds for
which the Trustee, its affiliates or subsidiaries provide investment advisory or other
management services or for which the Trustee or an affiliate of the Trustee serves as investment
administrator, shareholder servicing agent, and / or custodian or subcustodian, notwithstanding
that (i) the Trustee or an affiliate of the Trustee receives fees from funds for services rendered,
(ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are
separate from the fees received from such funds, and (iii) services performed for such funds and
pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee
or an affiliate of the Trustee.
W2
(e) Certificates of deposit secured at all times by collateral described in (a) and/or (b)
above. Such certificates must be issued by commercial banks or savings and loan associations
(including the Trustee or its affiliates). The collateral must be held by a third party and the
Bondholders must have a perfected first security interest in the collateral.
(f) Certificates of deposit, savings accounts, deposit accounts or money market deposits
which are fully insured by FDIC or secured at all times by collateral described in (a) and / or (b)
above.
(g) Commercial paper rated, at the time of purchase, "Prime-1" by Moody's and "A-1"
or better by S&P.
(h) Federal funds or bankers acceptances with a maximum term of 180 days of any bank
which has an unsecured, uninsured and unguaranteed obligation rating at the time of
investment of "Prime-1" or better by Moody's and "A-1" or better by S&P.
(i) The Local Agency Investment Fund of the State, created pursuant to 16429.1 of the
California Government Code.
(j) The County pooled investment fund.
(k) Municipal obligations rated "A" or higher by S&P.
(1) Other forms of investments that satisfy the City's Statement of Investment Policy as of
the time of investment.
"Plans and Specifications" means, with respect to the 2024 Project or any component
thereof, the plans and specifications relating thereto filed by the City with the Authority
pursuant to Section 3.2 of the Installment Sale Agreement, as such plans and specifications may
be revised from time to time by the City pursuant to Section 3.2 of the Installment Sale
Agreement.
"Pledged Net Revenues" means, for any period, an amount equal to all of the Net
Revenues received during such period minus the amount required to be paid with respect to
the Senior Obligations during such period.
"Principal Account" means the account by that name established in the Bond Fund
pursuant to Section 5.02.
"Rate Stabilization Fund" means the account by that name established by the City
pursuant to Section 4.11 of the Installment Sale Agreement.
"Record Date" means, with respect to any Interest Payment Date, the fifteenth (15th)
calendar day of the month preceding such Interest Payment Date.
"Registration Books" means the records maintained by the Trustee pursuant to Section
2.05 for the registration and transfer of ownership of the Bonds.
"Revenues" means (a) all amounts received by the Authority or the Trustee pursuant or
with respect to the Installment Sale Agreement, including, without limiting the generality of the
foregoing, all of the Installment Payments (including both timely and delinquent payments, any
late charges, and whether paid from any source) and prepayments, and (b) all interest, profits or
-10-
other income derived from the investment of amounts in any fund or account established
pursuant to this Indenture; but excluding any Additional Payments.
"S&P" means S&P Global Ratings, and its successors.
"Senior Obligations" means, collectively, the 2016 Bonds and the 2020 Bonds.
"Sinking Account" means the account by that name established in the Bond Fund
pursuant to Section 5.02.
"State" means the State of California.
"Subordinate Obligations" means any obligations of the City payable from and secured by
a pledge of and lien upon any of the Pledged Net Revenues subordinate to the City's payment
obligations under the Installment Sale Agreement and any Parity Obligations.
"Supplemental Indenture" means any indenture hereafter duly authorized and entered
into between the Authority and the Trustee, supplementing, modifying or amending this
Indenture; but only if and to the extent that such Supplemental Indenture is specifically
authorized hereunder.
"Taxable Rate" means, from and after the Date of Taxability following a Determination of
Taxability, 6.350% per annum based on a 30-day month and a 360-day year for calculating
interest.
"Tax -Exempt Rate" means 4.820% per annum based on a 30-day month and a 360-day
year for calculating interest.
"Term of the Installment Sale Agreement" means the time during which the Installment
Sale Agreement is in effect, as provided in Section 4.2 of the Installment Sale Agreement.
"Trustee" means The Bank of New York Mellon Trust Company, N.A., a national
banking association organized and existing under the laws of the United States of America, or
its successor, as Trustee hereunder as provided in Section 8.01.
"Trust Office" means the corporate trust office of the Trustee at 700 South Flower Street,
Suite 500, Los Angeles, California 90017-4104, or at such other or additional offices as may be
specified in writing to the Authority and the City, except that with respect to presentation of
Bonds for payment or for registration of transfer and exchange such term shall mean the office
or agency of the Trustee at which, at any particular time, its corporate trust agency business
shall be conducted.
"2016 Bonds" means, the City of Tustin (Orange County, California) 2016 Water
Refunding Revenue Bonds.
"2020 Bonds" means, the City of Tustin (Orange County, California) Taxable Water
Refunding Revenue Bonds, Series 2020.
"2024 Project" means the land, improvements and other property described more fully in
Exhibit B attached to the Installment Sale Agreement and by this reference incorporated herein,
as such description may be amended by the City from time to time pursuant to and in
accordance with Section 3.2 of the Installment Sale Agreement. The precise identification of the
-11-
2024 Project or any component thereof shall be determined by reference to the Plans and
Specifications therefor.
"2024 Project Costs" means, with respect to any 2024 Project, all costs of the Acquisition
and Construction thereof, including but not limited to:
(a) all costs required to be paid to any person under the terms of any agreement for or
relating to the Acquisition and Construction of the 2024 Project;
(b) obligations incurred for labor and materials in connection with the Acquisition and
Construction of the 2024 Project;
(c) the cost of performance or other bonds and any and all types of insurance that may
be necessary or appropriate to have in effect in connection with the Acquisition and
Construction of the 2024 Project;
(d) all costs of engineering and architectural services, including the actual out-of-pocket
costs for test borings, surveys, estimates, plans and specifications and preliminary
investigations therefor, development fees, sales commissions, and for supervising construction,
as well as for the performance of all other duties required by or consequent to the proper
Acquisition and Construction of the 2024 Project;
(e) any sums required to reimburse the Authority or the City for advances made for any
of the above items or for any other costs incurred and for work done which are properly
chargeable to the Acquisition and Construction of the 2024 Project;
(f) all financing costs incurred in connection with the Acquisition and Construction of
the 2024 Project, including but not limited to Costs of Issuance and other costs incurred in
connection with the Installment Sale Agreement and the financing of the 2024 Project; and
(g) the interest components of the Installment Payments during the period of
Acquisition and Construction of the 2024 Project, to the extent not paid from the proceeds of the
Bonds deposited in the Interest Account pursuant to the Indenture.
"2024 Project Fund" means the fund by that name established pursuant to Section 3.04.
"Water Fund" means the City's existing water enterprise fund, established and held by
the City with respect to the Enterprise.
"Written Certificate," "Written Request" and "Written Requisition" of the Authority or the
City mean, respectively, a written certificate, request or requisition signed in the name of the
Authority or the City by its Authorized Representative. Any such instrument and supporting
opinions or representations, if any, may, but need not, be combined in a single instrument with
any other instrument, opinion or representation, and the two or more so combined shall be read
and construed as a single instrument.
Section 1.02. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include
the plural and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and shall be deemed to include the neuter, masculine or feminine gender, as
appropriate.
-12-
(b) Headings of articles and sections herein and the table of contents hereof are solely for
convenience of reference, do not constitute a part hereof and shall not affect the meaning,
construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Indenture; the words "herein," "hereof,"
"hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or subdivision hereof.
-13-
ARTICLE 11
THE BONDS
Section 2.01. Authorization of Bonds. The Authority hereby authorizes the issuance
hereunder of the Bonds, which shall constitute special obligations of the Authority, for the
purpose of providing funds to enable the City to refinance the Acquisition and Construction of
the 2024 Project. The Bonds are hereby designated the "Tustin Public Financing Authority
Water Revenue Bonds, Series 2024 (Subordinate Lien)." The principal amount of Bonds initially
issued and Outstanding under this Indenture shall equal four million one hundred twenty-five
thousand dollars ($4,125,000). This Indenture constitutes a continuing agreement with the
Trustee and the Owner from time to time of the Bonds to secure the full payment of the
principal of and interest on all the Bonds, subject to the covenants, provisions and conditions
herein contained.
Section 2.02. Terms of the Bonds. The Bonds shall be issued as one fully registered bond,
registered initially in the name of the Original Purchaser, in the principal amount of four
million one hundred twenty-five thousand dollars ($4,125,000, shall bear interest at the Tax -
Exempt Rate and shall mature on April 1, 2044; provided, however, that so long as an Event of
Default shall have occurred and is continuing, the interest rate may, at the option of the Owner,
be increased to the Default Rate, as provided in a written notice to the Trustee, the Authority
and the City; provided further, however, that from and after the Date of Taxability following a
Determination of Taxability, the interest rate may, at the option of the Owner, be increased to
the Taxable Rate.
Registered ownership of the Bonds, or any portion thereof, may not thereafter be
transferred except as set forth herein.
Interest on the Bonds shall be payable semi-annually calculated based on a 360-day year
of twelve (12) thirty -day months on each Interest Payment Date to the person whose name
appears on the Registration Books as the Owner thereof as of the Record Date immediately
preceding each such Interest Payment Date The Trustee shall pay principal of and interest on
the Bonds when due by wire transfer (or other form of electronic payment) in immediately
available funds to the Owner as of the Record Date in accordance with such wire transfer
instructions as shall be filed by the Owner with the Trustee from time to time, or, with the
Owner's consent, by another commercially reasonable method of payment. Payments of
principal of the Bonds shall be made without the requirement for presentation and surrender of
the Bonds by the Owner, provided that principal of the Bonds that is payable at final maturity
shall be made only upon presentation and surrender thereof at the Trust Office. Principal of and
interest on the Bonds shall be payable in lawful money of the United States of America.
Each Bond shall be dated the Closing Date and shall bear interest from the Interest
Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated
after a Record Date and on or before the following Interest Payment Date, in which event it
shall bear interest from such Interest Payment Date, or (b) unless it is authenticated on or before
September 15, 2024, in which event it shall bear interest from the Closing Date; provided,
however, that if, as of the date of authentication of any Bond, interest thereon is in default, such
Bond shall bear interest from the Interest Payment Date to which interest has previously been
paid or made available for payment thereon.
-14-
The Bonds shall not be (a) assigned a rating by any rating agency, (b) registered with
The Depository Trust Company or any other securities depository, or (c) issued pursuant to any
type of offering document or official statement.
Section 2.03. Form of Bonds. The Bonds, the Trustee's Certificate of Authentication, and
the Assignment to appear thereon, shall be substantially in the form set forth in Exhibit A,
which is attached hereto and by this reference incorporated herein, with such variations,
omissions and insertions, as permitted or required by this Indenture.
Section 2.04. Execution of Bonds. The Bonds shall be executed in the name and on behalf
of the Authority with the facsimile or manual signature of the Chairperson of the Board of
Directors and attested by the facsimile or manual signature of the Secretary of the Board of
Directors. The Bonds shall then be delivered to the Trustee for authentication by it. In case any
of the officers who shall have signed or attested any of the Bonds shall cease to be such officer
or officers of the Authority before the Bonds so signed or attested 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 those who signed and attested the same had
continued to be such officers of the Authority and also any Bond may be signed and attested on
behalf of the Authority by such persons as at the actual date of execution of such Bond shall be
the proper officers of the Authority although at the nominal date of such Bond any such person
shall not have been such officer of the Authority.
Only such of the Bonds as shall bear thereon a certificate of authentication substantially
in the form set forth in Exhibit A attached hereto, manually executed by 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 executed, authenticated and delivered hereunder and are entitled to the benefits of this
Indenture.
Section 2.05. Transfer of Bonds.
(a) The Bonds may, in accordance with their terms, be transferred, upon the Registration
Books, by the person in whose name it is registered, in person or by a duly authorized attorney
of such person, upon surrender of such Bond to the Trustee at its Trust Office for cancellation,
accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee,
duly executed. Whenever any Bonds shall be surrendered for registration of transfer, the
Authority shall execute and the Trustee shall deliver a new Bond or Bonds, of like interest rate,
maturity and principal amount. The Trustee shall collect from the Owner any tax or other
governmental charge on the transfer of any Bonds pursuant to this Section 2.05. The cost of
printing Bonds and any services rendered or expenses incurred by the Trustee in connection
with any transfer shall be paid by the City.
The Trustee may refuse to transfer, under the provisions of this Section 2.03, either (a)
any Bonds during the period fifteen (15) days prior to the date established by the Trustee for the
selection of Bonds for redemption, or (b) any Bonds selected by the Trustee for redemption.
(b) Ownership of the Bonds may be transferred in whole only and only to a (i) an
affiliate of the Owner or (ii) a bank, trust, custodian, insurance company or other financial
institution or an affiliate thereof, in each case that executes and delivers to the Trustee a
representation letter in substantially the form attached hereto as Exhibit B.
-15-
Nothing herein limits the right of the Owner to sell or assign participation interests in
the Bonds, in minimum amounts of $250,000, to one or more entities listed in (i) or (ii), provided
that any participation, custodial or similar agreement under which multiple ownership interests
in the Bonds are created shall provide the method by which the owners of such interests shall
establish the rights and duties of a single entity, owner, servicer or other fiduciary or agent
acting on behalf of all of such owners (a loan servicer) to act on their behalf with respect to the
rights and interests of the Owner, including with respect to the exercise of rights and remedies
of the Owner on behalf of such owners upon the occurrence of an event of default under this
Indenture.
Prior to any transfer of the Bonds, the transferor shall provide or cause to be provided to
the Trustee all information necessary to allow the Trustee to comply with any applicable tax
reporting obligations, including without limitation any cost basis reporting obligations under
section 6045 of the Code, as amended. The Trustee shall conclusively rely on the information
provided to it and shall have no responsibility to verify or ensure the accuracy of such
information.
Section 2.06. Exchange of Bonds. Any Bond may be exchanged at the Trust Office for a
like aggregate principal amount of Bonds of other authorized denominations and of like
maturity. The Trustee shall require the Owner requesting such exchange to pay any tax or other
governmental charge required to be paid with respect to such exchange.
Section 2.07. Registration Books. The Trustee will keep or cause to be kept, at the Trust
Office, sufficient records for the registration and transfer of ownership of the Bonds, which shall
at all reasonable times with reasonable prior notice be open to inspection during regular
business hours by the Authority, the City and the Owner; and, upon presentation for such
purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or
transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as
hereinbefore provided.
Section 2.08. Temporary Bonds. The Bonds may be issued in temporary form
exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be
printed, lithographed or typewritten, shall be of such denominations as may be determined by
the Authority, shall be in fully registered form without coupons 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 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 deliver definitive Bonds as promptly thereafter as practicable, and thereupon
the temporary Bonds may be surrendered, for cancellation, at the Trust Office and the Trustee
shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate
principal amount of definitive Bonds of authorized denominations. Until so exchanged, the
temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
Section 2.09. 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 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 and
delivered to, or upon the order of, the Authority. If any Bond shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence
be satisfactory to it and indemnity satisfactory to it shall be given, the Authority, at the expense
of the Owner of such lost, destroyed or stolen Bond, shall execute, and the Trustee shall
-16-
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, instead of issuing
a substitute Bond, the Trustee may pay the same without surrender thereof). The Authority may
require payment by the Owner of a sum not exceeding the actual cost of preparing each new
Bond issued under this Section 2.08 and of the expenses which may be incurred by the City, the
Authority and the Trustee in the premises. Any Bond issued under the provisions of this
Section 2.08 in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original
additional contractual obligation on the part of the Authority whether or not the Bond so
alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be
entitled to the benefits of this Indenture with all other Bonds secured by this Indenture.
-17-
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
Section 3.01. Issuance of the Bonds. At any time after the execution of this Indenture, the
Authority may execute and the Trustee shall authenticate and, upon the Written Request of the
Authority, deliver Bonds in the principal amount of four million one hundred twenty-five
thousand dollars ($4,125,000).
Section 3.02. Application of Proceeds of the Bonds. The proceeds received from the sale
of the Bonds ($4,125,000.00), being the principal amount of the Bonds, shall be deposited in trust
with the Trustee or transferred as follows:
(a) The Trustee shall deposit the amount of $125,000.00 in the Costs of Issuance Fund;
and
(b) The Trustee shall deposit the remaining balance of such proceeds ($4,000,000.00) in
the 2024 Project Fund.
The Trustee may, in its discretion, establish a temporary fund or account to facilitate the
foregoing transfers.
Section 3.03. Establishment and Application of Costs of Issuance Fund. The Trustee shall
establish, maintain and hold in trust a separate fund designated as the "Costs of Issuance
Fund." The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee
to pay the Costs of Issuance upon submission of Written Requisitions of the Authority stating
the person to whom payment is to be made, the amount to be paid, the purpose for which the
obligation was incurred and that such payment is a proper charge against said fund. Each
Written 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 May
14, 2024, or upon the earlier Written Request of the Authority, all amounts remaining in the
Costs of Issuance Fund shall be transferred by the Trustee to the City for deposit in the 2024
Project Fund and the Costs of Issuance Fund shall be closed.
Section 3.04. Establishment and Application of 2024 Project Fund.
(a) The Trustee shall establish when required and maintain and hold in trust a separate
fund designated as the "2024 Project Fund." The moneys in the 2024 Project Fund shall be used
by the City to pay the costs of the 2024 Project, including any interest payable during the
construction of such project, if applicable. Amounts deposited in the 2024 Project Fund shall be
used solely for payment of 2024 Project Costs.
(b) Before any payment from the 2024 Project Fund shall be made, the City shall file or
cause to be filed with the Trustee a Written Requisition of the City stating (i) the name of the
person to whom each such payment is due, which may be the City in the case of reimbursement
for costs of the 2024 Project theretofore paid or to be paid by the City; (ii) the respective
amounts to be paid; (iii) the purpose by general classification for which each obligation to be
paid was incurred; and (iv) that each item thereof is a proper charge against the 2024 Project
Fund and has not been previously paid from said Fund. The Trustee may conclusively rely on
the accuracy of each such Written Requisition and shall have no duty or obligation to verify the
content of any Written Requisition.
-18-
(c) When the 2024 Project has been completed, the City shall notify the Trustee of such
completion. Any moneys remaining in the 2024 Project Fund upon such notification shall be
transferred and applied upon the written order of the City to the Bond Fund and the 2024
Project Fund shall be closed. The City shall acquire, construct and install the 2024 Project or
cause the 2024 Project to be acquired, constructed and installed and shall proceed with due
diligence and use its best efforts to cause the construction and / or installation of the 2024 Project
to be completed by February 14, 2027, delays beyond the reasonable control of the City only
excepted.
Section 3.05. Validity of Bonds. The validity of the authorization and issuance of the
Bonds is not dependent on and shall not be affected in any way by any proceedings taken by
the Authority or the Trustee with respect to or in connection with the Installment Sale
Agreement. The recital contained in the Bonds that the same are issued pursuant to the
Constitution and laws of the State shall be conclusive evidence of their validity and of
compliance with the provisions of law in their issuance.
-19-
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Terms of Redemption.
(a) Sinking Account Redemption. The Bonds are subject to mandatory redemption, in part,
from Sinking Account payments set forth in the following schedule on April 1, 2025, and on
April 1 in each year thereafter to and including April 1, 2044, at a redemption price equal to the
principal amount thereof to be redeemed (without premium), together with interest accrued
thereon to the date fixed for redemption; provided, however, that if some but not all of the Bonds
have been redeemed pursuant to subsection (b) below, the total amount of Sinking Account
payments to be made subsequent to such redemption shall be reduced in an amount equal to
the principal amount of the Bonds so redeemed by reducing future Sinking Account payment in
inverse order of payment date.
Redemption Date
(April 1)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
t Maturity.
Principal
Amount
$105,000
135,000
140,000
145,000
155,000
160,000
170,000
180,000
185,000
195,000
205,000
215,000
225,000
235,000
245,000
260,000
270,000
285,000
300,000
315,000
(b) Optional Redemption. The Bonds are subject to redemption, at the option of the City on
or after April 1, 2034, as a whole on any date or in part on any Interest Payment Date, by lot,
from any available source of funds, from prepayments of the Installment Payments made at the
option of the City pursuant to Section 9.2 of the Installment Sale Agreement, at a redemption
price equal to the principal amount of the Bonds to be redeemed, together with accrued interest
thereon to the date fixed for redemption, without premium. Partial redemptions shall be
applied to the principal of the Bond in inverse order of sinking account payment.
Section 4.02. Notice of Redemption. Notice of redemption shall be mailed by first class
mail, postage prepaid, not less than thirty (30) nor more than sixty (60) days before any
redemption date, to the Owner at its address appearing on the Registration Books. Each notice
of redemption shall state the date of the notice, the redemption date, the place or places of
redemption, whether less than all of the Bonds are to be redeemed and, in the case of Bonds to
-20-
be redeemed in part only, the portions of the principal amount thereof to be redeemed. Each
such notice shall also state that on the redemption date there will become due and payable on
each of said Bonds the redemption price thereof, and that from and after such redemption date
interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered.
Neither the failure to receive any notice nor any defect therein shall affect the proceedings for
such redemption or the cessation of accrual of interest from and after the redemption date.
Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for
and on behalf of the Authority.
Notice of any redemption of Bonds (other than redemptions pursuant to Section 4.01(a))
shall either (i) explicitly state that the proposed redemption is conditioned on there being on
deposit in the applicable fund or account on the redemption date sufficient money to pay the
full redemption price of the Bonds to be redeemed, or (ii) be sent only if sufficient money to pay
the full redemption price of the Bonds to be redeemed is on deposit in the applicable fund or
account.
Section 4.03. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in
part only, the Authority shall execute and the Trustee shall authenticate and deliver to the
Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized
denominations equal in aggregate principal amount to the unredeemed portion of the Bonds
surrendered.
Section 4.04. Effect of Redemption. Notice of redemption having been duly given as
aforesaid, and moneys for payment of the redemption price of, together with interest accrued to
the date fixed for redemption on, the Bonds (or portions thereof) so called for redemption being
held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions
thereof) so called for redemption shall become due and payable, interest on the Bonds so called
for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to
any benefit or security under this Indenture, and the Owner of said Bonds shall have no rights
in respect thereof except to receive payment of the redemption price thereof.
All Bonds redeemed pursuant to the provisions of this Article shall be canceled by the
Trustee upon surrender thereof and destroyed.
-21-
ARTICLE V
REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.01. Pledge and Assignment; Bond Fund.
(a) Subject only to the provisions of this Indenture permitting the application thereof for
the purposes and on the terms and conditions set forth herein, all of the Revenues and any other
amounts (including proceeds of the sale of the Bonds) held in any fund or account established
pursuant to this Indenture are hereby pledged to secure the payment of the principal of and
interest on the Bonds in accordance with their terms and the provisions of this Indenture. Said
pledge shall constitute a lien on and security interest in such assets and shall attach, be
perfected and be valid and binding from and after the Closing Date, without any physical
delivery thereof or further act.
(b) The Authority hereby transfers in trust, grants a security interest in and assigns to
the Trustee, for the benefit of the Owner from time to time of the Bonds, all of the Revenues and
all of the rights of the Authority in the Installment Sale Agreement (other than the rights of the
Authority under Sections 4.9, 6.3 and 8.4 thereof). The Trustee shall be entitled to and shall
collect and 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 forthwith be paid by the Authority to the Trustee. The Trustee
also shall be entitled to and shall, subject to the provisions of Article VIII, take all steps, actions
and proceedings which the Trustee determines to be reasonably necessary in its judgment to
enforce, either jointly with the Authority or separately, all of the rights of the Authority and all
of the obligations of the City under the Installment Sale Agreement.
The assignment of the Installment Sale Agreement to the Trustee is solely in its capacity
as Trustee under this Indenture and the duties, powers and liabilities of the Trustee in acting
thereunder shall be subject to the provisions of this Indenture, including, without limitation, the
provisions of Article VIII hereof. The Trustee shall not be responsible for any representations,
warranties, covenants or obligations of the Authority.
(c) All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a
special fund designated as the 'Bond Fund" which the Trustee shall establish, maintain and
hold in trust. All Revenues deposited with the Trustee shall be held, disbursed, allocated and
applied by the Trustee only as provided in this Indenture.
(d) The Trustee shall provide written notice to the City, at least ten Business Days
preceding each Interest Payment Date, of the amount of Revenues, derived from Installment
Payments as required by the Installment Sale Agreement, due to the Trustee on such Interest
Payment Date, taking into account any investment earnings which shall be applied as a credit
against such required payment. If, on the 5th Business Day preceding each Interest Payment
Date, the Trustee is not in receipt of the total amount due to the Trustee on such Interest
Payment Date, the Trustee shall provide a second similar notice to the City and promptly notify
the Director of Finance / City Treasurer by telephone. Notwithstanding the foregoing, the failure
of the Trustee to provide either of such notices shall in no way relieve the City of its obligation
to make all Installment Payments as required by the Installment Sale Agreement.
Section 5.02. Allocation of Revenues. On each date on which principal of or interest on
the Bonds becomes due and payable, the Trustee shall transfer from the Bond Fund and deposit
into the following respective accounts (each of which the Trustee shall establish and maintain
-22-
within the Bond 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) The Trustee shall deposit in the Interest Account an amount required to cause the
aggregate amount on deposit in the Interest Account to be at least equal to the amount of
interest becoming due and payable on such date on all Bonds then Outstanding.
(b) The Trustee shall deposit in the Sinking Account or the Principal Account an amount
required to cause the aggregate amount on deposit in the Sinking Account or the Principal
Account to equal the principal amount or the Sinking Account redemption of the Bonds coming
due and payable on such date.
Section 5.03. Application of Interest Account. All amounts in the Interest Account shall
be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as
it shall become due and payable (including accrued interest on any Bonds purchased or
redeemed prior to maturity pursuant to this Indenture).
Section 5.04. Application of Sinking Account and Principal Account. All amounts in the
Sinking Account and Principal Account shall be used and withdrawn by the Trustee solely to
pay the principal amount or the Sinking Account redemption of the Bonds at their respective
maturity dates.
Section 5.05. 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. Such investments shall be directed by the Authority pursuant to a Written Request
of the Authority filed with the Trustee at least two (2) Business Days in advance of the making
of such investments. In the absence of any such directions from the Authority, the Trustee shall
invest any such moneys in the money market fund set forth in the letter of authorization and
direction executed by the Authority and delivered to the Trustee. If no specific money market
fund had been specified by the Authority, the Trustee shall make a request to the Authority for
investment directions and, if no investment directions are provided, such amount shall be held
in cash, uninvested until specific investment directions are provided by the Authority to the
Trustee. Permitted Investments purchased as an investment of moneys in any fund shall be
deemed to be part of such fund or account. To the extent investments are registrable, such
investments shall be registered in the name of the Trustee.
All interest or gain derived from the investment of amounts in 2024 Project Fund shall
be retained therein. All interest or gain derived from the investment of amounts in Costs of
Issuance Fund shall be retained therein. All interest or gain derived from the investment of
amounts in Interest Account shall be retained therein. All interest or gain derived from the
investment of amounts in any other funds or accounts established hereunder shall be
transferred when received to the Interest Account.
For purposes of acquiring any investments hereunder, the Trustee may commingle
funds held by it hereunder. The Trustee or an affiliate may act as principal or agent in the
acquisition or disposition of any investment and may impose its customary charges therefor.
The Trustee shall incur no liability for losses arising from any investments made pursuant to
this Section 5.05.
Such investments shall be valued by the Trustee not less often than quarterly, at the
market value thereof, exclusive of accrued interest. Deficiencies in the amount on deposit in any
-23-
fund or account resulting from a decline in market value shall be restored no later than the
succeeding valuation date.
The Authority acknowledges that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the Authority the right to receive
brokerage confirmations of security transactions as they occur, the Authority will not receive
such confirmations to the extent permitted by law. The Trustee will furnish the Authority with
account transaction statements as provided herein which shall include detail for all investment
transactions made by the Trustee hereunder.
The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection
with any investments made by the Trustee hereunder.
Section 5.06. Valuation and Disposition of Investments. All moneys held by the Trustee
shall be held in trust, but need not be segregated from other funds unless specifically required
by this Indenture. Except as specifically provided in this Indenture, the Trustee shall not be
liable to pay interest on any moneys received by it, but shall be liable only to account to the
Authority for earnings derived from funds that have been invested.
The Authority covenants that all investments of amounts deposited in any fund or
account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the
Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and
valued (as of the date that valuation is required by this Indenture or the Code) at Fair Market
Value.
-24-
ARTICLE VI
PARTICULAR COVENANTS
Section 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid
the principal of and interest on 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 6.02. No 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 6.02 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 6.03. 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, and reserves the right to issue other obligations for such purposes.
Section 6.04. 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 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 shall at all times, subject to the provisions of Article VIII and to the extent permitted by
law, defend, preserve and protect said pledge and assignment of Revenues and other assets and
all the rights of the Owner under this Indenture against all claims and demands of all persons
whomsoever.
Section 6.05. Accounting Records and Financial Statements. The Trustee shall at all times
keep, or cause to be kept, proper books of record and account, prepared in accordance with
corporate trust industry standards, in which complete and accurate entries shall be made of all
transactions made by it relating to the proceeds of Bonds, the Revenues, the Installment Sale
Agreement 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
business hours and under reasonable circumstances. The Trustee shall deliver a monthly
accounting of all funds and accounts except for any fund or account which has a balance of
$0.00 and has not had any activity since the last reporting date. The Trustee shall establish such
other funds and accounts as it deems necessary to carry out its duties under this Indenture.
Section 6.06. No Additional Obligations. The Authority covenants that no additional
bonds, notes or other indebtedness shall be issued or incurred which are payable out of the
Revenues in whole or in part.
Section 6.07. Tax Covenants.
-25-
(a) No Arbitrage. The Authority shall not take, or permit to be taken by the Trustee, the
City or otherwise, any action with respect to the proceeds of the Bonds which, if such action had
been reasonably expected to have been taken, or had been deliberately and intentionally taken,
on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds"
within the meaning of section 148 of the Code.
(b) Rebate Requirement. The Authority shall cause the City to take any and all actions
necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess
investments earnings, if any, to the federal government, to the extent that such section is
applicable to the Bonds.
(c) Private Activity Bond Limitation. The Authority shall assure that the proceeds of the
Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(c)
of the Code or the private loan financing test of section 141(b) of the Code.
(d) Federal Guarantee Prohibition. The Authority shall not take any action or permit or
suffer any action to be taken if the result of the same would be to cause any of the Bonds to be
"federally guaranteed" within the meaning of section 149(b) of the Code.
(e) Maintenance of Tax Exemption. The Authority shall take any and all actions necessary
to assure the exclusion of interest on the Bonds from the gross income of the Owner to the same
extent as such interest is permitted to be excluded from gross income under the Code as in
effect on the date of issuance of the Bonds.
(f) Small Issuer Exemption from Bank Deductibility Restriction. The Authority hereby
designates the Bonds for purposes of paragraph (3) of section 265(b) of the Code and represents
that not more than $10,000,000 aggregate principal amount of obligations the interest on which
is excludable (under section 103(a) of the Code) from gross income for federal income tax
purposes (excluding (i) private activity bonds, as defined in section 141 of the Code, except
qualified 501(c)(3) bonds as defined in section 145 of the Code and (ii) current refunding
obligations to the extent the amount of the refunding obligation does not exceed the
outstanding amount of the refunded obligation), has been or will be issued by or on behalf of
the City, including all subordinate entities of the City, during the calendar year 2024.
Section 6.08. Installment Sale Agreement. The Trustee shall promptly collect all amounts
due from the City pursuant to the Installment Sale Agreement. Subject to the provisions of
Article VIII, the Trustee shall enforce, and take all steps, actions and proceedings as directed by
the Owner for the enforcement of all of its rights thereunder as assignee of the Authority and
for the enforcement of all of the obligations of the City under the Installment Sale Agreement.
Section 6.09. Waiver of Laws. The Authority shall not at any time insist upon or plead in
any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law
now or at any time hereafter in force that may affect the covenants and agreements contained in
this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby
expressly waived by the Authority to the extent permitted by law.
Section 6.10. Further Assurances. The Authority will make, execute and deliver any and
all such further indentures, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Indenture and for the
better assuring and confirming unto the Owner of the rights and benefits provided in this
Indenture.
Section 6.11. Continued Existence of the Authority. The Authority will take or cause to
be taken all actions reasonably necessary to continue its existence until such time as the Bonds
-26-
have been paid in full, including but not limited to the addition or substitution of one or more
new members.
-27-
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default. The following events shall be Events of Default
hereunder:
(a) Default in the due and punctual payment of the principal of any Bonds when and as
the same shall become due and payable, whether at maturity as therein expressed, by
acceleration, or otherwise.
(b) Default in the due and punctual payment of any installment of interest on any Bonds
when and as the same shall become due and payable.
(c) Default by the Authority in the observance of any of the other covenants, agreements
or conditions on its part in this Indenture or in the Bonds contained, if such default shall have
continued for a period of thirty (30) days after written notice thereof, specifying such default
and requiring the same to be remedied, shall have been given to the Authority by the Trustee;
provided, however, that if in the reasonable opinion of the Authority the default stated in the
notice can be corrected, but not within such thirty (30) day period, such default shall not
constitute an Event of Default hereunder if the Authority shall commence to cure such default
within such thirty (30) day period and thereafter diligently and in good faith cure such failure
in a reasonable period of time; provided that such additional cure period may not exceed 30
days without the written consent of the Owner.
(d) The occurrence and continuation of an event of default under and as defined in the
Installment Sale Agreement.
Section 7.02. Remedies Upon Event of Default. If any Event of Default shall occur, then,
and in each and every such case during the continuance of such Event of Default, the Trustee
may, and shall at the written direction of the Owner, upon notice in writing to the Authority
and the City, declare the principal of all of the Bonds then Outstanding, and the interest accrued
thereon, to be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in this Indenture or in the Bonds
contained to the contrary notwithstanding.
Any such declaration is subject to the condition that if, at any time after such declaration
and before any judgment or decree for the payment of the moneys due shall have been obtained
or entered, the Authority or the City shall deposit with the Trustee a sum sufficient to pay all
the principal of and installments of interest on the Bonds payment of which is overdue, with
interest on such overdue principal at the rate borne by the respective Bonds to the extent
permitted by law, and the reasonable fees, charges and expenses (including those of its
attorneys) of the Trustee, and any and all other Events of Default known to the Trustee (other
than in the payment of principal of and interest on the Bonds due and payable solely by reason
of such declaration) shall have been made good or cured to the satisfaction of the Trustee or
provision deemed by the Trustee to be adequate shall have been made therefor, then, and in
every such case, the Owner, by written notice to the Authority, the City and the Trustee, or the
Trustee if such declaration was made by the Trustee, may, on behalf of the Owner, rescind and
annul such declaration and its consequences and waive such Event of Default; but no such
rescission and annulment shall extend to or shall affect any subsequent Event of Default, or
shall impair or exhaust any right or power consequent thereon. Nothing herein shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on behalf the Owner any
-28-
plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the
rights of the Owner, or to authorize the Trustee to vote in respect of the claim of the Owner in
any such proceeding without the approval of the Owner.
Section 7.03. Application of Revenues and Other Funds After Default. If an Event of
Default shall occur and be continuing, all Revenues and any other funds then held or thereafter
received by the Trustee under any of the provisions of this Indenture shall be applied by the
Trustee as follows and in the following order:
(a) To the payment of any expenses necessary to protect the interests of the Owner and
payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and
disbursements of its counsel) incurred in and about the performance of its powers and duties
under this Indenture;
(b) To the payment of the principal of and interest then due on the Bonds (upon
presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment
if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of this
Indenture, as follows:
First: To the payment to the persons entitled thereto of all installments of interest
then due in the order of the maturity of such installments, and, if the amount available
shall not be sufficient to pay in full any installment or installments maturing on the same
date, then to the payment thereof ratably, according to the amounts due thereon, to the
persons entitled thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal of
any Bonds which shall have become due, whether at maturity or by acceleration, with
interest on the overdue principal at the rate borne by the respective Bonds (to the extent
permitted by law), and, if the amount available shall not be sufficient to pay in full all
the Bonds, together with such interest, then to the payment thereof ratably, according to
the amounts of principal due on such date to the persons entitled thereto, without any
discrimination or preference.
Section 7.04. Trustee to Represent Bond Owner. The Trustee is hereby irrevocably
appointed (and the successive respective Owners of the Bonds, by taking and holding the same,
shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful
attorney -in -fact of the Owner for the purpose of exercising and prosecuting on their behalf such
rights and remedies as may be available to such Owner under the provisions of the Bonds, this
Indenture and applicable provisions of any law. Upon the occurrence and continuance of an
Event of Default or other occasion giving rise to a right in the Trustee to represent the Owner,
the Trustee in its discretion may, and upon the written request of the Owner, and upon being
indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights
of such Owner by such appropriate action, suit, mandamus or other proceedings as it shall
deem most effectual to protect and enforce any such right, at law or in equity, either for the
specific performance of any covenant or agreement contained herein, or in aid of the execution
of any power herein granted, or for the enforcement of any other appropriate legal or equitable
right or remedy vested in the Trustee or in the Owner under the Bonds, this Indenture or any
other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of
right, to the appointment of a receiver of the Revenues and other assets pledged under this
Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or
otherwise may be prosecuted and enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or
-29-
proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit
and protection of the Owner, subject to the provisions of this Indenture.
Section 7.05. Owner Direction of Proceedings. Anything in this Indenture to the contrary
notwithstanding, the Owner shall have the right, by an instrument or concurrent instruments in
writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its
reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by
the Trustee hereunder, provided that such direction shall not be otherwise than in accordance
with law and the provisions of this Indenture, and that the Trustee shall have the right to
decline to follow any such direction which would expose it to liability.
Section 7.06. Limitation on Owner's Right to Sue. Notwithstanding any other provision
hereof, the Owner shall have no right to institute any suit, action or proceeding at law or in
equity, for the protection or enforcement of any right or remedy under this Indenture, the
Installment Sale Agreement or any other applicable law with respect to such Bonds, unless (a)
the Owner shall have given to the Trustee written notice of the occurrence of an Event of
Default; (b) the Owner shall have made written request upon the Trustee to exercise the powers
hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) the
Owner shall have tendered to the Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request; (d) the Trustee shall have failed to
comply with such request for a period of sixty (60) days after such written request shall have
been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) no
direction inconsistent with such written request shall have been given to the Trustee during
such sixty (60) day period by the Owner.
Section 7.07. Absolute Obligation of Authority. Nothing in Section 7.06 or in any other
provision of this Indenture or in the Bonds contained shall affect or impair the obligation of the
Authority, which is absolute and unconditional, to pay the principal of and interest on the
Bonds to the Owner at its date of maturity, but only out of the Revenues and other assets herein
pledged therefor, or affect or impair the right of the Owner, which is also absolute and
unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.
Section 7.08. Termination of Proceedings. In case any proceedings taken by the Trustee
or the Owner on account of any Event of Default shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Trustee or the Owner, then in every
such case the Authority, the Trustee and the Owner, subject to any determination in such
proceedings, shall be restored to their former positions and rights hereunder, severally and
respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the
Owner shall continue as though no such proceedings had been taken.
Section 7.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee or to the Owner is intended to be exclusive of any other remedy or remedies, and
each and every such remedy, to the extent permitted by law, shall be cumulative and in
addition to any other remedy given hereunder or now or hereafter existing at law or in equity
or otherwise.
Section 7.10. No Waiver of Default. No delay or omission of the Trustee or of the Owner
to exercise any right or power arising upon the occurrence of any Event of Default shall impair
any such right or power or shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Indenture to the Trustee or the
Owner may be exercised from time to time and as often as may be deemed expedient.
-30-
Section 7.11. Parties Interested Herein. Nothing in this Indenture expressed or implied is
intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City, the Authority or the Trustee, their officers, employees and agents, and the Owner any
right, remedy or claim under or by reason of this Indenture, or any covenant, condition or
stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture
contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the
City, the Authority or the Trustee, their officers, employees and agents, and the Owner.
-31-
ARTICLE VIII
THE TRUSTEE
Section 8.01. Appointment of Trustee. The Bank of New York Mellon Trust Company,
N.A., a national banking association 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 it will maintain a
Trustee having a corporate trust office in the State, with (or if a member of a bank holding
company system, its parent holding company shall have) a combined capital and surplus of at
least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or
State authority, so long as any Bonds are Outstanding. If such national banking association,
bank or trust company publishes a report of condition at least annually pursuant to law or to
the requirements of any supervising or examining authority above referred to, then for the
purpose of this Section 8.01 the combined capital and surplus of such national banking
association, bank 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 maturity
amount on the Bonds when duly presented for payment at maturity, and to cancel all Bonds
upon payment thereof. The Trustee shall keep accurate records of all funds administered by it
and of all Bonds paid and discharged.
Section 8.02. Acceptance of Trustee. 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, prior to the occurrence of an Event of Default and after curing of all
Events of Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of Default hereunder 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 shall use the same degree of care and skill and
diligence in their exercise, as a prudent person would use in the conduct of its own affairs.
(b) The Trustee may execute any of the trusts or powers hereof and perform the duties
required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to
advice of counsel concerning all matters of trust and its duty hereunder. The Trustee shall not
be responsible for any willful misconduct or negligence on the part of any agent, receiver or
attorney appointed with due care by it hereunder. The Trustee may conclusively rely upon an
opinion of counsel as full and complete protection for any action taken or suffered by it
hereunder.
(c) The Trustee shall not be responsible for any recital herein, 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 the Trustee shall
not be bound to ascertain or inquire as to the observance or performance of any covenants,
conditions or agreements on the part of the Authority hereunder.
(d) Except as provided in Section 3.02, the Trustee shall not be accountable for the use of
any proceeds of sale of the Bonds delivered hereunder. The Trustee may become the Owner of
secured hereby with the same rights which it would have if not the Trustee; may acquire and
-32-
dispose of other bonds or evidences of indebtedness of the Authority with the same rights it
would have if it were not the Trustee.
(e) The Trustee shall be protected in acting, in good faith and without negligence, upon
any notice, request, consent, certificate, order, affidavit, letter, telegram, requisition, facsimile
transmission, electronic mail or other paper or document believed by it to be genuine and
correct and to have been signed or sent 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 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, shall be conclusive and binding
upon all future Owners and upon Bonds issued in exchange therefor or in place thereof. The
Trustee shall not be bound to recognize any person as an Owner or to take any action at his
request unless the ownership of such Bond by such person shall be reflected on the Registration
Books.
(f) As to the existence or non-existence of any fact or as to the sufficiency or validity of
any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Written
Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the
occurrence of an Event of Default hereunder of which the Trustee has been given notice or is
deemed to have notice, as provided in Section 8.02(h) hereof, shall also be at liberty to accept a
Written Certificate of the Authority to the effect that any particular dealing, transaction or
action is necessary or expedient, but may at its discretion secure such further evidence deemed
by it to be necessary or advisable, but shall in no case be bound to secure the same.
(g) The permissive right of the Trustee to do things enumerated in this Indenture 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.
(h) The Trustee shall not be required to take notice or be deemed to have notice of any
Event of Default hereunder, under the Installment Sale Agreement, except failure by the
Authority to make any of the payments to the Trustee required to be made by the Authority
pursuant hereto or failure by the Authority to file with the Trustee any document required by
this Indenture 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, 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.
(i) At any and all reasonable times the Trustee and its duly authorized agents, attorneys,
experts, accountants and representatives, shall have the right (but not any duty) 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 such as may be desired but which is not privileged by
statute or by law.
Q) 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.
(k) 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
-33-
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.
(1) Before taking any action under Article VII hereof or this Article VIII at the request or
direction of the Owner, the Trustee may require payment or reimbursement of its fees and
expenses, including fees and expenses of counsel and receipt of an indemnity bond satisfactory
to it from the Owner to protect it against all liability, except liability which is adjudicated to
have resulted from its own negligence or willful misconduct in connection with any action so
taken. Before being required to take any action, the Trustee may require an opinion of
Independent Counsel acceptable to the Trustee, which opinion shall be made available to the
other parties hereto upon request, which counsel may be counsel to any of the parties hereto, or
a verified certificate of any party hereto, or both, concerning the proposed action. If it does so in
good faith, the Trustee shall be absolutely protected in relying thereon.
(m) 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.
(n) The Trustee shall not be liable for any error of judgment made in good faith by a
responsible officer, unless it shall be provided that the Trustee was negligent in ascertaining the
pertinent facts.
Whether or not therein expressly so provided, every provision of this Indenture, the
Installment Sale Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Article.
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, request, direction,
consent, order, bond, debenture, coupon or other paper or document.
(o) The Trustee shall have no responsibility for or liability in connection with assuring
that all of the procedures or conditions to closing set forth in the contract for purchase of the
Bonds have been met on the closing date or, that all documents required to be delivered on the
Closing Date to the parties are actually delivered, except its own responsibility to receive the
proceeds of the sale, deliver the Bonds or other certificates expressly required to be delivered by
it and its counsel.
The Trustee may assume that parties to the contract for purchase of the Bonds have
waived their rights to receive documents or to require the performance of procedures if the
parties to whom such documents are to be delivered or for whom such procedures are to be
performed do not require delivery or performance on or prior to the Closing Date.
(p) The Trustee shall have no responsibility with respect to any information, statement
or recital in any official statement, offering memorandum or any other disclosure material
prepared or distributed with respect to the Bonds.
(q) The Trustee shall not be considered in breach of or in default in its obligations
hereunder or progress in respect thereto in the event of enforced delay ("unavoidable delay') in
the performance of such obligations due to unforeseeable causes beyond its control and without
its fault or negligence, including, but not limited to, Acts of God or of the public enemy or
terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to
-34-
procure or general sabotage or rationing of labor, equipment, facilities, sources of energy,
material or supplies in the open market, litigation or arbitration involving a party or others
relating to zoning or other governmental action or inaction pertaining to the 2024 Project,
malicious mischief, condemnation, and unusually severe weather or delays of suppliers or
subcontractors due to such causes or any similar even and / or occurrences beyond the control of
the Trustee.
(r) Whenever in the administration of the trusts imposed upon it by this Trust
Agreement the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate of the Authority or City, and such certificate shall be full
warrant to the Trustee for any action taken or suffered in good faith under the provisions of this
Indenture in reliance upon such certificate, but in its discretion the Trustee may, in lieu thereof,
accept other evidence of such matter or may require such additional evidence as it may deem
reasonable.
(s) The Trustee agrees to accept and act upon instructions or directions pursuant to this
Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured
electronic methods, provided, however, that, the Trustee shall have received an incumbency
certificate listing persons designated to give such instructions or directions and containing
specimen signatures of such designated persons, which such incumbency certificate shall be
amended and replaced whenever a person is to be added or deleted from the listing. If the
Authority elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar
electronic method) and the Trustee in its discretion elects to act upon such instructions, the
Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not
be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's
reliance upon and compliance with such instructions notwithstanding such instructions conflict
or are inconsistent with a subsequent written instruction. The Authority agrees to assume all
risks arising out of the use of such electronic methods to submit instructions and directions 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.
(t) The Trustee shall not be liable in connection with the performance of its duties
hereunder, except for its own negligence or willful misconduct.
(u) The Trustee may consult with counsel, including, without limitation, counsel of or to
the Authority or City, with regard to legal questions, and, shall have full and complete
authorization and protection in respect of any action taken or suffered by the Trustee hereunder
in accordance therewith.
Section 8.03. 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, 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 respectively.
Section 8.04. Notice to Owner of Default. If an Event of Default hereunder occurs with
respect to any Bonds of which the Trustee has been given or is deemed to have notice, as
provided in Section 8.02(h) hereof, then the Trustee shall immediately give written notice
thereof, by first-class mail to the Owner, unless such Event of Default shall have been cured
-35-
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 shall, within thirty
(30) days of the Trustee's knowledge thereof, give such notice to the Owner unless the Trustee
in good faith determines that it is in the best interests of the Owner not to give such notice.
Section 8.05. Intervention by Trustee. In any judicial proceeding to which the Authority
is a party which, in the opinion of the Trustee's counsel, has a substantial bearing on the
interests of the Owner, the Trustee may intervene on behalf of the Owner, and subject to Section
8.02(1) hereof, shall do so if requested in writing by the Owner.
Section 8.06. Removal of Trustee. The Owner may at any time, and the Authority may,
so long as no Event of Default shall have occurred and then be continuing, remove the Trustee
initially appointed, and any successor thereto, by an instrument or concurrent instruments in
writing delivered to the Trustee, whereupon the Authority (with the written consent of the
City) or the Owner, as the case may be, shall appoint a successor or successors thereto; provided
that any such successor shall be a bank or trust company meeting the requirements set forth in
Section 8.01.
Section 8.07. 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 by first class mail. Upon receiving such notice of resignation, the
Authority (with the written approval of the City) 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
Owner at its address set forth on the Registration Books.
Section 8.08. Appointment of Successor Trustee. In the event of the removal or
resignation of the Trustee pursuant to Sections 8.06 or 8.07, respectively, and if the Owner shall
not have approved a successor Trustee, then, with the prior written consent of the City, 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 sixty (60) days following the
delivery to the Trustee of the instrument described in Section 8.06 or within sixty (60) days
following the receipt of notice by the Authority pursuant to Section 8.07, 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 8.01 hereof. 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 ninety -day period.
Within sixty (60) days following the appointment of a successor Trustee hereunder, the
former Trustee shall deliver to such successor Trustee (a) all funds and accounts held by the
former Trustee hereunder, and (b) any and all information and documentation as may be
required or reasonably requested by the Authority or such successor Trustee in connection with
the transfer to such successor Trustee of all the duties and functions of the Trustee hereunder.
The Authority shall pay the reasonable costs and expenses of such former Trustee incurred in
connection with such transfer.
Section 8.09. 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 it corporate trust business, provided that
such company shall meet the requirements set forth in Section 8.01, shall be the successor to the
-36-
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 8.10. 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
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 8.11. 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 it 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 which may be desirable or
necessary in connection therewith, it may be necessary that the Trustee appoint an additional
individual or institution as a separate co -trustee. The following provisions of this Section 8.11
are adopted to these ends.
In the event that the Trustee appoints an additional individual or institution as a
separate 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 or co -trustee but only to the extent necessary to enable such separate or co -
trustee to exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate 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,
resign or 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 8.12. Indemnification; Limited Liability of Trustee. The Authority further
covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and
employees, harmless against any loss, expense, including legal fees and expenses, and liabilities
which it may incur arising out of or in the exercise and performance of its powers and duties
-37-
hereunder, including the reasonable costs and expenses of defending against any claim of
liability or arising out of any untrue statement or alleged untrue statement of any material fact
or omission or alleged omission to state a material fact necessary to make the statements made,
in light of the circumstances under which they were made, not misleading in any official
statement or other disclosure utilized in connection with the sale of the Bonds, but excluding
any and all losses, expenses and liabilities which are due to the negligence or willful misconduct
of the Trustee, its officers, directors, agents or 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 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 Owner relating to the time, method and place of exercising
any trust or power or conducting any proceeding or remedy available to the Trustee under this
Indenture of for any special, indirect, consequential or punitive damages. The obligations of the
Authority hereunder and Section 8.03 shall survive the resignation or removal of the Trustee, or
the discharge of this Indenture.
-38-
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 9.01. Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority and of the Owner and
of the Trustee may be modified or amended from time to time and at any time by an indenture
or indentures supplemental thereto, which the Authority and the Trustee may enter into when
the written consent of the Owner, exclusive of Bonds disqualified as provided in Section 11.09
hereof, shall have been filed with the Trustee. No such modification or amendment shall (i)
extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or extend the
time of payment, or change the method of computing the rate of interest thereon, or extend the
time of payment of interest thereon, without the consent of the Owner of each Bond so affected,
or (ii) reduce the aforesaid percentage of Bonds the consent of the Owner of which is required to
effect any such modification or amendment, or permit the creation of any lien on the Revenues
and other assets pledged under this Indenture prior to or on a parity with the lien created by
this Indenture except as permitted herein, or deprive the Owner of the lien created by this
Indenture on such Revenues and other assets (except as expressly provided in this Indenture),
without the consent of the Owner. It shall not be necessary for the consent of the Owner to
approve the particular form of any Supplemental Indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
(b) This Indenture and the rights and obligations of the Authority, of the Trustee and the
may also be modified or amended from time to time and at any time by a Supplemental
Indenture, which the Authority and the Trustee may enter into without the consent of any
Owner, if the Trustee has been furnished an opinion of counsel that the provisions of such
Supplemental Indenture shall not materially adversely affect the interests of the Owner,
including, without limitation, for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Authority in this Indenture
contained other covenants and agreements thereafter to be observed, to pledge or assign
additional security for the Bonds (or any portion thereof), or to surrender any right or
power herein reserved to or conferred upon the Authority;
(ii) to modify, amend or supplement this Indenture in such manner as to permit
the qualification hereof under the Trust Indenture Act of 1939, as amended, or any
similar federal statute hereafter in effect, and to add such other terms, conditions and
provisions as may be permitted by said act or similar federal statute;
(iii) to modify, amend or supplement this Indenture in such manner as to cause
interest on the Bonds to remain excludable from gross income under the Code; or
(iv) to facilitate the issuance of Parity Obligations by the City pursuant to the
Installment Sale Agreement.
(c) The Trustee may in its discretion, but shall not be obligated to, enter into any such
Supplemental Indenture authorized by subsections (a) or (b) of this Section 9.01 which
materially adversely affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
-39-
(d) Prior to the Trustee entering into any Supplemental Indenture hereunder, there shall
be delivered to the Trustee an opinion of Bond Counsel stating, in substance, that such
Supplemental Indenture has been adopted in compliance with the requirements of this
Indenture and that the adoption of such Supplemental Indenture will not, in and of itself,
adversely affect the exclusion from gross income for purposes of federal income taxes of interest
on the Bonds.
Section 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental
Indenture pursuant to this Article IX, this Indenture shall be deemed to be modified and
amended in accordance therewith, and the respective rights, duties and obligations under this
Indenture of the Authority, the Trustee and the Owner 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 such Supplemental Indenture shall be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after
the execution of any Supplemental Indenture pursuant to this Article may, and if the Trustee so
determines shall, bear a notation by endorsement or otherwise in form approved by the
Authority and the Trustee as to any modification or amendment provided for in such
Supplemental Indenture, and, in that case, upon demand on the Owner at the time of such
execution and presentation of his Bonds for the purpose at the Trust Office or at such additional
offices as the Trustee may select and designate for that purpose, a suitable notation shall be
made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as
to conform, in the opinion of the Authority and the Trustee, to any modification or amendment
contained in such Supplemental Indenture, shall be prepared and executed by the Authority
and authenticated by the Trustee, and upon demand on the Owner shall be exchanged at the
Trust Office, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for
cancellation of such Bonds, in equal aggregate principal amount of the same series and
maturity.
Section 9.04. Amendment of Particular Bonds. The provisions of this Article IX shall not
prevent any Bond Owner from accepting any amendment as to the particular Bonds held by
him.
-40-
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Indenture. Any or all of the Outstanding Bonds may be paid
by the Authority in any of the following ways, provided that the Authority also pays or causes
to be paid any other sums payable hereunder by the Authority:
(a) by paying or causing to be paid the principal of and interest on such Bonds, as and
when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity, money or securities in
the necessary amount (as provided in Section 10.03) to pay or redeem such Bonds; or
(c) by delivering to the Trustee, for cancellation by it, all of such Bonds.
If the Authority shall also pay or cause to be paid all other sums payable hereunder by
the Authority, then and in that case, at the election of the Authority (evidenced by a Written
Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to
discharge all such indebtedness and this Indenture), and notwithstanding that any of such
Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues
and other assets made under this Indenture with respect to such Bonds and all covenants,
agreements and other obligations of the Authority under this Indenture with respect to such
Bonds shall cease, terminate, become void and be completely discharged and satisfied. In such
event, upon the Written Request of the Authority, the Trustee shall execute and deliver to the
Authority all such instruments as may be necessary or desirable to evidence such discharge and
satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or
securities or other property held by it pursuant to this Indenture which are not required for the
payment of any of such Bonds not theretofore surrendered for such payment.
Section 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in
trust, at or before maturity, of money or securities in the necessary amount (as provided in
Section 10.03) to pay or redeem any Outstanding Bonds (whether upon or prior to the maturity
or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to
maturity, notice of such redemption shall have been given as provided in Article IV or
provision satisfactory to the Trustee shall have been made for the giving of such notice, then all
liability of the Authority in respect of such Bonds shall cease, terminate and be completely
discharged, and the Owners thereof shall thereafter be entitled only to payment out of such
money or securities deposited with the Trustee as aforesaid for their payment, subject, however,
to the provisions of Section 10.04.
The Authority may at any time surrender to the Trustee for cancellation by it any Bonds
previously issued and delivered, which the Authority may have acquired in any manner
whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid
and retired.
Section 10.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture it
is provided or permitted that there be deposited with or held in trust by the Trustee money or
securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be
deposited or held may include money or securities held by the Trustee in the funds and
accounts established pursuant to this Indenture and shall be:
-41-
(a) lawful money of the United States of America in an amount equal to the principal
amount of such Bonds and all unpaid interest thereon to maturity; or
(b) Defeasance Obligations, the principal of and interest on which when due will, in the
written opinion of an Independent Accountant filed with the City, the Authority and the
Trustee, provide money sufficient to pay the principal of and interest on the Bonds to be paid,
as such principal and interest become due;
provided, in each case, that (i) the Trustee shall have been irrevocably instructed (by the terms
of this Indenture or by Written Request of the Authority) to apply such money to the payment
of such principal and interest with respect to such Bonds, and (ii) the Authority shall have
delivered to the Trustee an opinion of Bond Counsel to the effect that such Bonds have been
discharged in accordance with this Indenture (which opinion may rely upon and assume the
accuracy of the Independent Accountant's opinion referred to above).
Section 10.04. Unclaimed Funds. Notwithstanding any provisions of this Indenture, and
subject to applicable provisions of State law, any moneys held by the Trustee in trust for the
payment of the principal of, or interest on, any Bonds and remaining unclaimed for a period
ending on the earlier of 10 days prior to the date unclaimed funds would escheat to the state or
(a) two (2) years after the principal of all of the Bonds has become due and payable (whether at
maturity or by acceleration as provided in this Indenture), if such moneys were so held at such
date, or (b) two (2) years after the date of deposit of such moneys if deposited after said date
when all of the Bonds became due and payable, shall be repaid to the Authority free from the
trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall
thereupon cease; provided, however, that before the repayment of such moneys to the City as
aforesaid, the Trustee may (at the cost of the City) first mail to the Owner, at the addresses
shown on the Registration Books, a notice, in such form as may be deemed appropriate by the
Trustee with respect to the Bonds so payable and not presented and with respect to the
provisions relating to the repayment to the Authority of the moneys held for the payment
thereof.
-42-
ARTICLE XI
MISCELLANEOUS
Section 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in
this Indenture or in the Bonds contained, the Authority shall not be required to advance any
moneys derived from any source other than the Revenues and other assets pledged under this
Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the
principal of or interest on the Bonds or for any other purpose of this Indenture. Nevertheless,
the Authority may, but shall not be required to, advance for any of the purposes hereof any
funds of the Authority which may be made available to it for such purposes.
Section 11.02. Limitation of Rights to Parties and Owner. Nothing in this Indenture or in
the Bonds expressed or implied is intended or shall be construed to give to any person other
than the Authority, the Trustee, the City and the Owner, any legal or equitable right, remedy or
claim under or in respect of this Indenture or any covenant, condition or provision therein or
herein contained; and all such covenants, conditions and provisions are and shall be held to be
for the sole and exclusive benefit of the Authority, the Trustee, the City and the Owner.
Section 11.03. Funds and Accounts. Any fund or account required by this Indenture to
be established and maintained by the Trustee may be established and maintained in the
accounting records of the Trustee, either as a fund or an account, and may, for the purposes of
such records, any audits thereof and any reports or statements with respect thereto, be treated
either as a fund or as an account; but all such records with respect to all such funds and
accounts shall at all times be maintained in accordance with corporate trust industry standards
to the extent practicable, and with due regard for the requirements of Section 6.05 and for the
protection of the security of the Bonds and the rights of every Owner thereof.
Section 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in this
Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be
waived in writing by the person entitled to receive such notice and in any such case the giving
or receipt of such notice shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. Whenever in this Indenture any notice shall be required to be given
by mail, such requirement shall be satisfied by the deposit of such notice in the United States
mail, postage prepaid, by first class mail.
Section 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for
the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may,
upon Written Request of the Authority, in lieu of such cancellation and delivery, destroy such
Bonds (in the presence of an officer of the Authority, if the Authority shall so require) as may be
allowed by law, and deliver a certificate of such destruction to the Authority.
Section 11.06. Severability of Invalid Provisions. If any one or more of the provisions
contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions shall be deemed severable from
the remaining provisions contained in this Indenture and such invalidity, illegality or
unenforceability shall not affect any other provision of this Indenture, and this Indenture shall
be construed as if such invalid or illegal or unenforceable provision had never been contained
herein. The Authority hereby declares that it would have entered into this Indenture and each
and every other Section, paragraph, sentence, clause or phrase hereof and authorized the
issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections,
-43-
paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or
unenforceable.
Section 11.07. Notices. All written notices to be given under this Indenture shall be given
by first class mail or personal delivery to the party entitled thereto at its address set forth below,
or at such address as the party may provide to the other party in writing from time to time.
Notice shall be effective either (a) upon transmission by facsimile transmission or other form of
telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c)
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 parties, from time to time modify the address or
number to which communications are to be given hereunder.
If to the Authority: Tustin Public Financing Authority
c / o City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
Phone: (714) 573-3000
If to the City: City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
Phone: (714) 573-3000
If to the Trustee: The Bank of New York Mellon Trust Company, N.A.
333 South Hope Street, Suite 2525
Los Angeles, CA 90071
Attention: Corporate Trust Department
Phone: (213) 630-6260
If to the Original Purchaser: Capital One Public Funding, LLC
1307 Walt Whitman Road, 3rd Floor
Melville, NY 11747
Attention: President
Phone: (631) 531-2824
The City, the Authority, the Trustee and the Original Purchaser, by notice given
hereunder, may designate different addresses to which subsequent notices, certificates or other
communications will be sent.
Section 11.08. Evidence of Rights of Owner. Any request, consent or other instrument
required or permitted by this Indenture to be signed and executed by the Owner may be in any
number of concurrent instruments of substantially similar tenor and shall be signed or executed
by the Owner in person or by an agent or agents duly appointed in writing. Proof of the
execution of any such request, consent or other instrument or of a writing appointing any such
agent, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for
any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Authority
if made in the manner provided in this Section 11.08.
The fact and date of the execution by any person of any such request, consent or other
instrument or writing may be proved by the certificate of any notary public or other officer of
any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying
that the person signing such request, consent or other instrument acknowledged to him the
-44-
execution thereof, or by an affidavit of a witness of such execution duly sworn to before such
notary public or other officer.
The ownership of Bonds shall be proved by the Registration Books.
Any request, consent, or other instrument or writing of the Owner shall bind every
future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority
in accordance therewith or reliance thereon.
Section 11.09. Disqualified Bonds. In determining whether the Owner has concurred in
any demand, request, direction, consent or waiver under this Indenture, Bonds which are
known by the Trustee to be owned or held by or for the account of the Authority or the City, or
by any other obligor on the Bonds, or by any person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the Authority or the City or any
other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination. Bonds so owned which have been pledged in good faith
may be regarded as Outstanding for the purposes of this Section 11.09 if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right to vote such Bonds and that the
pledgee is not a person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, the Authority or the City or any other obligor on the Bonds. In
case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the Authority and the City
shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section
11.09 and the Trustee may conclusively rely on such certificate.
Section 11.10. Money Held for Particular Bonds. The money held by the Trustee for the
payment of the interest or principal due on any date with respect to particular Bonds (or
portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and
pending such payment, be set aside on its books and held in trust by it for the Owner entitled
thereto, subject, however, to the provisions of Section 10.04 hereof but without any liability for
interest thereon.
Section 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the
Authority shall be individually or personally liable for the payment of the principal of or
interest on the Bonds or be subject to any personal liability or accountability by reason of the
issuance thereof; but nothing herein contained shall relieve any such member, officer, agent or
employee from the performance of any official duty provided by law or by this Indenture.
Section 11.12. Successor Is Deemed Included in All References to Predecessor. Whenever
in this Indenture either the Authority or the Trustee is named or referred to, such reference shall
be deemed to include the successors or assigns thereof, and all the covenants and agreements in
this Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to
the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 11.13. Execution in Several Counterparts. This Indenture may be executed in any
number of counterparts and each of such counterparts shall for all purposes be deemed to be an
original; and all such counterparts, or as many of them as the Authority and the Trustee shall
preserve undestroyed, shall together constitute but one and the same instrument.
Section 11.14. Governing Law. This Indenture shall be governed by and construed in
accordance with the laws of the State.
-45-
IN WITNESS WHEREOF, the TUSTIN PUBLIC FINANCING AUTHORITY has caused
this Indenture to be signed in its name by its Executive Director, and THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trusts created
hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto
duly authorized, all as of the day and year first above written.
TUSTIN PUBLIC FINANCING
AUTHORITY
91
By A -4 CTZ:c
Executive Director
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
By
Authorized Signatory
[Signature page to Indenture of Trust, dated as of February 1,
2024, by and between the Tustin Public Financing Authority and
The Bank of New York Mellon Trust Company, N.A., as Trustee}
-46-
IN WITNESS WHEREOF, the TUSTIN PUBLIC FINANCING AUTHORITY has caused
dus Indenture to be signed in its name by its Executive Director, and THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trusts created
hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto
dui authorized, all as of the day and year first above written.40 a
M'P' TUSTIN PUBLIC FI ANCING
AUTHORITY
y
ec"c
AM
%HE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
CBy=!A�'
orized Signatory
40 40
[Signature page to Indenture of Trust, dated as of February 1,
024, by and between the Tustin- Public Financing Authority and
he Bank of New York Mellon Trust ComUanv. N.A., as Trustee!
Quint & Thimmig LLP
EXHIBIT A
FORM OF BOND
12/18/23
01/03/24
01/10/24
01/22/24
01/26/24
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THIS BOND MAY BE TRANSFERRED ONLY IN
WHOLE TO A TRANSFEREE PERMITTED BY SECTION 2.05 OF THE INDENTURE WHO
DELIVERS TO THE TRUSTEE AND THE AUTHORITY AN EXECUTED
REPRESENTATION LETTER SUBSTANTIALLY IN THE FORM SET FORTH IN THE
INDENTURE.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
ORANGE COUNTY
TUSTIN PUBLIC FINANCING AUTHORITY
Water Revenue Bond, Series 2024
(Subordinate Lien)
INTEREST RATE
MATURITY DATE
ORIGINAL ISSUE DATE
4.820%*
April 1, 2044
February 14, 2024
REGISTERED OWNER: CAPITAL ONE PUBLIC FUNDING, LLC
PRINCIPAL AMOUNT: FOUR MILLION ONE HIUNDRED TWENTY-FIVE
THOUSAND DOLLARS
The TUSTIN PUBLIC FINANCING AUTHORITY, a public body corporate and politic,
duly organized and existing under the laws of the State of California (the "Authority"), for
value received, hereby promises to pay to the Registered Owner specified above or registered
assigns (the "Registered Owner"), on the Maturity Date specified above, the Principal Amount
specified above, in lawful money of the United States of America, and to pay interest thereon in
like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the
date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest
Payment Date and after the close of business on the fifteenth day of the month preceding such
interest payment date, in which event it shall bear interest from such Interest Payment Date, or
(ii) this Bond is authenticated on or before September 15, 2024, in which event it shall bear
interest from the Original Issue Date specified 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
If the Default Rate or the Taxable Rate (each as defined in the Indenture) is in effect, interest will be computed
by applying such alternate rate.
Exhibit A 20027.04
Page 1
the Interest Payment Date to which interest has previously been paid or made available for
payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on
April 1 and October 1 in each year, commencing October 1, 2024 (collectively, the "Interest
Payment Dates'), calculated on the basis of a 360-day year composed of twelve 30-day months.
The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee")shall pay
principal of and interest on this Bond when due by wire transfer (or other form of electronic
payment) in immediately available funds to the Registered Owner hereof as of the Record Date
in accordance with such wire transfer instructions as shall be filed by the Registered Owner
with the Trustee from time to time, or, with the Registered Owner's consent, by another
commercially reasonable method of payment, to an account in the United States designated by
the Registered Owner. Payments of principal of this Bond shall be made without the
requirement for presentation and surrender of the Bond by the Registered Owner, provided
that principal of the Bond that is payable at final maturity shall be made only upon presentation
and surrender thereof at the corporate trust office (the "Trust Office") of the Trustee in Los
Angeles, California, or such other place as designated by the Trustee..
This Bond is not a debt of the City of Tustin (the "City"), Orange County, the State of
California, or any of its political subdivisions, and neither the City, said County, said State, nor
any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out
of any funds or properties of the Authority other than the Revenues.
This Bond is one of a duly authorized issue of bonds of the Authority designated as the
"Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)" (the
"Bonds"), in an aggregate principal amount of four million one hundred twenty-five thousand
dollars ($4,125,000), all of like tenor and date (except for such variation, if any, as may be
required to designate varying numbers, maturities or interest rates) and all issued pursuant to
the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 (commencing with section 6584)
of the California Government Code (the "Bond Law"), and pursuant to an Indenture of Trust,
dated as of February 1, 2024, by and between the Authority and the Trustee (the "Indenture"),
and a resolution of the Board of Directors of the Authority adopted on February 6, 2024,
authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of
which are on file at the office of the Authority) and all supplements thereto for a description of
the terms on which the Bonds are issued, the provisions with regard to the nature and extent of
the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and
immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of
the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and
agrees.
The Bonds have been issued by the Authority to aid in financing the acquisition and
construction of certain improvements and facilities (the "2024 Project") which constitute part of
the water enterprise of the City, to be sold to the City by the Authority pursuant to an
Installment Sale Agreement, dated as of February 1, 2024, by and between the Authority as
seller and the City as purchaser (the "Installment Sale Agreement"). The City's obligations
under the Installment Sale Agreement will be subordinate to the City's obligations with respect
to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water
Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water
Refunding Revenue Bonds, Series 2020.
This Bond and the interest hereon and all other Bonds and the interest thereon are
special obligations of the Authority, and are payable from, and are secured by a charge and lien
on the Revenues as defined in the Indenture, consisting primarily of installment payments to be
made by the City under the Installment Sale Agreement as the purchase price for the 2024
Project. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and
Exhibit A
Page 2
irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to
the payment of the principal of and interest on the Bonds.
The rights and obligations of the Authority and the owners of the Bonds may be
modified or amended at any time in the manner, to the extent and upon the terms provided in
the Indenture, but no such modification or amendment shall extend the fixed maturity of any
Bonds, or reduce the amount of principal thereof, or extend the time of payment, or change the
method of computing the rate of interest thereon, or extend the time of payment of interest
thereon, without the consent of the owner of each Bond so affected.
The Bonds are subject to redemption, at the option of the City on or after April 1, 2034,
as a whole on any date or in part on any Interest Payment Date, from any available source of
funds, at a redemption price equal to the principal amount of the Bonds to be redeemed,
together with accrued interest thereon to the date fixed for redemption, without premium.
The Bonds are also subject to mandatory redemption from sinking account payments
made by the Authority, on April 1, 2025, and on April 1 in each year thereafter to and including
April 1, 2044, at a redemption price equal to the principal amount thereof to be redeemed
together with accrued interest thereon to the redemption date, without premium, as set forth in
the following table:
Redemption Date
(April 1)
Principal
Amount
2025
$105,000
2026
135,000
2027
140,000
2028
145,000
2029
155,000
2030
160,000
2031
170,000
2032
180,000
2033
185,000
2034
195,000
2035
205,000
2036
215,000
2037
225,000
2038
235,000
2039
245,000
2040
260,000
2041
270,000
2042
285,000
2043
300,000
2044
315,000
t Maturity.
As provided in the Indenture, notice of redemption shall be mailed by the Trustee by
first class mail not less than thirty (30) nor more than sixty (60) days prior to the redemption
date to the respective owners of any Bonds designated for redemption at their addresses
appearing on the registration books of the Trustee, but neither failure to receive such notice nor
any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption
or the cessation of accrual of interest thereon from and after the date fixed for redemption.
Exhibit A
Page 3
If this Bond is called for redemption and payment is duly provided therefor as specified
in the Indenture, interest shall cease to accrue hereon from and after the date fixed for
redemption.
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds
may be declared due and payable upon the conditions, in the manner and with the effect
provided in the Indenture, but such declaration and its consequences may be rescinded and
annulled as further provided in the Indenture.
Ownership of this Bond may be transferred in whole only and only to a (i) an affiliate of
the Registered Owner or (ii) a bank, trust, custodian, insurance company or other financial
institution or an affiliate thereof, in each case that executes and delivers to the Trustee a
representation letter in substantially the form attached to the Indenture as Exhibit B.
Nothing herein limits the right of the Registered Owner to sell or assign participation
interests in the Bond, in minimum amounts of $250,000, to one or more entities listed in (i) or (ii)
above, provided that any participation, custodial or similar agreement under which multiple
ownership interests in the Bond are created shall provide the method by which the owners of
such interests shall establish the rights and duties of a single entity, owner, servicer or other
fiduciary or agent acting on behalf of all of such owners (a loan servicer) to act on their behalf
with respect to the rights and interests of the Registered Owner, including with respect to the
exercise of rights and remedies of the Registered Owner on behalf of such owners upon the
occurrence of an event of default under the Indenture.
The Authority and the Trustee may treat the Registered Owner hereof as the absolute
owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any
notice to the contrary.
It is hereby certified that all of the things, conditions and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist,
have happened or have been performed in due and regular time, form and manner as required
by the Bond Law and the laws of the State of California and that the amount of this Bond,
together with all other indebtedness of the Authority, does not exceed any limit prescribed by
the Bond Law or any laws of the State of California, and is not in excess of the amount of Bonds
permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or
obligatory for any purpose until the certificate of authentication hereon endorsed shall have
been signed by the Trustee.
Exhibit A
Page 4
IN WITNESS WHEREOF, the Tustin Public Financing Authority has caused this Bond to
be executed in its name and on its behalf with the facsimile signature of its Chair and attested to
by the facsimile signature of its Secretary, all as of the Original Issue Date.
Attest:
TUSTIN PUBLIC FINANCING
AUTHORITY
Chair
Secretary
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within -mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
an
Exhibit A
Page 5
Authorized Signatory
FORM OF ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the registration books of the Trustee with full power of substitution in
the premises.
Dated:
Signature Guaranteed:
Notice: Signature guarantee shall be made by a Notice: The signature on this assignment must
guarantor institution participating in the Securities correspond with the name(s) as written on the face of
Transfer Agents Medallion Program or in such other the within Bond in every particular without alteration or
guarantee program acceptable to the Trustee. enlargement or any change whatsoever.
Exhibit A
Page 6
EXHIBIT B
FORM OF INVESTOR'S LETTER
Tustin Public Financing Authority
Tustin, California
City of Tustin
Tustin, California
The Bank of New York Mellon Trust Company, N.A.
Los Angeles, California
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
Re: Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)
Ladies and Gentlemen:
The undersigned (the "Purchaser"), being the purchaser of the above -referenced bonds
(the "Bonds") from the previous owner thereof (the "Owner") does hereby certify, represent
and warrant for the benefit of the Tustin Public Financing Authority (the "Authority"), the City
of Tustin (the "City") and The Bank of New York Mellon Trust Company, N.A., as trustee (the
"Trustee") that:
(a) The Purchaser (MARK OR INDICATE APPROPRIATELY):
] is an affiliate of the Owner; or
[] is a bank, trust, custodian, insurance company or other financial institution
or an affiliate thereof.
(b) The Purchaser understands that the Bonds have not been registered
under the United States Securities Act of 1933, as amended (the "Securities Act"), or
under any state securities laws. The Purchaser agrees that it will comply with any
applicable state and federal securities laws then in effect with respect to any disposition
of the Bonds by it, and further acknowledges that any current exemption from
registration of the Bonds does not affect or diminish such requirements.
(c) The Purchaser is not now and has never been controlled by, or under
common control with, the Authority or the City. Neither the Authority nor the City has
ever been and is not now controlled by the Purchaser. The Purchaser has entered into no
arrangements with the Authority or the City or with any affiliate in connection with the
Bonds, other than as disclosed to the Authority and the City.
(d) The Purchaser has authority to purchase the Bonds and to execute this
letter and any other instruments and documents required to be executed by the
Purchaser in connection with the purchase of the Bonds. The individual who is signing
this letter on behalf of the Purchaser is a duly appointed, qualified, and acting officer of
the Purchaser and is authorized to cause the Purchaser to make the certificates,
representations and warranties contained herein by execution of this letter on behalf of
the Purchaser.
(e) The Purchaser acknowledges that it has the right to sell and transfer the
Bonds, in whole, subject to compliance with the transfer restrictions set forth in Section
2.05 of the Indenture of Trust, dated as of February 1, 2024, by and between the
Authority and the Trustee (the "Indenture'), including in certain circumstances the
requirement for the delivery to the Authority and the Trustee of an purchaser letter in
the same form as this Purchaser Letter, including this paragraph. Failure to comply with
the provisions of Section 2.05 of the Indenture shall cause the purported transfer to be
null and void.
(f) The Bonds are not being acquired by the Purchaser for resale thereof in any
manner that would result in the Purchaser being an agent of the City or an underwriter
within the meaning of the Securities Act.
(g) The Purchaser acknowledges that it has made its own inquiry and analysis
with respect to the Bonds and security therefor, that it has received the documents
executed or adopted by the Authority or the City in connection with the Bonds and
other documents it has requested, and that it has either been supplied with or been
given access to information, including financial statements and other financial
information, to which a reasonable investor would consider important in making
investment decisions, and the Purchaser has had the opportunity to ask questions and
receive answers from knowledgeable individuals concerning the City and the Bonds and
the security therefor so that, as a reasonable investor, the Purchaser has been able to
make its decision to purchase the Bonds. The Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits
and risks of its prospective investment in the Bonds.
(h) The Purchaser acknowledges that it may sell or assign participation interests
in the Bonds, in accordance with terms and conditions of the Indenture (including sales
only in minimum amounts of $250,000 and only to an affiliate of the Purchaser or one or
more banks, trusts, custodians, insurance companies, or other financial institutions or
their affiliates). The Purchaser acknowledges that it is solely responsible for compliance,
and covenants and agrees with the City that it will comply, with the Indenture and all
applicable federal or state securities laws then in effect with respect to any subsequent
sale, transfer or other disposition of the Bonds, including disclosure of material
information (without involving the Authority or the City in any manner). The Purchaser
agrees to indemnify the Authority and the City for any liabilities or costs incurred by the
Authority or the City (including attorney fees) in connection with any sale, transfer or
other disposition of the Bonds in violation of such restrictions or laws.
(i) Neither the Trustee nor the Authority's bond counsel, or any of their
employees, counsel or agents will have any responsibility to the Purchaser for the
accuracy or completeness of information obtained by the Purchaser from any source
regarding the City or its financial condition, the provision for payment of the Bonds, or
the sufficiency of any security therefor. The Purchaser acknowledges that, as between
the Purchaser and all of such parties, the Purchaser has assumed responsibility for
obtaining such information and making such review as the Purchaser deemed necessary
or desirable in connection with its decision to purchase the Bonds.
-2-
(j) The Purchaser acknowledges that the Bonds are exempt from the
requirements of Rule 15c2-12 of the Securities and Exchange Commission and that
neither the Authority nor the City has undertaken to provide any continuing disclosure
with respect to the Bonds, except as otherwise provided in the Indenture.
(k) The Purchaser understands that the Bonds (a) are not being registered or
otherwise qualified for sale under the "Blue Sky' laws and regulations of any state, (b)
will not be listed in any stock or other securities exchange, (c) will not carry a rating
from any rating agency, and (d) will be delivered in a form that may not be readily
marketable.
(1) The Purchaser acknowledges and agrees that the Placement Agent and
the Issuer take no responsibility for, and make no representation to the Purchaser, or any
subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bonds
in violation of the provisions of the Indenture, or any securities law or income tax law
consequences thereof. The Purchaser also acknowledges that, with respect to the City's
obligations and liabilities, the Purchaser is solely responsible for compliance with the
sales restrictions on the Bonds in connection with any subsequent transfer of the Bonds
made by the Purchaser.
(m) The Purchaser acknowledges that the sale of the Bonds to the Purchaser is
made in reliance upon the certifications, representations, and warranties herein made to
the addressees hereto.
(n) The interpretation of the provisions hereof shall be governed and
construed in accordance with State law without regard to principles of conflicts of laws.
(o) All representations of the Purchaser contained in this letter shall survive
the execution and delivery of the Bonds to the Purchaser as representations of fact
existing as of the date of execution and delivery of this Purchaser Letter.
The Purchaser acknowledges that the sale of the Bonds to the Purchaser is made in
reliance upon the certifications, representations and warranties herein by the addressees hereto.
Capitalized terms used herein and not otherwise defined have the meanings given such terms
in the Indenture.
[PURCHASER]
By
Name
Title
-3-