indenture - grass valley, california

INDENTURE
This Indenture (the “Indenture”), dated as of July 1, 2006, by and between the CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY (the “Authority”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the “Trustee”);
W I T N E S S E T H:
WHEREAS, the local agencies named in Schedule I hereto (the “Local Agencies”) have determined to simultaneously issue their Tax and Revenue Anticipation Notes, in the respective principal amounts set forth in Schedule I hereto (individually, a “Note” and, collectively, the “Notes”) and to sell the Notes to the Authority and participate in the California Communities Cash Flow Financing Program (the “Program”); and
WHEREAS, each Local Agency has acknowledged the pooling of its Note with the Notes issued by other Local Agencies participating in the Program and the assignment by the Authority of said Local Agency’s Note to the Trustee to secure payment of the Bonds issued under this Indenture (the “Bonds”), in order to achieve a lower net interest cost and lower costs associated with issuing its Note; and
WHEREAS, each Local Agency has entered into a purchase agreement with the Authority whereby the Authority has agreed to purchase such Local Agency’s Note and in connection therewith issue the Bonds; and
WHEREAS, each Local Agency has acknowledged that the Authority will enter into this Indenture and issue, pursuant to the terms of this Indenture, the Bonds; and
WHEREAS, pursuant to the Program and this Indenture, the Authority has assigned its interest in the Notes to the Trustee; and
WHEREAS, the Trustee, pursuant hereto, accepts the assignment of the Notes and all duties, obligations and trusts of the Trustee established in this Indenture; and
WHEREAS, the Bonds are secured, in part, by a Credit Instrument which is a municipal bond insurance policy issued by _________________________; 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 the Indenture and delivery of the Bonds 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 the Indenture;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
DOCSLA1:517851.1 2
OTHER VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall, for all purposes hereof and of any amendment hereof or supplement hereto and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein, have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein (provided that the Credit Instruments shall be governed by the respective definitions set forth therein):
“Authority” means the California Statewide Communities Development Authority, a public entity of the State of California, created pursuant to the provisions relating to the joint exercise of powers found in Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California.
“Authorized Authority Representative” means any member of the Commission of the Authority.
“Authorized Denomination” means (i) for any Index Bond $25,000 or any multiple thereof, or (ii) for any Fixed Rate Bond, $5,000 or any multiple thereof.
“Authorized Local Agency Representative” means the person or persons designated as such in the Local Agency Note Resolution or any other person at the time designated to act on behalf of such Local Agency by written certificate furnished to the Trustee, containing the specimen signature of such person and signed on behalf of such Local Agency by an Authorized Local Agency Representative.
“Authority Swap Obligation” means the amount payable by the Authority under the Swap Agreement on each Swap Payment Date.
“BMA Index” means a per annum rate equal to: (i) the rate determined on the basis of an index based upon the weekly interest rate resets of tax-exempt variable rate issues included in The Bond Market Association Municipal Swap Index, produced by Municipal Market Data, and effective on the Wednesday prior to any Index Bond BMA Reset Date; (ii) if the BMA Index is not published on the Wednesday prior to any Index Bond BMA Reset Date, the rate determined by reference to the J.J. Kenny High Grade Index and effective on the Wednesday prior to that Index Bond BMA Reset Date; provided that, with respect to clauses (i) and (ii), if any Wednesday is not a Business Day, the BMA Index shall be determined on the preceding Business Day; and (iii) if the BMA Index as described in clauses (i) and (ii) is not available for any week, the BMA Index determined pursuant to clause (i) or (ii) above for the next preceding Index Bond BMA Reset Date.
DOCSLA1:517851.1 3
“BMA Index Bond Rate” means a per annum rate equal to the BMA Index Rate plus or minus the BMA Margin applied on the basis of the actual number of days in the Index Bond Calculation Period divided by 365, all as calculated by Trustee from time to time.
“BMA Index Rate” means, in respect of the Index Bond Calculation Period, a per annum rate equal to the weighted arithmetic average of the BMA Index in effect for each day in the Index Bond Calculation Period, calculated by multiplying each such BMA Index by the number of days such BMA Index is in effect, determining the sum of such products and dividing such sum by the number of days in the Index Bond Calculation Period.
“BMA Margin” means the number of basis points which will be added to or subtracted from the BMA Index in calculating the BMA Index Bond Rate for such Series.
“Bond Payment Fund” means the fund by that name established in Section 3.02.
“Bond Purchase Agreement” means that certain Bond Purchase Agreement between the Authority and the Purchaser relating to the purchase of the Bonds by the Purchaser.
“Bonds” means the California Statewide Communities Development Authority 2006 Tax and Revenue Anticipation Bonds, Series A-1, authorized hereby and at any time Outstanding hereunder that are issued by the Authority under and pursuant to Article II.
“Business Day” means any day except Saturday, Sunday or any day on which banks located in the city in which the Principal Office of the Trustee or the Principal Office of the Credit Provider is located, are required or authorized to remain closed.
“Certificate” or “Request” with respect to a Local Agency means an instrument in writing signed on behalf of such Local Agency by an Authorized Local Agency Representative, and with respect to the Authority means an instrument in writing signed on behalf of the Authority by an Authorized Authority Representative or other person at the time designated to act on behalf of the Authority by written certificate furnished to the Trustee.
“Code” means the Internal Revenue Code of 1986 and the regulations issued or applicable thereunder.
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to a Local Agency or the Authority and related to the authorization, execution and delivery of the Notes and the related sale of the Bonds, including, but not limited to, the Credit Provider’s Credit Instrument fees or premium or costs of issuance, as applicable, costs of preparation, reproduction and delivery of documents, filing and recording fees, fees and charges of the Trustee and its counsel, bond counsel fees and charges, other legal fees and charges, fees and disbursements of consultants and professionals, fees and charges for preparation, execution, safekeeping and delivery of the Bonds and any other costs, charges or fees in connection with the original issuance of the Notes or the Bonds.
“Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.02 hereof.
DOCSLA1:517851.1 4
“Credit Agreement” means the Credit Agreement, if any, identified in Schedule III and dated the date indicated therein between the Authority and the Credit Provider as the same may be amended from time to time. If there is more than one Credit Agreement, the term shall refer to each of them separately and collectively.
“Credit Fund” means the fund of that name pursuant to Section 3.02 hereof.
“Credit Instrument” means the instrument designated in Schedule III as the Letter of Credit/Policy of Insurance dated the date of issuance of the Bonds, issued by the Credit Provider designated in Schedule III in favor of the Trustee, as the same may be amended from time to time. If there is more than one Credit Instrument, the term shall refer to each of them separately and collectively. Unless otherwise provided in the Credit Instrument, the Credit Instrument shall be deemed to enhance the Notes which secure the Bonds.
“Credit Instrument Payment Certificate” means the Credit Instrument Payment Certificate, if any, relating to the procedures for submission of claims under the Credit Instrument and for apportionment of the policy limit, to the extent required.
“Credit Provider” means the entity, if any, identified as provider of the Credit Instrument in Schedule III. If there is more than one Credit Provider, the term shall refer to each of them separately and collectively.
“Defaulted Note” means a Note (i) the principal of and interest on which has been paid in whole or in part with the proceeds of a drawing or claim or payment under or from the Credit Instrument which remains not fully reimbursed on the Note Maturity Date or (ii) any of the principal of or interest on which is not paid when due.
“Default Rate” means the rate of interest per annum payable with respect to the outstanding portion of each Defaulted Note which (i) if the Defaulted Note is unpaid and no Credit Instrument is applicable thereto, shall equal the Note Rate, or (ii) if the Defaulted Note is paid in whole or in part by an unreimbursed draw or claim or payment under or from a Credit Instrument, is calculated in accordance with the applicable provisions of the Credit Instrument or the Credit Agreement; provided, however, if the Credit Instrument or the Credit Agreement, if any contains no such provision or provisions regarding the calculation of a default rate of interest, “Default Rate” means the Note Rate.
“Financial Advisor” shall mean RBC Capital Markets.
“Fixed Rate Bond” means a Bond bearing interest at a fixed rate of interest.
“Fund” shall mean, each of the Funds established pursuant to Section 3.02 hereof.
“Indenture” means this Indenture, dated as of July 1, 2006, by and between the Trustee and the Authority, as originally executed and entered into and as it may from time to time be amended or supplemented in accordance herewith.
DOCSLA1:517851.1 5
“Index Bond” means a Bond bearing interest at the BMA Index Bond Rate or the LIBOR Index Bond Rate until its Maturity Date or, if earlier, its Redemption Date.
“Index Bond Calculation Period” for any Index Bond means the period from and including each Interest Payment Date for the Index Bond to but excluding the next succeeding Interest Payment Date for the Index Bond; provided that the first Index Bond Calculation Period shall mean the period from and including the Effective Date for the Index Bond to but excluding the next succeeding Interest Payment Date and the final Index Bond Calculation Period shall mean the last Interest Payment Date before the Maturity Date (or, if earlier the Redemption Date) for the Index Bonds.
“Index Bond LIBOR Reset Date” means each Thursday (and, if the Effective Date is a day other than a Thursday, the Thursday next preceding the Effective Date) or, if any Thursday is not a Business Day, the next succeeding Business Day.
“Index Bond BMA Reset Date” means each Thursday (and, if the Effective Date is a day other than a Thursday, the Thursday next preceding the Effective Date) or, if any Thursday is not a Business Day, the next succeeding Business Day.
“Interest Fund” means the fund by that name established in Section 3.02.
“Interest Payment Date” means (i) for any Index Bond, the first Business Day of each calendar month and the Maturity Date for the Index Bond or, if earlier, the Redemption Date for the Index Bond; and (ii) for any Fixed Rate Bond, the Maturity Date.
[“Investment Agreement” means that certain investment agreement dated as of July 1, 2006, among the Trustee, the Authority and ________________________________, providing for the investment of certain funds held hereunder.]
“LIBOR Factor” means a percentage determined at the time of the sale of any Series of Index Bonds bearing interest at a LIBOR Index Bond Rate, provided that different percentages may apply to separate Series of Index Bonds bearing interest at a LIBOR Index Bond Rate.
“LIBOR Index” means a per annum rate equal to: (i) the rate for deposits in U.S. Dollars for the LIBOR Index Maturity which appears on Bloomberg as of 11:00 A.M., London time, on each Index Bond LIBOR Reset Date; provided that for the first Index Bond Calculation Period, it shall be the rate that is established two London Banking Days preceding the Effective Date. “Bloomberg” means the display entitled “British Bankers Association LIBOR Rates” that currently appears after entering “BBAM1” into a Bloomberg terminal (or such other page as may replace the page “British Bankers Association LIBOR Rates” for the purpose of displaying London interbank offered rates of major banks) on that service or such other service or services as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. Dollar deposits); or (ii) if the LIBOR Index as described in clause (i) is not available on the applicable Index Bond LIBOR Reset Date, the rate for deposits in U.S. Dollars for the LIBOR Index Maturity which appears on the Reuters Screen LIBOR Page as of 11:00 A.M., London time, on the Index Bond LIBOR Reset Date. If at least two rates
DOCSLA1:517851.1 6
appear on the Reuters Screen LIBOR Page, the rate for such Index Bond LIBOR Reset Date will be the arithmetic mean of such rates. “Reuters Screen LIBOR Page” means the display designated as page “LIBOR” on the Reuters Monitor Money Rates Service (or such other page as may replace page LIBOR on that service for the purpose of displaying London interbank offered rates of major banks). If the LIBOR Index as described under clause (i) or (ii) is not available, the LIBOR Index means the rate for deposits in U.S. Dollars for the LIBOR Index Maturity which appears on Bloomberg as of 11:00 a.m., London time, on the Business Day next preceding the Index Bond LIBOR Reset Date.
“LIBOR Index Maturity” means a period of one month or any multiple thereof as designated by the Treasurer at the time of the sale of the Index Bonds.
“LIBOR Index Bond Rate” means a per annum rate equal to the LIBOR Index Rate multiplied by the LIBOR Factor applied on the basis of the actual number of days in the Index Bond Calculation Period divided by 365.
“LIBOR Index Rate” means, in respect of the Index Bond Calculation Period, a per annum rate equal to the weighted arithmetic average of the LIBOR Index in effect for each day in the Index Bond Calculation Period, calculated by multiplying each such LIBOR Index by the number of days such LIBOR Index is in effect, determining the sum of such products and dividing such sum by the number of days in the Index Bond Calculation Period.
“London Banking Day” means any day on which dealings in deposits in U.S. Dollars are transacted in the London interbank market.
“Local Agencies” means the California local agencies listed in Schedule I hereto and, their successors and assigns.
“Maturity Date” means the maturity date of the Bonds, being June 30, 2007.
“Moody’s” means Moody’s Investors Service.
“Note Maturity Date” means the maturity date of each Note, being June 30, 2007.
“Note Rate” means the stated rate of interest payable on the Notes.
“Note Payment Deposit Date” means June ___, 2007.
“Note Resolutions” means the respective resolutions adopted by the legislative bodies of the Local Agencies authorizing the issuance of the Notes, acknowledging the form of this Indenture and approving the execution and delivery of this Indenture and the Bonds by the Authority.
“Notes” means the tax and revenue anticipation notes issued by the Local Agencies in the respective aggregate principal amounts described in Schedule I hereto.
“Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed by the Authority and
DOCSLA1:517851.1 7
satisfactory to and approved by the Trustee (who shall be under no liability by reason of such approval).
“Outstanding” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.02 hereof) all Bonds except --
(1) Bonds cancelled by the Trustee or surrendered to the Trustee for cancellation;
(2) Bonds paid or deemed to have been paid within the meaning of Section 10.01; and
(3) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered by the Trustee hereunder.
“Owner” means the registered owner of any Outstanding Bond.
“Payment Account Deposit Certification” means a certification of the Local Agency in the form set forth in Exhibit C hereto that the deposit required to be made to the Payment Account pursuant to the Note Resolution has been made.
“Payment Accounts” means the accounts created by the Local Agencies pursuant to the Note Resolutions.
“Permitted Investments” means any of the following to the extent then permitted by law:
(i) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.
(ii) Obligations of instrumentalities or agencies of the United States of America. These are specifically limited to:
DOCSLA1:517851.1 8
-- Federal Home Loan Mortgage Corporation (FHLMC) Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) Debt Obligations
-- Federal Home Loan Banks (FHL Banks) Consolidated debt obligation
-- Federal National Mortgage Association (FNMA) Debt obligations Mortgage backed securities (Excluded are stripped mortgage securities-which are purchased at prices exceeding their principal amounts).
Book entry securities listed in 1 and 2 above must be held in a trust account with the Federal Reserve Bank or with a clearing corporation or chain of clearing corporations which has an account with the Federal Reserve Bank.
(iii) Federal Housing Administration debentures.
(iv) Commercial paper, payable in the United States of America, having original maturities of not more than 92 days and which are rated A+ by S&P and Prime-1 by Moody’s.
(v) Interest bearing demand or time deposits issued by state banks or trust companies, savings and loan associations, federal savings banks or any national banking associations, the deposits of which are insured by the Bank Insurance Fund (BIF) or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation (SAIF) or any successors thereto. These deposits: (a) must be continuously and fully insured by BIF or SAIF, or (b) must have maturities of less than 366 days and be deposited with banks the short term obligations of which are rated A+ by S&P and P-1 by Moody’s.
(vi) Money market mutual funds or portfolios investing in short-term US Treasury securities rated AAAm or AAAm-G by S&P and Aaa by Moody’s, including those which the Trustee and its affiliates or subsidiaries provide advisory or management services.
(vii) Investment agreements approved by the Credit Provider which are with investment institutions, or with a financial entity whose obligations are guaranteed or insured by a financial entity, having long-term obligations which are rated “AA-” or higher by S&P and “Aa” or higher by Moody’s as to long term instruments and rated in the highest rating category by S&P and Moody’s as to short term instruments and which are approved by S&P and Moody’s and approved by the Credit Provider; provided that if such rating falls below AA- or Aa3, by S&P or Moody’s, respectively, the
DOCSLA1:517851.1 9
investment agreement shall require the Trustee to replace such financial institution or shall provide for the investment agreement to be collateralized at levels and under 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).
(viii) The Local Agency Investment Fund administered by the State of California.
(ix) Investment Trust of California, doing business as CalTRUST.
(x) Such other investments as are approved in writing by the Credit Provider and S&P and reviewed by Moody’s.
“Predefault Obligations” means (i) the respective obligations of the respective Local Agencies to the Credit Provider under the Credit Instrument and/or the Credit Agreement, if any, (ii) all indemnification to the Credit Provider by the respective Local Agencies, and (iii) all other amounts due to the Credit Provider by the respective Local Agencies under the Credit Instrument and the Credit Agreement, (including interest on overdue Predefault Obligations to the extent permitted by law), to the extent they are not Costs of Issuance, in each case becoming due prior to an Event of Default under the respective Note Resolutions.
“Pricing Confirmation Supplement” means that certain Pricing Confirmation Supplement attached to each Purchase Agreement as agreed and accepted by each of the respective Local Agencies.
“Principal Fund” means the fund by that name established pursuant to Section 3.02 hereof.
“Principal Office of the Credit Provider” means a United States of America office of the Credit Provider to or from which draws under, claims or payments pursuant to or from the Credit Instrument are to be made.
“Principal Office of the Trustee” means the principal corporate trust office of the Trustee, which, for the Trustee initially appointed hereunder, is located in Los Angeles, California or such other place as the Trustee may designate in writing to the Authority.
“Proceeds Fund” means the fund by that name established pursuant to Section 3.02 hereof.
“Program” means the Authority’s “California Cash Flow Financing Program” pursuant to which the Bonds are issued to assist the Local Agencies in financing cash flow deficits.
“Purchase Agreement” means that certain Purchase Agreement by and between each of the respective Local Agencies and the Authority relating to the Notes.
DOCSLA1:517851.1 10
“Purchaser” means, collectively, the underwriters and purchasers of the Bonds listed in, under and pursuant to the Bond Purchase Agreement.
“Reimbursement Obligations” means (i) the respective obligations of the respective Local Agencies under the Credit Instrument and/or the Credit Agreement, including, without limitation, obligations evidenced by Defaulted Notes, (ii) all indemnification to the Credit Provider by the respective Local Agencies, and (iii) all other amounts at any time due to the Credit Provider by the respective Local Agencies under the Credit Instrument and/or the Credit Agreement (including any Predefault Obligations and interest on any overdue Reimbursement Obligations to the extent permitted by law), in each case becoming due as a result of or after an Event of Default under the respective Note Resolutions.
“Representation Letter” shall mean the letter or letters of representation from the Authority and the Trustee to, or other instrument or agreement among the Authority and the Trustee with, a securities depository for the Bonds in which the Authority and the Trustee, among other things, make certain representations to such securities depository with respect to the Bonds, the payment thereof, and delivery of notices with respect thereto.
“S&P” means Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc.
“Secured Percentage” means, with respect to any Credit Instrument and the Notes to which it applies, an amount (i) equal to 100%, if the available amount of the Credit Instrument is greater than or equal to the aggregate amount of principal of and interest on unpaid Notes (or unpaid portions thereof) or (ii) equal to the available amount of the Credit Instrument divided by the aggregate amount of unpaid principal of and interest on Notes (or unpaid portions thereof), expressed as a percentage, if the available amount of the Credit Instrument is less than the aggregate amount of unpaid principal of and interest on Notes (or unpaid portions thereof) as of the Maturity Date.
[“Series A-2 Bonds” means the California Statewide Communities Development Authority 2006 Tax and Revenue Anticipation Bonds, Series A-2, authorized and at any time Outstanding under the Series A-2 Indenture.]
[“Series A-2 Indenture” means the Series A-2 Indenture, dated as of July 1, 2006, by and between the Trustee and the Authority, as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith, relating to the Series A-2 Bonds.]
[“Series A-2 Trustee” means Wells Fargo Bank, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, or any other bank or trust company at its principal corporate trust office which may at any time be substituted in its place, as trustee under the Series A-2 Indenture.]
[“Series A-2 Owner” means the registered owner of any outstanding Series A-2 Bond.]
DOCSLA1:517851.1 11
DOCSLA1:517851.1 12
[“Series B Bonds” means the California Statewide Communities Development Authority 2006 Tax and Revenue Anticipation Bonds, Series B, authorized and at any time Outstanding under the Series B Indenture.]
[“Series B Indenture” means the Series B Indenture, dated as of July 1, 2006, by and between the Trustee and the Authority, as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith, relating to the Series B Bonds.]
[“Series B Trustee” means Wells Fargo Bank, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, or any other bank or trust company at its principal corporate trust office which may at any time be substituted in its place, as trustee under the Series B Indenture.]
[“Series B Owner” means the registered owner of any outstanding Series B Bond.]
[“Series C-1 Bonds” means the California Statewide Communities Development Authority 2006 Tax and Revenue Anticipation Bonds, Series C-1 (Taxable), authorized and at any time Outstanding under the Series C-1 Indenture.]
“Series C-1 Indenture” means the Series C-1 Indenture, dated as of July 1, 2006, by and between the Trustee and the Authority, as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith, relating to the Series C-1 Bonds.
[“Series C-1 Trustee” means Wells Fargo Bank, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, or any other bank or trust company at its principal corporate trust office which may at any time be substituted in its place, as trustee under the Series C-1 Indenture.]
[“Series C-1 Owner” means the registered owner of any outstanding Series C-1 Bond.]
[“Series C-2 Indenture” means the Series C-2 Indenture, dated as of July 1, 2006, by and between the Trustee and the Authority, as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith, relating to the Series C-2 Bonds.]
DOCSLA1:517851.1 13
“Swap Interest Payment Account” means the account by that name established in the Interest Fund pursuant to Section 3.02 hereof.
“Swap Repayment Account” means the account by that name established in the Interest Fund pursuant to Section 3.02 hereof.
DOCSLA1:517851.1 14
“Swap Repayment Date” means the date or dates upon which the Authority is obligated to make payments, if any, to the Swap Provider.
“Swap Agreement” means that certain swap agreement, if any, between the Authority and the Swap Provider, as the same may be amended and supplemented.
“Swap Provider” means the party executing the Swap Agreement with the Authority.
“Tax Certificate” means the Tax Certificate and Agreement signed by the Authority on the date of the initial issuance and delivery of the Bonds relating to the requirements of the Code.
“Trustee” means Wells Fargo Bank, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, at the Principal Corporate Trust Office of the Trustee or any other bank or trust company at its principal corporate trust office which may at any time be substituted in its place, as trustee under the Indenture.
“Underwriters” means Lehman Brothers, Citigroup Global Markets Inc., Banc of America Securities LLC and E. J. De La Rosa & Co., Inc.
SECTION 1.02. Equal Security. In consideration of the acceptance of the
Bonds by the Owners and the issuance of the Credit Instrument by the Credit Provider as indicated on Schedule III, this Indenture shall be deemed to be and shall constitute a contract among the Trustee, the Authority, and the Owners to secure the full and final payment of the interest on and principal of the Bonds, all Predefault Obligations and all Reimbursement Obligations, subject to the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of all Owners without distinction, preference or priority as to benefit, protection or security of any Bonds over any other Bonds by reason of the number or date thereof or the time of execution or delivery thereof or otherwise for any cause whatsoever, and for the benefit of the Credit Provider except as expressly provided herein or therein. The Credit Provider shall be deemed a third party beneficiary of all covenants and conditions contained in this Indenture.
DOCSLA1:517851.1 15
ARTICLE II
CONDITIONS AND TERMS OF BONDS
SECTION 2.01. Initial Issuance of Bonds. The Bonds to be issued under this Indenture are hereby created and such Bonds are designated as the “California Statewide Communities Development Authority 2006 Tax and Revenue Anticipation Bonds, Series A-1.” The aggregate principal amount of Bonds which may be issued and Outstanding under this Indenture shall not exceed $[PAR AMOUNT]. The Trustee is hereby authorized and directed to authenticate the Bonds in the aggregate principal amount of $[PAR AMOUNT]. The Bonds shall be initially delivered in the form of one Bond registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company (“DTC”).
SECTION 2.02. Denominations, Medium, Method and Place of Payment and Dating of Bonds. The Bonds shall be prepared in the form of fully registered Bonds in Authorized Denominations. The interest on and principal of the Bonds shall be payable in lawful money of the United States of America. The Trustee may treat the Owner of any Bond as the absolute owner of such Bond for all purposes, whether or not such Bond shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest on and principal of such Bond shall be made only to such Owner as above provided, which payments shall be valid and effectual to satisfy and discharge the liability on such Bond to the extent of the sum or sums so paid. All Bonds paid pursuant to the provisions of this section shall be cancelled and destroyed by the Trustee and shall not be redelivered and a certificate of destruction shall be delivered to the Authority and Credit Provider.
The Bonds shall be dated the date of initial issuance.
The “Record Date” for purposes of determining ownership of Bonds on the Registration Books maintained by the Trustee shall be the Business Day immediately preceding each Interest Payment Date on the Bonds.
SECTION 2.03. Terms of the Bonds. The Bonds shall be issued as Fixed Rate Bonds, shall mature on the Maturity Date and shall bear interest at the Note Rate.
Interest shall be payable on each Interest Payment Date. Interest and principal payable on the Maturity Date, shall be payable upon surrender of the Bond by the Owner thereof, at the Principal Office of the Trustee.
The interest payable on the Notes and on the Fixed Rate Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. The interest payable on the Index Bonds shall be computed on the basis of a 365 or 366-day year, as the case may be, and actual days elapsed.
The Bonds shall not be subject to prepayment or redemption prior to the Maturity Date.
DOCSLA1:517851.1 16
SECTION 2.04. Form of Bonds. The Bonds and the form of assignment to appear thereon shall be in substantially the forms in Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or required thereby or hereby. The Bonds may be prepared in typewritten, lithographed or printed form.
SECTION 2.05. Execution of Bonds. The Bonds shall be executed by the Chair or Vice-Chair of the Authority and attested by the Secretary of the Authority by manual or facsimile signature and shall be authenticated by the Trustee by the manual signature of an authorized officer of the Trustee. The Bonds need not bear the seal of the Authority, if any.
SECTION 2.06. Transfer and Exchange of Bonds. All Bonds are transferable or exchangeable by the Owner thereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee in the books required to be kept by the Trustee pursuant to the provisions of Section 2.07, upon surrender of such Bonds accompanied by delivery of a duly executed written instrument of transfer or exchange in a form approved by the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer or exchange, the Trustee shall execute and deliver a new Bond or Bonds of authorized denominations representing the same aggregate principal amount, except that the Trustee shall require the payment by any Owner requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange. All Bonds surrendered pursuant to the provisions of this Section shall be cancelled by the Trustee and shall not be redelivered.
SECTION 2.07. Bond Registration Books. At the Principal Office of the Trustee, the Trustee will keep sufficient books for the registration of the ownership, transfer or exchange of the Bonds, which books shall be available for inspection by the Authority, the Credit Provider, the Local Agencies or any Owner or such Owner’s agent duly authorized in writing at reasonable hours and under reasonable conditions during regular business hours; and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register the ownership, transfer or exchange of the Bonds in such books as hereinabove provided. The ownership of any Bonds may be proved by the books required to be kept by the Trustee pursuant to the provisions of this Section.
SECTION 2.08. Temporary Bonds. The Bonds may be initially delivered in temporary form exchangeable for definitive Bonds when ready for delivery, which temporary Bonds shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Trustee, shall be in fully registered form and shall contain such reference to any of the provisions hereof as may be appropriate. Every temporary Bond shall be executed and delivered by the Trustee upon the same conditions and terms and in substantially the same manner as definitive Bonds. If the Trustee executes and delivers temporary Bonds, it will prepare and execute definitive Bonds without delay, and in that case, upon demand of the Owner of any temporary Bonds, such definitive Bonds shall be exchanged without cost to such Owner for temporary Bonds at the Principal Office of the Trustee upon surrender of such temporary Bonds, and until so exchanged such temporary Bonds shall be entitled to the same benefit, protection and security hereunder as the definitive Bonds executed and delivered hereunder. All temporary Bonds surrendered pursuant to the provisions of this Section shall be cancelled by the Trustee and shall not be redelivered.
DOCSLA1:517851.1 17
SECTION 2.09. Bonds Mutilated, Destroyed, Lost or Stolen. If any Bond shall become mutilated, the Trustee shall execute and deliver a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated, and every mutilated Bond so surrendered to the Trustee shall be cancelled by it. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee shall authenticate and deliver a new Bond of like tenor and principal amount in lieu of and in substitution for the destroyed, lost or stolen Bond. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond authenticated and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any replacement Bond executed and delivered under the provisions of this Section in lieu of and in substitution for any mutilated, destroyed, lost or stolen Bond shall be equally and proportionately entitled to the benefit, protection and security hereof with all other Bonds executed and delivered hereunder; and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be executed and delivered hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and the replacement Bond shall be treated as one and the same. Notwithstanding any other provisions of this Section, rather than authenticating and delivering a new Bond for a mutilated, destroyed, lost or stolen Bond, the Maturity Date of which has occurred or is about to occur, the Trustee may make payment of the principal evidenced and represented by such mutilated, destroyed, lost or stolen Bond directly to the Owner thereof under such regulations as the Trustee may prescribe.
SECTION 2.10. Special Covenants as to Book-Entry Only System.
(a) Except as otherwise provided in subsections (b) and (c) of this Section 2.10, the Bonds initially executed and delivered hereunder shall be registered in the name of Cede & Co., as nominee for DTC, or such other nominee as DTC may request. Payment of the principal of and interest on each Bond registered in the name of Cede & Co. shall be made to the account, in the manner and at the address indicated in or pursuant to the Representation Letter delivered to DTC by the Authority.
(b) The Bonds executed and delivered hereunder shall be in the form of a single authenticated fully registered bond for each one hundred fifty million dollars of principal amount (or excess fraction thereof). Upon initial execution of the Bonds, the ownership of all such Bonds shall be registered in the registration records maintained by the Trustee pursuant to Section 2.07 in the name of Cede & Co., as nominee of DTC, or such other nominee as DTC may request. The Trustee, the Authority and the Local Agencies may treat DTC (or its nominee) as the sole and exclusive Owner of the Bonds registered in its name for the purposes of payment of the principal of and interest on such Bonds, giving any notice permitted or required to be given to an Owner under the Indenture, registering the transfer of Bonds, obtaining any consent or other action to be taken by the Owners and for all other purposes whatsoever; and neither the Trustee, the Authority nor the Local Agencies shall be affected by any notice to the contrary. Neither the Trustee nor the Local Agencies shall have any responsibility or obligation to any Participant (which shall mean, for purposes of this Section 2.10, securities brokers and dealers,
DOCSLA1:517851.1 18
banks, trust companies, clearing corporations and other entities, some of whom directly or indirectly own DTC), any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the registration records as being an Owner, with respect to (i) the accuracy of any records maintained by DTC or any Participant, (ii) the payment by DTC or any Participant of any amount in respect of the principal or interest represented by such Bonds, (iii) any notice which is permitted or required to be given to the Owners under the Indenture or (iv) any consent given or other action taken by DTC as Owner. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only at the times, to the accounts, at the addresses and otherwise in accordance with the Representation Letter. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of its then existing nominee, the Bonds will be transferable to such new nominee in accordance with subsection (f) of this Section 2.10.
(c) In the event that the Authority determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Trustee shall, upon the written instruction of the Authority, so notify DTC, whereupon DTC shall notify the Participants of the availability through DTC of Bonds. In such event, the Bonds will be transferable in accordance with subsection (f) of this Section 2.10. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice of such discontinuance to the Local Agencies, the Authority or the Trustee and discharging its responsibilities with respect thereto under applicable law. In such event, the Bonds will be transferable in accordance with subsection (f) of this Section 2.10. Whenever DTC requests the Local Agencies, the Authority or the Trustee to do so, the Trustee, the Authority and the Local Agencies will cooperate with DTC in taking appropriate action after reasonable notice to arrange for another securities depository to maintain custody of all certificates evidencing the Bonds then Outstanding. In such event, the Bonds will be transferable to such securities depository in accordance with subsection (f) of this Section 2.10, and thereafter, all reference in this Indenture to DTC or its nominee shall be deemed to refer to such successor securities depository and its nominee, as appropriate.
(d) Notwithstanding any other provision of this Indenture to the contrary, so long as all Bonds Outstanding are registered in the name of any nominee of DTC, all payments with respect to the principal and interest represented by each such Bond and all notices with respect to each such Bond shall be made and given, respectively, to DTC as provided in the Representation Letter.
(e) The Authority shall execute and deliver the Representation Letter and, in connection with any successor nominee for DTC and any successor depository, enter into comparable arrangements, and shall have the same rights with respect to its actions thereunder as it has with respect to its actions under this Indenture.
(f) In the event that any transfer or exchange of Bonds is authorized under subsection (b) or (c) of this Section 2.10, such transfer or exchange shall be accomplished upon receipt by the Trustee from the Owner thereof of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance with the
DOCSLA1:517851.1 19
applicable provisions of Section 2.06. In the event Bonds are issued to holders other than Cede & Co., its successor as nominee for DTC as holder of all the Bonds, another securities depository as holder of all the Bonds, or the nominee of such successor securities depository, the provisions of Sections 2.02, 2.03 and 2.06 shall also apply to, among other things, the registration, exchange and transfer of the Bonds and the method of payment of principal of, premium, if any, and interest on the Bonds.
DOCSLA1:517851.1 20
ARTICLE III
PROCEEDS OF BONDS
SECTION 3.01. Delivery of Bonds. The Trustee is hereby authorized to, and shall, authenticate and deliver the Bonds to the Purchaser pursuant to the Bond Purchase Agreement upon receipt of (a) the Request of the Authorized Authority Representative, (b) the Notes, and (c) the net proceeds of sale of the Bonds.
SECTION 3.02. Establishment of Funds and Deposit of Proceeds of Bonds. The Trustee shall establish and maintain hereunder, in trust, the Costs of Issuance Fund, the Proceeds Fund, the Bond Payment Fund, the Interest Fund, the Principal Fund, the Credit Fund and the Rebate Fund. In the event the Authority enters into a Swap Agreement, the Trustee shall establish within the Interest Fund the Swap Interest Payment Account and the Swap Repayment Account. The proceeds received from the sale of the Bonds are to be deposited in the following funds in the following amounts:
Costs of Issuance Fund $_____________ Proceeds Fund $_____________
SECTION 3.03. Use of Money in the Costs of Issuance Fund and the Proceeds Fund.
(a) The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee, to pay the Costs of Issuance upon receipt of (i) a Request of an Authorized Authority Representative, which Request shall be sequentially numbered, stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund and (ii) an original invoice or invoices or evidence of the Authority’s or Purchaser’s payment of an invoice when such requisition is in reimbursement thereof. On February 1, 2007, or on such earlier date upon Request of an Authorized Authority Representative, amounts, if any, remaining in the Costs of Issuance Fund (and not required to pay identified Costs of Issuance, including any additional fees or expenses of the Credit Provider or the Trustee, or any identified Predefault Obligations and Reimbursement Obligations) shall be transferred to the Proceeds Fund and credited to and returned by the Trustee by check to each Local Agency in proportion to the amounts initially deposited in the Costs of Issuance Fund attributable to each such Local Agency.
(b) All moneys in the Proceeds Fund shall be held by the Trustee in trust and applied as provided herein and, pending such application, are hereby pledged to the payment of the Bonds and shall be subject to a lien and charge in favor of the Owners and for the further security of the Owners. Funds in the Proceeds Fund shall be credited to each of the Local Agencies initially in amounts set forth in Schedule II, which is attached hereto and made a part hereof. Moneys in the Proceeds Fund shall be disbursed to each Local Agency in the amounts set forth in Schedule II relating to such Local Agency, as soon as practical, pursuant to a Request of an Authorized Authority Representative and a written requisition of the Local Agency in substantially the form set forth in Exhibit B attached hereto, submitted in advance of the requested payment date (by facsimile, hand delivery or mail), and once disbursed, shall be held
DOCSLA1:517851.1 21
and invested by the Local Agency as permitted by law and used and expended for any purpose for which the Local Agency is authorized to use and expend moneys.
(c) The Trustee shall not create subaccounts within the Proceeds Fund, but shall keep records to account separately for funds in the Proceeds Fund attributable to each Local Agency. Said record of separate accounting by the Trustee for each Local Agency shall be deemed a “Proceeds Subaccount” for the purposes of each Local Agency’s Note Resolution. To the extent that the Trustee so holds moneys and/or securities in the Proceeds Fund on behalf of a Local Agency on the first day of any Repayment Month, such moneys and securities (up to the amount required to be set aside by the Local Agency in its Payment Account in such Repayment Month) shall no longer be subject to disbursement and shall be deemed to be held by the Trustee on behalf of the Local Agency in the Local Agency’s Payment Account. In the event that a Local Agency has invested funds in the Investment Agreement and, amounts held by the Trustee in the Local Agency’s Payment Account on the first day of any Repayment Month are less than the amount required to be in the Payment Account for such Repayment Month, the Trustee shall immediately notify the Local Agency of such deficiency.
(d) For purposes of payments from the Costs of Issuance Fund, the Trustee may consolidate the Costs of Issuance Fund with the costs of issuance funds under the Series A- 2 Indenture, the Series A-3 Indenture, Series A-4 Indenture, Series A-5 Indenture, Series B Indenture, the Series C-1 Indenture, the Series C-2 Indenture, Series C-3 Indenture and the Series C-4 Indenture and the Trustee may pay any invoices submitted under either this Indenture, or such other Series Indentures from such consolidated fund.
DOCSLA1:517851.1 22
ARTICLE IV
TRUSTEE’S DUTIES REGARDING NOTES
SECTION 4.01. Authenticating Agent. The Trustee shall be the authenticating agent for the Local Agencies in connection with the issuance of the Notes under the Note Resolutions.
SECTION 4.02. Registrar and Paying Agent. The Trustee shall be the registrar and paying agent for the Notes. As long as any Notes are outstanding under the applicable Note Resolution, each Local Agency shall maintain and keep at the Principal Office of the Trustee an office or agency for the payment of principal of and interest on the Notes and for the registration and transfer of the Notes.
SECTION 4.03. Return of Paid Notes. Each Note, when paid in full (including by reimbursement to the Credit Provider as provided in Section 5.03 hereof), shall be cancelled by the Trustee and returned to the respective Local Agency that issued such Note.
DOCSLA1:517851.1 23
ARTICLE V
NOTE PAYMENTS
SECTION 5.01. Assignment of Notes. The Notes and all right, title and interest of the Authority therein and to all payments thereon, are hereby irrevocably assigned and pledged and transferred to the Trustee for the benefit of the Owners of the Bonds and the Credit Provider and the Swap Provider, if any, and the payments on the Notes shall be used for the punctual payment of the interest on and principal of the Bonds or the reimbursement of drawings under or payments made pursuant to or from the Credit Instrument and the Swap Provider, if any, and the Notes shall not be used for any other purpose while any of the Bonds remain Outstanding. This assignment, transfer and pledge shall constitute a first and exclusive lien on the principal and interest payments of and all other rights under the Notes for the foregoing purpose in accordance with the terms hereof. Each Local Agency has approved, and the Trustee hereby accepts, such assignment of the Notes.
All principal and interest payments on the Notes shall be paid directly by each Local Agency to the Trustee. All principal and interest payments on the Notes received by the Trustee shall be held in trust by the Trustee under the terms hereof and shall be deposited by it, as and when received, in the Bond Payment Fund, and all money in such fund shall be held in trust by the Trustee for the benefit and security of the Owners and the Credit Provider to and the Swap Provider, if any, to the extent provided herein. If the Trustee receives Note repayments from a Local Agency which, together with other amounts on deposit in the Bond Payment Fund allocable to such Local Agency, are in excess of the amounts required to pay the principal of and interest due on such Local Agency’s Note, such excess amounts shall remain in the Bond Payment Fund, and subject to any rebate requirements as specified in Section 5.08 hereof, shall be transferred to such Local Agency following payment of the amount of Bonds corresponding to such Local Agency’s Note and reimbursement of the Credit Provider for drawings, if any, under or payments pursuant to or from the Credit Instrument and payment to such Credit Provider of any Reimbursement Obligations and Predefault Obligations applicable to such Local Agency.
Moneys received by the Trustee attributable to a Local Agency shall not be used in any manner (directly or indirectly) to make up any deficiency in any other Local Agency’s Note repayments.
Attached as Exhibit D hereto is a form of Deposit Notice to be used by a Local Agency to transfer payments of principal and interest on its Note to the Trustee.
SECTION 5.02. Use of Money in the Bond Payment Fund and Amounts Received from Swap Provider, if any. The Trustee shall deposit the money contained in the Bond Payment Fund and amounts received from the Swap Provider, if any, at the following respective times in the following respective funds in the manner and priority hereinafter provided, and the money in each of such funds shall be disbursed only for the purposes and uses hereinafter authorized (subject to Section 5.03 hereof):
(a) Interest Fund.
DOCSLA1:517851.1 24
(i) If the Authority has not entered into a Swap Agreement, the Trustee shall deposit in the Interest Fund that amount of money representing the interest due and payable on the Bonds on such date; and such money shall be used by the Trustee solely for the purpose of paying interest on the Bonds on such date.
(ii) If the Authority has entered into a Swap Agreement, on each Interest Payment Date all moneys in the Swap Interest Payment Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds. On each Swap Repayment Date, the Trustee shall deposit in the Swap Repayment Account the Authority Swap Obligation which shall be used and withdrawn by the Authority solely for purposes of paying the Authority Swap Obligation.
(b) Principal Fund. The Trustee, on the Maturity Date, shall deposit in the Principal Fund that amount of money representing the principal becoming due and payable on the Bonds on such Maturity Date. All moneys in the Principal Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds on the Maturity Date.
(c) Rebate Fund. The Trustee shall deposit in the Rebate Fund that amount of money representing the amount of interest earned on funds deposited in the Bond Payment Fund in excess of the permissible arbitrage yield as set forth in the Tax Certificate. All moneys in the Rebate Fund shall be used and withdrawn by the Trustee solely in accordance with the provisions of Section 5.08 hereof.
Subject to the rebate requirements set forth in Section 5.08 hereof, moneys held in the Bond Payment Fund, the Principal Fund or the Interest Fund on the Maturity Date after the payment by the Trustee of all of the principal of and interest on the Bonds and the Authority Swap Obligation shall be returned by the Trustee to each Local Agency (other than a Local Agency which is in default in the payment of the principal of and interest on its Note) by check in an amount equal to the proportion of the amount initially received from each Local Agency and deposited in the Bond Payment Fund over all amounts received from all Local Agencies and deposited in the Bond Payment Fund multiplied by the remaining balance in the Bond Payment Fund.
SECTION 5.03. Draws under or Payments Pursuant to or in Connection With Credit Instrument; Payment of Principal and Interest.
The other provisions of this Article V notwithstanding, the Trustee shall, in accordance with the second sentence hereof, draw upon or request payment under the Credit Instrument by the times required therein and in accordance with the terms thereof, at such time and in sufficient amounts to make timely payment of the principal of and interest on the Bonds (up to the amount covered by such Credit Instrument). For purposes of this Section and as provided in Section 5.05 hereof, interest on the Bonds is deemed to include the Authority Swap Obligation. The Trustee shall draw upon and request payment pursuant to the Credit Instrument on, or before in accordance with Section 5.09 hereof, each Interest Payment Date if the amounts in the Principal Fund and/or the Interest Fund, as appropriate, are insufficient to pay the full amount of the principal of and/or interest on the Bonds. Except as otherwise explicitly provided in the Credit Instrument (and subject to the next paragraph of this Section), each Bond shall be
DOCSLA1:517851.1 25
paid first from all available moneys in the Interest Fund and Principal Fund. To the extent amounts in the Principal Fund and Interest Fund, together with the maximum amount available under the Credit Instrument (as determined pursuant to the Credit instrument Payment Certificate, if any) is insufficient to pay the Bonds in full, moneys drawn under or paid pursuant to the Credit Instrument shall be used to pay each Bond pro rata, and allocated to each Note pro rata in accordance with the unpaid principal thereof and interest thereon, and shall be applied to pay, and allocated to, interest first and then principal. Pending application as aforesaid, moneys drawn under or paid pursuant to the Credit Instrument shall be deposited in the Credit Fund, which shall be maintained by the Trustee and held in trust apart from all other moneys and securities held under this Indenture or otherwise, and over which the Trustee shall have the exclusive and sole right of withdrawal for the exclusive benefit of the Owners. Moneys in the Credit Fund derived from a draw under or payment pursuant to a Credit Instrument in the form of a letter of credit or policy of insurance shall be held in cash and shall not be applied to satisfy any costs, expenses or liabilities of the Trustee.
If the amount available under the Credit Instrument is equal to 100% of the principal of and all interest on the Bonds, notwithstanding anything to the contrary contained in this Section or this Article, if the Credit Provider honors a drawing or payment request made pursuant to this Section on the Credit Instrument to pay such principal and/or interest or resulting from deficiency in the payment of principal of or interest on a Note or Notes in order to pay principal of or interest due on the Bonds on such date, moneys so drawn or paid under the Credit Instrument shall be credited to the Credit Fund and applied to the payment of such principal and/or interest as provided in the preceding paragraph of this Section, except that, moneys, if any, on deposit in the Principal Fund and Interest Fund that would have been applied to pay such principal or interest absent this Section and such drawing or payment on the Credit Instrument shall be applied by the Trustee to reimburse the Credit Provider by wire transfer as soon as possible and, in any case, prior to 1:00 p.m., Los Angeles time, on the day such drawing or payment request is honored, in the amount of such payment or disbursement by the Credit Provider honoring such drawing or payment request. Subject to the provisions of Section 5.08 hereof, any moneys at any time on deposit in the Bond Payment Fund allocable to a Local Agency in excess of the amounts required to be deposited therein on the Maturity Date pursuant to Section 5.02 hereof shall be applied by the Trustee to the payment of any of such Local Agency’s Predefault Obligations specified by the Credit Provider in writing to the Trustee. Any amounts on deposit in the Credit Fund derived from a draw under or payment pursuant to a Credit Instrument in the form of a letter of credit or policy of insurance and remaining following a date on which a payment of principal of and interest on the Bonds is made shall promptly be remitted by the Trustee to the Credit Provider.
In the event of default by any Local Agency in the payment of any of the principal of or interest on its Note (other than the uninsured Local Agencies), upon payment by the Credit Provider of a drawing or payment request under the Credit Instrument with respect to the payment of such principal or interest, the Credit Provider shall be deemed to have purchased the Secured Percentage of such Note. The Credit Provider will succeed and be subrogated to the rights of the Owners of the Bonds with respect to the Secured Percentage of such Note, and the Trustee shall hold such Note for the benefit of the Credit Provider (in the Secured Percentage) and also for the benefit of the Bond Owners (to the extent the Secured Percentage of the Credit
DOCSLA1:517851.1 26
Instrument is less than 100%) in accordance with the provisions of the Credit Agreement. Any Note described in the preceding sentence shall be a Defaulted Note and the unpaid portion thereof shall be deemed Outstanding and shall not be deemed paid until all amounts due to the Credit Provider (as provided therein and in the Credit Instrument and/or the Credit Agreement, if any) and to the Bond Owners with respect to the unsecured portion thereof have been paid in full, including interest accrued thereon as provided therein and in the Credit Agreement. The interest on the unpaid portion of a Defaulted Note (or the portion thereof with respect to which a Credit Instrument applies for which no reimbursement on a draw or payment thereunder has been made) shall be payable at the Default Rate and upon demand and shall be computed on the basis of a 360-day year, actual number of days elapsed; provided that, no interest shall accrue on the portion of a Defaulted Note which is paid with a drawing on or payment pursuant to the Credit Instrument to the extent such portion of a Defaulted Note is paid (and reimbursement is made to the Credit Provider with respect to the drawing on or payment pursuant to the Credit Instrument by 1:00 p.m., Los Angeles time, on the date of such draw or payment). Upon payment in full of a Note, and reimbursement to the Credit Provider with respect to the drawing under or payment pursuant to the Credit Instrument with respect to such Note and payment of all Predefault Obligations and Reimbursement Obligations due and owing such Credit Provider with respect to such Note, from amounts available in the Principal Fund or Interest Fund or otherwise, the Trustee shall, with the consent of the Credit Provider cancel such Note and surrender it to the Local Agency that issued it; provided that, each Note shall be deemed Outstanding and shall not be cancelled by the Trustee until (i) the Owners have been paid in full with respect to such Note, and (ii) the Credit Provider has been so reimbursed for the drawings or payments made under the Credit Instrument with respect to such Note and all Predefault Obligations and Reimbursement Obligations due and owing such Credit Provider with respect to such Notes have been paid.
SECTION 5.04. Credit Instrument; Relation to Series C-1 Bonds.
(a) Each of the Local Agencies, in its respective Pricing Confirmation Supplement, has (if the Credit Instrument is a letter of credit or policy of insurance) acknowledged the delivery by the Authority to the Trustee of the Credit Instrument on or prior to the date of delivery of the Bonds. Each of the Local Agencies has authorized and acknowledged that the Authority shall execute and deliver, where and if applicable, the Credit Agreement on behalf of said Local Agency. The Trustee shall hold and maintain such Credit Instrument for the benefit of the Owners (but subject to the rights of the Series C-1 Owners) until the Credit Instrument terminates in accordance with its terms. The Trustee shall diligently enforce all terms, covenants and conditions of such Credit Instrument, including payment when due of any draws on or claims under the Credit Instrument, and will not consent to or agree to or permit any amendments or modifications thereof which would materially adversely affect the rights or security of the Owners. If at any time during the term of the Credit Instrument (if the Credit Instrument is a letter of credit or policy of insurance) any successor Trustee shall be appointed and qualified under this Indenture, the resigning or removed Trustee shall request that the Credit Provider transfer such Credit Instrument to the successor Trustee pursuant to the applicable provision set forth in the Credit Agreement and Section 8.02 hereof. If the resigning or removed Trustee fails to make this request, the successor Trustee shall do so before accepting appointment.
DOCSLA1:517851.1 27
(b) Each of the Local Agencies acknowledges that the Credit Instrument is held by the Trustee hereunder as security for the Owners, and by Wells Fargo Bank, National Association, in its capacity as Series C-1 Trustee, under the Series C-1 Indenture, as security for the Series C-1 Owners, and that the amounts available to pay the principal of and interest on the Bonds and the Series C-1 Bonds, to the Owners and the Series C-1 Owners, respectively, shall be determined pursuant to the procedure set forth in Section 5.08 hereof and the Credit Instrument Payment Certificate.
SECTION 5.05. Provisions Relating to Swap; Right to Enforce Swap Agreement Limited. All amounts received by the Trustee pursuant to the Swap Agreement shall be deposited when received into the Swap Interest Payment Account and used to pay interest on the Bonds. In consideration of such use, the Authority Swap Obligation shall be deemed the payment of interest on the Bonds for all purposes under this Indenture. Anything in this Indenture to the contrary notwithstanding, neither the Trustee nor any Bondholder shall have any right under this Indenture or under the Swap Agreement to enforce the rights of the Authority to receive payments under the Swap Agreement.
SECTION 5.06. Investments. Any money held by the Trustee at any time in any Fund created hereunder other than the Credit Fund and the Rebate Fund shall, to the fullest extent practicable, be invested as directed in writing by an Authorized Authority Representative in Permitted Investments which will, as nearly as practicable, mature on or before the dates on which such money is anticipated to be needed for disbursement hereunder. In the absence of any written direction from the Authority, the Trustee shall invest any money held in any Fund created hereunder (other than the Credit Fund and the Rebate Fund) in Permitted Investments identified in clause (vi) of the definition thereof which will, as nearly as practicable, mature on or before the dates on which such money is anticipated to be needed for disbursement hereunder. The amounts held in the Proceeds Fund will be accounted for separately for the respective Local Agencies. The Trustee may act as principal or agent in the acquisition or disposition of any investment and may at its sole discretion, for the purpose of any such investment, except with respect to the Credit Fund, commingle any of the money held by it hereunder. The Trustee shall not be liable or responsible for any loss suffered in connection with any such deposit or investment made by it under the terms of and in accordance with this Section. The Trustee may present for redemption or sell any such deposit or investment whenever it shall be necessary in order to provide money to meet any payment of the money so deposited or invested, and the Trustee shall not be liable or responsible for any losses resulting from any such deposit or investment presented for redemption or sold. Any interest or profits on such deposits and investments received by the Trustee shall be credited to the fund, account or subaccount from which such investment was made.
Moneys in the Credit Fund shall be invested as specified in Section 5.03 hereof. Moneys in the Rebate Fund shall not be invested.
SECTION 5.07. Confirmation of Deposits to Payment Accounts. (a) The Trustee shall, on the fifteenth day of each month identified as a Repayment Month, unless the Repayment Month is June, in which case on June 1, for each Local Agency in its respective Note, send a request for a Payment Account Deposit Certification, substantially in the form of
DOCSLA1:517851.1 28
Exhibit C attached hereto, requesting that such Local Agency confirm and certify that it has made the required deposit (in the amount and on the date specified in the Pricing Confirmation Supplement for each Local Agency attached to the Purchase Agreement) into its Payment Account created pursuant to its Note Resolution. Such Payment Account Deposit Certification shall be signed by an Authorized Local Agency Representative and delivered to the Trustee within seven Business Days after the date of such request. In the event that the Trustee has not received the Payment Account Deposit Certification from a Local Agency within seven Business Days following the date such Payment Account Deposit Certification was due from a Local Agency, the Trustee shall be entitled to conclude that the deposit into such Local Agency’s Payment Account has not been made and shall immediately notify each rating agency then rating the Bonds, the Underwriters, the Financial Advisor and the Credit Provider of such event, which constitutes an “Event of Default” under such Local Agency’s Note Resolution. Upon the occurrence of such an event, the Trustee shall at the Credit Provider’s direction exercise the rights and remedies set forth in Article VII hereof. Notwithstanding anything to the contrary in this Section, any Local Agency for which the Trustee is holding or investing moneys or securities on behalf of said Local Agency (which moneys or securities are intended to be that Local Agency’s Payment Account deposit, either pursuant to Section 3.03(c) hereof or through some other arrangement between the Trustee and the Local Agency) need not present a Payment Account Deposit Certification; likewise, the Trustee need not send a request for a Payment Account Deposit Certification to said Local Agency.
(b) On the Note Payment Deposit Date, the Trustee shall transfer all amounts held by it on behalf of each Local Agency to the Bond Payment Fund.
SECTION 5.08. Rebate Fund. (a) Within the Rebate Fund, the Trustee shall maintain such accounts as shall be necessary to comply with the instructions of the Authority pursuant to the terms and conditions of the Tax Certificate. Subject to the transfer provisions provided in paragraph (E) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the federal government of the United States of America. Neither the Authority nor any Owner shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and by the Tax Certificate. The Trustee shall be deemed conclusively to have complied with such provisions if it follows the directions of the Authority including supplying all necessary information in the manner provided in the Tax Certificate, and shall have no liability or responsibility to enforce compliance by the Local Agencies or the Authority with the terms of the Tax Certificate.
(b) Upon the Authority’s written direction, an amount shall be deposited to the Rebate Fund by the Trustee from deposits by the Authority, if and to the extent required, so that the balance in the Rebate Fund shall equal the Rebate Requirement. Computations of the Rebate Requirement shall be furnished by or on behalf of the Authority in accordance with the Tax Certificate.
DOCSLA1:517851.1 29
(c) The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the funds and accounts created under this Indenture or from other moneys provided to it by the Authority.
(d) At the written direction of the Authority, the Trustee shall invest all amounts held in the Rebate Fund in Investment Securities, subject to the restrictions set forth in the Tax Certificate. The Trustee shall not be liable for any consequences arising from such investment.
(e) Upon receipt of the Authority’s written directions, the Trustee shall remit part or all of the balances in the Rebate Fund to the United States, as so directed. Any funds remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Requirement, or provision made therefor satisfactory to the Trustee, shall be withdrawn and remitted to the Authority.
(f) Notwithstanding any other provision of this Indenture, including in particular Article X hereof, the obligation to remit the Rebate Requirement to the United States and to comply with all other requirements of this Section and the Tax Certificate shall survive the defeasance or payment in full of the Bonds.
SECTION 5.09. Credit Provider Requirements; Subrogation. Notwithstanding anything to the contrary contained herein, as long as the Credit Instrument shall be in full force and effect and the Credit Provider shall be [Financial Security Assurance Inc. (“FSA”)], the Authority and the Trustee shall comply with the following provisions.
(a) Upon payment of a claim under the Credit Instrument the Trustee shall establish a separate special purpose trust account for the benefit of Bondholders to be designated as the “Policy Payments Account” and over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid under the Credit Instrument in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Trustee to Bondholders in the same manner as principal and interest payments are to be made with respect to the Bonds hereunder. Amounts held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in the Policy Payments Account following a payment date with respect to the Bonds shall promptly be remitted to FSA.
(b) FSA shall, to the extent it makes any payment of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Credit Instrument.
(c) FSA shall be deemed a third party beneficiary to this Indenture.
(d) The rights of FSA to direct or consent to the Authority, the Trustee or Bondholder actions under this Indenture shall be suspended during any period in which FSA is in default in its payment obligations under the Credit Instrument (except to the extent of amounts
DOCSLA1:517851.1 30
previously paid by FSA and due and owing to FSA) and shall be of no force or effect in the event the Credit Instrument is no longer in effect or FSA asserts that the Credit Instrument is not in effect or FSA shall have provided written notice that it waives such rights.
(e) The rights granted FSA under this Indenture to request, consent to or direct any action are rights granted to FSA in consideration of its issuance of the Credit Instrument. Any exercise by FSA of such rights is merely an exercise of FSA’s contractual rights and shall not be construed or deemed to be taken for the benefit or on behalf of the Bondholders nor does such action evidence any position of FSA, positive or negative, as to whether Bondholder consent is required in addition to consent of FSA.
(f) Copies of any amendment to the Indenture shall be delivered to S&P, Moody’s and such other rating agency then rating the Bonds at least 10 days prior to the effective date thereof.
(g) The Authority shall pay or reimburse FSA for reasonable charges, fees, costs and expenses FSA incurs in connection with (i) the administration, enforcement, defense or preservation of any rights or security in respect of the Indenture, (ii) the pursuit of any remedies under the Indenture or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Indenture whether or not executed or completed, (iv) the violation by the Authority or Local Agency of any law, rule or regulation, or any judgment, order or decree applicable to it or (v) any litigation or other dispute in connection with the Indenture or the transactions contemplated thereby, other than amounts resulting from the failure of FSA to honor its obligations under the Credit Instrument.
(h) Payments required to be made to FSA shall be payable solely from payments received from the trust estate created by this Indenture and shall be paid (i) prior to an event of default, to the extent not paid from the Bond Payment Fund, and (ii) after an event of default, with respect to amounts other than principal and interest on the Bonds, on the same priority as payments to the Trustee for expenses. The obligations to FSA shall survive discharge or termination of the Indenture.
(i) FSA shall be entitled to pay principal or interest on the Bonds that shall become due for payment but shall be unpaid by reason of Nonpayment by the Authority (as defined in the Credit Instrument) whether or not FSA has received a Notice (as defined in the Credit Instrument) of Nonpayment or a claim upon the Bond Insurance Policy.
(j) Notwithstanding anything to the contrary herein, the Credit Provider, so long as it has not failed to comply with its payment obligations under the Credit Instrument, shall have the right to direct remedies upon any Event of Default hereunder.
(k) FSA shall be provided with the following:
(i) notice of any default known to the Trustee within five Business Days after knowledge thereof;
DOCSLA1:517851.1 31
(ii) notice of the resignation or removal of the Trustee and the appointment of, and acceptance of duties by, any successor thereto;
(iii) the commencement of any proceeding by or against the Authority or any Local Agency commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency Proceeding”);
(iv) the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds;
(v) a full original transcript of all proceedings relating to the execution of any amendment or supplement to the Indenture; and
(vi) all reports, notices and correspondence to be delivered under the terms of the Indenture.
(l) The Trustee shall follow the procedures set forth in the

indenture - grass valley, california

Documents