Resolution 14319CITY OF A
MEDA RESOLUTION NO. 14319
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALAMEDA
AUTHORIZING THE ISSUANCE OF CITY OF ALAMEDA TAXABLE
PENSION OBLIGATION BONDS, AUTHORIZING THE EXECUTION AND
DELIVERY OF AN INDENTURE AND AUTHORIZING
COMMENCEMENT OF A VALIDATION ACTION RELATING THERETO
AND APPROVING OTHER MATTERS RELATING THERETO
WHEREAS, the City of Alameda (the "City ") provides retirement benefits
( "Retirement Benefits ") to eligible former employees pursuant to its City of
Alameda Police and Fire Retirement System Pension Plan 1079 ( "Plan 1079 "),
adopted by the City Council pursuant to Ordinance No. 1079, adopted on
November 4, 1952, as amended, and its City of Alameda Police, and Fire
Retirement System Pension Plan 1082 ( "Plan 1082" and with Plan 1079, the
"Plans "), Ordinance No. 1082, adopted by the City Council pursuant to Ordinance
No. 1082, adopted on February 17, 1953, as amended, and pursuant to the labor
contracts between the City and the affected employees (collectively, the "Labor
Contracts ");
WHEREAS, as of January 1, 2009, based upon the actuarial report of
Bartel Associates (the "Actuary"), the City had an unfunded accrued actuarial
liability for the Retirement Benefits which the City is obligated to pay pursuant to
the Labor Contracts (the "Unfunded Accrued Actuarial Liability ") in the amount of
$22,273,000;
WHEREAS, the Unfunded Accrued Actuarial Liability is an indebtedness
of the City evidenced by the Labor Contracts;
WHEREAS, the City is authorized pursuant to Articles 10 and 11
(commencing with section 53570) of Chapter 3 of Division 2 of Title 5 of the
California Government Code to issue refunding bonds for the purpose of
refunding any evidence of indebtedness of the City;
WHEREAS, for the purposes of refunding all of the Unfunded Accrued
Actuarial Liability, the City desires to issue its "Taxable Pension Obligation
Bonds" (the `Bonds ") in an aggregate principal amount not exceeding the sum of
(a) the Unfunded Accrued Actuarial Liability as confirmed by the Actuary as of
the date of issuance of the Bonds, plus (b) the costs of issuance of the Bonds
(including any underwriter's discount or placement agent's fee), plus (c) any
original issue discount on the Bonds;
WHEREAS, 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, to provide a mechanism for the investment of the
proceeds of the Bonds applied to the refunding of the Unfunded Accrued
Actuarial Liability and to provide a mechanism or the disbursement of such
amounts as required to pay the Retirement Benefits, the City proposes to enter
into an indenture with Union Bank, N.A.; as trustee (such indenture, in the form
presented to this meeting, with such changes, insertions and omissions as are
made pursuant to this Resolution, being referred to herein as the "Indenture ");
WHEREAS, the City has determined that securing the timely payment of
the principal of and interest on the Bonds by obtaining a bond insurance policy
with respect thereto could be economically advantageous to the City;
WHEREAS, there has been prepared and submitted'` to this meeting a
form of the Indenture; and
WHEREAS, the City has full legal right, power and authority under the
Constitution and the laws of the State of California to enter into the transactions
hereinafter authorized;
NOW, THEREFORE, BE 1T RESOLVED, as follows:
Section 1. The foregoing recitals are true and correct and the City Council
hereby so finds and determines:
Section 2. Subject to the provisions of Section 2 hereof, the issuance of
the Bonds, in an aggregate principal amount of not to exceed the sum of (a) the
Unfunded Accrued Actuarial Liability as confirmed by the Actuary as of the date
of issuance of the Bonds, plus (b) the costs of issuance of the Bonds (including
any underwriter's discount or placement agent's fee), plus (c) any original issue
discount on the Bonds, and subject to the limitations specified in, the Indenture,
is hereby authorized and approved. The Bonds shall be dated, shall bear interest
at the rates, shall mature on the dates, shall be subject to call and redemption,
shall be issued in the forms and shall be as otherwise provided in the Indenture,
as the same shall be completed as provided in this Resolution:
Section 3. The Indenture, in substantially the form submitted to this
meeting and made a part hereof as though set forth herein, be and the same is
hereby approved. Each of the Mayor, and such other member of the City Council
as the Mayor may designate, the City Treasurer, the City Manager, any Assistant
City Manager, the Finance Director, and such other officer or employee of the
City as the City Manager may designate (the "Authorized Officers "), is hereby
authorized, and any one of the Authorized Officers is hereby directed, for and on
behalf of the City, to execute and deliver the Indenture in the form presented to
this meeting, with such changes, insertions and omissions as may be approved
by the Authorized Officer executing the same on behalf of the City, said
execution being conclusive evidence of such approval; provided, however, that
(a) the aggregate principal amount of the Bonds shall not exceed the sum of (i)
the Unfunded Accrued Actuarial Liability as confirmed by the Actuary as of the
date of issuance of the Bonds, plus (ii) the costs of issuance of the Bonds
(including any underwriter's discount or placement agent's fee), plus (iii) any
original issue discount on the Bonds, (b) the interest rate on the Bonds shall not
exceed the maximum rate permitted by law, (c) the true interest cost of the
Bonds shall not exceed 8%, and (d) the Bonds shall mature not later than 32
years from the date of issuance thereof.
Section 4. The Authorized Officers are each hereby authorized and
directed to apply for municipal bond insurance for the Bonds and to obtain such
insurance if the present value cost of such insurance is less than the present
value of the estimated interest savings with respect to the Bonds. Each of the
Authorized Officers is hereby authorized, and any one of the Authorized Officers
is hereby directed, for and on behalf of the City, to execute and deliver a contract
for such insurance if such contract is deemed by the Authorized Officer executing
the same to be in the best interests of the City, such determination to be
conclusively evidenced by such Authorized Officer's execution and delivery of
such contract.
Section 5. The Authorized Officers are each hereby authorized and
directed, for and in the name of the City, to commence and pursue a validation
action under Section 860 of the California Code of Civil Procedure to determine
the legality and validity of the Unfunded Accrued Actuarial Liability, the Bonds
and the Indenture, and the other documents and proceedings authorized by this
Resolution. Quint & Thimmig LLP is hereby authorized to commence and pursue
such validation action on behalf of the City.
Section 6. The officers and employees of the City are hereby authorized
and directed, jointly and severally, to do any and all things which they may deem
necessary or advisable in order to consummate the transactions herein
authorized and otherwise to carry out give effect to and comply with the terms
and intent of this Resolution.
Section 7. All actions heretofore taken by the officers, employees and
agents of the City with respect to the transactions herein authorized are hereby
approved, confirmed and ratified.
Section 8. This Resolution shall take effect upon its adoption by this City
Council.
Quint & Thimmig LLP 03/19/09
03/31/09
INDENTURE
Dated as of , 2009
by and between the
CITY OF ALAMEDA
and
UNION BANK, N.A., as Trustee
City of Alameda
2009 Taxable Pension Obligation Bonds
01019,16
TABLE OF CONTENTS
ARTICLE I
DEFINITIQNS; RULES OF CONSTRUCTION
Section 1.01. De6oibona-----------------------------------------------�3
Section 1.02. Authorization 9
Section IO3. Interpretation ------------------g
ARTICLE II
/\TJTBI}DIZATlCN^ AND RMS OF B
Section 2.01. Authorization and Purpose of Bonds -------------------------------l0
Section 2.02. Term of the Bonds ----------'-------`----_--------------'lO
Section 2.03. Redemption of Bonds 11
Section 2.04. Selection of Bonds for Redemption 12
Section 2.05. Notice of Redemption 12
Section 2.06. Partial Red tionnfBond._----------.--_---'--_------------_I3
Section 2.O7. Purchase o( Bonds ------------------------------------------I3
Section 2.08. Forms cf Bonds --------------------------------------------I4
Section 2.09. Execution -----------------------------------------------�I4
Section 2.10. Transfer and E ---------------------------------------]4
Section 2.1I. Bonds Mutilated, Lost, Destroyed nr Stolen ---------------------------]4
Section 2.12. Payment -----------------------------------------------l5
Section 2.13. Execution of Documents and Proof of Ownership ------------------------15
Section 2.14. -----------------------------------------l6
Section 2.15. CUSIP Numbers and ISTN Numbers -------------------------------'I6
Section 2.l6. Use of Depository --_--------------------------------------_]6
ARTICLE III:
DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS
Section 3.Ol Issuance of Bonds. -----------------------------------------'l8
Section 3.02. Deposit and Application o6 Proceeds -------------------------------'l8
Section 3.O3. Costs of Issuance Fund ---------------------------------------'ID
Section 3.O3. Retirement Benefits Fund --------------------------------------l8
Section 3.05. Validity o[ Bonds ------------------------------------------'l9
ARTICLE IV
SECURITY FOR THE BONDS; FLOW OF FUNDS; INVESTMENTS
Section 4.01. Security of Bonds; E al Security. .19
Section 4.02. Deposits to Pay Debt Service 19
Section 4.03. Debt Service Fund 20
Section 4.04. Investrnent of Moneys in Funds 20
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual P t ---------------,-------------------------�21
Section 5.02. Budget and A ihon of Debt Service ----------------------------2l
Section 5.03. Extension of Payment / Bonds ----------------------------------2l
Section 5,04. Books and Accounts; Financial Statements; Additiona Information 21
Section 5.O5. Continuing Disclosure. ---------------------------------------Zl
Section 5.06. Protection o{ Security and Rights nf Owners. --------------------------�22
Section 5.07. Further Assurances -----------------------------------------'22
ARTICLE VI
THE TRUSTEE
Section 6.OI. Duties, Immunities and Liabilities of Trustee. --------------------------Z3
Section 6.02. Merger or Consolidation. ---------------------------.24
Section 6.O3. Liability of Trustee ------------------------------------------24
Section 6.04. Right to Rely on Documents 26
Section 6.05. Preservation and Inspection of Documents ----------------------------26
Section 6.06. Compensation and Indemnification, -------------------------------.27
Section 6.07. Accounting Records and Financial Statements --------------------------27
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURF
Section 7.01. Amendments Permitted 28
Section 7.O2. Effect of Supplemental Agreement --------'?-----------------------'29
Section 7,O3. Endorsement oz Replacement nf Bonds After Amendment -------------------29
Section 7.04. Amendm tual Consent 29
Section 7.05. Trustee's Reliance 29
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.OI. Events o{ Default -------------------------------------------3D
Section 8.02. Remedies 30
Section 8.03. Application of Funds Upon Event u{ Default ---------------------------3l
Section 8.04. Power of Trustee to Control Proceedings. ----------------------------3l
Section 8.05. Limitation on Owners' Right io Sue. -------------------------------.3I
Section 8.06. Non-waiver 32
Section 8.07, Actions Attorney-in-Fact 33
Section 8.08. Remedies Not Exclusive ---------------------------------------J3
ARTICLE IX
MISCELLANEOUS
Section 9.O]. Benefits Limited to Parties -------------------------------------'34
Section 9.02. Successor is Deemed included in All References to Predecessor ................................................ 34
Section 9.O3.Defcasaoccof Bonds -----------------------------------------34
Section 9.04. Execution of Documents and Proof of Ownership hy Owners -----------------.35
Section 9.05. Dis Bonds
Section 9.06. Waiver of Personal Liability ------------------------------------'35
Section 9.07. Destruction of Canceled Bonds ----------------------------------'35
Section 9I0. Notices ------------------------------------------------'35
Section 9.09. Partial
Section 9.10. Unclaimed ---------------------------------�----.36
Section 9Il. Execution bz Counterparts -------------------------------------']6
Section 9.12. Governi Law -------------------------------------------'36
EXHIBIT A: FORM OF CURRENT INTEREST BOND
EXHIBIT B: FORM OF THE CAPITAL APPRECIATION BOND
EXHIBIT C: TABLE OF ACCRETED VALUES OF THE CAPITAL APPRECIATION BONDS
INDENTURE OF TRUST
THIS INDENTURE (this "Indenture"), dated as of , 2009, is by and between
the CITY OF ALAMEDA, a municipal corporation and chartered city organized and existing
under the laws of the State of California (the "City"), and UNION BANK, N.A., a national
banking association organized and existing under the laws of the United States of America, as
Trustee (the "Trustee").
BACKGROUND:
WHEREAS, the City provides retirement benefits ("Retirement Benefits") to
eligible
former employees pursuant to its City of Alameda Police and Fire Retirement 5 ' �
Plans 1079 ("Plan 1079") and 1082 ("Plan 1082") adopted by the City Council pursuant to
Ordinance No. 1079, adopted on , as amended, and Ordinance No. 1082 adopted on
, as amended, and pursuant to the labor contracts between the Citvaod the affected
employees (collectively, the "Labor Contracts");
City
as of January 1, 2009, based upon the actuarial report of Bartel Associates
(the "Actuary"), the City had an unfunded accrued actuarial liobilitv for �eI�etirenucotDenc�ts
which the City is obligated to pay pursuant to the Labor Contracts (the "Unfunded Accrued
Actuarial Liability") in the amount of $22,273,000;
WHEREAS, the Unfunded Accrued Actuarial Liability is an indebtedness of the City
evidenced by the Labor Contracts;
WHEREAS, the City is authorized pursuant to Articles 10 and 11 (commencing with
section 53570) of Cha t 3 of Division 2 of Title 5 of the California Government Code to issue
refunding bonds for the purpose of refunding any evidence of indebtedness of the City;
WHEREAS, for the purposes of refunding all of the Unfunded Accrued Actuarial
Liability, the Cit desires to issue its ''2009 Taxable Pension Obligation Bonds" (the "Bonds") in
an aggregate principal amountnot exceeding the sum of (a) the Unfunded Accrued Actuarial
Liability as confirmed by the Actuary as of the date of issuance of the Bonds, plus (b) the costs
of issuance of the Bonds (including any underwriter's discount or placement agent's fee), plus
(c) any original issue discount on the Bonds;
WHEREAS, the principal of and interest on the Bonds are payable from any source of
legally available funds of the City, including amounts on deposit in the General Fund of the
City;
WHEREAS, the Bonds and any Additional Bonds have been determined to be the legal,
valid and binding obligations of the City by judgment of the Alameda Superior Court rendered
on , 2009 in City nfAlameda n, All Persons Interested, etc, Case No. ,
WHEREAS, in order to provide for the execution, 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 or accreted value thereof, premium, if
any, and interest thereon, the City has authorized the execution and delivery of this Indenture;
WHEREAS, the City has determined that all acts and proceedings required by law
necessary to make the Bonds, when executed by the City and authenticated and delivered by
the Trustee, the valid and binding obligations of the City, 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 has been in
all respects duly authorized; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and entering
into of this Indenture do exist, have happened and have been performed in regular and due
time, form and manner as required by law, and the parties hereto are now duly authorized to
execute and enter into this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal and accreted value of, and premium, if any, and interest on all Bonds
at any time issued and outstanding under this Indenture, according to their tenor, and to secure
the performance and observance of all the covenants and conditions therein and herein set
forth, and to declare the 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 consideration, the receipt whereof is hereby acknowledged, the City does hereby
covenant and agree with the Trustee, for the benefit of the respective owners from time to time
of the Bonds; as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section ].OI. Definitions. Unless the context clearly otherwise requires or unless
otherwise defined herein, when used in this Indenture the foliowing terms have the meanings
set forth below.
"Accreted Interest" means with respect to any Capital f the d
of calculation, the interest accrued thereon, compounded semiannually from the Closing Date,
at the interest rate applicable to such Capital Appreciation Bond, on each 1 and
1, commencing , assuming in any year that such Accreted Interest
increases in equal daily amounts on the basis of a year of three hundred sixty (360) days
composed of twelve (12) months of thirty (30) days each.
"Accreted Value" means, on any date of calculation, with respect to a Capital
Appreciation Bond, the Denominational Amount thereof plus the Accreted Interest represented
thereby.
"Authorized Denominations" means (i) with respect to any Current Interest Bond, $5,000 or
any integral multiple thereof, and, (ii) with respect to any Capital Appreciation Bond, the
Denominational Amount per $5,000 of Accreted Value, or any integral multiple thereof.
"Authorizing Resolution" means Resolution No. , adopted by the City Council
of the City on April ,2O09.
"Beneficial Owner" means the beneficial owner of each such Bond, determined under the
rules of DTC.
nd Co md LLP,oz(b) any other attorney firm of
attorneys appointed by or acceptable to the City of nationally-recognized experience in the
issuance of obligations issued by public agencies.
"Boous" means, collectively, the $ City of Alameda 2009 Taxable Pension
Obligation Bonds, issued pursuant to Section 2.01, which are Current Interest Borids and the
� the $ City of Alameda 2009 Taxable Pension Obligation Bonds, issued
pursuant to Section 2.01, which are Capital Appreciation Bonds.
"Business Day" means a day of the year (other than a Saturday or Sunday) on p/bicb
banks in California are not required or permitted to be closed, and on which the New York
Stock Exchange is open.
"Capital Appreciation Bond" means a Bond, the
compourided semiannually on each land 1, co
and which does not pay interest on a current basis. _
hich is
"Certificate of the City" means a certificate in writing signed by the Mayor, the City
Manager, any Assistant City Manager or the Finance Director (or such other person performing
the functions of chief financial officer of the City), or any other officer of the City duly
authorized by the City for that purpose.
"City" means the City f Alameda, chartered city and municipal corporation doly
organized and existing under the Constitution and laws of the State of California.
3
"Closing Date" means , 2009, being the date on which the Bonds are
delivered by the City to the Original Purchaser.
"Continuing Disclosure Certificate" means the Continuing Disclosure Certificate executed
and delivered by the City on the Closing Date with respect to the Bonds.
"Corporate Trust Office" means the corporate trust office of the Trustee at the address set
forth in Section 9.08, or at such other or additional offices as may be spccified by the Trustee in
writing to the City as the office at which it conducts its business as Trustee hereunder. For
operational purposes (i.e, payment, redemption, etc.), the Corporate Trust Office of the Trustee
shall be designated as , Los Angeles, California
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds,
including but not limited to: printing expenses; rating agency fees; filing and recording fees;
initial fees, expenses and charges of the Trustee and its counsel, including the Trustee's first
annual administrative fee; fees, charges and disbursements of attorneys, financial advisors,
actuarial firms, accounting firms, consultants and other professionals; and any other cost,
charge or fee in connection with the original issuance of the Bonds.
"Costs of Issuance Fund" means the fund by that name established and held by the
Trustee under Section 3.03.
"Current Interest Bond" means a Bond, the interest component of which is payable on
each Interest Payment Date through the maturity date specified for such Bond.
"CUSIP Number" means that unique number assigned to each Bond by the CUSIP Service
Bureau upon initial sale of the Bonds.
"Debt Service" means the scheduled amount of interest and amortization of principal
payable on the Bonds during the period of computation, including the principal amount of any
Bonds which are subject to mandatory sinking fund redemption during such period but
excluding amounts scheduled during such period which relate to principal which has been
retired before the beginning of such period.
"Debt Service Fund" means the fund by that name established and held by the Trustee
under Section 4.03.
"Denominational Amount" means, with respect to the Capital Appreciation Bonds, the
principal amount thereof, without Accreted Interest.
"Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as
Depository under Section 2.16.
system.
"Depository System Participant" means any participant in the Depository's book-entry
"DTC" means The Depository Trust Company, New York, New York, and its successors
and assigns.
"Event of Default" means any of the events described in Section 8.01.
"Federal Securities" means: (a) any direct general obligations of the United States of
America (including obligations issued or held in book entry form on the books of the
- 4 -
Department of the Treasury of the United States of America), for which the full faith and credit
of the United States of America are pledged; (b) obligations of any agency, department or
instrumentality of the United States of America, the timely payment of principal and interest on
which are directly or indirectly secured or guaranteed by the full faith and credit of the United
States of America; and (c) any obligations of a financial institution the timely payment of
principal of and interest on which are secured or collateralized by obligations described in the
foregoing clauses (a) or (b).
'Fiscal Year" means any twelve -month period beginning on July 1 in any year and
extending to the next succeeding June 30, both dates inclusive, or any other twelve -month
period selected and designated by the City as its official fiscal year period in a Certificate of the
City filed with the Trustee.
"Indenture" means this Indenture of Trust between the City and the Trustee, as amended
or supplemented from time to time under any Supplemental Agreement entered into under the
provisions hereof.
"Independent Accountant" means any accountant or firm of such accountants duly
licensed or registered or entitled to practice and practicing as such under the laws of the State of
California, appointed by or acceptable to the City, and who, or each of whom: (a) is in fact
independent and not under domination of the City; (b) does not have any substantial interest,
direct or indirect, with the City; and (c) is not connected with the City as an officer or employee
of the City, but who may be regularly retained to make reports to the City.
"Information Services" means Financial Information, Inc.'s Financial Daily Called Bond
Service; Standard & Poor's J.J. Kenny Information Services; Moody's Municipal and
Government; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and /or such other services providing information with
respect to the redemption of bonds as the City may designate in a Request of the City delivered
to the Trustee.
"Interest Payment Date" means each 1 and 1, commencing
"IS1N Number" means the unique number assigned to each Bond traded within the
Euroclear System and Clearstream, Luxembourg, from and after the date upon which such
trading commences.
"Maturity Value" means the Accreted Value of any Capital Appreciation Bond on its
maturity date.
"Moody's" means Moody's Investors Service, its successors and assigns.
"Nominee" means (a) initially, Cede & Co. as nominee of DTC, and (b) any other
nominee of the Depository designated under Section 2.16.
"Original Purchaser" means , as original purchaser of the Bonds upon
the negotiated sale thereof.
"Outstanding," when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 9.05) all Bonds except: (a) Bonds theretofore canceled by the
Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have beer;
paid within the meaning of Section 9.03; and (c) Bonds in lieu of or in substitution for which
other Bonds have been authorized, executed, issued and delivered by the City pursuant hereto.
5
"Owner" means, with respect to any Bond, the person in whose name the ownership of
such Bond is registered on the Registration Books.
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State of California for the moneys proposed to be
invested therein:
(a) Federal Securities;
(b) Federal Housing Administration debentures.
(c) The listed obligations of government-sponsored agencies which are not backed by
the full faith and credit of the United States of America:
(i) Federal Home Loan Mortgage Corporation participation certificates
(excluding stripped mortgage securities which are purchased at prices exceeding their
principal amounts) or senior debt obligations
(ii) Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate
Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes
(iii) Federal Home Loan Banks consolidated debt obligations
(iv) Federal National Mortgage Association senior debt obligations or
mortgage-backed securities (excluding stripped mortgage securities which are
purchased at prices exceeding their principal amounts)
(v) Student Loan Marketing Association senior debt obligations (excluded are
securities that do not have a fixed par value and/or whose terms do not promise a fixed
dollar amount at maturity or call date)
(vi) Financing Corporation debt obligations, and
(vii) Resolution Funding Corporation debt obligations.
(d) Unsecured certificates of deposit, time deposits, and bankers' acceptances (having
maturities of not more than 30 days) of any bank, including the Trustee or its affiliates, the
short-term obligations of which are rated "A-1" or better by S&P.
(e) Deposits the aggregate amount of which are fully insured by the Federal Deposit
Insurance Corporation (FDIC), in banks, including the Trustee or its affiliates, which have
capital and surplus of at least $5 million.
(f) Commercial paper (having original maturities of not more than 270 days) rated
"A-1+" by S&P and "Prime-1" by Moody's.
(g) Money market funds rated "AAm" or "AAm-G" by S&P, or better, including funds
for which the Trustee or its affiliates or subsidiaries provide investment or other advisory
services.
(h) Municipal obligations rated "A" or better by S&P and Moody's;
- 6 -
rating.
(i) Obligations of any agency or instrumentality of the City with any rating or with no
(j) Investment agreements with a domestic or foreign bank or corporation (other than a
life or yro erty casualty insurance company) the long-term debt of which, or, in the case of a
guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty
insurance company, claims paying ability, of the guarantor is rated at least ^AA" by S&P and
"Aa''by Moody's; provided that, by the term.s of the investment agreement:
(i)ioterest payments are to be made to the Trustee at the times and in amounts as
necessary to pay amourits due with respect to the Bonds;
(ii) the invested funds are available for withdrawal without penalty or premium,
at any time upon not more than seven (7) days' prior notice; the City and the Trustee
hereby agree to give or cause to be given notice in accordance with the terms of the
investment agreement so as to receive funds thereunder with no penalty or premium
paid;
(iii) the investment agreement shall state that is the unconditional and general
obligation of, and is not subordinated to any other obligation of, the provider thereof, or
in the case of a bank, that the obligation of the bank to make payments under the
agreement ranks pari passu with the obligations of the bank to its other depositors and
its other, unsecured and unsubordinated creditors;
(iv) the City d the Trustee receive the opinion of domestic counsel (which
opinion shall be addressed to the City and the Trustee) that such investment agreement
is legal, valid, binding and enforceable upon the provider in accordance with its terms
and of foreign counsel (if applicable) in form and substance acceptable, and addressed
to, the City and the Trustee;
(v) the investmertt agreement shall provide that if during its term
(A) the provider's rating by either S&P or Moody's falls below "AA-" or
"Aa3," respectively, the provider shall, at its option, within 10 days of receipt of
publication of such downgrade, either (i) collateralize the investment agreement
by delivering or transferring in accordance with applicable state and federal laws
(other than by means of entries on the provider's books) to the City, the Trustee
or a third party acting solely as agent therefor (the "Holder of the Collateral")
collateral free and clear of any third-party liens or claims the market value of
which collateral is maintained at levels and upon such conditions as would be
acceptable to S&P and Moody's to maintain an "A" rating in an "A" rated
structured financing (with a market value approach); or (ii) repay 'the principal of
and accrued but unpaid interest on the investment, and
(B) the rovid ' by either S&P or Moody's is withdrawn or
suspended or falls below "A-" or "A3," respectively, the provider must, at the
direction of the City or the Trustee, within 10 days of receipt of such direction,
repay the principal of and accrued but unpaid interest on the investment, in
either case with no penalty or premium to the City or Trustee.
(vi) The investment agreement shall state and an opinion of counsel shall be
rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement, at the time such collateral is delivered, that the
holder of the Collateral has a perfected first priority security interest in the collateral,
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any substituted collateral and all proceeds thereof (in the case of bearer securities, this
means the holder of the Collateral is in possession);
(vii) the investment agreement must provide that if during its term (a) the
provider shall default in its payment obligations, the provider's obligations under the
investment agreement shall, at the direction of the City or the Trustee, be accelerated
and amounts invested and accrued but unpaid interest thereon shall be repaid to the
City or Trustee, as appropriate, and (b) the provider shall become insolvent, not pay its
debts as they become due, be declared or petition to be declared bankrupt, etc., the
provider's obligations shall automatically be accelerated and amounts invested and
accrued but unpaid interest thereon shall be repaid to the City or Trustee, as
appropriate.
(k) Repurchase which meet the following standards and criteria:
(i) The agreement must be with (1) any domestic bank, or domestic branch of a
foreign bank, the long term debt of which is rated at least "A" by S &P and Moody's; or
(2) any broker - dealer with "retail customers" or a related affiliate thereof which broker -
dealer has, or whose parent company (which guarantees the provider) has, long -term
debt rated at least "A" by S &P and Moody's, which falls under the jurisdiction of the
Securities Investors Protection Corporation; or (3) any other entity rated "A" or better by
S &P and Moody's, provided that:
(A) The market value of the collateral is maintained at levels and upon
such conditions as would be acceptable to S & P and Moody's to maintain an "A"
rating in an "A" rated structured financing (with a market value approach and
without regard to the rating of the provider);
(B) The Trustee or a third party acting solely as agent therefor or for the
City (the "Holder of the Collateral ") has possession of the collateral or the
collateral has been transferred to the Holder of the Collateral in accordance with
applicable state and federal laws (other than by means of entries on the
transferor's books);
(C) The agreement shall state and an opinion of counsel shall be rendered
at the time such collateral is delivered that the Holder of the Collateral has a
perfected first priority security interest in the collateral, any substituted collateral
and all proceeds thereof (in the case of bearer securities, this means the Holder of
the Collateral is in possession);
(D) All other requirements of S &P in respect of repurchase agreements
shall be met.
(E) The agreement shall provide that if during its term the provider's
rating by either Moody's or S &P is withdrawn or suspended or falls below "A -"
by S &P or "A3" by Moody's, as appropriate, the provider must, at the direction
of the City or the Trustee, within 10 days of receipt of such direction, repurchase
all collateral and terminate the agreement, with no penalty or premium to the
City or the Trustee.
Notwithstanding the above, if a repurchase agreement has a term of 270 days or
less (with no evergreen provision), collateral levels need not be as specified in (a) above,
so long as such collateral levels are 103% or better and the provider is rated at least "A"
by S &P and Moody's, respectively.
-8
O> The Local Agency Investment Fund which is administered by the California
Treasurer for the investment of funds beloriging to local agencies within the State of California.
"Record lJote" means, with respect to an Interest Payment Date, the j5th calendar day of
the month immediately preceding such Interest Payment Date.
"Registration Booka" means the records maintained by the Trustee under Section 2.14 for
the registration and transfer of ownership of the Bonds.
"Request of the City" means a request in writing signed by the Mayor, the City Manager
or the Director of Administrative Services/Chief Financial Officer of the City (or such other
person performing the functions of chief financial officer of the City), or by any other officer of
the City duly authorized by the City for that purpose.
"Retirement Fund" means the fund by that name established and held by the
Trustee under Section 3.04.
"S&P" means Standard & Poor's Corporation, o Nev York, New York, and its
successors.
"Securities current guidelines of
the Securities and Exchange Commission, such other addresses and/or such other securities
depositories as the City may desi nate in a Request of the City delivered to the Trustee,
"Supplemental Agreement" means any indenture, agreement or other instrument which
amends, s i ents or modifies this Indenture and which has been duly entered into between
the City and the Trustee; but only if and to the extent that such Supplemental Agreement is
specifically authorized hereunder.
'Trustee" means Union Bank, N.A, as Trustee hereunder, or any successor thereto
appointed as Trustee hereunder in accordance with the provisions of Article VI.
Section I.02. Authorization. Each of the parties hereby represents and warrants that it
has full legal authority and is duly empowered to enter into this Indenture, and has taken all
actions necessary to authorize the executiori hereof by the officers and persons signing it.
Section 1.03. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular include the
plural and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for
convenience of reference, do not constitute a part hereof and do not affect the meaning,
construction or effect hereof. ' ^
(c) All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding /\rbcles,Secdoosor subdivisions of�ds Indenture; the pvords"berein,",berao�^
"hereby," "hereunder" and other words of similar import refer to this lndenture as a whole and
rtot to any particular Article, Section or subdivision hereof,
ARTICLE II
AUTHORIZATION AND TERMS OF BONDS
Section 2.01. Authorization and Purpose of Bonds. The City has reviewed all
proceedings heretofore taken and has found, as a result of such review, and hereby finds and
determines that all things, conditions and acts required by law to exist, happen or be performed
precedent to and in connection with the issuance of the Bonds do exist, have happened and
have been performed in due time, form and manner as required by law, and the City is now
duly empowered, under each and every requirement of law, to issue the Bonds in the manner
and form provided in this Indenture.
The City hereby authorizes the issuance of the Bonds in the aggregate principal amount
of $ under the Authorizing Resolution and the Bond Law for the purposes of
providing funds to refinance the Retirement Obligations of the City as provided herein. The
Bonds are authorized and issued under, and are subject to the terms of, this Indenture, the
Authorizing Resolution and the Bond Law. The Bonds are designated the "City of Alameda
2009 Taxable Pension Obligation Bonds." The Bonds shall be comprised of $ Current
Interest Bonds and $ Capital Appreciation Bonds,
Section 2.02. Terms of the Bonds. The Bonds are issuable in fully registered form without
coupons in Authorized Denominations, and will be dated as of the Closing Date.
(a) Current Interest Bonds.
(i) Each Current Interest Bond shall be dated as of the Closing Date. Interest with
respect to each Current Interest Bond shall be payable from the Interest Payment Date
next preceding the date of execution thereof, unless: (i) it is executed as of an Interest
Payment Date, in which event interest with respect thereto shall be payable from such
Interest Payment Date; or (ii) it is executed after a Regular Record Date and before the
following Interest Payment Date, in which event interest with respect thereto shall be
payable from such Interest Payment Date; or (iii) it is executed on or before ,
in which event interest with respect thereto shall be payable from the Closing Date;
provided, however, that if, as of the date of issuance of any Current Interest Bond, interest
is in default with respect to any Outstanding Current Interest Bonds, interest on such
Current Interest Bond shall be payable from the Interest Payment Date to which interest
has previously been paid or made available for payment with respect to the Outstanding
Current Interest Bonds. Payment of defaulted interest shall be paid by check mailed to
the Owners as of a special record date to be fixed by the Trustee in its sole discretion,
notice of which shall be given to the Owners not less than ten (10) days prior to such
special record date.
(ii) Subject to Section 2.03, the Current Interest Bonds shall mature on
1 in each of the respective years, and in the respective amounts, except that no Current
Interest Bond may have principal maturing in more than one year, and interest thereon
shall be computed at the respective rates, as follows:
Maturity Principal Interest
1) Amount Rate
(iii) Interest on the Current Interest Bonds shall be payable on each Interest
Payment Date to and including the date of maturity or redemption, whichever is earlier,
(b) Capital Appreciation Bonds.
(i) The Capital Appreciation Bonds shall be dated as of the Closing Date. Each
Capital Appreciation Bond shall represent its Accreted Value from the Closing Date to
its date of maturity.
(ii) Subject to Section 2.03, the Capital Appreciation Bonds shall mature on
1 in each of the respective years, and in the respective Denominational
Amounts and Maturity Amounts, except that no Capital Appreciation Bond may have
principal maturing in more than one year, as follows:
Initial Approximate
Maturity Denominational Accretion Maturity
( 1) Amount Rate Amount
(iii) No interest payments shall be made with respect to the Capital Appreciation
Bonds. The value of each Capital Appreciation Bond shall accrete semi-annually on each
Interest Payment Date. The approximate Accreted Value of each $5,000 portion of the
Capital Appreciation Bonds as of each Interest Payment Date is shown on the Table of
Accreted Values set forth in Exhibit C attached hereto.
Section 2.03. Redemption of Bonds.
(a) Current Interest Bonds.
(i) Optional Redemption. [OPTIONAL REDEMPTION PROVISIONS TO COME].
7 11 -
(ii) Mandatory Redemption.
(A) The Current Interest Bonds maturing on 1, , are subject to
mandatory redemption in part on 1, , and on 1, , at a
redemption price equal to the principal amount thereof to be redeemed, together
with accrued interest to the date fixed for redemption, without premium, as
follows:
Principal Amount of
Year Current Interest Bonds
1) to be Redeemed
tMaturity
(B) In the event that the Trustee shall redeem Current Interest Bonds
maturing on 1, , in part but not in whole pursuant to subsections (a)(i)
of this Section 2.03, the amount of the Current Interest Bonds to be redeemed in
each subsequent year pursuant to this subsection (a)(iii) shall be reduced to
correspond to the principal amount of Current Interest Bonds following such
redemption.
(b) Capita! Appreciation Bonds.
(i) Optional Redemption. [OPTIONAL REDEMPTION PROVISIONS TO COME].
Section 2.04. Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of Bonds and less than all Outstanding Bonds are to be redeemed,
the Trustee shall select Bonds for redemption from the Outstanding Bonds not previously called
for redemption in such order of maturity as shall be designated by the City (and, in lieu of such
designation, pro rata among maturities) and by lot within a maturity. The Trustee shall select
Bonds for redemption within a maturity by lot in any manner which the Trustee shall, in its sole
discretion, deem appropriate. For the purposes of such selection, Bonds shall be deemed to be
composed of $5,000 portions and any such portion may be separately redeemed. The Trustee
shall promptly notify the City in writing of the Bonds so selected for redemption. Selection by
the Trustee of Bonds for redemption shall be final and conclusive.
Section 2.05. Notice of Redemption. Unless waived in writing by any Owner of a Bond
to be redeemed, notice of any such redemption shall be given by the Trustee on behalf and at
the expense of the City, by mailing a copy of a redemption notice by first class mail, postage
prepaid, at least thirty (30) days and not more than sixty (60) days prior to the date fixed for
redemption to such Owner of the Bond or Bonds to be redeemed at the address shown on the
Registration Books or at such other address as is furnished in writing by such Owner to the
Trustee; provided, however, that neither the failure to receive such notice nor any defect in any
notice shall affect the sufficiency of the proceedings for the redemption of the Bonds.
All notices of redemption shall be dated and shall state: (i) the redemption date; (ii) the
redemption price; (iii) if less than all Outstanding Bonds of a maturity are to be redeemed, the
Bond numbers (and, in the case of partial redemption, the respective principal amounts) of the
Bonds to be redeemed; (iv) that on the redemption date the redemption price will become due
and payable upon each such Bond or portion thereof called for redemption and that interest
with respect to the Current Interest Bonds shall cease to accrue or the Capital Appreciate Bonds
- 12 -
shall cease to accrete in value, as applicable, from and after said date; (v) the place where such
Bonds are to be surrendered for payment of the redemption price, which place of payment shall
be the Principal Corporate Trust Office; (vi) the CUSIP numbers and the ISIN numbers, if any,
of all Bonds being redeemed; (vii) the original date of execution and delivery of the Bonds; (viii)
the rate of interest payable or accretion rate, as applicable, with respect to each maturity of
Bonds being redeemed; (ix) the maturity date of each Bond being redeemed; and (x) any other
descriptive information needed to identify accurately the Bonds being redeemed.
Prior to any redemption date, the City shall deposit, or cause to be deposited, with the
Trustee an amount of money in immediately available funds sufficient to pay the redemption
price of all the Bonds or portions of Bonds which are to be redeemed on that date,
Notice of redemption having been given as aforesaid and the deposit of the redemption
price having been made by the City, the Bonds or portions of Bonds so to be redeemed shall, on
the redemption date, become due and payable at the redemption price therein specified, and
from and after such date interest with respect to such Bonds or portions of Bonds, if applicable,
shall cease to be payable. Upon surrender of such Bonds for redemption in accordance with said
notice, such Bonds shall be paid by the Trustee at the redemption price. Upon the payment of
the redemption price of Bonds being redeemed, each check or other transfer of funds issued for
such purpose shall bear the CUSIP number and the ISIN number, if any, identifying, by issue
and maturity, the Bonds being redeemed with the proceeds of such check or other transfer, to
the extent possible. Installments of interest due on or prior to the redemption date shall be
payable as herein provided for payment of interest. All Bonds which have been redeemed shall
be canceled by the Trustee, shall not be redelivered and shall be destroyed pursuant to Section
9.07.
In addition to the foregoing notice to the Owners, notice shall also be given by the
Trustee, by telecopy, registered, certified or overnight mail, to all Securities Depositories and to
an Information Service which shall state the information set forth above, but no defect in said
notice nor any failure to give all or any portion of such further notice shall in any manner defeat
the effectiveness of a call for redemption if notice thereof is given as prescribed above.
The Trustee shall have no responsibility for a defect in the CUSIP number that appears
on any Bond or in the redemption notice. The redemption notice may provide that the CUSIP
numbers have been assigned by an independent service and are included in the notice solely for
the convenience of Bond Owners and that the Trustee and the City shall not be liable in any
way for inaccuracies in said numbers.
Section 2.06. Partial Redemption of Bond. Upon surrender of any Bond redeemed in part
only, the Trustee shall execute and deliver to the ` Owner thereof a new Bond or Bonds of
Authorized Denominations equal in aggregate principal amount to the unredeemed portion of
the Bond surrendered and of the same interest rate or accretion rate, as applicable, and the same
maturity,
Section 2.07, Purchase of Bonds, In lieu of redemption of Bonds as provided in Section
2,03, amounts held by the Trustee for such redemption may also be used on any Interest
Payment Date, upon receipt by the Trustee at least ninety (90) days prior to the next scheduled
Interest Payment Date of the written request of a City Representative, for the purchase of Bonds
at public or private sale as and when and at such prices (including brokerage, accrued interest
and other charges) as the City may in its discretion direct, but not to exceed the redemption
price which would be payable if such Bonds were redeemed; provided, however, that no Bonds
shall be purchased in lieu of redemption with a trade settlement date less than seventy -five (75)
days prior to the relevant redemption date. Such purchases may be affected through the
investment department of the Trustee or of an affiliate of the Trustee. The aggregate principal
13-
amount of Bonds of the same maturity porchasedin)�oofred b rsnaottodz�Secdoo
2.07 shall not exceed the aggregate principal amount of Bonds of such maturity which would
otherwise be subject to such redemption.
Section 2.08. Forms of Bonds. The Bonds shall be delivered in the form of fully registered
Bonds without coupons in the denomination of 55000 or any integral lti l thereof. The
Current Interest Bonds shall be numbered consecutively, beginning with CICR-1. The Current
Interest Bonds shall be substantially in the form set forth in Exhibit B attached hereto and by
this reference incorporated herein. The Capital Appreciation Bonds shall be numbered
consecutively, beginning with CACR-1. The Capital Appreciation Bonds shall be substantially
in the form set forth in Exhibit C attached hereto and by this reference incorporated herein.
Section 2.09, Execution. The Bonds shall be executed by and in the name of the Trustee
by the manual signature I an authorized officer or signatory of the Trustee. If any officer or
signatory whose signature appears on any Bond ceases to be such officer or signator before tbe
date of delivery of said Bond, such signature shall rievertheless be as effective as if the officer or
signatory had remained in office until such date
Section 2.10. Transfer and Exchange.
(a) Transfer of Bonds. The registration of any Bond may, in accordance with its terms, be
transferred upon the Registration Books by the person in whose name it is registered, in person
or by his attorney duly authorized in writing upon surrender of such Bond for cancellation at
the Principal Corporate Trust Office, accompanied by delivery of a written instrument of
transfer in a form approved by the Trustee, duly executed. Whenever any Bond or Bonds shall
be surrendered for registration of transfer, the Trustee shall execute and deliver a new Bond or
Bonds for like aggregate i i | amount or Denominational Amount, as applicable, in
Authorized Denominations. The City shall pay any costs of the Trustee incurred in connection
with such transfer, except that the Trustee may require the payment by the Bond Owner
requesting such transfer of any tax or other governmental charge required to be id with
respect to such transfer. The Trustee shall not be required to transfer (i) any Bonds or portion
thereof during the period between the date fifteen (15) days prior to the date of selection of
Bonds for redemption and such date of selection, or (ii) any Bonds selected for redemption.
(b) Exchange Bonds. Bonds may be exchanged, upon surr thereof, at the Principal
Corporate Trust Office fVr a like aggregate principal amount or Denomirtational Amount, as
applicable, of Bonds of other Authorized Denominations of the same maturity. Whenever any
Bond or Bonds shall be surrendered for exchange, the Trustee shall execute and deliver a new
Bond or Bonds for like aggregate principal amount or Denominational Amount, as applicable,
in Authorized Denominations. The City shall pay any costs of the Trustee incurred in
connection with such exchange, except that the Trustee may require the payment by the Bond
Owner requesting such exchange of any tax or other governmental charge required to be paid
with respect to such exchange. The Trustee shall not be required to exchange (i) any Bond or
any portion thereof during the period between the date fifteen (15) days prior to the date of
selection of Bonds for redemption and such date of selection, or (ii) any Bond selected for
redemption.
Section 2.11. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Trustee, at the expense of the Owner of said Bond, shall execute and deliver a
new Bond of like tenor, maturity and principal amount or Denominational Amount, as
applicable, 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 destroyed with a Bond of destruction furnished to the City. If any Bond
shall be lost, destroyed or stolen, evidence of such loss, destruction or theft shall be submitted to
14
the Trustee, and, if such evidence is satisfactory to the Trustee and if an indemnity
� d ' satisfadn
satisfactory the Trustee shall be given, the Trustee, at the expense of the Bond Owner, �b l and
deliver a new Bond of like tenor, maturity and principal amount or Deoo inational Amount, as
applicable, and numbered as the Trustee shall determine
in lieu of and in substitution for the
Bond ao lost, destroyed or stolen. The Trustee may require payment b the City of the expenses
which may be incurred by the Trustee in carrying out the duties under this Section 2.1I. Any executed and delivered under the provisions of this Section 2.11 in lieu of any Bond
'
alleged to be lost, destroyed or stolen shall be equally and fractionally entitled to the benefits of
this Indenture with all other Bonds secured by this Indenture. The Trustee shall not be required
to treat both the original Bond and any replacement Bond as being Outstanding for the purpose
of determinirig the principal amount or Denominational Amount, as applicable, of Bonds which
may be executed and delivered hereunder or for the purpose of determinin t of
Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as
one and the same. Notwithstanding any other provision of this Section 2.11, in lieu of delivering
a new Bond to replace a Bond which has been mutilated, lost, destroyed or stolen, and which
has matured or has been called for redemption or is about to be called for redemption, the
Trustee may make payment with respect to such Bond upon receipt of the aforementioned
indemnity.
Section 2.12. Payment. Payment of idb any Current Interest
Bond on any Interest Payment Date shall be made to the person appearing on the Registration
Books as the Owner thereof as of the Regular Record Date immediately preceding such Interest
Payment Date, such interest to be paid by check mailed on the Interest Payment Date by first
class mail to such Owner at his address as it appears on the Registration Books as of such
Regular Record Date or, upon written request filed with the Trustee prior to the Regular Record
Date by an Owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire
transfer in immediately available funds to an account in the United States designated by such
Owner in such written request. Any such written request shall remain in effect until rescinded
in writing by the Owner. The principal or Maturity Value, as applicable, with respect to the
Bonds at maturity or the principal amount or Accreted Value, as applicable, upon prior
redemption shall be payable by check denominated in lawful money of the United States of
America upon surrender of the Bonds at the Principal Corporate Trust Office.
Section 2.13. E d f D t d P f of O*
consent, revocation of consent, or other instrument in writing required or permitted by this
Indenture to be signed or executed by Bond Owners may be in any number of concurrent
instruments of similar tenor, and may be signed or executed by such Owners in person or by
their attorneys or agents appointed by an instrument in writing for that purpose, or by any
bank, trust company or other depository for such Bonds. Proof of the execution of any such
instrument, or of any instrument appointing any such attorney or agent, and of the ownership
of Bonds shall be sufficient for any purpose of this Indenture (except as otherwise herein
provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his attorney or agent of any such
instrument and of any instrument appointing any such attorney or agent, may be proved by a
Bond, which need not be acknowledged or verified, of an officer of any bank or trust company
located within the United States of America, or of any notary public, or other officer authorized
to take acknowledgments of deeds to be recorded in such jurisdictions, stating that the persons
signing such instruments acknowledged before him the execution thereof. Where any such
instrument is executed by an officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or partnership, such Bond shall also
constitute sufficient proof of his authority.
15
(b) The fact of the ownership of Bonds by any person and the amount, the maturity and
the numbers of such Bonds and the date of his holding the same shall be proved by the
Registration Books.
Any request or consent of the Owner of any Bond shall bind every future Owner of the
same Bond in respect of anything done or suffered to be done by the Trustee pursuant to such
request or consent.
Section 2.14. Registration Books. The Trustee shall keep or cause to be kept, at its
Principal Corporate Trust Office, sufficient records for the registration and registration of
transfer of the Bonds, which shall at all reasonable times be open to inspection by the City
during regular business hours on any Business Day with reasonable prior notice; and, upon
presentation for such purpose, the Trustee shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be registered or transferred, on the Registration Books,
Bonds as hereinbefore provided.
Section 2.15. CUSIP Numbers and ISIN Numbers . Neither the Trustee nor the City shall
be liable for any defect or inaccuracy in the CUSIP number or ISIN number that appears on any
Bond or in any redemption notice. The Trustee may, in its discretion, include in any redemption
notice a statement to the effect that the CUSIP numbers or ISIN numbers on the Bonds have
been assigned by independent services and are included in such notice solely for the
convenience of the Owners and that neither the Trustee nor the City shall be liable for any
inaccuracies in such numbers.
Section 2.16. Use of Depository. Notwithstanding any provision of this Indenture to the
contrary:
(a) At the request of the Original Purchaser, the Bonds shall be initially executed,
delivered and registered in the name of "Cede & Co.," as nominee of The Depository Trust
Company, the depository designated by the Original Purchaser, and shall be evidenced by one
Bond maturing on each of the maturity dates set forth in Section 2.02 hereof to be in a
denomination corresponding to the total principal therein designated to mature on such date.
Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred
except:
(i) to any successor of The Depository Trust Company or its nominee, or of any
substitute depository designated pursuant to paragraph (ii) of this subsection (a)
("substitute depository"); provided that any successor of The Depository Trust
Company or substitute depository shall be qualified under any applicable laws to
provide the service proposed to be provided by it;
(ii) to any substitute depository designated in a written request of the City, upon
(A) the resignation of The Depository Trust Company or its successor (or any substitute
depository or its successor) from its functions as depository or (B) a determination by
the City that The Depository Trust Company or its successor is no longer able to carry
out its functions as depository; provided that any such substitute depository shall be
qualified under any applicable laws to provide the services proposed to be provided by
it; or
(iii) to any person as provided below, upon (A) the resignation of The Depository
Trust Company or its successor (or any substitute depository or its successor) from its
functions as depository or (B) a determination by the City that The Depository Trust
Company or its successor is no longer able to carry out its functions as depository;
- 16 -
provided that no substitute depository which is not objected to by the City and the
Trustee can be obtained.
'
(b) In the case of any transfer pursuant to paragraph (i) or paragraph (ii) of subsection
(a) of this Section 2.12, upon receipt of all Outstanding Bonds by the Trustee, together with a
written request of a City Representative to the Trustee, a single new Bond shall be executed and
delivered for each maturity of such Bond then outstanding, registered in the name of such
successor or such substitute depository or their nominees, as the case may be, all as specified in
such written request of a City Representative. In the case of any transfer pursuant to paragraph
(iii) of subsection (a) of this Section 2.12, upon receipt of all Outstanding Bonds by the Trustee
together with a written request of a City Representative, new Bonds shall be executed and
delivered in such denominations and registered in the names of such persons as are requested
in a written request of the City provided the Trustee shall not be required to deliver such new
Bonds within a period less than sixty (60) days from the date of receipt of such a written request
of a City Representative.
(c) In the case of partial redem ti or an advance refunding of any Bonds vid ioA
all of the principal maturing in a particular year, The Depository Trust Company shall, at the
City's expense, deliver the Bonds to the Trustee for cancellation and re-registration to reflect the
amounts of such reduction in principal.
(d) The City and the Trustee shall be entitled to treat the person in whose name any
Bond is registered as the absolute Owner thereof for all purposes of this Indenture and any
applicable laws, notwithstanding any notice to the contrar i d b the Trustee the City
and the City and the Trustee shall have no responsibility for the accuracy of any records
maintained by DTC or any participant in DTC or transmitting payments to, communication
with, notifying or otherwise dealing with any beneficial owners of the Bonds. Neither the City
nor the Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial
owners or to any other party including The Depository Trust Company or its successor (or
substitute depository or its successor), except for the registered owner of any Bond.
(e) So long as all outstanding Bonds are registered in the name of Cede & Co. or its
registered assign, the City and the Trustee shall reasonably cooperate with Cede & Co, as sole
registered Owner, or its registered assign in ffe ti payment of dh i i l and interest due
with respect to the Bonds by arranging for payment in such manner that funds for such
payments are properly identified and are made immediately available on the date they are due,
in accordance with the Letter of Representations between [)T[ and the Trustee.
(f) So long as all Do d in the name of Cede & Co. or its
registered assigns (hereinafter, for purposes of this paragraph (f), the "Owner"):
(i) All notices and payments addressed to the Owners shall contain the Bonds'
CUSIP number.
(ii) Notices to the Owner shall be forwarded in the manner set forth in the form
of DTC's standard form blanket issuer letter of representations executed by the City and
received and accepted by DTC.
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS
Section 3.01. Issuance of Bonds. Upon the execution and delivery of this Indenture, the
City shall execute and deliver Bonds in the aggregate principal amount of $
to the Trustee. At the Request of the City, the Trustee shall authenticate and deliver the Bonds
to the Original Purchaser on the Closing Date.
Section 3.02. Deposit and Application of Proceeds. Upon receipt of the proceeds of the
Bonds on the Closing Date, the Trustee shall deposit the proceeds into a special fund to be held
by the Trustee and known as the Bond Proceeds Account, to be applied as follows:
(a) Current Interest Bonds The net proceeds received by the Trustee from the sale of the
Current Interest Bonds in the amount of $ , being the face amount of the Current
Interest Bonds (S ), less an underwriter's discount of $ , plus a premium of
, shall forthwith be deposited or transferred by the Trustee as follows:
(i) The Trustee shall deposit the amount of $ in the Costs of Issuance
Fund.
(ii) The Trustee shall deposit the amount of $ , constituting the
remainder of the proceeds of sale of the Current Interest Bonds, in the Retirement
Benefits Fund.
(b) Capital Appreciation Bonds. The net proceeds received by the Trustee from the sale of
the Capital Appreciation Bonds in the amount of $ , being the face amount of the
Capital Appreciation Bonds ($ ), less an underwriter's discount of $ , shall
forthwith be deposited or transferred by the Trustee as follows:
(i) The Trustee shall deposit the amount of $ in the Costs of Issuance
Fund.
(ii) The Trustee shall deposit the amount of $ , constituting the
remainder of the proceeds of sale of the Current Interest Bonds, in the Retirement
Benefits Fund.
(c) The Trustee may establish a temporary fund or account in its records to facilitate such
deposits and transfers.
After making the foregoing transfers, the Trustee shall dose the Bond Proceeds Account,
Section 3.03. Costs of Issuance Fund. There is hereby established a separate fund to be
known as the "Costs of Issuance Fund," to be held by the Trustee. The Trustee shall disburse
moneys in the Costs of Issuance Fund from time to time to pay Costs of Issuance upon
submission of a Request of the City stating (a) the person to whom payment is to be made, (b)
the amounts to be paid, (c) the purpose for which the obligation was incurred, (d) that such
payment is a proper charge against the Costs of Issuance Fund, and (e) that such amounts have
not been the subject of a prior Request of the City. On , the Trustee shall
transfer any amounts remaining in the Costs of Issuance Fund to the Debt Service Fund.
Section 3.04. Retirement Benefits Fund, There is hereby established a separate fund to be
known as the "Retirement Benefits Fund," to be held by the Trustee. The Trustee shall disburse
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moneys in the Retirement Benefits Fund from time to time to pay Retirement Benefits upon
submission of a Request of the City stating (a) the person to whom payment is to be made, (b)
the amounts to be paid, (c) that such payment is a proper charge against the Retirement Benefits
Fund, and (d) that such amounts have not been the subject of a prior Request of the City.
Section 3.05. Validity of Bonds. The validity of the authorization and issuance of the
Bonds is not dependent upon the expenditure of the proceeds thereof to pay Retirement
Benefits, or upon the performance by any person of its obligation with respect to the Retirement
Benefits.
ARTICLE IV
SECURITY FOR THE BONDS; FLOW OF FUNDS; TNVESTMENTS
Section 4.01. Security of Bonds; Equal Security.
(a) The obligations of the City under the Bonds, including the obligation to make all
payments of principal of and interest on the Bonds when due and the obligation of the City to
make the deposits required hereunder for the security of the Bonds, are obligations of the City
imposed by law and are absolute and unconditional, without any right of set-off or
counterclaim. The Bonds do not constitute an obligation of the City for which the City is
obligated to levy or pledge any form of taxation. Neither the Bonds nor the obligations of the
City to make payments on the Bonds constitute an indebtedness of the City, the State of
California, or any of its political subdivisions within the meaning of any constitutional or
statutory debt limitation or restriction.
(b) In consideration of the acceptance of the Bonds by those who hold the same from
time to time, this Indenture constitutes a contract between the City and the Owners from time to
time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf
of the City are for the equal and proportionate benefit, security and protection of all Owners of
the Bonds without preference, priority or distinction as to security or otherwise of any of the
Bonds over any of the others by reason of the number or date thereof or the time of sale,
execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly
provided therein or herein.
Section 4.02. Deposits to Pay Debt Service and Expenses.
(a) Prepayment of Debt Service. Not later than July 1 in each year, commencing July 1,
, the Trustee shall: (a) determine the amount which the City is obligated to deposit with the
Trustee for the payment of Debt Service on the Bonds during the current Fiscal Year, consisting
of the aggregate amount of principal of and interest on the Bonds coming due and payable in
such Fiscal Year, less the amount then held by the Trustee in the Debt Service Fund; and (b)
notify the City in writing of the amount so determined. The City agrees and covenants that, not
later than August 15 following receipt of such written notice from the Trustee, it will transfer
the amount set forth in such written notice to the Trustee, for deposit in the Debt Service Fund.
(b) Additional Payments. Not later than the fifth Business Day immediately preceding
each Interest Payment Date, the Trustee shall determine whether the amounts held by it in the
Debt Service Fund will be sufficient to pay the aggregate amount of Debt Service coming due
and payable on such Interest Payment Date. If the Trustee determines that the amounts held by
it in the Debt Service Fund will be insufficient to make such payment, the Trustee shall
immediately notify the City of such fact, and the City shall pay the amount of such insufficiency
to the Trustee, from any source of legally available funds of the City, such payment to be made
not later than three Business Days prior to the Interest Payment Date.
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Section 4.03. Debt Service Fund. There is hereby established a separate fund known as
the "Debt Service Fund," to be held by the Trustee in trust. The Trustee shall hold the Debt
Service Fund so long as any of the Bonds remain Outstanding. The Trustee shall disburse
moneys in the Debt Service Fund from time to time to pay Debt Service on the Bonds, including
the principal and premium (if any) required to be paid upon the redemption of the Bonds. All
amounts remaining on deposit in the Debt Service Fund on 2 of each year, following
the payment in full of all Debt Service then required to be paid on the Bonds, shall be retained
therein and credited towards the deposit next required to be made by the City with the Trustee
under Section 4.02(a).
Section 4.04. Investment of Moneys in Funds. The Trustee shall invest moneys held by it
in the Debt Service Fund and the Costs of Issuance Fund solely in Permitted Investments. In the
absence of any such direction from the City, the Trustee shall invest any such moneys solely in
Permitted Investments described in clause (g) of the definition thereof. The Trustee shall invest
moneys held by it in the Retirement Benefit Fund solely in Permitted Investments listed in
paragraphs and of the definition thereof.
Obligations purchased as an investment of moneys in any fund or account shall be
deemed to be part of such fund or account. All interest or gain derived from the investment of
amounts in any of the funds or accounts held by the Trustee hereunder shall be retained in the
respective fund or account from which such investment was made. 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 has no liability for
losses arising from any investments made under this Section 4.04.
The City acknowledges that to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grant the City the right to receive brokerage confirmations
of security transactions as they occur, the City specifically waives receipt of such confirmations
to the extent permitted by law. The Trustee will furnish the City periodic transaction statements
which 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.
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment. The City shall punctually pay or cause to be paid the
principal, premium (if any) and interest to become due in respect of all the Bonds in strict
conformity with the terms of this Indenture. The City shall faithfully observe and perform all of
the conditions, covenants and requirements of this Indenture and all Supplemental Agreements.
Section 5.02. Budget and Appropriation of Debt Service.The City covenants to take such
action as may be necessary to include in each of its annual budgets the payments required to be
made by the City under Section 4.02, and to make the necessary annual appropriations for all
such payments. If any payment of Debt Service requires the adoption by the City of a
supplemental budget or appropriation, the City will promptly adopt the same. The covenants
on the part of the City herein contained constitute duties imposed by law and it is the duty of
each and every public official of the City to take such action and do such things as are required
by law in the performance of the official duty of such officials to enable the City to carry out and
perform the covenants and agreements in this Indenture agreed to be carried out and
performed by the City.
Section 5.03. Extension of Payment of Bonds. The City may 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 if the
maturity of any of the Bonds or the time of payment of any such claims for interest is extended,
such Bonds or claims for interest are not 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
Outstanding Bonds and of all claims for interest thereon which have not been so extended.
Nothing in this Section 5.03 limits the right of the City to issue bonds for the purpose of
refunding any Outstanding Bonds, and such issuance does not constitute an extension of
maturity of the Bonds.
Section 5.04. Books and Accounts; Financial Statements; Additional Information. The
City will keep, or cause to be kept, proper books of record and accounts, separate from all other
records and accounts of the City. Such books of record and accounts shall at all times during
business hours be subject, upon prior written request, to the reasonable inspection of the
Trustee (who has no duty to inspect), the Owners of not less than 10% in aggregate principal
amount of the Bonds then Outstanding, or their representatives authorized in writing.
The City will cause to be prepared annually, within 180 days after the close of each
Fiscal Year so long as any of the Bonds are Outstanding, complete audited financial statements
with respect to such Fiscal Year, as of the end of such Fiscal Year, The City will furnish a copy of
such statements, upon reasonable request, to the Trustee and any Bond Owner. The Trustee has
no duty to review any such financial statement.
Section 5.05. Continu n Disclosure. The City will comply with and carry out all of the
provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision
hereof, failure of the City to comply with the Continuing Disclosure Certificate does not
constitute an Event of Default hereunder; provided, however, that any Participating Underwriter
(as such term is defined in the Continuing Disclosure Certificate) or any Owner or Beneficial
Owner of the Bonds may take such actions as may be necessary and appropriate, including
seeking specific performance by court order, to cause the City to comply with its obligations
under this Section 5.05.
Section 5.06. Protection of Security and Rights of Owners. The City will preserve and
protect the security of the Bonds and the rights of the Owners. From and after the date of
issuance of the Bonds, the City may not contest the validity or enforceability of the Bonds or this
Indenture.
Section 5.07. Further Assurances, The City will adopt, make, execute and deliver any
and all such further resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Indenture, and for the
better assuring and confirming unto the Bond Owners the rights and benefits provided in this
Indenture.
ARTICLE VI
THE TRUSTEE
Section 6.01. Duties, Immunities and Liabilities of Trustee.
(a) Performance of Duties. The Trustee shall, prior to the occurrence of an Event of Default,
and after the curing or waiving of all Events of Default which may have occurred, perform such
duties and only such duties as are specifically set forth in this Indenture and no implied
covenants or duties shall be read into this Indenture against the Trustee. The Trustee shall,
during the existence of any Event of Default (which has not been cured or waived), exercise
such of the rights and powers vested in it by this Indenture, and use the same degree of care
and skill in their exercise, as a prudent person would exercise or use in the conduct of such
person's own affairs.
(b) Removal. The City may remove the Trustee at any time, and shall remove the Trustee
(i) if at any time requested to do so by an instrument or ; concurrent instruments in writing
signed by the Owners of not less than a majority in aggregate principal amount of the Bonds
then Outstanding (or their attorneys duly authorized in writing) or (u) if at any time the Trustee
ceases to be eligible in accordance with subsection (e) of this Section 6.01, or becomes incapable
of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is
appointed, or any public officer takes control or charge of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation. In each case such removal
shall be accomplished by the giving of 30 days' written notice of such removal by the City to the
Trustee, whereupon in the case of the Trustee, the City shall appoint a successor Trustee by an
instrument in writing.
(c) Resignation. The Trustee may at any time resign by giving written notice of such
resignation to the City, and by giving notice of such resignation by first class mail, postage
prepaid, to the Bond Owners at their respective addresses shown on the Registration Books.
Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee
by an instrument in writing.
(d) Successors. Any removal or resignation of the Trustee and appointment of a successor
Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no
successor Trustee is appointed and accepts appointment within 45 days following giving notice
of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf
of such Owner and all other Owners) may petition any court of competent jurisdiction for the
appointment of a successor Trustee, and such court may t hereupon, after such notice (if any) as
it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under
this Indenture shall signify its acceptance of such, appointment by executing and delivering to
the City and to its predecessor Trustee a written acceptance thereof, and to the predecessor
Trustee an instrument indemnifying the predecessor Trustee for any costs or claims arising
during the time the successor Trustee serves as Trustee hereunder, and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the moneys, estates,
properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like
effect as if originally named Trustee herein; but, nevertheless, upon the receipt by the
predecessor Trustee of the Request of the City or the request of the successor Trustee, such
predecessor Trustee shall execute and deliver any and all instruments of conveyance or further
assurance and do such other things as may reasonably be required for more fully and certainly
vesting in and confirming to such successor Trustee all the right, title and interest of such
predecessor Trustee in and to any property held by it under this Indenture and shall pay over,
transfer, assign and deliver to the successor Trustee any money or other property subject to the
trusts and conditions herein set forth, Upon request of the successor Trustee, the City shall
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execute and deliver any and all instruments as may be reasonably required for fully and
certainly vesting in and confirming to such successor Trustee all such moneys, estates,
properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a
successor Trustee as provided in this subsection, the City shall mail or cause the successor
Trustee to mail, by first class mail postage prepaid„ a notice of the succession of such Trustee to
the trusts hereunder to each rating agency which then maintains a rating on the Bonds, and to
the Owners at the addresses shown on the Registration Books. If the City fails to mail such
notice within 15 days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the City.
(e) Qualifications. Any Trustee appointed under the provisions of this Section 6.01 in
succession to the Trustee must: (i) be a company or bank having trust (ii) have a
corporate trust office in the State of California, (iii) have (or be part of a bank holdi � 6coonpaoy
system whose bank holding company has) a combined capital and surplus of at least
$50,000,000, and (iv) be subject to supervision or examination by federal or state authority.
If such bank or company publishes a report of condition at least annually, under law or
to the requirements of any supervising i referred to, then for the
purpose of this subsection the combined capital and surplus of such bank or company shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee ceases to be eligible in accordance with the provisions of
this subsection (e), ihe Trustee shall resign immediately in the manner and with the effect
specified in subsection (c) of this Section 6.01.
Section 6.02. Merger or Consolidation Any bank or company into which the Trustee
may be merged or converted or with which either of thern may be consolidated or any bank or
company resulting from any merger, conversion or consolidation to which it shall be a party or
any bank or company to which the Trustee may sell or transfer all or substantially all of its
corporate trust business, provided such bank or company is eligible under subsection (e)
of
Section 6.01, shall be the successor to such Tr stee without the execution or filing of any
or any further act, anything herein to the contrary notwithstanding.
Section 6.03. Liability of Trustee.
(a) The recitals of facts contained herein and in the Bonds shall be taken as statements of
the City, and the Trustee shall not assume responsibility for the correctness of the same, nor
make any representations as to the validity or sufficiency of this Indenture or of the Bonds, nor
shall incur any responsibility in respect thereof, other than as expressly stated herein. The
Trustee shall, however, be responsible for its representations contained in its certificate of
authentication on the Bonds. The Trustee is not liable in connection with the performance of its
duties hereunder, except for its own negligence or willful misconduct. The Trustee is not liable
for the acts of any agents of the Trustee selected by it with due care. The Trustee ozaybecocne
the Owner of any Bonds or the holder of any other form of indebtedness of the City with the
same rights it would have if it were not Trustee and, to the extent permitted by law, may act as
depository for and permit any of its officers or directors to act as acneznbez of, or in any � odher
capacity with respect to, any committee formed to protect the rights of the Owners, whether or
not such committee shall represent the Owners of a majority in principal amount of the Bonds
then Outstanding. The Trustee, either as principal or agent, may engage in or be entrusted in
any financial or other trarisaction with the City.
(b) The Trustee is not liable for any error of judgment made in good faith by a
o ib)eofficer.
resp ns `
(c) The Trustee is not liable with respect to any action taken or omitted to be taken by it
in accordance with the direction of the Owners of a majority in aggregate principal amount of
the Bonds at the time Outstanding relating to the time, method and place of conducting arty
proceeding for any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Indenture.
(d) The Trustee is not liable for any action taken by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by this Indenture,
except for actions arising from the negligence or willful misconduct of the Trustee. The
permissive right of the Trustee to do things enumerated hereunder is not construed as a
mandatory duty.
(e) The Trustee is not deemed to have knowledge of any Event of Default hereunder
unless and until a responsible officer of the Trustee has actual knowledge thereof, or the Trustee
receives written notice thereof at its Corporate Trust Office. Except as otherwise expressly
provided herein, the Trustee is not bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or of any of the
documents executed in connection with the Bonds, or as to the existence of an Event of Default
hereunder or thereunder. The Trustee is not responsible for the City's payment of principal and
interest on the Bonds, the observance or performance; by the City of any other covenants,
conditions or terms contained herein, or the validity or effectiveness of any collateral given to or
held by it. Without limiting the generality of the foregoing, the Trustee is not responsible for the
recording or filing of any document relating to this Indenture or of financing statements or of
any supplemental instruments or documents of further assurance as may be required by law in
order to perfect the security interests in any collateral given to or held by it or reviewing the
contents of any financial statements furnished to the Trustee under Section 5.07 and may rely
conclusively on any representations made to it by the City concerning compliance with its
financial covenants hereunder.
(f) No provision in this Indenture shall require the Trustee to risk or expend its own
funds or otherwise incur any financial liability hereunder, The Trustee shall be entitled to
receive interest on any moneys advanced by it hereunder, at the maximum rate permitted by
law.
(g) The Trustee may establish additional accounts or subaccounts of the funds
established hereunder as the Trustee deems necessary or prudent in furtherance of its duties
under this Indenture.
(h) The Trustee has 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.
(i) Before taking any action under Article VIII' the Trustee may require indemnity
satisfactory to the Trustee be furnished to it to hold the Trustee harmless from any expenses
whatsoever and to protect it against any liability it may incur hereunder.
(j) The immunities extended to the Trustee also extend to its directors, officers,
employees and agents.
(k) The permissive right of the Trustee to do things enumerated in this Indenture is not
construed as a duty.
O\ The Trustee may execute any of the trusts or powers hereof arid perform any of its
duties through rys, agents and receivers and is not answerable for the conduct of the
same if appointed by it with reasonable care.
(co) The Trustee is not considered in breach of or in default in its obli tions hereunder
or progress in respect thereto in the event of enforced delay ("unavoidable delay") in the
performance of such obligations due to unforeseeable causes beyond its control and without its
fault or negligence, including, but not limited to, Acts of God or of the public enemy or
terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to
procure or general sabotage or rationing of labor, equipment, facilities, sources or energy,
material or supplies in the open market, litigation or arbitration involving a party or others
relating to zoning or other cnrueotal action or inaction pertaining to the project, malicious
mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors
due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
(n) The Trustee agrees to accept and act upon facsimile transmission of written
instructions and/or directions under this Indenture; provided, hoo/ovcr' that: (i) subsequent to
such facsimile transmission of written instructions and/or directions the Trustee shall forthwith
receive the originally executed instructions and/or directions, (ii) such originally execot d
instructions and/or directions shall be signed by a person as may be designated and authorized
to sign for the party signing such instructions and/or directions, and (iii) the Trustee has
received a current incumbency certificate containing the specimeri signature of such designated
person.
Section 6.04. Right to Rely on Documents. The Trustee is protected in acting u
notice, resolution, requisition, request, consent, order, certificate, report, opinion, facsiozDe
transmission, electronic mail, or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties. The Trustee may consult with
counsel, including, without limitation, Bond Counsel or other counsel of or to the City, with
regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protectiori in respect of any action taken or suffered by the Trustee hereunder
in accordance therewith.
The Trustee is not bound to recognize any person as the Owner of any Bond unless and
until such Bond is submitted for inspection, if required, and such person's title thereto is
established to the satisfaction of the Trustee.
Whenever in the administration of the trusts imposed upon it by this Indenture the
Trustee deems 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 Ci which 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 (but has no duty to), in lieu thereof, accept other evidence of such
matter or may require such additional evidence as to it may deem reasonable. The Trustee may
conclusively rely on any certificate or report of any Independent Accountant appointed by the
Section 6.05, Preservation and Inspection All documents received b the
Trustee under the provisions of this Indenture shall be retained in its possession and shall be
subject during normal business hours, and upon reasonable prior written notice, to the
inspection of the City and any Owner, and their agents and representatives duly authorized in
writing.
26-
Section 6.06. Compensation and Indemnification. (a) The City shall pay to the Trustee
from time to time compensation for all services rendered under this Indenture and also all
expenses, charges, legal and consulting fees and other disbursements and those of its attorneys
(including any allocated costs of internal counsel), agents and employees, incurred in and about
the performance of its powers and duties under this Indenture. The Trustee has a first lien on
amounts held in the funds and accounts held by it hereunder to secure the payment to the
Trustee of all fees, costs and expenses, including compensation to its experts, attorneys and
counsel incurred in declaring such Event of Default and in exercising the rights and remedies
set forth in Article VIII.
(b) The City further shall indemnify the Trustee and its officers, directors, agents and
employees, against any loss, expense and liabilities which it may incur arising out of or in the
exercise and performance of its powers and duties hereunder, including the costs and expenses
of defending against any claim of liability, and of enforcing any remedies hereunder and under
any related documents, 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.
(c) The obligations of the City under this Section 6.06 shall survive resignation or
removal of the Trustee under this Indenture and payment of the Bonds and discharge of this
Indenture.
Section 6.07. 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 standards, in which complete and accurate entries shall be made of all
transactions made by it relating to the proceeds of the Bonds and all funds and accounts
established and held by the Trustee under this Indenture. Such books of record and account
shall be available for inspection by the City at reasonable hours, during regular business hours,
with reasonable prior notice and under reasonable circumstances. The Trustee shall furnish to
the City, at least semiannually, an accounting (which may be in the form of its customary
statements) of all transactions relating to the proceeds of the Bonds and all funds and accounts
held by the Trustee under this Indenture.
ARTICLE VII
MODIFICATION OR AMENDMENTOF THIS INDENTURE
Section 7.01. Amendments Permitted.
(a) Amendment With Bond Owner Consent. This Indenture and the rights and obligations
of the City and of the Owners of the Bonds may be modified or amended by the City and the
Trustee upon Written Request of the City at any time by the execution of a Supplemental
Agreement, but only with the written consent of the Owners of a majority in aggregate principal
amount of the Bonds then Outstanding with respect to all Bonds then Outstanding, exclusive of
Bonds disqualified as provided in Section 9.05. Any such Supplemental Agreement becomes
effective upon the execution and delivery thereof by the parties thereto and upon consent of the
requisite Bond Owners. No such modification or amendment may
(i) extend the maturity of any Bond or reduce the interest rate thereon, or
otherwise alter or impair the obligation of the City to pay the principal thereof, or
interest thereon, or any premium payable on the redemption thereof, at the time and
place and at the rate and in the currency provided therein, without the written consent
of the Owner of such Bond, or
(ii) reduce the percentage of Bonds required for the affirmative vote or written
consent to an amendment or modification, or
(iii) modify any of the rights or obligations of the Trustee without its written
consent.
(b) Amendment Without Bond Owner Consent. This Indenture and the rights and
obligations of the City and of the Owners of the Bonds may also be modified or amended at any
time by a Supplemental Agreement, without the consent of any Owners of the Bonds, but only
for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City contained in this
Indenture, other covenants and agreements thereafter to be observed, or to limit or
surrender any rights or power herein reserved to or conferred upon the City;
(ii) to cure any ambiguity, or to cure, correct or supplement any defective
provision contained in this Indenture, or in any other respect whatsoever as the City
deems necessary or desirable, provided under any circumstances that such
modifications or amendments do not materially adversely affect the interests of the
Owners in the opinion of Bond Counsel filed with the City and the Trustee;
(iii) to modify, amend or add to the provisions herein to provide for the
establishment of different interest rate modes, tender or purchase provisions in
connection with the Bonds; or
(iv) to modify, amend or add to the provisions herein to provide for credit
facilities, liquidity facilities or other financial products agreements in connection with
the Bonds.
(c) Prohibited Amendments. Notwithstanding the foregoing provisions of this Section 7.01,
no amendment of this Indenture shall be made which would permit the City to purchase the
Bonds either outright or in lieu of redemption for purposes other than retiring the Bonds.
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(d) Notice of Amendments. The City shall deliver or cause to be delivered a draft of any
Supplemental Agreement to each rating agency at least 10 days prior to the effective date of
such Supplemental Agreement under this Section 7.01.
Section 7.02. Effect of Supplemental Agreement. From and after the time any
Supplemental Agreement becomes effective under this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners, as the case may be, shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such modification
and amendment, and all the terms and conditions of any Supplemental Agreement shall be
deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 7.03. Endorsement or Replacement of Bonds After Amendment. After the
effective date of any amendment or modification hereof under this Article VII, the City may
determine that any or all of the Bonds shall bear a notation, by endorsement in form approved
by the City, as to such amendment or modification and in that case upon demand of the City
the Owners of such Bonds shall present such Bonds for that purpose at the Corporate Trust
Office of the Trustee, and thereupon a suitable notation as to such action shall be made on such
Bonds. In lieu of such notation, the City may determine that new Bonds shall be prepared and
executed in exchange for any or all of the Bonds and in that case upon demand of the City the
Owners of the Bonds shall present such Bonds for exchange at the Corporate Trust Office of the
Trustee without cost to such Owners.
Section 7.04. Amendment by Mutual Consent. The provisions of this Article VII do not
prevent any Owner from accepting any amendment as to the particular Bond held by such
Owner, provided that due notation thereof is made on such Bond.
Section 7.05. Trustee's Reliance. The Trustee may conclusively rely, and is protected in
relying, upon a Certificate of the City and an opinion of counsel stating that all requirements of
this Indenture relating to the amendment or modification hereof have been satisfied and that
such amendments or modifications do not materially adversely affect the interests of the
Owners.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. Each of the following events constitutes an Event of
Default hereunder:
(a) Default in the due and punctual payment of the Debt Service when due and payable,
whether at maturity as therein expressed, by proceedings for redemption, or otherwise.
(b) Default by the City in the observance of any of the other covenants, agreements or
conditions on its part contained in this Indenture or in the Bonds, if such default has continued
for a period of 30 days after written notice thereof, specifying such default and requiring the
same to be remedied, has been given to the City by the Trustee or by the Owners of not less
than 25% in aggregate principal amount of the Bonds at the time Outstanding; provided, however,
if in the reasonable judgment of the City the default stated in the notice can be corrected, but not
within such 30 -day period, such default shall not constitute an Event of Default if corrective
action is instituted by the City within such 30 -day period and diligently pursued until the
default is corrected; and
(d) The filing of a petition in bankruptcy or the commencement of a proceeding under
the United States Bankruptcy Code or any other applicable law concerning insolvency,
reorganization or bankruptcy by or against the City, or if under the provisions of any other law
for the relief or aid of debtors any court of competent jurisdiction assumes custody or control of
the City or of the whole or any substantial part of its property.
Section 8.02. Remedies. If an Event of Default occurs under Section 8.01 and is
continuing, the Trustee may at the written direction of the Owners of a majority in aggregate
principal amount of the Bonds then Outstanding the Trustee must, (a) declare the principal of
the Bonds, together with the accrued interest thereon, to be due and payable immediately, and
upon any such declaration the same will become immediately due and payable, anything in this
Indenture or in the Bonds to the contrary notwithstanding, and (b) subject to the provisions of
Sections 8.07 and 8.09, exercise any other remedies available to the Trustee and the Bond
Owners in law or at equity to enforce the rights of the Bond Owners under this Indenture.
Without limiting the generality of the foregoing, the Trustee shall have the right by mandamus,
suit, action or proceeding, to compel the City and its members, officers, agents or employees to
perform each and every term, provision and covenant contained in this Indenture and in the
Bonds, and to require the carrying out of any or all such covenants and agreements of the City
and the fulfillment of all duties imposed upon it. If the maturity of the Bonds is accelerated
under the foregoing clause (a), the City may elect, in its sole discretion, to pay accelerated
principal and accrued interest on such principal to the date of acceleration (to the extent unpaid
by the City) and the Trustee is required to accept such amounts.
Immediately upon becoming aware of the occurrence of an Event of Default, but in no
event later than fourteen Business Days following becoming aware of such occurrence, the
Trustee shall give notice of such Event of Default to the City by telephone confirmed in writing.
Such notice shall also state whether the principal of the Bonds has been declared to be or have
immediately become due and payable. With respect to any Event of Default described in clauses
(a) or (b) above the Trustee shall, and with respect to any Event of Default described in clause
(c) above the Trustee in its sole discretion may, also give such notice to the Owners in the same
manner as provided herein for notices of redemption of the Bonds, which shall include the
statement that interest on the Bonds shall cease to accrue from and after the date, if any, on
which the Trustee declares the Bonds to become due and payable under the preceding
- 30 -
paragraph (but only to the extent that principal and any accrued, but unpaid, interest on the
Bonds is actually paid on such date).
This provision, however, is subject to the condition that if, at any time after the principal
of the Bonds has been so declared due and payable, and before any judgment or decree for the
payment of the moneys due has been obtained or entered, the City deposits with the Trustee a
sum sufficient to pay all principal on the Bonds matured prior to such declaration and all
matured installments of interest (if any) upon all the Bonds, with interest on such overdue
installments of principal and interest at an interest rate of 100/0 per annum, and the reasonable
fees and expenses of the Trustee, including fees and expenses of its attorneys, and any and all
other defaults known to the Trustee (other than in the payment of Debt Service due and payable
solely by reason of such declaration) has been made good or cured to the satisfaction of the
Trustee or provision deemed by the Trustee to be adequate has been made therefor, then, and in
every such case, the Owners of at least a majority in aggregate principal amount of the Bonds
then Outstanding, by written notice to the City and to the Trustee, may, on behalf of the
Owners of all of the Bonds, rescind and annul such declaration and its consequences. However,
no such rescission and annulment shall extend to or shall affect any subsequent default, or shall
impair or exhaust any right or power consequent thereon.
Section 8.03. Application of Funds Upon Event of Default. All of the amounts held in the
funds and accounts established and held by the Trustee hereunder upon the occurrence of an
Event of Default, and all sums thereafter received by the Trustee hereunder; shall be applied by
the Trustee as follows and in the following order:
First, to the payment of any fees, costs and expenses incurred by the Trustee to protect
the interests of the Owners of the Bonds; payment of the fees, costs and expenses of the Trustee
(including fees and expenses of its counsel, including any allocated costs of internal counsel)
incurred in and about the performance of its powers and duties under this Indenture and the
payment of all fees, costs and expenses owing to the Trustee under Section 6.06, together with
interest on all such amounts advanced by the Trustee at the maximum rate permitted bylaw.
Second, to the payment of the whole amount then owing and unpaid upon the Bonds for
interest and principal, with interest on such overdue amounts at the respective rates of interest
borne by those Bonds, and in case such moneys are insufficient to pay in full the whole amount
so owing and unpaid upon the Bonds, then to the payment of such interest, principal and
interest on overdue amounts without preference or priority among such interest, principal and
interest on overdue amounts ratably to the aggregate of such interest, principal and interest on
overdue amounts.
Section 8.04. Power of Trustee to Control Proceedings. If the Trustee, upon the
happening of an Event of Default, takes any action, by judicial proceedings or otherwise, in the
performance of its duties hereunder, whether upon its own discretion, or upon the request of
the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, it has
full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with
respect to the continuance, discontinuance, withdrawal, compromise, settlement or other
disposal of such action. The Trustee may not, unless there no longer continues an Event of
Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation
pending at law or in equity, if at the time there has been filed with it a written request signed by
the Owners of a majority in principal amount of the Outstanding Bonds hereunder opposing
such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.
Section 8.05. Limitation on Owners' Right to Sue. No Owner of any Bond has the right to
institute any suit, action or proceeding at law or in equity, for any remedy under or upon this
Indenture, unless:
- 31 -
(a) said Owner has previously given to the Trustee written notice of the occurrence of an
Event of Default;
(b) the Owners of a majority in aggregate principal amount of all the Bonds then
Outstanding have requested the Trustee in writing to exercise the powers hereinbefore granted
or to institute such action, suit or proceeding in its own name;
(c) said Owners have tendered to the Trustee indemnity reasonably acceptable to the
Trustee against the costs, expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee has failed to comply with such request for a period of 60 days after such
written request has been received by, and said tender of indemnity has been made to, the
Trustee; and
(e) no direction inconsistent with such written request has been given to the Trustee
during such 60 day period by the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy
hereunder; it being understood and intended that no one or more Owners has any right in any
manner whatever by his or their action to enforce any right under this Indenture, except in the
manner herein provided, and that all proceedings at law or in equity to enforce any provision of
this Indenture shall be instituted, had and maintained in the manner herein provided and for
the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of and
premium, if any, and interest on such Bond as herein provided, is not impaired or affected
without the written consent of such Owner, notwithstanding the foregoing provisions of this
Section 8.05 or any other provision of this Indenture.
Section 8.06. Non-waiver. Nothing in this Article VIII or in any other provision of this
Indenture or in the Bonds, affects or impairs the obligation of the City, which is absolute and
unconditional, to pay from the amounts pledged hereunder, the principal of and interest and
redemption premium (if any) on the Bonds to the Bond Owners when due and payable as
herein provided, or affects or impairs the right of action, which is also absolute and
unconditional, of the Bond Owners to institute suit to enforce such payment by virtue of the
contract embodied in the Bonds.
A waiver of any default by any Owner does not affect any subsequent default or impair
any rights or remedies on the subsequent default. No delay or omission of any Owner to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Owners by the Bond Law or by this Article VIII may be
enforced and exercised from time to time and as often as shall be deemed expedient by the
Owners.
If a suit, action or proceeding to enforce any right or exercise any remedy is abandoned
or determined adversely to the Owners, the City and the Owners will be restored to their
former positions, rights and remedies as if such suit, action or proceeding had not been brought
or taken.
- 32 -
Section 8.07. Actions by Trustee as Attorney-in-Fact. Any suit, action or proceeding
which any Owner has the right to bring to enforce any right or remedy hereunder may be
brought by the Trustee for the equal benefit and protection of all Owners similarly situated and
the Trustee is hereby appointed (and the successive respective Owners by taking and holding
the Bonds shall be conclusively deemed so to have appointed it) the true and lawful attorney-in-
fact of the respective Owners for the purpose of bringing any such suit, action or proceeding
and to do and perform any and all acts and things for and on behalf of the respective Owners as
a class or classes, as may be necessary or advisable in the opinion of the Trustee as such
attorney-in-fact, subject to the provisions of Article VI. Notwithstanding the foregoing
provisions of this Section 8.07, the Trustee has no duty to enforce any such right or remedy
unless it has been indemnified to its satisfaction for any additional fees, charges, expenses and
liabilities of the Trustee related thereto, including without limitation, fees and charges of its
attorneys and advisors.
Section 8.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Owners is intended to be exclusive of any other remedy. Every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now or hereafter
existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting
and without regard to any other remedy conferred by the Bond Law or any other law.
ARTICLE IX
MISCELLANEOUS
Sectiol1 9.01. Benefits Limited to Parties, Nothing in this Indenture, expressed or implied,
is intended to give to any person other than the City, the Trustee and the Owners of the Bonds,
any right, remedy, claim under or by reason of tRis Indenture. Any covenants, stipulations,
promises or agreements in this Indenture contained by and on behalf of the City shall be for the
sole and exclusive benefit of the Trustee artd the Owners of the Bonds.
Section 9.02. Successor is Deemed Included in All References to Predecessor. Whenever
in this Indenture or any Supplemental Agreement either the City or the Trustee is named or
referred to, such reference shall be deemed to include the successors or assigns thereof &nd aall tbe covenants and agreements contained in this Indenture by or on behal City of or the
Trustee bind and inure to the benefit of the respective successors and assigns thereof w ther so
expressed or not.
Section 9.03. Defeasance of Bonds. If the City pays and discharges the entire
indebtedness oo any Bonds bn any one ozcnorrof the following ways:
(a) by paying siog to be paid the principal of and interest on such Bonds, as and
when they become due and payable;
(b) by irrevocably depositing with the Trustee or an escrow bank, in trust, at or before
maturity, an amount of cash which, together with the available amounts then on deposit in the
funds and accounts established under this Indenture, in the opinion or report of an Independent
Accountant is fully sufficient to pay such Bonds, including all principal of such Bonds and the
interest and redemption premium, if any thereon;
(c) by irrevocably depositing with the Trustee or an escrow bank, in trust, direct non-
callable Federal Securities in such amount as an Independent Accountant determines will,
together with the interest to accrue thereon and available moneys then on deposit in any of the
funds and accounts established under this Indenture, be fully sufficient to pay and discharge
the indebtedness on such Bonds (including all principal of such Bonds and ^ the interest and
redemption premium, if any thereon) at or before maturity; or
(d) by purchasing such Bonds prior to maturity and tendering such Bonds to the Trustee
for cancellation;
and, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption
has been duly given or provision satisfactory to the Trustee has been made for the giving of
such notice, then, at the election of the City, and notwithstanding that any such Bonds have not
been surrendered for payment, the obligations of the Trustee and the City under this Indenture
with respect to such Bonds shall cease and terminate, except only:
(i) the obligation of the Trustee to transfer and exchange Bonds hereunder,
(ii) the obligation of the City to pay or cause to be paid to the Owners of such
Bonds, from the amounts so deposited with the Trustee, all sums due thereon, and
(iii) the obligations of the City to compensate and indeozoifv the Trustee under
Section 6.06. '
The City must file notice of such election with the Trustee. The Trustee shall pay any
funds thereafter held by it, which are not required for said purpose, to the City.
To accomplish defeasance, the City shall cause to be delivered (i) a report of an
Independent Accountant verifying the sufficiency of the escrow established to pay Bonds in
full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit Agreement, (iii)
an opinion of Bond Counsel to the effect that the Bonds are no longer Outstanding and (iv) a
certificate of discharge of the Trustee with respect to the Bonds. Each Verification and
defeasance opinion shall be acceptable in form and substance, and addressed, to the City and
Trustee.
In the case of a defeasance or payment of all of the Bonds Outstanding in accordance
with this Section 9.03, the Trustee shall pay all amounts held by it in any funds or accounts
hereunder, which are not required for said purpose or for payment of amounts due the Trustee
under Section 6.06, to the City.
Section 9.04. Execution of Documents and Proof of Ownership by Owners. Any request,
declaration or other instrument which this Indenture may require or permit to be executed by
any Owner may be in one or more instruments of similar tenor, and shall be executed by such
Owner in person or by their attorneys appointed in writing.
The ownership of Bonds, and the amount, maturity, number and date of ownership
thereof, are conclusively proved by the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond binds
all future Owners of such Bond in respect of anything done or suffered to be done by the City or
the Trustee in good faith and in accordance therewith.
Section 9.05. Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction,
consent or waiver under this Indenture, Bonds which are owned or held by or for the account of
the City (but excluding Bonds held in any employees retirement fund) must be disregarded
and deemed not to be Outstanding for the purpose of any such determination. The Trustee will
not be deemed to have knowledge that any Bond is owned by the City unless the City is the
Owner of such Bond or the Trustee has received written notice to that effect.
Section 9.06. Waiver of Personal Liability. No member, officer, agent or employee of the
City shall be individually or personally liable for the payment of the principal of or interest or
redemption premium on the Bonds; but nothing herein contained shall relieve any such
member, officer, agent or employee from the performance of any official duty provided by law.
Section 9.07. Destruction of Canceled Bonds. Whenever in this Indenture provision is
made for the surrender to the City of any Bonds which have been paid or canceled under the
provisions of this Indenture, a certificate of destruction duly executed by the Trustee shall be
deemed to be the equivalent of the surrender of such canceled Bonds and the City shall be
entitled to rely upon any statement of fact contained in any certificate with respect to the
destruction of any such Bonds therein referred to. The City shall pay all costs of any
microfilming of Bonds to be destroyed.
Section 9.08. 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) upon actual receipt after deposit in the United States mail, postage
- 35 -
prepaid, or (c) in any other case, upon actual receipt. 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 City
If to the Trustee:
City of Alameda
2263 Santa Clara Avenue
Alameda, CA 94501
Attention: Finance Director
Phone: (510) 747-4888
Fax: (510) 748-4696
Union Bank, N.A,
35O California Street, lI*Floor
San Francisco, CA 94104
Attention: Corporate Trust Departrnent
Phone: (415) 273-2518
Fax: (415) 273-2492
Section 9.09. Partial Invalidity. If a b sentence, clause bza
this Indenture is for any reason held illegal, invalid or unenforceable, such holding will not
affect the validity of the remaining portions of this Indenture. The City and the Trustee hereby
declare that they would have entered into this Indenture and each and every other Section,
paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant
thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or
phrases of this Indenture may be held illegal, invalid or unenforceable.
Section 9.I0. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any mone held by the Trustee in trust for the payment and discharge of the
interest or premium (if any) on or principal of the Bonds which remains unclaimed for two
years after the date when the payments f such interest, premium d
principal
payable, if such 0000ey was held by the Trustee at such date, or for `tvvo aftert the date '--f
deposit of such money if deposited with the Trustee after the date when the interest and
premium (if any) on and principal of such Bonds have become payable, shall be repaid by the
Trustee to the City as its absolute property free from trust, and the Trustee shall thereupon be
released and discharged with respect thereto and the Owners shall look only to the City for the
payment of the principal of and interest and redemptiori premium (if any) on such Bonds,
Section 9.I1. Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 9.12. Governing This Indenture shall be construed and governed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the CITY OF ALAMEDA has caused this Indenture to be
signed in its name by its officer thereunto duly authorized and attested to by its City Clerk, and
UNION BANK, 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.
Attest:
Name
City Clerk
CITY OF ALAMEDA
By
Name
Title
UNION BANK, N.A.
By
Name
Title
Quint & Thimmig LLP
EXHIBIT A
FORM OF CURRENT INTEREST BOND
CITY OF ALAMEDA
2009 Taxable Pension Obligation Bond
(Current Interest Bond)
03/31/09
RATE OF INTEREST
MATURITY DATE
DATED DATE
CUSIP
0/0
1,
, 2009
REGISTERED OWNER:
CEDE & CO
PRINCIPAL AMOUNT: DOLLARS
The CITY OF ALAMEDA, a charter city and municipal corporation organized and
existing under the Constitution and laws of the State of California (the "City") for value
received, hereby promises to pay to the Registered Owner stated above, or registered assigns,
on the Maturity Date stated above (subject to any right of prior redemption hereinafter
mentioned), the Principal Amount stated above, in lawful money of the United States of
America; and to pay interest thereon in like lawful money from the Interest Payment Date next
preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day
during the period commencing after the fifteenth day of the month preceding an Interest
Payment Date and ending on or before such Interest Payment Date, in which event it shall bear
interest from such Interest Payment Date, or unless this Bond is authenticated on or before
15, , in which event it shall bear interest from the Issue Date stated above) until
payment of such principal sum shall be discharged as provided in the Indenture hereinafter
mentioned, at the Interest Rate per annum stated above, payable semiannually on each
1 and 1, commencing 1, (each, an "Interest Payment Date").
The principal (or redemption price) hereof is payable by check at the Corporate Trust
Office (as defined in the Indenture referred to below) of Union Bank, N.A. (together with any
successor trustee under the Indenture, the "Trustee"). Interest hereon is payable by check of the
Trustee mailed on each Interest Payment Date to the Registered Owner as of the 15th day of the
month preceding each Interest Payment Date (except with respect to payment of defaulted
interest as provided in the Indenture hereinafter referred to) at the address shown on the
registration books maintained by the Trustee. Payment of interest will be made by wire transfer
in immediately available funds to an account in the United States of America to any Owner of
Bonds in the aggregate principal amount of $1,000,000 or more who shall furnish written wire
instructions to the Trustee before the 15th day of the month preceding the applicable Interest
Payment Date,
This Bond is one of a duly authorized issue of bonds of the City designated as its "City
of Alameda 2009 Taxable Pension Obligation Bonds " (the "Bonds"), in the aggregate principal
amount of $ , authorized under Resolution No. , adopted by the City
Council of the City on April 7, 2009 (the "Authorizing Resolution"), and issued under an
Indenture of Trust, dated as of , 20 (the "Indenture"), by and between the City
and the Trustee. The Bonds have been issued for the purpose of refinancing obligations of the
City to
Exhibit A
Page 1
01019.16
Reference is hereby made to the Indenture (a copy of which is on file at said Office of the
Trustee) and all indentures supplemental thereto and to the Authorizing Resolution for a
description of the rights thereunder of the owners of the Bonds, of the nature and extent of the
security, of the rights, duties and immunities of the Trustee and of the rights and obligations of
the City thereunder. The Registered Owner of this Bond, by acceptance hereof, assents and
agrees to all the provisions of the Indenture.
The principal of and interest on the Bonds are payable from any source of legally
available funds of the City, including amounts on deposit in the General Fund of the City. The
Bonds are not secured by a pledge of or lien any specific revenues, income or funds of the City.
The obligations of the City under the Bonds, including the obligation to make all payments of
principal of and interest on the Bonds when due and the obligation of the City to make the
deposits required hereunder for the security of the Bonds, are obligations of the City imposed
by law and are absolute and unconditional, without any right of set-off or counterclaim. The
Bonds do not constitute an obligation of the City for which the City is obligated to levy or
pledge any form of taxation. Neither the Bonds nor the obligations of the City to make
payments on the Bonds constitute an indebtedness of the City, the State of California, or any of
its political subdivisions in contravention of any constitutional or statutory debt limitation or
restriction.
The City Council is obligated in each fiscal year to appropriate all amounts from such
funds as may be required to pay the aggregate amount of the principal of and interest on the
Bonds coming due and payable in such fiscal year As provided in the Indenture, not later than
August 15 in each fiscal year, commencing August 15, 2009, the City will transfer to the Trustee
an amount required for the payment of debt service coming due on the Bonds during such fiscal
year, consisting of the aggregate amount of principal of and interest on the Bonds coming due
and payable in such fiscal year, less the amount then held by the Trustee in the Debt Service
Fund which is established under the Indenture.
This Bond is transferable and exchangeable by the Owner, in person or by his attorney
duly authorized in writing, at the Corporate Trust Office, but only in the manner, subject to the
limitations and upon payment of any charges provided in the Indenture and upon surrender
and cancellation of this Bond. Upon such transfer, a new Bond or Bonds of an authorized
denomination or denominations for the same aggregate principal amount will be delivered to
the transferee in exchange for this Bond. The District, the Corporation and the Trustee may treat
the Owner as the absolute owner hereof for all purposes, whether or not the payments
represented by this Bond shall be overdue and the District, the Corporation and the Trustee
shall not be affected by any notice to the contrary.
The Bonds are subject to optional redemption [TO COME]
The Bonds maturing on 1, , are subject to mandatory redemption in part on
1, , and on 1, , at a redemption price equal to the principal amount thereof to
be redeemed, together with accrued interest to the date fixed for redemption, without premium,
as follows:
Year
( 1)
1-Maturity
Principal Amount of
Bonds to be Redeemed
Exhibit A
Page 2
In the event that the Trustee prepays Bonds maturing on 1, , in part but not in
whole as described in the paragraphs above entitled relating to optional redemption, the
amount of Bonds to be redeemed in each subsequent year will be reduced to correspond to the
principal of the Bonds remaining unpaid following such redemption.
Notice of redemption is to be given by the Trustee by mailing a redemption notice by
first class mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed
for redemption to the registered owner of the Bond or Bonds to be redeemed at the address
shown on the Bond registration books maintained by the Trustee. Notice of redemption having
been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the
redemption date, become due and payable at the redemption price therein specified, and from
and after such date (unless the District shall default in the payment of the redemption price)
interest with respect to such Bonds or portions of Bonds shall cease to accrue and be payable.
The Trustee has no obligation or liability to the registered owners of the Bonds to make
payments of principal or interest with respect to the Bonds. The Trustee's sole obligations are to
administer, for the benefit of the registered owners of the Bonds, the various funds and
accounts established under the Indenture. The Trustee makes no representation concerning the
recitals contained in the Indenture or in this Bond.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company, a New York corporation ( "DTC "), to the Trustee for registration of transfer,
exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE,` OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
It is hereby certified and recited that any and all things, conditions and acts required to
exist, to have happened and to have been performed precedent to and in the issuance of this
Bond do exist, have happened and have been performed in due time form and manner as
required by the Authorizing Resolution, and by the constitution and laws of the State of
California, and that the amount of this Bond, together with all other indebtedness of the City,
does not exceed any limit prescribed by the Authorizing Resolution and is not in excess of the
amount of Bonds permitted to be issued under the Indenture.
This Bond is not entitled to any benefit under the Indenture, or is not valid or obligatory
for any purpose, until the certificate of authentication hereon endorsed has been signed by the
Trustee.
Exhibit A
Page 3
IN WITNESS WHEREOF, City f Alameda has caused this Bond to be executed in its
name and on its behalf by the facsimile signature of the and attested to by the
facsimile sigriature of its City Clerk, all as of the Issue Date stated above,
Attest
CITY OP ALAMEDA
By
City Clerk
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentjoned Indenture.
Dated:
as Trustee
By
Authorized Signatory
Exhibit A
Page 4
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Secu
y Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute and appoint
attorney, to transfer the same on the registration books of the Trustee, with full power of
substitution in the premises.
Dated:
9
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers,
savings and loan associations and credit unions with
membership in an approved signature guarantee
medallion program) pursuant to Securities and
Exchange Commission Rule 17 Ad-15.
NOTICE: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of
the within Bond in every particular, without alteration
or enlargement or any change whatsoever.
Exhibit A
Page 5
Quint & Thimmig LLP
EXHIBIT C
FORM OF CAPITAL APPRECIATION BOND
CITY OF ALAMEDA
2009 Taxable Pension Obligation Bond
(Capital Appreciation Bond)
03/31/09
ACCRETION RATE
MATURITY DATE
DATED DATE `
CUSIP
%
1
,2009
REGISTERED OWNER:
DENOMINATIONAL AMOUNT: DOLLARS
MATURITY AMOUNT: DOLLARS
CEDE & CO.
The CITY OF ALAMEDA, a charter city and municipal corporation organized and
existing under the Constitution and laws of the State of California (the "City ") for value
received, hereby promises to pay to the Registered Owner stated above, or registered assigns,
on the Maturity Date stated above (subject to any right of prior redemption hereinafter
mentioned), the Maturity Amount stated above, in lawful money of the United States of
America, such Maturity Value being comprised of the Denominational Amount and interest
accreted thereon.
The Maturity Amount is payable by check at the Corporate Trust Office (as defined in
the Indenture referred to below) of Union Bank, N.A. (together with any successor trustee
under the Indenture, the "Trustee ").
This Bond will not bear current interest but will accrete interest, compounded on each
1 and ____ 1, commencing 1, 2009, at the Accretion Rate specified above to the
Maturity Date, assuming that in any such semiannual period the sum of such compounded
accreted interest and the Denomination Amount (such sum being herein called the "Accreted
Value ") increases in equal daily amounts on the basis of a 360 -day year consisting of twelve
30 -day months. Accreted Value is payable in lawful money of the United States of America by
check of the Trustee upon presentation and sunender hereof at the Corporate Trust Office.
This Bond is one of a duly authorized issue of bonds of the City designated as its "City
of Alameda 2009 Taxable Pension Obligation Bonds " (the "Bonds "), in the aggregate
principal amount of $ , authorized under Resolution No. , adopted by the
City Council of the City on April 7, 2009 (the "Authorizing Resolution "), and issued under an
Indenture of Trust, dated as of , 20 (the "Indenture "), by and between the City
and the Trustee. The Bonds have been issued for the purpose of refinancing obligations of the
City to
Reference is hereby made to the Indenture' (a copy of which is on file at said Office of
the Trustee) and all indentures supplemental thereto and to the Authorizing Resolution for a
description of the rights thereunder of the owners of the Bonds, of the nature and extent of the
security, of the rights, duties and immurities of the Trustee and of the rights and obligations
Exhibit B
Page 1
01019.16
of the City thereunder. The Registered Owner of this Bond, by acceptance hereof, assents and
agrees to all the provisions of the Indenture.
The Maturity Amount is payable from any source of legally available funds of the City,
including amounts on deposit in the General Fund of the City. The Bonds are not secured by a
pledge of or lien any specific revenues, income or funds of the City, The obligations of the City
under the Bonds, including the obligation to make all payments of principal of and interest on
the Bonds when due and the obligation of the City to make the deposits required hereunder for
the security of the Bonds, are obligations of the City imposed by law and are absolute and
unconditional, without any right of set-off or counterclaim. The Bonds do not constitute an
obligation of the City for which the City is obligated to levy or pledge any form of taxation.
Neither the Bonds nor the obligations of the City to make payments on the Bonds constitute an
indebtedness of the City, the State of California, or any of its political subdivisions in
contravention of any constitutional or statutory debt limitation or restriction.
The City Council is obligated in each fiscal year to appropriate all amounts from such
funds as may be required to pay the aggregate amount of the principal of and interest on the
Bonds coming due and payable in such fiscal year. As provided in the Indenture, not later than
August 15 in each fiscal year, commencing August 15, 2009, the City will transfer to the
Trustee an amount required for the payment of debt service coming due on the Bonds during
such fiscal year, consisting of the aggregate amount of principal of and interest on the Bonds
coming due and payable in such fiscal year, less the amount then held by the Trustee in the
Debt Service Fund which is established under the Indenture.
This Bond is transferable and exchangeable by the Owner, in person or by his attomey
duly authorized in writing, at the Corporate Trust Office, but only in the manner, subject to
the limitations and upon payment of any charges provided in the Indenture and upon
surrender and cancellation of this Bond. Upon such transfer, a new Bond or Bonds of an
authorized denomination or denominations for the same aggregate principal amount will be
delivered to the transferee in exchange for this Bond. The District, the Corporation and the
Trustee may treat the Owner as the absolute owner hereof for all purposes, whether or not the
payments represented by this Bond shall be overdue and the District, the Corporation and the
Trustee shall not be affected by any notice to the contrary.
The Bonds are subject to optional redemption [TO COME]
Notice of redemption is to be given by the Trustee by mailing a redemption notice by
first class mail at least thirty (30) days and not more than sixty (60) days prior to the date
fixed for redemption to the registered owner of the Bond or Bonds to be redeemed at the
address shown on the Bond registration books maintained by the Trustee. Notice of
redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed
shall, on the redemption date, become due and payable at the redemption price therein
specified, and from and after such date (unless the District shall default in the payment of the
redemption price) interest with respect to such Bonds or portions of Bonds shall cease to
accrue and be payable.
The Trustee has no obligation or liability to the registered owners of the Bonds to make
payments of principal or interest with respect to the Bonds, The Trustee's sole obligations are
to administer, for the benefit of the registered owners of the Bonds, the various funds and
accounts established under the Indenture. The Trustee makes no representation concerning the
recitals contained in the Indenture or in this Bond.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the Trustee for registration of transfer,
Exhibit B
Page 2
exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
It is hereby certified and recited that any and all things, conditions and acts required to
exist, to have happened and to have been performed precedent to and in the issuance of this
Bond do exist, have happened and have been performed in due time, form and manner as
required by the Authorizing Resolution, and by the constitution and laws of the State of
California, and that the amount of this Bond, together with all other indebtedness of the City,
does not exceed any limit prescribed by the Authorizing Resolution and is not in excess of the
amount of Bonds permitted to be issued under the Indenture.
This Bond is not entitled to any benefit under the Indenture, or is not valid or obligatory
for any purpose, until the certificate of authentication hereon endorsed has been signed by the
Trustee.
IN WITNESS WHEREOF, City of Alameda has caused this Bond to be executed in its
name and on its behalf by the facsimile signature of the and attested to by the
facsimile signature of its City Clerk, all as of the Issue Date stated above.
Attest
CITY OF ALAMEDA
By
City Clerk
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Dated:
UNION BANK, N.A.,
as Trustee
By
Authorized Signatory
Exhibit B
Page 3
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assi
the within Bond and do(es) hereby irrevocably constitute and appoint
ee)
attorney, to transfer the same on the registration books of the Trustee, with full po
substitution in the premises.
Dated:
9
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers,
savings and loan associations and credit unions with
membership in an approved signature guarantee
medallion program) pursuant to Securities and
Exchange Commission Rule 17 Ad -15.
'er of
NOTICE: The signature(s) on this Assignment must
correspond with the name(s) as written on the face cf
the within Bond in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit B
Page 4
EXHIBIT C
TABLE OF ACCRETED VALUES OF THE
CAPITAL APPRECIATION BONDS
Exhibit C
I, the undersigned, hereby certify that the foregoing Resolution was duly and
regularly adopted and passed by the Council of the City of Alameda during the Regular
Meeting of the City Council on the 7th day of April, 2009, by the following vote to wit:
AYES: Councilmembers deHaan, Gilmore, Matarrese, Tam
and Mayor Johnson - 5.
NOES: None.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of
said City this 8th day of April, 2009.
Lara Weisiger, Qity . Ie K
City of Alameda