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718699760
TRUST AGREEMENT
by and between
CITY OF MESA, ARIZONA,
and
UMB BANK, N.A.,
as Trustee
Dated as of __________ 1, 2026
relating to
$__________,000
Utility Systems Revenue Refunding
Obligations, Series 2026
Evidencing Proportionate Interests of the Holders Thereof
in Installment Payments of the Purchase Price to be Paid
by the City of Mesa, Arizona, Pursuant to an
Installment Purchase Agreement,
Dated as of _________ 1, 2026
(i)
(This Table of Contents is for informational purposes only
and is not to be considered a part of the Trust Agreement)
TABLE OF CONTENTS
SECTION
HEADING
PAGE
Parties ...............................................................................................................................................1
Granting Clauses ..............................................................................................................................1
Excepted Property ............................................................................................................................2
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION ................................................................................................ 2
Section 1.1
Definitions ......................................................................................................... 2
Section 1.2
Interpretation ................................................................................................... 15
Section 1.3
All Obligations Equally and Ratably Secured; Obligations Not General
Obligations of the City .................................................................................... 15
ARTICLE II AUTHORIZATION AND TERMS OF OBLIGATIONS ..................................... 16
Section 2.1
Authorization of Obligations .......................................................................... 16
Section 2.2
Form, Date and Payment Terms of Obligations.............................................. 16
Section 2.3
Mutilated, Destroyed, Lost and Stolen Obligations ........................................ 18
Section 2.4
Execution of Obligations................................................................................. 18
Section 2.5
Registration, Transfer and Exchange of Obligations ...................................... 18
Section 2.6
Persons Deemed Owners................................................................................. 19
Section 2.7
Non-Presentment of Obligations ..................................................................... 19
Section 2.8
Book-Entry ...................................................................................................... 19
ARTICLE III REDEMPTION OF OBLIGATIONS ................................................................... 20
Section 3.1
Right to Redeem .............................................................................................. 20
Section 3.2
Redemption of Obligations ............................................................................. 20
Section 3.3
Selection of Obligations to be Redeemed ....................................................... 20
Section 3.4
Partial Redemption of Obligations .................................................................. 21
Section 3.5
Effect of Call for Redemption ......................................................................... 21
Section 3.6
Notice of Redemption ..................................................................................... 21
ARTICLE IV FORM OF OBLIGATIONS ................................................................................. 22
ARTICLE V REVENUES AND FUNDS ................................................................................... 22
Section 5.1
Creation of Funds and Accounts ..................................................................... 22
Section 5.2
Application of Obligation Proceeds ................................................................ 22
Section 5.3
Flow of Funds Into the Obligation Fund ......................................................... 22
Section 5.4
Flow of Funds Out of the Obligation Fund ..................................................... 23
Section 5.5
Delivery Costs Fund ........................................................................................ 24
Page
(ii)
Section 5.6
Investment of Moneys Held by Trustee .......................................................... 24
Section 5.7
Liability of Trustee for Investments ................................................................ 25
Section 5.8
Investment Income .......................................................................................... 25
ARTICLE VI CERTAIN COVENANTS .................................................................................... 25
Section 6.1
Payment of Principal and Interest ................................................................... 25
Section 6.2
Performance of Covenants .............................................................................. 25
Section 6.3
Instruments of Further Assurance ................................................................... 26
Section 6.4
Rights under Purchase Agreement .................................................................. 26
Section 6.5
Protection of Lien ............................................................................................ 26
ARTICLE VII DEFAULT AND REMEDIES ............................................................................ 26
Section 7.1
Events of Default............................................................................................. 26
Section 7.2
Remedies and Enforcement of Remedies ....................................................... 27
Section 7.3
No Acceleration .............................................................................................. 27
Section 7.4
Application of Revenues and Other Moneys After Default ............................ 27
Section 7.5
Remedies Not Exclusive ................................................................................. 28
Section 7.6
Remedies Vested in Trustee ............................................................................ 28
Section 7.7
Individual Holder Action Restricted ............................................................... 29
Section 7.8
Termination of Proceedings ............................................................................ 29
Section 7.9
Waiver of Event of Default ............................................................................. 30
Section 7.10 Notice of Default ............................................................................................. 30
Section 7.11 Limitation of Liability ..................................................................................... 30
Section 7.12 Limitations on Remedies................................................................................. 31
ARTICLE VIII THE TRUSTEE ................................................................................................. 31
Section 8.1
Certain Duties and Responsibilities of Trustee ............................................... 31
Section 8.2
Certain Rights of Trustee ................................................................................ 32
Section 8.3
Employment of Experts................................................................................... 33
Section 8.4
Enforcement of Performance by Others .......................................................... 34
Section 8.5
Right to Deal in Obligations and Take Other Actions .................................... 34
Section 8.6
Removal and Resignation of Trustee .............................................................. 34
Section 8.7
Proof of Claim ................................................................................................. 35
Section 8.8
Trustee’s Fees and Expenses ........................................................................... 35
Section 8.9
Destruction of Obligations .............................................................................. 36
Section 8.10 Reports; Records ............................................................................................. 36
Section 8.11 Separate or Co-Trustee .................................................................................... 36
Section 8.12 Recitals and Representations........................................................................... 38
ARTICLE IX SUPPLEMENTS TO TRUST AGREEMENT AND AMENDMENTS TO
PURCHASE AGREEMENT .......................................................................... 39
Section 9.1
Supplements Not Requiring Consent of Holders ............................................ 39
Section 9.2
Supplements Requiring Consent of Holders ................................................... 40
Section 9.3
Execution and Effect of Supplements ............................................................. 41
Page
(iii)
Section 9.4
Amendments to Purchase Agreement Not Requiring Consent of
Holders ............................................................................................................ 42
Section 9.5
Amendments to Purchase Agreement Requiring Consent of Holders ............ 42
ARTICLE X SATISFACTION AND DISCHARGE .................................................................. 43
Section 10.1 Discharge......................................................................................................... 43
Section 10.2 Providing for Payment of Obligations ............................................................ 43
Section 10.3 Payment of Obligations After Discharge ........................................................ 44
ARTICLE XI MISCELLANEOUS ............................................................................................. 45
Section 11.1 Evidence of Acts of Holders ........................................................................... 45
Section 11.2 Limitation of Rights ........................................................................................ 45
Section 11.3 Severability ..................................................................................................... 46
Section 11.4 Holidays .......................................................................................................... 46
Section 11.5 Governing Law................................................................................................ 46
Section 11.6 Notices............................................................................................................. 46
Section 11.7 Counterparts .................................................................................................... 46
Section 11.8 Waiver of Personal Liability ........................................................................... 47
Section 11.9 Binding Effect ................................................................................................. 47
Section 11.10 Certain Statutory Notices ................................................................................ 47
Section 11.11 Instructions ...................................................................................................... 48
Section 11.12 Force Majeure ................................................................................................. 49
EXHIBIT A – Form of Obligation
EXHIBIT B – Delivery Costs Requisition
TRUST AGREEMENT
This TRUST AGREEMENT, made and entered into as of the 1st day of ________,
2026 (this “Trust Agreement”), by and between CITY OF MESA, ARIZONA, a municipal
corporation of the State of Arizona (the “City”), and UMB BANK, N.A., a national association
authorized to do trust business in the United States of America including in the State of Arizona,
as trustee, and any successor to its duties hereunder (the “Trustee”),
W ITNESSETH:
WHEREAS, the Trustee, in its capacity as seller (the “Seller”), and the City, as
purchaser, have entered into an Installment Purchase Agreement, dated as of even date herewith
(the “Purchase Agreement”), concerning the City’s acquisition of the Existing Projects (as defined
in the Purchase Agreement); and
WHEREAS, for the purpose of obtaining the moneys to acquire the Existing
Projects, rights of the Seller pursuant to the Purchase Agreement have been assigned and
transferred to the Trustee for the purposes hereof, and in consideration of such assignment and the
execution hereof, the Trustee shall execute and deliver certain Utility Systems Revenue Refunding
Obligations, Series 2026 Evidencing Proportionate Interests of the Holders Thereof in Installment
Payments of the Purchase Price to be Paid by the City of Mesa, Arizona, Pursuant to an Installment
Purchase Agreement, dated as of ________ 1, 2026 (the “Obligations”), each evidencing a
proportionate interest in certain rights pursuant to the Purchase Agreement, including the right to
receive payment of the Purchase Price (as defined in the Purchase Agreement);
GRANTING CLAUSES
NOW, THEREFORE, THIS TRUST AGREEMENT FURTHER WITNESSETH:
That in order to secure all of the Obligations executed and delivered pursuant hereto, the payment
of principal and interest thereon, the rights of the Holders (as defined herein) of the Obligations
and the performance and observance of the covenants and conditions contained herein and in the
Obligations and the Purchase Agreement, the Trustee shall receive and hold as security for the
Holders of the Obligations, and there shall be granted a security interest in and released, assigned,
transferred, pledged, mortgaged, granted and conveyed unto the Trustee or any successor to its
duties hereunder, the following described property:
A.
All rights and interests of the Seller in, under and pursuant to the
Purchase Agreement as assigned, mortgaged, hypothecated and pledged pursuant to the Purchase
Agreement, provided that the assignment made by this clause shall not include any right to
limitation of liability, indemnification of liability, Seller’s rights of approval or consent thereunder,
or payment or reimbursement of fees, costs or expenses,
B.
Amounts on deposit from time to time in the funds and accounts
created pursuant hereto subject to the provisions of this Trust Agreement permitting the application
thereof for the purposes and on the terms and conditions set forth herein and
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C.
Any and all other real or personal property of any kind from time to
time after execution hereof by delivery or by writing of any kind specifically conveyed, pledged,
assigned or transferred, as and for additional security hereunder for the Obligations, by the City or
by anyone on its behalf or with its written consent, in favor of the Trustee, which is hereby
authorized to receive any and all such property at any and all times and to hold and apply the same
subject to the terms hereof,
TO HAVE AND TO HOLD all said properties assigned, mortgaged, hypothecated
and pledged and conveyed by the Seller, including all additional property that by the terms hereof
has or may become subject to the encumbrance hereof, unto the Trustee and its successors in trust
and its assigns forever, subject, however, to the rights reserved hereunder,
IN TRUST NEVERTHELESS, for the equal and proportionate benefit and security
of the Holders from time to time of the Obligations executed and delivered and Outstanding (as
defined herein) hereunder, [and (ii) the Insurer with respect to the Insurer Reimbursement
Amounts,] without preference, priority or distinction as to lien or otherwise of any of the
Obligations over any other or others of the Obligations to the end that each Holder of the
Obligations has the same rights, privileges and lien under and by virtue hereof; and conditioned,
however, that if all liabilities, obligations and sums at any time secured hereby shall be well and
truly paid, or caused to be paid fully and promptly when due, and all of the covenants, warranties
and agreements contained herein shall promptly, faithfully and strictly be kept, performed and
observed, then and in such event, this Trust Agreement shall be and become void and of no further
force and effect; otherwise, the same shall remain in full force and effect, and upon the trust and
subject to the covenants and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1
Definitions. Unless the context otherwise requires, the following
words and phrases shall have the following meanings:
“Authorized Officers” means officers of the City with the authority to provide
Instructions as listed in an incumbency certificate containing specimen signatures of such officers,
which certificate shall be amended by the City whenever a person is to be added or deleted from
the listing.
“Bonds Being Refunded” means all or portions of the City’s Utility Systems
Revenue Bonds, Series 2013, Utility Systems Revenue Bonds, Series 2014, Utility Systems
Revenue Bonds, Series 2015, Utility Systems Revenue Bonds, Series 2016, and Utility Systems
Revenue Refunding Bonds, Series 2016.
“Business Day” means any day other than (a) a Saturday or Sunday, (b) a day on
which banks located in the City of Phoenix, Arizona, and in the city or cities in which the corporate
trust office of the Trustee and the Paying Agents are not required or authorized by law or executive
order to remain closed, and (c) a day on which the City is required or authorized by law or
executive order to remain closed.
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“City Council” means the City Council of the City.
“City Representative” means the Deputy City Manager/Chief Financial Officer or
any other person at any time designated to act on behalf of the City by written certificate furnished
to the Trustee containing the specimen signature of such person and signed by the City Manager
or the Deputy City Manager/Chief Financial Officer, or the designee of either of them. Such
certificate may designate one or more alternates.
[“Claim” means any claim or enforcement proceeding in connection with an
Insolvency Proceeding.]
“Code” means the Internal Revenue Code of 1986, as amended, and any successor
provisions thereto.
“Debt Service Reserve Account” means the account of the Obligation Fund created
pursuant to Section 5.1.
“Defeasance Obligations” means any of the following: (1) cash, (2) non-callable
direct obligations of the United States of America (“Treasuries”), (3) evidences of ownership of
proportionate interests in future interest and principal payments on Treasuries 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
Treasuries are not available to any person claiming through the custodian or to whom the custodian
may be obligated, (4) pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and
Moody’s, respectively, or (5) securities eligible for “AAA” defeasance under then-existing criteria
of S&P, or (6) any combination thereof.
“Delivery Costs” means costs and expenses relating to the sale, credit enhancement
and execution and delivery of the Obligations, including, but not limited to “out of pocket”
expenses and charges, fees and disbursements of counsel, printing expenses and other expenses
reasonably incurred by the City and the Trustee in connection with this Trust Agreement and the
Purchase Agreement.
“Delivery Costs Fund” means the fund of that name created pursuant to Section 5.1.
“Depository Trustee” means any financial institution meeting the requirements as
a successor Trustee under Section 8.6 that may be designated by the City.
“DTC” means The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, and its successors and assigns.
“Electronic Means” means the following communications methods: e-mail, secure
electronic transmission containing applicable authorization codes, passwords and/or
authentication keys issued by the Trustee, or another method or system specified by the Trustee as
available for use in connection with its services hereunder and under the Purchase Agreement.
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“Fiscal Year” means the 12-month period used by the City for its general
accounting purposes as the same may be changed from time to time, said fiscal year currently
extending from July 1 to June 30.
“Holder” means the registered owner of any Obligation[, including the Insurer, as
applicable].
[“Independent Counsel” means an attorney duly admitted to the practice of law
before the highest court of the state in which such attorney maintains an office and who is not an
employee of the City or the Trustee and which may include the counsel giving a Special Counsel’s
Opinion.]
[“Insolvency Proceeding” means any proceeding by or against the City under the
United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law.]
“Instructions” means instructions, including funds transfer instructions.
[“Insured Obligations” means the Obligations maturing on July 1, 20__, through
and including July 1, 20__.]
[“Insurer” means __________, a ___________ corporation, or any successor
thereto or assignee thereof.]
[“Insurer Advances” means a sum equal to the total of all amounts paid by the
Insurer under the Policy.]
[“Insurer Reimbursement Amounts” means, collectively, the Insurer Advances and
interest on such Insurer Advances from the date paid by the Insurer until the payment thereof in
full, payable to the Insurer at the Late Payment Rate per annum.]
“Interest Account” means the account of the Obligation Fund of that name created
pursuant to Section 5.1.
[“Late Payment Rate” means the lesser of (a) the greater of (i) the per annum rate
of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office
in New York, New York, as its prime or base lending rate (the “Prime Rate”) (any change in such
Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank) plus
3% and (ii) the then applicable highest rate of interest on the Insured Obligations and (b) the
maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late
Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of
360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, the
Prime Rate shall be the publicly announced prime or base lending rate of such national bank as the
Insurer shall specify.]
“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and
existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a securities rating
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agency for the type of credit in question, “Moody’s” shall be deemed to refer to any other nationally
recognized securities rating agency designated by the City by written notice to the Trustee.
“Obligation Fund” means the fund of that name created pursuant to Section 5.1.
“Obligation Payment Date” means each January 1 and July 1, commencing [July 1,
2026], so long as any Obligations are Outstanding.
“Opinion of Counsel” means a written opinion of an attorney or firm of attorneys
acceptable to the Trustee and who or which (except as otherwise expressly provided herein or in
the Purchase Agreement) may be counsel for the City or the Trustee, provided that such attorney
or firm of attorneys may not be an employee of the Trustee.
“Outstanding” when used with reference to the Obligations, means, as of any date
of determination, all Obligations theretofore executed and delivered except:
(i)
Obligations theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii)
Obligations that are deemed paid and no longer Outstanding as
provided herein;
(iii)
Obligations in lieu of which other Obligations have been executed
and delivered pursuant to the provisions hereof relating to Obligations destroyed, stolen or
lost, unless evidence satisfactory to the Trustee has been received that any such Obligation
is held by a bona fide purchaser; and
(iv)
For purposes of any consent or other action to be taken hereunder or
under the Purchase Agreement by the Holders of a specified percentage in principal amount
of Obligations, Obligations held by or for the account of the City, or any Person controlling,
controlled by, or under common control with the City; except that in determining whether
the Trustee shall be protected in relying upon any such approval or consent of an Holder,
only Obligations which the president, any vice president, any assistant vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior associate,
any associate or any other officer of the Trustee within the corporate trust office described
in Section 11.6(a)(i) or any officer to which a corporate trust matter is referred (because of
such person’s knowledge of and familiarity with the subject) and having direct
responsibility for the administration of this Trust Agreement, actually knows to be so held
shall be disregarded unless all Obligations are so held, in which case such Obligations shall
be considered Outstanding for the purpose of such determination.
[“Owner” or any similar term, when used with respect to an Insured Obligation,
means the person in whose name such Insured Obligation shall be registered, including the Insurer,
as applicable.]
“Paying Agent” means the banks or trust companies and their successors from time
to time designated by the City as the paying agencies or places of payment for the Obligations.
The Trustee is designated as the initial Paying Agent for the Obligations.
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“Permitted Investments” means, to the extent the use of which is not otherwise
prohibited by applicable law:
1.
A.
Cash;
B.
U.S. Treasury Certificates, Notes and Bonds (including State and
Local Government Series – (SLGs));
C.
Direct obligations of the U.S. Treasury which have been stripped by
the U.S. Treasury itself;
D.
Resolution Funding Corp. (“REFCORP”) but only the interest
component of REFCORP strips which have been stripped by request
to the Federal Reserve Bank of New York in book entry form are
acceptable;
E.
Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA”
by S&P but if, however, the issue is only rated by S&P (i.e., there is
no Moody’s rating) then the pre-refunded bonds must have been pre-
refunded with cash, direct U.S. or U.S. guaranteed obligations, or
AAA rated pre-refunded municipals to satisfy this condition and
F.
Obligations issued by the following agencies which are backed by
the full faith and credit of the U.S.:
(i)
U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of
beneficial ownership,
(ii)
Farmers Home Administration (FmHA),
(iii)
Federal Financing Bank,
(iv)
General Services Administration
Participation Certificates,
(v)
U.S. Maritime Administration
Guaranteed Title XI financing and
(vi)
U.S. Department of Housing and Urban Development
(HUD)
Project Notes
Local Authority Bonds
New Communities Debentures – U.S. government
guaranteed debentures
U.S. Public Housing Notes and Bonds – U.S. government
guaranteed public housing notes and bonds;
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2.
Federal Housing Administration debentures;
3.
Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by
any of the following non-full faith and credit U.S. government agencies (stripped securities are
only permitted if they have been stripped by the agency itself):
A.
Federal Home Loan Mortgage Corporation (FHLMC or “Freddie Mac”)
Participation Certificates (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), Senior debt obligations;
B.
Farm Credit Banks (formerly Federal Land Banks, Federal Intermediate
Credit Banks and Banks for Cooperatives) Consolidated system-wide bonds
and notes;
C.
Federal Home Loan Banks (FHL Banks) Consolidated debt obligations;
D.
Federal National Mortgage Association (FNMA or “Fannie Mae”) Senior
debt obligations, Mortgage-backed securities (excluded are stripped
mortgage securities that are purchased at prices exceeding the portion of
their unpaid principal amounts);
E.
Financing Corporation (FICO) Debt obligations; and
F.
Resolution Funding Corp. (REFCORP) Debt obligations;
4.
Bank deposit products, unsecured certificates of deposit, time deposits, and
bankers’ acceptances (having maturities of not more than 30 days) of any bank the short-term
obligations of which are rated ‘A-1’ or better by S&P or the highest rating category of Moody’s
or are fully insured by the Federal Deposit Insurance Corporation (FDIC).
5.
Deposits the aggregate amount of which are fully insured by the Federal Deposit
Insurance Corporation (FDIC).
6.
Commercial paper (having original maturities of not more than 270 days) rated
‘A-1+’ by S&P and ‘Prime-1’ by Moody’s.
7.
Money market mutual funds rated ‘AAm’ or ‘AAm-G’ or higher by S&P or having
a rating in the highest investment category granted thereby from Moody’s, including those for
which the Trustee or an affiliate receives and retains a fee for services provided to the fund,
whether as a custodian, transfer agent, investment advisor or otherwise.
8.
“State Obligations”, which means:
A.
Direct general obligations of any state of the United States of America or
any subdivision or agency thereof to which is pledged the full faith and
credit of a state the unsecured general obligation debt of which is rated ‘A3’
by Moody’s and ‘A’ by S&P, or higher, or any obligation fully and
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unconditionally guaranteed by any state, subdivision or agency whose
unsecured general obligation debt is so rated.
B.
Direct general short-term obligations of any state agency or subdivision or
agency thereof described in (A) above and rated “A-1+” by S&P and
“MIG-1” by Moody’s.
C.
Special Revenue Bonds (as defined in the United States Bankruptcy Code)
of any state, state agency or subdivision described in (A) above and rated
“AA” or better by S&P and “Aa” or better by Moody’s.
9.
Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s
meeting the following requirements:
A.
the municipal obligations are (1) not subject to redemption prior to maturity
or (2) the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the
municipal obligations has covenanted not to redeem such municipal
obligations other than as set forth in such instructions;
B.
the municipal obligations are secured by cash or United States Treasury
Obligations that may be applied only to payment of the principal of, interest
and premium on such municipal obligations;
C.
the principal of and interest on the United States Treasury Obligations (plus
any cash in the escrow) has been verified by the report of independent
certified public accountants to be sufficient to pay in full all principal of,
interest, and premium, if any, due and to become due on the municipal
obligations (“Verification”);
D.
the cash or United States Treasury Obligations serving as security for the
municipal obligations are held by an escrow agent or trustee in trust for
owners of the municipal obligations;
E.
no substitution of a United States Treasury Obligation shall be permitted
except with another United States Treasury Obligation and upon delivery of
a new Verification; and
F.
the cash or United States Treasury Obligations are not available to satisfy
any other claims, including those by or against the trustee or escrow agent.
10.
Repurchase or reverse repurchase agreements: 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 the parent company (which guarantees the provider) of which has, long-term
debt rated at least “A” by S&P and Moody’s, which broker-dealer 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:
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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);
B.
The Trustee or a third party acting solely as agent therefor (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 repurchase or reverse repurchase 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 or reverse
repurchase agreements shall be met;
E.
The repurchase or reverse repurchase 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 (acting at the
direction of the City), within 10 days of receipt of such direction, repurchase
all collateral and terminate the agreement, with no penalty or premium to
the City or 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 percent or better and the provider is rated at least “A” by S&P and
Moody’s, respectively.
11.
Investment agreements with a domestic or foreign bank or corporation (other than
a life or property 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
“Aa2” by Moody’s; provided that, by the terms of the investment agreement:
A.
interest payments are to be made to the Trustee at times and in amounts as
necessary to pay debt service (or, if the investment agreement is for the
construction fund, construction draws) on the Obligations;
B.
the invested funds are available for withdrawal without penalty or premium,
at any time upon not more than seven days’ prior notice; the Trustee thereby
agrees 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;
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C.
the investment agreement shall state that it is the unconditional and general
obligation of, and is not subordinated to any other obligation of, the provider
thereof or, if the provider is a bank, the agreement or the opinion of counsel
shall state that the obligation of the provider to make payments thereunder
ranks pari passu with the obligations of the provider to its other depositors
and its other unsecured and unsubordinated creditors;
D.
the Trustee receives the opinion of domestic counsel (which opinion shall
be addressed to 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);
E.
the investment agreement shall provide that if during its term:
(i)
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
(a) 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
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 (b) repay the principal
of and accrued but unpaid interest on the investment; and
(ii)
the provider’s rating 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 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
Trustee, and
F.
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, any substituted collateral and all proceeds
thereof (in the case of bearer securities, this means the Holder of the
Collateral is in possession);
G.
the investment agreement must provide that if during its term:
(i)
the provider shall default in its payment obligations, the provider’s
obligations under the investment agreement shall, at the direction of
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the Trustee, be accelerated and amounts invested and accrued but
unpaid with interest thereon shall be repaid to the Trustee, and
(ii)
the provider shall become insolvent, not pay its debts as they
become due, be declared or petition to be declared bankrupt, etc.
(“event of insolvency”), the provider’s obligations shall
automatically be accelerated and amounts invested and accrued but
unpaid with interest thereon shall be repaid to the Trustee, as
appropriate.
12.
Interests in the Local Government Investment Pool established pursuant to Arizona
Revised Statutes Section 35-326.
13.
Any other investment that is permitted under the City’s adopted written investment
policy.
“Person” includes an individual, an association, an unincorporated organization, a
corporation, a partnership, a joint venture, or a government or agency or political subdivision
thereof.
[“Policy” means the municipal bond insurance policy issued by the Insurer that
guarantees the scheduled payment of principal of and interest on the Insured Obligations when
due.]
“Prior Registrar” means UMB Bank, n.a., as the registrar and paying agent of the
Bonds Being Refunded.
“Principal Account” means the account of the Obligation Fund of that name created
pursuant to Section 5.1.
“Principal Installment” means, for any particular date, the aggregate of the
principal amount of Obligations that is due on such date.
“Qualified Reserve Fund Instrument” means a letter or line of credit, insurance
policy or surety bond that meets the requirements set forth below:
(i)
A surety bond or insurance policy issued to the Trustee by a company
licensed to issue an insurance policy guaranteeing the timely payment of debt service on
the Obligations may be deposited in the Debt Service Reserve Account to meet the amount
that should have then been on deposit in the Debt Service Reserve Account pursuant to the
requirements of the Purchase Agreement if the claims paying ability of the issuer thereof
shall be rated at least “AA-” or “Aa3” by S&P or Moody’s, respectively, or a lower rating
acceptable to the City, provided that any issuer rated below “AA-” or “Aa3” by S&P or
Moody’s, respectively, will not adversely affect the then-current rating pertaining to the
Obligations, if then rated by S&P or Moody’s.
(ii)
An unconditional irrevocable letter of credit issued to the Trustee, as agent
of the Holders of the Obligations, by a bank may be deposited in the Debt Service Reserve
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Account to meet the amount that should have then been on deposit in the Debt Service
Reserve Account pursuant to the requirements of the Purchase Agreement if the issuer
thereof is rated at least “AA-” by S&P, or a lower rating acceptable to the City, provided
that any issuer rated below “AA-” by S&P will not adversely affect the then-current rating
pertaining to the Obligations, if then rated by S&P or Moody’s. The letter of credit shall
be payable in one or more draws upon presentation by the beneficiary of a sight draft
accompanied by its certificate that it then holds insufficient funds to make a required
payment of principal or interest on the Obligations. The draws shall be payable within two
days of presentation of the sight draft. The letter of credit shall be for a term of not less
than three years. The issuer of the letter of credit shall be required to notify the City and
the Trustee, not later than 24 months prior to the stated expiration date of the letter of credit,
as to whether such expiration date shall be extended, and if so, shall indicate the new
expiration date.
The letter of credit shall permit a draw in full not less than 14 days prior to the
expiration or termination of such letter of credit if the letter of credit has not been replaced
or renewed. The Trustee is authorized and directed to draw upon the letter of credit prior
to its expiration or termination unless an acceptable replacement is in place or the Debt
Service Reserve Account is fully funded in its required amount.
If the expiration date of the letter of credit shall not be extended, the City may
deposit in the Debt Service Reserve Account an amount sufficient to cause cash or
Permitted Investments on deposit in the Debt Service Reserve Account to equal the amount
that should have then been on deposit in the Debt Service Reserve Account pursuant to the
requirements of the Purchase Agreement, such deposit to be paid in equal installments on
at least a semiannual basis over the ensuing three years, unless the Qualified Reserve Fund
Instrument is replaced by a Qualified Reserve Fund Instrument meeting the requirements
in either (i) or (ii) above.
The deposit of any Qualified Reserve Fund Instrument pursuant to this paragraph
(ii) shall be subject to the Trustee’s receipt of an opinion of counsel of an attorney or firm
of attorneys of nationally recognized standing in the related field as to the due
authorization, execution, delivery and enforceability of such instrument in accordance with
its terms, subject to applicable laws affecting creditors’ rights generally, and, in the event
the issuer of such credit instrument is not a domestic entity, an opinion of foreign counsel.
In addition, the use of an irrevocable letter of credit shall be subject to the Trustee’s receipt
of an opinion of counsel of such attorney or firm of attorneys to the effect that payments
under such letter of credit would not constitute avoidable preferences under Section 547 of
the U.S. Bankruptcy Code or similar state laws with avoidable preference provisions in the
event of the filing of a petition for relief under the U.S. Bankruptcy Code or similar state
laws by or against the issuer of the Obligations (or any other account party under the letter
of credit).
(iii)
The obligation to reimburse the issuer of a Qualified Reserve Fund
Instrument for any fees, expenses, claims or draws upon such Qualified Reserve Fund
Instrument shall be subordinate to the payment of debt service on the Obligations. The
right of the issuer of a Qualified Reserve Fund Instrument to payment or reimbursement of
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its fees and expenses shall be subordinated to cash replenishment of the Debt Service
Reserve Account, and subject to the second succeeding sentence, its right to reimbursement
for claims or draws shall be on a parity with the cash replenishment of the Debt Service
Reserve Account. The Qualified Reserve Fund Instrument shall provide for a revolving
feature under which the amount available thereunder will be reinstated to the extent of any
reimbursement of draws or claims paid. If the revolving feature is suspended or terminated
for any reason, the right of the issuer of the Qualified Reserve Fund Instrument to
reimbursement will be further subordinated to cash replenishment of the Debt Service
Reserve Account to an amount equal to the difference between the full original amount
available under the Qualified Reserve Fund Instrument and the amount then available for
further draws or claims. If (A) the issuer of a Qualified Reserve Fund Instrument becomes
insolvent or (B) the issuer of a Qualified Reserve Fund Instrument defaults in its payment
obligations thereunder or (C) the claims-paying ability of the issuer of the insurance policy
or surety bond falls below a S&P “AA-” or a Moody’s “Aa3” (or if the City initially
selected a lower rated issuer, the S&P or Moody’s rating on such issuer declines from its
initial level and such decline adversely affects the then-current rating pertaining to the
Obligations, if then rated by S&P or Moody’s) or (D) the rating of the issuer of the letter
of credit falls below a S&P “AA-” (or if the City initially selected a lower rated issuer, the
S&P rating on such issuer declines from its initial level and such decline adversely affects
the then-current rating pertaining to the Obligations, if then rated by S&P or Moody’s) the
obligation to reimburse the issuer of the Qualified Reserve Fund Instrument shall be
subordinate to the cash replenishment of the Debt Service Reserve Account.
(iv)
If (A) the revolving reinstatement feature described in the preceding
paragraph is suspended or terminated or (B) the rating of the claims paying ability of the
issuer of the surety bond or insurance policy falls below a S&P “AA-” or a Moody’s “Aa3”
(or if the City initially selected a lower rated issuer, the S&P or Moody’s rating on such
issuer declines from its initial level and such decline adversely affects the then-current
rating pertaining to the Obligations, if then rated by S&P or Moody’s) or (C) the rating of
the issuer of the letter of credit falls below a S&P “AA-” (or if the City initially selected a
lower rated issuer, the S&P rating on such issuer declines from its initial level and such
decline adversely affects the then-current rating pertaining to the Obligations, if then rated
by S&P or Moody’s), the City shall either (1) deposit into the Debt Service Reserve
Account an amount sufficient to cause the cash or Permitted Investments on deposit in the
Debt Service Reserve Account to equal the amount that should have then been on deposit
in the Debt Service Reserve Account pursuant to the requirements of the Purchase
Agreement, such amount to be paid over the ensuing five years in equal installments
deposited at least semiannually or (2) replace such instrument with a surety bond, insurance
policy or letter of credit meeting the requirements in any of (i)-(iii) above within six months
of such occurrence. In the event (a) the rating of the claims-paying ability of the issuer of
the surety bond or insurance policy is no longer investment grade or (b) the rating of the
issuer of the letter of credit is no longer investment grade or (c) the issuer of the Qualified
Reserve Fund Instrument defaults in its payment obligations or (d) the issuer of the
Qualified Reserve Fund Instrument becomes insolvent, the City shall either (i) deposit into
the Debt Service Reserve Account an amount sufficient to cause the cash or Permitted
Investments on deposit in the Debt Service Reserve Account to equal the amount that
should have then been on deposit in the Debt Service Reserve Account pursuant to the
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requirements of the Purchase Agreement, such amount to be paid over the ensuing year in
equal monthly installments or (ii) replace such instrument with a surety bond, insurance
policy or letter of credit meeting the requirements above, as applicable, within six months
of such occurrence.
(v)
Where applicable, the amount available for draws or claims under the
Qualified Reserve Fund Instrument may be reduced by the amount of cash or Permitted
Investments deposited in the Debt Service Reserve Account pursuant to clause (d)(i) of the
preceding subparagraph (iv).
(vi)
Any amounts owed by the City to the issuer of the Qualified Reserve Fund
Instrument as a result of a draw thereon or a claim thereunder, as appropriate, shall be
included in any calculation of debt service requirements required to be made pursuant to
the Purchase Agreement for any purpose, e.g., Sections 4.2 and 4.4 of the Purchase
Agreement.
(vii)
The Trustee shall ascertain the necessity for a claim or draw upon the
Qualified Reserve Fund Instrument and provide notice to the issuer of the Qualified
Reserve Fund Instrument in accordance with its terms not later than three days (or such
longer period as may be necessary depending on the permitted time period for honoring a
draw under the Qualified Reserve Fund Instrument) prior to each Obligation Payment Date.
(viii) Cash on deposit in the Debt Service Reserve Account shall be used (or
investments purchased with such cash shall be liquidated and the proceeds applied as
required) prior to any drawing on the Qualified Reserve Fund Instrument.
(ix)
A Qualified Reserve Fund Instrument may not be provided to replace
existing cash or Permitted Investments unless the City obtains, and provides to the Trustee,
a Special Counsel’s Opinion to the effect that such action will not cause the interest on any
Obligations to become includible in gross income for purposes of federal income taxes.
“Rating Agency” shall mean Moody’s or S&P, or either of them or their
replacements as provided in the definition of each.
“Record Date” means (i) with respect to any Obligation Payment Date occurring
on the first calendar day of any month, the 15th day of the calendar month next preceding that
Obligation Payment Date (regardless of whether such 15th day is a Business Day) or (ii) such other
date as may be designated pursuant to Section 2.2(c).
“Reserve Requirement” means, if the Debt Service Reserve Account is required to
be funded, an amount equal to the greatest amount to be paid in any subsequent Fiscal Year of the
City with respect to the Obligations; provided, however, that such amount shall not exceed the
least of (a) ten percent (10%) of the net proceeds of the Obligations at the time of original delivery,
(b) the greatest amount to be paid in any subsequent Fiscal Year of the City with respect to the
Obligations or (c) one hundred twenty-five percent (125%) of the average annual debt service. If
the Debt Service Reserve Account is not required to be funded, the Reserve Requirement is $0.00.
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“S&P” means S&P Global Ratings, a division of Standard & Poor’s Financial
Services LLC, its successors and assigns, and, if such entity shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency for the type of credit in question,
“S&P” shall be deemed to refer to any other nationally recognized securities rating agency
designated by the City by written notice to the Trustee.
“Securities Depository” has the meaning provided in Section 2.8.
“Special Counsel” means an attorney or firm of attorneys of nationally recognized
standing in the field of law relating to municipal bonds selected by the City.
“Special Counsel’s Opinion” means an opinion signed by Special Counsel.
“State” means the State of Arizona.
“Trust Agreement Event of Default” means any one of those events set forth in
Section 7.1.
Section 1.2
Interpretation.
(a)
Any reference herein to the City Council or any officer of the City
shall include those succeeding to their functions, duties or responsibilities pursuant to or by
operation of law or who are lawfully performing their functions.
(b)
Unless the context otherwise indicates, words importing the singular
shall include the plural and vice versa and the use of the neuter, masculine or feminine gender is
for convenience only and shall be deemed to mean and include the neuter, masculine or feminine
gender.
(c)
Headings of articles and sections herein and the table of contents
hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect
the meaning, construction or effect hereof. References to “Articles” and “Sections” are to those
in this Trust Agreement, unless otherwise specified.
Section 1.3
All Obligations Equally and Ratably Secured; Obligations Not
General Obligations of the City. All of the Obligations executed and delivered hereunder and at
any time Outstanding shall in all respects be equally and ratably secured hereby, without
preference, priority, or distinction on account of the date or dates or the actual time or times of the
execution and delivery or maturity of the Obligations, so that all Obligations at any time
Outstanding hereunder shall have the same right, lien and preference hereunder and shall all be
equally and ratably secured hereby. The Obligations shall be payable solely out of the revenues
and other security pledged hereby and shall not constitute an indebtedness, a general obligation or
a pledge of ad valorem property taxes of the City within the meaning of any State constitutional
provision or statutory limitation. The Obligations shall never constitute or give rise to a pecuniary
liability of the City or be a charge against the City’s general credit, and the Obligations shall never
constitute a charge against the general credit or the taxing powers of the State or any political
subdivision thereof.
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ARTICLE II
AUTHORIZATION AND TERMS OF OBLIGATIONS
Section 2.1
Authorization of Obligations. The Trustee is hereby authorized and
directed, upon receipt of a request in writing from the City Representative, to prepare, execute and
deliver the Obligations to, or upon the direction of, _________________, as the underwriter of the
Obligations, in the principal amount of $_________. In no event shall the Obligations be deemed
a debt or liability of the Trustee.
Section 2.2
Form, Date and Payment Terms of Obligations.
(a)
The Obligations shall be dated the date of their initial execution and
delivery, be executed and delivered in denominations of $5,000 of principal each or any integral
multiple thereof, and bear interest from the most recent Obligation Payment Date to which interest
has been paid or for which due provision has been made or, if no interest has been paid, from the
date of their initial execution and delivery. Said interest shall represent the portion of each
installment of the Purchase Price designated as interest and coming due during the six-month
period preceding each Obligation Payment Date paid pursuant to Section 5.4(i); provided that the
first installment shall be for interest from the date of initial execution and delivery of the
Obligations to [July 1, 2026]. The proportionate share of the portion of each installment of the
Purchase Price designated as interest with respect to any Obligation shall be computed by
multiplying the portion of each installment of the Purchase Price designated as principal with
respect to such Obligation by the rate of interest applicable to such Obligation (on the basis of a
360-day year of twelve 30-day months).
The Obligations shall mature on July 1 in the years and amounts and bear
interest at rates per annum (calculated on the basis of a 360-day year of twelve 30-day months) as
follows:
17
Year
Principal
Amount
Interest
Rate
2026
$
%
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
(b)
The Obligations shall be executed and delivered only in fully
registered form and shall be numbered or otherwise designated in a manner specified by the
Trustee so as to distinguish each Obligation from every other Obligation.
(c)
Interest on the Obligations shall be payable when due to the Holder
in whose name such Obligation is registered at the close of business on the Record Date with
respect to each Obligation Payment Date, irrespective of any transfer or exchange of such
Obligation subsequent to such Record Date and prior to such Obligation Payment Date, unless
there is a default in the payment of interest due on such Obligation Payment Date. In the event of
any such default, such defaulted interest shall be payable to the Holder in whose name such
Obligation is registered at the close of business on a special Record Date for the payment of such
defaulted interest established by notice mailed by the Trustee to the Holders of the Obligations not
less than 15 days preceding such special Record Date. Such notice shall be mailed to the Holders
in whose name the Obligations are registered at the close of business on the fifth day preceding
the date of mailing. If the Trustee registers the transfer of any Obligation subsequent to the mailing
of such notice and on or before the special Record Date, any such notice of payment of defaulted
interest shall be binding upon the transferee and a copy of the notice of payment of defaulted
interest shall be delivered by the Trustee to the transferee(s) along with the Obligation(s).
(d)
Principal of and redemption premium, if any, and interest on the
Obligations shall be payable when due in any coin or currency of the United States of America
that is legal tender for the payment of public and private debts. Principal of and redemption
premium, if any, on the Obligations shall be payable at the designated corporate trust office of the
Trustee upon surrender of the Obligation on or after the maturity date. Payment of interest on the
Obligations shall be made by check or draft mailed to the registered address of the Person entitled
thereto; except that, upon the written direction of any Holder of not less than $1,000,000 in
aggregate principal amount of Obligations (which direction shall remain effective for so long as
18
such Holder owns not less than $1,000,000 in Obligations or until such Holder countermands such
written direction in writing), the payment of interest on the Obligations owned by such Holder
may be made by wire transfer of immediately available funds to an account located in a bank
within the United States pursuant to wire transfer directions issued by such Holder.
(e)
Any payment due on any Obligation that is not paid when due shall
bear interest at a rate equal to the rate of interest borne on such Obligation, from the date such
payment is due until the payment is made. Such interest shall be calculated based upon an
assumption of a 360-day year of twelve 30-day months, with such interest compounded
semiannually.
Section 2.3
Mutilated, Destroyed, Lost and Stolen Obligations. If (a) any
mutilated Obligation is surrendered to the Trustee, or the Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Obligation, and (b) there is delivered to the
Trustee such security or indemnity as the Trustee may require to hold the Trustee harmless, then,
in the absence of notice to the Trustee that such Obligation has been acquired by a bona fide
purchaser and upon the Holder paying the reasonable expenses of the Trustee and of any security
or indemnity obligation required by the Trustee, the Trustee shall execute and deliver, in exchange
for such mutilated Obligation or in lieu of such destroyed, lost or stolen Obligation, a new
Obligation of like principal amount, date and tenor. If any such mutilated, destroyed, lost or stolen
Obligation has become, or will on or before the next Obligation Payment Date become, due and
payable, the Trustee may, in its discretion, pay such Obligation when due instead of delivering a
new Obligation.
Section 2.4
Execution of Obligations. All Obligations shall be executed by and
in the name of the Trustee by manual signature of an authorized representative of the Trustee. If
any authorized representative of the Trustee whose signature appears on any Obligation ceases to
be such authorized representative before the date of initial execution and delivery of the
Obligations, such signature shall nevertheless be effective.
Section 2.5
Registration, Transfer and Exchange of Obligations.
(a)
All Obligations executed and delivered hereunder shall be
negotiable, subject to the provisions for registration and transfer thereof contained herein or in the
Obligations.
(b)
So long as any Obligations are Outstanding, the Trustee shall
maintain at its offices books for the registration and transfer of Obligations and shall provide for
the registration and transfer of any Obligation under such reasonable regulations as the Trustee
may prescribe. The Trustee shall act as registrar for purposes of exchanging and registering
Obligations in accordance with the provisions hereof.
(c)
Each Obligation shall be transferable only upon the registration
books maintained by the Trustee, by the Holder thereof in person or by his attorney duly authorized
in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the
Trustee duly executed by the registered Holder or his duly authorized attorney. Upon surrender
for transfer of any Obligation, the Trustee shall authenticate and deliver, in the name of the
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transferee, one or more new Obligations, of the same aggregate principal amount and maturity as
the surrendered Obligation.
(d)
Any Obligation, upon surrender thereof to the Trustee together with
written instructions satisfactory to the Trustee, duly executed by the registered Holder or his
attorney duly authorized in writing, may, at the option of the registered Holder thereof, be
exchanged for Obligations of any other authorized denominations, with an equal aggregate
principal amount and the same maturity.
(e)
All Obligations surrendered in any exchange or transfer of
Obligations shall forthwith be cancelled by the Trustee.
(f)
In connection with any such exchange or transfer of Obligations the
Holder requesting such exchange or transfer shall as a condition precedent to the exercise of the
privilege of making such exchange or transfer remit to the Trustee an amount sufficient to pay any
tax or other governmental charge required to be paid with respect to such exchange or transfer.
Section 2.6
Persons Deemed Owners. The Person in whose name any
Obligation shall be registered shall be deemed and regarded as the absolute owner thereof for all
purposes, and payment of principal of and premium, if any, and interest or any applicable premium
on any Obligation shall be made only to or upon the written order of the registered Holder thereof
(subject to provisions in this Trust Agreement regarding the Record Date). Such payment shall be
conclusively valid and effectual to satisfy and discharge the liability upon such Obligation to the
extent of the amount so paid.
Section 2.7
Non-Presentment of Obligations. In the event any Obligation shall
not be presented for payment when the principal thereof and premium, if any, becomes due, either
at maturity or otherwise, if moneys sufficient to pay the principal of, premium, if any, and interest
on, such Obligation shall have been deposited hereunder for such payment, all liability to the
Holder thereof for the payment of such Obligation shall forthwith cease, determine and be
completely discharged, and thereupon it shall be the duty of the Trustee to hold such moneys as
provided herein, including specifically Section 10.3, without liability for interest thereon, for the
benefit of the Holder of such Obligation, who shall thereafter be restricted exclusively to such
moneys, for any claim of whatever nature on his part under this Trust Agreement or on, or with
respect to, said Obligation.
Section 2.8
Book-Entry. The Trustee or the City may from time to time enter
into, and discontinue, an agreement with a “clearing agency” (securities depository) registered
under Section 17A of the Securities Exchange Act of 1934, as amended (the “Securities
Depository”), which is the owner of the Obligations, to establish procedures with respect to the
Obligations not inconsistent with the provisions of this Trust Agreement; provided, that,
notwithstanding any other provisions of this Trust Agreement, any such agreement may provide
that different provisions for notice to the Securities Depository may be set forth herein and that a
legend shall appear on each Obligation so long as the Obligations are subject to such agreement.
With respect to Obligations registered in the name of a Securities Depository (or its nominee), the
Trustee shall not have any obligation to any of its members or participants or to any person on
behalf of whom an interest is held in the Obligations. The City has entered into an agreement with
20
DTC and while such agreement is in effect the procedures established therein shall apply to the
Obligations notwithstanding any other provisions of this Trust Agreement to the contrary. As long
as DTC is the Securities Depository with respect to the Obligations, the Trustee shall be a “DTC
Direct Participant.”
ARTICLE III
REDEMPTION OF OBLIGATIONS
Section 3.1
Right to Redeem. The Obligations shall be subject to redemption
prior to maturity, in any order of maturity, as directed by the City, at such times, to the extent and
in the manner provided herein.
Section 3.2
Redemption of Obligations.
(a)
Optional Redemption of the Obligations. The Obligations maturing
on or prior to July 1, 20__, are not subject to optional redemption prior to maturity. The
Obligations maturing on and after July 1, 20__, are subject to redemption, at the option of the City,
in whole or in part on any date on or after July 1, 20__, in increments of $5,000 of principal amount
due on a specific maturity date, in any order of maturity, all as directed by the City, and by lot
within a maturity (as provided in Section 3.3 below) by payment of the principal amount of each
Obligation to be redeemed plus interest accrued to the date fixed for redemption, without premium.
(b)
Principal represented by the Obligations maturing on July 1, 20__
will be subject to mandatory redemption and will be redeemed on July 1 of the respective years
set forth below and in the principal amounts set forth below, by payment of a redemption price
equal to the principal amount of the Obligations then called for redemption plus the interest
accrued to the date fixed for redemption, but without premium, as follows:
Obligations due July 1, 20__
Redemption Date
(July 1)
Principal Amount
20__
$___,000
20__
___,000
20__
___,000
20__*
___,000
*Maturity
(c)
Whenever Obligations subject to mandatory redemption are
redeemed (other than pursuant to mandatory redemption) or delivered to the Trustee for
cancellation, the principal amount of the Obligations so retired shall satisfy and be credited against
the mandatory redemption requirements for such Obligations for such years as the City may direct.
Section 3.3
Selection of Obligations to be Redeemed. If less than all of the
Obligations of the same maturity are to be redeemed upon any redemption of Obligations
hereunder, the Trustee shall select the Obligations to be redeemed, from among those of the
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applicable maturity, by lot. In making such selection, the Trustee shall treat each Obligation as
representing that number of Obligations of the lowest authorized denomination as is obtained by
dividing the original principal amount of each such Obligation by such minimum denomination.
Section 3.4
Partial Redemption of Obligations. Upon the selection and notice of
redemption and the surrender of any Obligation for redemption in part only, the Trustee shall
execute and deliver to or upon the written order of the Holder thereof, at the expense of the City,
a new Obligation(s) of authorized denominations in an aggregate principal amount equal to the
unredeemed portion of the Obligation surrendered.
Section 3.5
Effect of Call for Redemption. On the date designated for redemption
by notice given as herein provided, the Obligations so called for redemption shall become and be
due and payable at the redemption price provided for redemption of such Obligations on such date.
If on the date fixed for redemption moneys or Defeasance Obligations sufficient for payment of
the redemption price and accrued interest on such date are held by the Trustee as provided herein,
interest on the Obligations so called for redemption shall cease to accrue, such Obligations shall
cease to be entitled to any benefit or security hereunder except the right to receive payment from
the moneys or Defeasance Obligations held by the Trustee and the amount of such Obligations so
called for redemption shall be deemed paid and no longer Outstanding.
Section 3.6
Notice of Redemption.
(a)
Whenever redemption of Obligations is to be made, the Trustee shall
give notice of the redemption of such Obligations, which notice shall specify the redemption date,
the redemption price and the place or places where amounts due upon such redemption will be
payable and, if less than all of the Obligations are to be redeemed, the numbers or other
distinguishing marks of such Obligations so to be redeemed, including CUSIP numbers, and, in
the case of Obligations to be redeemed in part only, such notice shall also specify the respective
portions of the principal amounts thereof to be redeemed. Such notice shall further state that on
such date there shall become due and payable upon each Obligation to be redeemed the redemption
price thereof, as appropriate, of such Obligation or the specified portion thereof in the case of an
Obligation to be redeemed in part only, together with interest accrued to the redemption date on
such Obligations or portion thereof so to be redeemed and that, from and after such date, the
Obligations being redeemed will cease to accrue interest. Notwithstanding the foregoing, no notice
of redemption shall be sent unless (i) the Trustee has on deposit sufficient funds to effect such
redemption or (ii) the redemption notice states that redemption is contingent upon receipt of such
funds prior to the redemption date. Such redemption notices may state that no representation is
made as to the correctness or accuracy of the CUSIP numbers printed therein or on the Obligations.
(b)
Such notice shall be given by mailing a copy of such notice, first
class United States mail postage prepaid, not less than 30 days nor more than 60 days before the
redemption date, to all Holders of any Obligations or portions of Obligations that are to be
redeemed at their last addresses appearing upon the registry books. Such notice shall be mailed a
second time to any Holder of Obligations that have been called for redemption if such Holder has
not presented such Obligations for payment of the redemption price within 60 days after the
redemption date. Failure to mail any such notice, or a defect in such notice, as to any Obligation
shall not affect the validity of the proceedings for the redemption of any other Obligation, and
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failure to mail such second notice shall not affect the validity of the proceedings for the redemption
of any Obligation.
ARTICLE IV
FORM OF OBLIGATIONS
The Obligations shall be substantially in the form set forth in Exhibit A hereto with
such additions, omissions, insertions and variations as are consistent with the provisions hereof.
ARTICLE V
REVENUES AND FUNDS
Section 5.1
Creation of Funds and Accounts. The Trustee shall create (a) the
Obligation Fund, which shall contain the following accounts: (i) the Interest Account, (ii) the
Principal Account and (iii) the Debt Service Reserve Account, and (b) the Delivery Costs Fund.
Such funds and accounts shall be held in trust for the benefit of the Holders.
Section 5.2
Application of Obligation Proceeds. The Trustee shall receive
$___________, being the proceeds of the sale of the Obligations (representing the face amount of
the Obligations, plus [net] original issue premium in the amount of $______, less the underwriter’s
discount in the amount of $________ [and less the premium paid to the Insurer for the Policy in
the amount of $________]). The Trustee shall (i) deposit proceeds of the sale of the Obligations
in an amount equal to $___________ to the Delivery Costs Fund and (ii) transfer proceeds of the
sale of the Obligations in an amount equal to $___________ to the Prior Registrar on the date the
Obligations are executed and delivered for the purpose of refunding and redeeming the Bonds
Being Refunded.
Section 5.3
Flow of Funds Into the Obligation Fund. The following payments
to the Trustee shall be applied in the following manner:
(i)
The Trustee shall deposit to the Interest Account amounts
paid pursuant to Section 3.3(b)(ii) of the Purchase Agreement. (Amounts transferred
pursuant to Section 5.4(iii)(C) of this Trust Agreement shall also be deposited into the
Interest Account.)
(ii)
The Trustee shall deposit to the Principal Account amounts
paid pursuant to Section 3.3(b)(iii) of the Purchase Agreement as well as the total of any
amounts received for any redemption of the Obligations. (Amounts transferred pursuant to
Section 5.4(iii)(C) of this Trust Agreement shall also be deposited into the Principal
Account.)
(iii)
The Trustee shall deposit to the Debt Service Reserve
Account amounts paid pursuant to Section 3.3(b)(iv) of the Purchase Agreement. No
deposit need be made into the Debt Service Reserve Account if the amount on deposit
therein plus the maximum amount of the Qualified Reserve Fund Instrument contained
therein equals the Reserve Requirement. [The prior written consent of the Insurer shall be
a condition precedent to the deposit of any credit instrument provided in lieu of a cash
deposit into the Debt Service Reserve Account. Notwithstanding anything to the contrary
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set forth herein, amounts on deposit in the Debt Service Reserve Account shall be applied
solely to the payment of debt service due on the Obligations and any Additional Obligations
secured by the Debt Service Reserve Account.]
Section 5.4
Flow of Funds Out of the Obligation Fund. Amounts in the
following accounts shall be applied in the following manner:
(i)
Amounts in the Interest Account shall be used to pay interest
on the Obligations as it becomes due.
(ii)
Amounts in the Principal Account shall be used to retire
Obligations by payment on their scheduled maturity date, mandatory redemption date or
optional redemption date.
(iii)
(A)
Amounts in the Debt Service Reserve Account shall
be used to pay the interest on, or to retire at their scheduled maturity or mandatory
redemption date, the Obligations in the event that no other money of the City is available
therefor or for the retirement (including by defeasance pursuant to Section 10.2) of all of
the Obligations then Outstanding. If and to the extent that money has been deposited in the
Debt Service Reserve Account, all such money shall be used (or investments purchased
with such money shall be liquidated and the proceeds applied as required) prior to any
drawing under a Qualified Reserve Fund Instrument.
(B)
Notwithstanding anything herein or in the Purchase
Agreement to the contrary, if, after the City has been required to make deposits to the Debt
Service Reserve Account pursuant to Section 3.3(b)(iv) of the Purchase Agreement, the
Pledged Revenues for two consecutive Fiscal Years equal or exceed 175 percent of the
aggregate Principal Requirement and the Interest Requirement on all Obligations, Parity
Obligations and Additional Obligations then Outstanding for the corresponding Bond Year
for such Fiscal Years (as certified in writing by the City to the Trustee), any moneys and/or
Qualified Reserve Fund Instruments held in the Debt Service Reserve Account may, at the
written request of the City, be released to or as directed in writing by the City and (except
as otherwise limited by the terms of any Qualified Reserve Fund Instrument) used by the
City for any lawful purpose, and the City’s obligation to maintain the Reserve Requirement
in the Debt Service Reserve Account shall terminate, subject to Section 3.3(b)(iv) of the
Purchase Agreement for funding the Debt Service Reserve Account if the circumstances
described in Section 3.3(b)(iv) of the Purchase Agreement occur.
(C)
If on July 2 of any year the amount in the Debt
Service Reserve Account exceeds an amount equal to the Reserve Requirement and if the
City is not then in default under the Purchase Agreement, the Trustee shall withdraw the
amount of any such excess from such account and shall apply such amount, first and on a
pro-rata basis, to pay amounts due with respect to the Qualified Reserve Fund Instrument,
including by transferring amounts in the “reimbursement fund” established to reimburse the
provider of the Qualified Reserve Fund Instrument for any payments made by the provider
thereof until the corresponding costs with respect thereto are paid, second, as a deposit to
the Interest Account, and third, if the amount in the Interest Account is equal to or greater
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than the interest due on the Obligations on the next Obligation Payment Date, as a deposit
to the Principal Account.
(D)
The Trustee is also directed to draw on a Qualified
Reserve Fund Instrument in accordance with the terms included in the definition of
Qualified Reserve Fund Instrument.
Section 5.5
Delivery Costs Fund. Proceeds from the sale of the Obligations, in
the amount listed in Section 5.2, shall be deposited in the Delivery Costs Fund. The Trustee shall
disburse moneys in the Delivery Costs Fund only upon a requisition signed by the City
Representative, substantially in the form attached hereto as Exhibit B entitled “Delivery Costs
Requisition”, setting forth the amounts to be disbursed for payment or reimbursement of Delivery
Costs and the person or persons to whom such amounts are to be disbursed, stating that the amounts
to be disbursed are for Delivery Costs properly chargeable to the Delivery Costs Fund. Amounts
remaining in the Delivery Costs Fund after [November] 1, 2026, or such earlier date as the City
has notified the Trustee in writing that all Delivery Costs have been paid, shall be transferred to
the City for deposit to the Interest Account.
The Trustee shall be responsible for the safekeeping and investment, upon and in accordance with
the written direction of the City Representative, of the moneys held in the Delivery Costs Fund in
Permitted Investments and the payment thereof in accordance with this Section. Notwithstanding
the foregoing, the Trustee shall be entitled to rely conclusively on the requisitions and written
orders supplied to it by the City Representative in connection with disbursements made pursuant
to this Section.
Section 5.6
Investment of Moneys Held by Trustee.
(a)
Moneys in all funds and accounts held by the Trustee shall be
invested by the Trustee, as soon as possible upon receipt of immediately available funds at its
designated corporate trust office, to the fullest amount possible, in Permitted Investments as
directed, in writing, by the City Representative; provided that the maturity date or the date on
which such Permitted Investments may be redeemed at the option of the holder thereof shall
coincide as nearly as practicable with (but in no event shall be later than) the date or dates on which
moneys in the funds or accounts for which the investments were made will be required for the
purposes thereof. In the event no investment direction is given to the Trustee by the City, then the
Trustee shall invest moneys in investments described in a money market fund permitted by clause
7 of the definition of Permitted Investments.
(b)
Amounts credited to a fund or account may be invested, together
with amounts credited to one or more other funds or accounts, in the same Permitted Investment,
provided that (i) each such investment complies in all respects with the provisions of subsection
(a) of this Section as they apply to each fund or account for which the joint investment is made
and (ii) the Trustee maintains separate records for each fund and account and such investments are
accurately reflected therein.
(c)
The Trustee may make any investment permitted by this Section,
through or with its own commercial banking or investment departments, as agent or principal,
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unless otherwise directed by the City Representative. The Trustee may conclusively rely upon
such written direction from the City as to both the suitability and legality of the directed
investments. The City acknowledges that regulations of the Comptroller of the Currency grant the
City the right to receive brokerage confirmations of the security transactions as they occur, at no
additional cost. To the extent permitted by law, the City specifically waives compliance with 12
C.F.R. 12 and hereby notifies the Trustee that no brokerage confirmations need be sent relating to
the security transactions as they occur.
(d)
In computing the amount in any fund or account, Permitted
Investments purchased as an investment of moneys therein shall be valued at market. In
determining market value of Permitted Investments, the Trustee may use and rely conclusively
and without liability upon any generally recognized pricing information service (including brokers
and dealers in securities) available to it.
(e)
The Trustee shall sell at the best price obtainable, or present for
redemption, any Permitted Investment purchased by it as an investment whenever it shall be
necessary in order to provide moneys to make any required payment or transfer from the fund or
account for which such investment was made.
(f)
The City shall not knowingly use or direct or permit the use of any
moneys of the City in its possession or control in any manner that would cause any Obligation to
be an “arbitrage bond” within the meaning ascribed to such term in section 148 of the Code, or
any successor section of the Code. The City shall comply with and take all actions required by
any arbitrage or similar certificate and will continue to do so until all such obligations under such
arbitrage or similar certificate have been fulfilled, notwithstanding any satisfaction or discharge of
this Trust Agreement.
Section 5.7
Liability of Trustee for Investments. The Trustee shall not be liable
for any loss resulting from the making of any investment made in accordance with the provisions
hereof, except for its own negligence or willful misconduct.
Section 5.8
Investment Income. Except as otherwise provided herein, interest
income and gain received, or loss realized, from investments or moneys in any fund or account
shall be credited, or charged, as the case may be, to such respective fund or account.
ARTICLE VI
CERTAIN COVENANTS
Section 6.1
Payment of Principal and Interest. Subject to the limited liability
and sources of payment specified herein, the Obligations shall be promptly paid in the amounts
due at the place, on the dates and in the manner provided herein and in said Obligations according
to the terms thereof. The amounts due on the Obligations are payable solely from moneys held or
received by the Trustee hereunder, all of which are hereby specifically assigned and pledged to
such payment in the manner and to the extent specified herein and nothing herein or in the
Obligations shall be construed as assigning or pledging any other funds or assets of the City.
Section 6.2
Performance of Covenants. Subject to the limited liability and
sources of payment described herein and except to the extent assigned to the Trustee hereunder,
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the City shall faithfully perform at all times any and all covenants, undertakings, stipulations and
provisions on its part to be performed as provided herein, in each and every Obligation executed,
authenticated and delivered hereunder and in all proceedings of the City pertaining thereto.
Section 6.3
Instruments of Further Assurance. The City shall do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such
instruments supplemental hereto and such further acts, instruments and transfers as may be
reasonably necessary or proper, or as reasonably required by the Trustee, to carry out the intention
or to facilitate the performance of this Trust Agreement, and for the better assuring and confirming
unto the Trustee the rights and benefits provided herein for the payment of the principal of and
premium, if any, and interest on the Obligations in the manner and to the extent contemplated
herein.
Section 6.4
Rights under Purchase Agreement. The Trustee may enforce all
rights under the Purchase Agreement for and on behalf of the Holders, whether or not the City is
then in default hereunder.
Section 6.5
Protection of Lien. The City shall not make or create or agree to
permit to be made or created any assignment or lien on a parity with or having priority or
preference over the assignment and lien hereof upon the interests granted hereby or any part thereof
except as otherwise specifically provided in the Purchase Agreement. No obligation, the payment
of which is secured by property or revenues pledged hereunder, shall be executed and delivered
by the City except in lieu of, or upon transfer of registration or exchange of, any Obligation except
as provided in the Purchase Agreement.
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.1
Events of Default. Each of the following is a “Trust Agreement
Event of Default”:
(a)
If payment of any installment of interest on any Obligation is not
made in full when the same becomes due and payable;
(b)
If payment of the principal or redemption premium, if any, on any
Obligation is not made in full when the same becomes due and payable;
(c)
If, under the provisions of any law for the relief or aid of debtors,
any court of competent jurisdiction assumes custody or control of all or any part of the interests
pledged hereunder and such custody or control continues for more than 60 days;
(d)
If the City defaults in the due and punctual performance of any other
of the covenants, conditions, agreements and provisions on its part to be performed as provided
herein or in the Obligations and such default continues for 30 days after written notice specifying
such default and requiring the same to be remedied shall have been given to the City [and the
Insurer] by the Trustee, unless within such 30 days the City shall commence and diligently pursue
in good faith appropriate corrective action to the satisfaction of the Trustee; the Trustee may give
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such notice in its discretion and shall give such notice at the written request of the Holders of not
less than 25 percent in principal amount of the Obligations then Outstanding; or
(e)
If any event of default provided by Section 7.1 of the Purchase
Agreement occurs.
Section 7.2
Remedies and Enforcement of Remedies.
(a)
Upon the occurrence and continuance of any Trust Agreement Event
of Default and in accordance with Article VII hereof and Article VII of the Purchase Agreement,
the Trustee may, and upon the written request of the Holders of not less than a majority in principal
amount of the Obligations Outstanding, together with indemnification of the Trustee to its
satisfaction therefor, shall, proceed forthwith to protect and enforce its rights and the rights of the
Holders hereunder and the Obligations by such suits, actions or proceedings as the Trustee, being
advised by counsel, deems expedient, including but not limited to, an action for the recovery of
any amounts due hereunder for the breach of this Trust Agreement, and the Trustee may pursue
any other remedy afforded by law or in equity, including the remedy of specific performance. The
Trustee shall also have those remedies provided pursuant to Article VII of the Purchase
Agreement, subject to any limitations on such remedies set forth in such Article VII.
(b)
Regardless of the happening of a Trust Agreement Event of Default
and subject to Section 7.7, the Trustee, if requested in writing by the Holders of not less than a
majority in principal amount of the Obligations then Outstanding shall, upon being indemnified to
its satisfaction therefor, institute and maintain such suits and proceedings as it deems necessary or
expedient (i) to prevent any impairment of the security hereunder by any acts that may be unlawful
or in violation hereof, or (ii) to preserve or protect the interests of the Holders, provided that such
request is in accordance with law and the provisions hereof and, in the sole judgment of the
Trustee, is not unduly prejudicial to the interest of the Holders of Obligations not making such
request.
Section 7.3
No Acceleration. In no event shall the Trustee have the right to
accelerate or cause to become immediately due and payable, or payable in advance of their
scheduled maturity dates, any amounts due under this Trust Agreement other than as a result of
optional redemption pursuant to Article III of this Trust Agreement and then only to the extent of
the amount to be so redeemed.
Section 7.4
Application of Revenues and Other Moneys After Default.
(a)
During the continuance of a Trust Agreement Event of Default all
moneys received by the Trustee pursuant to any right given or action taken under the provisions
of this Article together with all moneys held by the Trustee hereunder shall, after payment of the
costs and expenses of the proceedings resulting in the collection of such moneys and of the fees,
expenses and advances incurred or made by the Trustee with respect thereto, be deposited in the
Obligation Fund, and all amounts held by the Trustee hereunder shall be applied as follows;
provided, that if the amount available shall not be sufficient to pay in full any amount or amounts
then due, then to the payment thereof ratably in a manner consistent with Section 3.3 of the
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Purchase Agreement, according to the amounts due to the Persons entitled thereto, without any
discrimination or preference:
First: To the payment of all installments of interest then due (including interest on
amounts not paid when due on the Obligations); and
Second: To the payment of the unpaid Principal Installments or redemption price
of any Obligations that have become due, whether at maturity or by call for
redemption, in the order of their due dates.
(b)
Whenever moneys are to be applied by the Trustee pursuant to the
provisions of this Section, such moneys shall be applied by it at such times, and from time to time,
as the Trustee shall determine, having due regard for the amount of such moneys available for
application and the likelihood of additional moneys becoming available for such application in the
future. Whenever the Trustee shall apply such moneys, it shall fix the date upon which such
application is to be made and upon such date interest on the amounts of principal of the Obligations
to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem
appropriate of the deposit with it of any such moneys and of the fixing of any such date, and shall
not be required to make payment to the Holder of any unpaid Obligation until such Obligation is
presented to the Trustee for appropriate endorsement of any partial payment or for cancellation if
fully paid.
(c)
Whenever all principal of and interest on the Obligations that has
become due has been paid under the provisions of this Section and all expenses and charges of the
Trustee have been paid and the Obligation Fund contains the amounts then required to be credited
thereto, any balance remaining shall be paid to the City.
Section 7.5
Remedies Not Exclusive. No remedy by the terms hereof conferred
upon or reserved to the Trustee or the Holders is intended to be exclusive of any other remedy, but
each and every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or existing at law or in equity or by statute on or after the date hereof, to the extent
consistent with this Trust Agreement and the Purchase Agreement.
Section 7.6
Remedies Vested in Trustee. Any cause of action (including the
right to file proof of claims) hereunder or under any of the Obligations may be enforced by the
Trustee, without the possession of any of the Obligations or the production thereof in any trial or
other proceedings relating thereto. Any such suit or proceeding may be brought without the
necessity of joining as plaintiffs or defendants any Holders of the Obligations. Subject to the
provisions of Section 7.4, any recovery or judgment shall be for the equal benefit of the Holders
of the Outstanding Obligations. Nothing in this Trust Agreement shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of
any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding without the approval of the Holders so affected.
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Section 7.7
Individual Holder Action Restricted.
(a)
No Holder of any Obligation shall have any right to institute any
suit, action or proceeding in equity or at law for the enforcement hereof or for the execution of any
trust hereunder or for any remedy hereunder except for the right to institute any suit, action or
proceeding in equity or at law for the enforcement of the Trustee’s duties and powers hereunder
upon the occurrence of all of the following events:
(i)
The Holders of at least a majority in principal amount of
Obligations Outstanding have made written request to the Trustee to proceed to exercise
the powers granted herein; and
(ii)
Such Holders have offered to indemnify the Trustee as
provided in Section 8.2(v); and
(iii)
The Trustee has failed or refused to exercise the duties or
powers herein granted for a period of 60 days after receipt by it of such request and offer
of indemnity; and
(iv)
During such 60-day period no direction inconsistent with
such written request has been delivered to the Trustee by the Holders of a greater majority
in principal amount of Obligations then Outstanding.
(b)
No one or more Holders of Obligations shall have any right in any
manner whatsoever to affect, disturb or prejudice the security hereof or to enforce any right
hereunder except in the manner herein provided and for the equal benefit of the Holders of all
Obligations Outstanding.
(c)
Nothing contained herein shall affect or impair, or be construed to
affect or impair, the right of the Holder of any Obligation (i) to receive payment of the principal
of or premium, if any, or interest on such Obligation, as the case may be, on or after the due date
thereof or (ii) to institute suit for the enforcement of any such payment on or after such due date;
provided, however, no Holder of any Obligation may institute or prosecute any such suit or enter
judgment therein if, and to the extent that, the institution or prosecution of such suit or the entry
of judgment therein would, under applicable law, result in the surrender, impairment, waiver or
loss of the lien hereof on the moneys, funds and properties pledged hereunder for the equal and
ratable benefit of all Holders of Obligations.
Section 7.8
Termination of Proceedings. In case any proceeding taken on
account of a Trust Agreement Event of Default shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Trustee or the Holders, then the City, the
Trustee and the Holders shall be restored to their former positions and rights hereunder, and all
rights and powers of the Trustee and the Holders shall continue as if no such proceeding had been
taken.
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Section 7.9
Waiver of Event of Default.
(a)
No delay or omission of the Trustee or of any Holder of the
Obligations to exercise any right or power accruing upon any Trust Agreement Event of Default
shall impair any such right or power or shall be construed to be a waiver of any such Trust
Agreement Event of Default or an acquiescence therein. Every power and remedy given by this
Article may be exercised from time to time and as often as may be deemed expedient.
(b)
The Trustee may waive in writing any Trust Agreement Event of
Default that in its opinion has been remedied before the entry of final judgment or decree in any
suit, action or proceeding instituted by it under the provisions hereof, or before the completion of
the enforcement of any other remedy hereunder.
(c)
In case of any waiver by the Trustee of a Trust Agreement Event of
Default hereunder, the City, the Trustee and the Holders shall be restored to their former positions
and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other
Trust Agreement Event of Default or impair any right consequent thereon. The Trustee shall not
be responsible to anyone for waiving or refraining from waiving any Trust Agreement Event of
Default in accordance with this Section.
Section 7.10 Notice of Default.
(a)
Within 30 days after (i) the occurrence of a Trust Agreement Event
of Default under Section 7.1(a) or (b) of which the Trustee is deemed to have notice, or (ii) receipt
by the Trustee of actual knowledge or written notice of a Trust Agreement Event of Default under
Section 7.1(c), (d) or (e), the Trustee shall, unless such Trust Agreement Event of Default has been
cured, give written notice thereof by first class mail to each Holder of an Obligation then
Outstanding, provided that, except in the case of a default in the payment of Principal Installments
or the redemption price of or interest on any of the Obligations, the Trustee may withhold such
notice if, in its sole judgment, it determines that the withholding of such notice is in the best
interests of the Holders.
(b)
The Trustee shall immediately notify the City of (i) the occurrence
of a Trust Agreement Event of Default under Section 7.1(a) or (b) and (ii) when the Trustee has
received actual knowledge or written notice of a Trust Agreement Event of Default under Section
7.1(c), (d) or (e).
Section 7.11 Limitation of Liability.
(a)
Except for the payment of amounts pursuant to the Purchase
Agreement when due and the performance of the other covenants and agreements of the City
contained in the Purchase Agreement and herein, the City shall have no pecuniary obligation or
liability to any of the other parties or to the Holders with respect to this Trust Agreement or the
terms, execution, delivery or transfer of the Obligations, or the distribution of applicable portions
of the Purchase Price to the Holders by the Trustee.
(b)
The City shall not have any obligation or liability to any of the other
parties or to the Holders with respect to the performance by the Trustee of any duty imposed upon
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it under this Trust Agreement; nor shall the Trustee have any obligation or liability to any of the
other parties or to the Holders with respect to the performance by the City of any duty imposed
upon it under this Trust Agreement.
Section 7.12 Limitations on Remedies. It is the purpose and intention of this
Article to provide rights and remedies to the Trustee and Holders that may be lawfully granted,
but should any right or remedy herein granted be held to be unlawful, the Trustee and the Holders
shall be entitled, as above set forth, to every other right and remedy provided in this Trust
Agreement and, to the extent consistent with the provisions of this Trust Agreement, by law.
ARTICLE VIII
THE TRUSTEE
Section 8.1
Certain Duties and Responsibilities of Trustee.
(a)
Except during the continuance of a Trust Agreement Event of
Default:
(i)
The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Trust Agreement, and no implied covenants or
obligations shall be read into this Trust Agreement against the Trustee; and
(ii)
In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and conforming to
the requirements of this Trust Agreement; but in the case of any such certificates or
opinions that are required by any provision hereof or of the Purchase Agreement, the
Trustee shall be under a duty to examine the same to determine whether or not they conform
on their face to the requirements of this Trust Agreement or the Purchase Agreement on
their face.
(b)
In case a Trust Agreement Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances.
(c)
No provision of this Trust Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i)
this subsection shall not be construed to limit the effect of
subsection (a);
(ii)
the Trustee shall not be liable for any error of judgment made
in good faith and without negligence or willful misconduct by a president or vice-president of the
board of directors, the president or vice-president of the executive committee of the board of
directors, the president, any vice president, any assistant vice president, the secretary, any assistant
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secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer, the controller and any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of the above
designated officers or, with respect to a particular matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular subject;
(iii)
the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith and without negligence or in accordance with the
direction of[, subject to Section 12.6, the Insurer or] the Holders of the Outstanding Obligations
as provided herein relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Trust Agreement and
(iv)
no provision of this Trust Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. The Trustee may, nevertheless, begin suit, or appear
in and defend suit, or do anything else in its judgment properly to be done by it as the Trustee,
without prior assurance of indemnity, and in such case shall be entitled to reimbursement by the
City for all reasonable costs, expenses, attorneys’ and other fees and expenses, and all other
reasonable disbursements, including its own fees and expenses, and for all liability and damages
suffered by the Trustee in connection therewith except for the Trustee’s negligence or willful
misconduct.
(d)
Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
Section 8.2
Certain Rights of Trustee. Except as otherwise provided in
Section 8.1:
(i)
The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, obligation, note or other paper or
document reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(ii)
Any request or direction of the City mentioned herein shall
be sufficiently evidenced by a certificate of the City Representative, and any action of the
City Council of the City may be sufficiently evidenced by a copy of a resolution certified
by the Clerk or Assistant Clerk of the City to have been duly adopted by the City Council
of the City and to be in full force and effect on the date of such certification and delivered
to the Trustee.
(iii)
Whenever in the administration of this Trust Agreement the
Trustee shall deem it desirable that a matter be proved or established prior to taking,
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suffering or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon a certificate
of the City Representative.
(iv)
The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(v)
The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement or by the Purchase Agreement at
the request or direction of any of the Holders pursuant to this Trust Agreement unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that might be incurred by it in compliance with such request
or direction.
(vi)
The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, direction, consent, order, obligation, promissory note or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(vii)
The Trustee may engage agents and attorneys to assist it in
executing any of the trusts or powers hereunder or performing any duties hereunder and
shall not be liable for the negligence or misconduct of such agents and attorneys so long as
the Trustee exercises due care in the selection thereof.
(viii)
The Trustee shall not be responsible for the recording or
filing of any documents relating to the Purchase Agreement or this Trust Agreement.
(ix)
The permissive right of the Trustee to do things enumerated
in this Trust Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or willful misconduct. The Trustee shall not be
required to give any bond or surety in respect of the execution of the said trusts and powers
or otherwise in respect of the premises.
(x)
In acting or omitting to act as Trustee and Seller pursuant to
the Purchase Agreement, the Trustee shall be entitled to all of the rights, immunities and
indemnities accorded to it under this Trust Agreement, including, but not limited to, this
Article 8.
(xi)
In no event shall the Trustee be liable for incidental, indirect,
special or consequential damages in connection with or arising from the existence,
furnishing or use of the Existing Projects in accordance with this Trust Agreement or the
Purchase Agreement.
Section 8.3
Employment of Experts. The Trustee is authorized to employ as its
agents such attorneys at law, certified public accountants and recognized authorities in their fields
34
(who are not employees of the Trustee), as it reasonably may deem necessary to assist it to carry
out any of its obligations hereunder, and shall be reimbursed by the City for all reasonable expenses
and charges in so doing.
Section 8.4
Enforcement of Performance by Others. Except as provided in
Section 8.1 or otherwise specifically provided herein, it shall not be the duty of the Trustee to see
that any duties and obligations herein imposed upon the City are performed.
Section 8.5
Right to Deal in Obligations and Take Other Actions. The Trustee
may in good faith buy, sell or hold and deal in any Obligations with like effect as if it were not
such Trustee and may commence or join in any action that a Holder is entitled to take with like
effect as if the Trustee were not the Trustee. It is understood and agreed that the Trustee engages
in a general banking business and no provision hereof or of the Purchase Agreement is to be
construed to limit or restrict the right of the Trustee to engage in such business with the City or
any Holder. So engaging in such business shall not, in and of itself, and so long as the Trustee
duly performs all of its duties as required hereby and by the Purchase Agreement, constitute a
breach of the standard of care on the part of the Trustee, but neither shall engaging in such business
abrogate, alter or diminish any duty or obligation of the Trustee as Trustee hereunder.
Section 8.6
Removal and Resignation of Trustee.
(a)
The Trustee may resign with 30 days’ written notice to the City from
the trusts created hereby by giving written notice of the resignation to the City and any Paying
Agents and by mailing written notice of the resignation to the Holders as their names and addresses
appear on the register it maintains with respect to the Obligations at the close of business 15 days
prior to the mailing. The resignation shall take effect upon the appointment of a successor Trustee.
Any such resignation of the Trustee shall also automatically be deemed a resignation by the Trustee
as Seller.
(b)
The Trustee may be removed at any time by an instrument or
document or concurrent instruments or documents in writing delivered to the Trustee, with copies
thereof mailed to the City and any Paying Agents and signed by (i) the City Representative or
(ii) by or on behalf of the Holders of not less than a majority in aggregate principal amount of the
Obligations then Outstanding. The Trustee also may be removed at any time for any breach of
trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with,
any provision of this Trust Agreement with respect to the duties and obligations of the Trustee by
an instrument signed by the City or by any court of competent jurisdiction upon the application of
the City, or the Holders of not less a majority in aggregate principal amount of the Obligations
then Outstanding under this Trust Agreement. Any removal shall not take effect until a successor
Trustee has been appointed. In the event a successor Trustee has not been appointed and qualified
within 60 days of the date notice of resignation or removal is given, the Trustee may apply to any
court of competent jurisdiction for the appointment of a successor Trustee to act until such time as
a successor is appointed as provided in this Section.
(c)
In the event of the resignation or removal of the Trustee or in the
event the Trustee is dissolved or otherwise becomes incapable to act as the Trustee, the City shall
be entitled to appoint a successor Trustee acceptable to the City.
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(d)
If the Holders of a majority of the principal amount of Obligations
then Outstanding object to the successor Trustee so appointed by the City and if such Holders
designate another Person qualified to act as the Trustee, the City shall then appoint as the Trustee
the Person so designated by the Holders.
(e)
Unless otherwise ordered by a court or regulatory body having
competent jurisdiction, or unless required by law, any successor Trustee shall be a trust company
or bank having the powers of a trust company as to trusts, qualified to do trust business in the State
and having an officially reported combined capital, surplus, undivided profits and reserves
aggregating at least $200,000,000, if there is such an institution willing, qualified and able to
accept the trust upon reasonable or customary terms.
(f)
Every successor Trustee howsoever appointed hereunder shall
execute, acknowledge and deliver to its predecessor and also to the City an instrument in writing,
accepting such appointment hereunder, and thereupon such successor Trustee, without further
action, shall become fully vested with all the rights, immunities, powers, trusts, duties and
obligations of its predecessor, and such predecessor shall execute and deliver an instrument
transferring to such successor Trustee all the rights, power and trusts of such predecessor. The
predecessor Trustee shall execute any and all documents necessary or appropriate to convey all
interest it may have to the successor Trustee. The predecessor Trustee shall promptly deliver all
records relating to the trust or copies thereof and communicate all material information it may have
obtained concerning the trust to the successor Trustee.
(g)
Each successor Trustee, not later than ten days after its assumption
of the duties hereunder, shall mail a notice of such assumption to each Holder of an Obligation.
(h)
Any company into which the Trustee may be merged or converted
or with which it may be consolidated or any company resulting from any merger, conversion or
consolidation to which it shall be a party or any company to which the Trustee may sell or transfer
all or substantially all of its corporate trust business shall be the successor to such Trustee without
the execution or filing of any paper or any further act, provided such company shall be eligible as
a successor Trustee under this Trust Agreement.
Section 8.7
Proof of Claim. The Trustee shall have the right and power to take
actions in the name and place of the City or the Holders to make proof of claim in any proceeding,
bankruptcy, reorganization or otherwise where proof of claim may be required. Any amount
recovered as a result of any such claim, after payment of all fees (including reasonable attorneys’
fees), costs, expenses and advances incurred by the Trustee or its agents in pursuing such claim,
shall be for the equal benefit of all of the Holders.
Section 8.8
Trustee’s Fees and Expenses.
(a)
The Trustee shall be entitled to be paid from time to time reasonable
compensation for all services rendered by it hereunder; to reimbursement upon request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and its agents), except any such expense, disbursement
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or advance as may be attributable to its negligence or bad faith or willful misconduct; and, together
with the Trustee’s officers, directors, agents and employees to be indemnified by the City, for,
from and against any loss, liability, claim, suit, cost, judgment, damages or expense (including
without limitation legal fees and expenses) arising out of or in connection with the acceptance or
administration of this trust or its duties under this Trust Agreement, the Purchase Agreement and
any other document or transaction contemplated in connection with this Trust Agreement or the
Purchase Agreement. The Trustee’s right to indemnity shall not extend to claims, suits and actions
successfully brought against the Trustee for, or losses, liabilities or expenses incurred as a result
of the Trustee’s own negligence, bad faith or willful misconduct. In the event any action or
proceeding is instituted or pending against the Trustee by reason of or in connection with the
acceptance or administration of this trust or the Trustee’s duties hereunder, the City may, at its
election, assume the defense of any such action or proceeding with counsel satisfactory to the
Trustee. If any such action or proceeding includes any claims alleging the Trustee’s own
negligence, bad faith or willful misconduct, the Trustee shall be liable for the expenses (including
reasonable attorneys’ fees), if any, of the City in connection with assuming the defense of such
action or proceeding if it is determined by a final judgment of a court of competent jurisdiction
that the Trustee is not entitled to be indemnified as authorized in this Section. Any settlement of
any such action or proceeding shall not, of itself, create a presumption as to the merits of any
claims alleging the Trustee’s own negligence, bad faith or willful misconduct. The Trustee’s rights
to compensation, reimbursement and indemnity while serving as Trustee hereunder shall survive
resignation or removal of the Trustee or discharge of this Trust Agreement.
(b)
Any provision hereof to the contrary notwithstanding, if the City
fails, within 30 days of receiving an itemized invoice and back-up documentation, to make any
payment properly due the Trustee for its reasonable fees, costs, expenses and fees of attorneys,
certified public accountants, recognized authorities in their field and agents (not employees of the
Trustee) incurred in performance of its duties, the Trustee may reimburse itself from any moneys
on hand in any fund or account created pursuant hereto not needed for the next upcoming payment
of principal of or interest on the Obligations and from amounts in the Debt Service Reserve
Account that are in excess of the Reserve Requirement.
Section 8.9
Destruction of Obligations. Upon payment of or surrender to the
Trustee for cancellation of any Obligation, the Trustee shall destroy such Obligation.
Section 8.10 Reports; Records. The Trustee shall quarterly, or at such other
intervals as the Trustee and the City shall from time to time agree upon (but in no event more
frequently than monthly), prepare and submit to the City reports covering all moneys received and
all payments, expenditures and investments made as the Trustee hereunder since the last previous
such report. The Trustee’s records shall be kept in accordance with corporate trust industry
standards and shall be available for inspection by the City, or any of its agents, at any time, upon
reasonable prior notice, during regular business hours.
Section 8.11 Separate or Co-Trustee.
(a)
At any time or times, solely for the purpose of meeting any legal
requirements of any jurisdiction other than the State, the City and the Trustee shall have power to
appoint, and, upon the request of the Trustee or of the Holders of at least a majority in principal
37
amount of Obligations then Outstanding and the City shall for such purpose join with the Trustee
in the execution, delivery and performance of all instruments and agreements necessary or proper
to appoint, one or more Persons, approved by the Trustee and, unless a Trust Agreement Event of
Default has occurred and is continuing, reasonably acceptable to the City, either to act as co-trustee
or co-trustees, jointly with the Trustee of all or any part of the pledged property, or to act as separate
trustee or separate trustees of all or any part of the pledged property, and to vest in such Person or
Persons, in such capacity, such title to the pledged property or any part thereof, and such rights,
powers, duties, trusts or obligations as the City and the Trustee may consider necessary or
desirable, subject to the remaining provisions of this Section.
(b)
If the City fails to join in such appointment within 30 days after the
receipt by it of a request to do so, or if a Trust Agreement Event of Default has occurred and is
continuing, the Trustee alone shall have power to make such appointment.
(c)
The City shall execute, acknowledge and deliver all such
instruments as may reasonably be required by any such co-trustee or separate trustee for more fully
and certainly vesting in such co-trustee or separate trustee the property, rights, powers and duties
intended to be vested in such co-trustee or separate trustee.
(d)
Every co-trustee or separate trustee shall, to the extent permitted by
law but to such extent only, be appointed subject to the following terms, namely:
(i)
The Obligations shall be authenticated and delivered, and all
rights, powers, trusts, duties and obligations hereby conferred upon the Trustee in respect
to the custody, control and management of moneys, papers, securities and other personal
property shall be exercised, solely by the Trustee.
(ii)
All rights, powers, trusts, duties and obligations conferred or
imposed upon the trustees shall be conferred or imposed upon and exercised or performed
by the Trustee, or by the Trustee and such co-trustee or co-trustees or separate trustee or
separate trustees jointly, as shall be provided in the instrument appointing such co-trustee
or co-trustees or separate trustee or separate trustees, except to the extent that, under the
law of any jurisdiction in which any particular act or acts are to be performed, the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event such act or
acts shall be performed by such co-trustee or co-trustees or separate trustee or separate
trustees.
(iii)
Any request in writing by the Trustee to any co-trustee or
separate trustee to take or to refrain from taking any action hereunder shall be sufficient
warrant for the taking, or the refraining from taking, of such action by such co-trustee or
separate trustee and such co-trustee or separate trustee shall abide by such request.
(iv)
Any co-trustee or separate trustee may, to the extent
permitted by law, delegate to the Trustee the exercise of any right, power, trust, duty or
obligation, discretionary or otherwise.
(v)
The Trustee may at any time, by any instrument in writing,
with the concurrence of the City, accept the resignation of or remove any co-trustee or
38
separate trustee appointed under this Section, and, in case a Trust Agreement Event of
Default shall have occurred and be continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee. Upon the request of the
Trustee, the City shall join with the Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to effectuate such resignation or
removal.
(vi)
No Trustee or any Paying Agent hereunder shall be
personally liable by reason of any act or omission of any other trustee or paying agent
hereunder, nor will the act or omission of any trustee or paying agent hereunder be imputed
to any other trustee or paying agent.
(vii)
Any demand, request, direction, appointment, removal,
notice, consent, waiver or other action in writing delivered to the Trustee shall be deemed
to have been delivered to each such co-trustee or separate trustee.
(viii)
Any moneys, papers, securities or other items of personal
property received by any such co-trustee or separate trustee hereunder shall forthwith, so
far as may be permitted by law, be turned over to the Trustee.
(e)
Upon the acceptance in writing of such appointment by any such co-
trustee or separate trustee, it or he shall be vested jointly with the Trustee (except insofar as local
law makes it necessary for any such co-trustee or separate trustee to act alone) with such title to
the pledged property or any part thereof, and with such rights, powers, duties or obligations, as
shall be specified in the instrument of appointment subject to all the terms hereof. Every such
acceptance shall be filed with the Trustee. To the extent permitted by law, any co-trustee or
separate trustee may, at any time by an instrument in writing signed by the Trustee and any co-
trustee or separate trustee, constitute the Trustee, its or his attorney-in-fact and agent, with full
power and authority to do all acts and things and to exercise all discretion on its or his behalf and
in its or his name.
(f)
In case any co-trustee or separate trustee shall dissolve, cease to
exist, become incapable of acting, resign or be removed, the title to the pledged property, and all
rights, powers, trusts, duties and obligations of said co-trustee or separate trustee shall, so far as
permitted by law, vest in and be exercised by the Trustee unless and until a successor co-trustee
or separate trustee shall be appointed in the manner herein provided.
Section 8.12 Recitals and Representations.
(a)
The recitals, statements and representations contained herein, or in
any Obligation (excluding the Trustee’s authentication on the Obligations or any recitals or
representations concerning the Trustee or its powers) shall not be taken or construed as made by
the Trustee, and the Trustee neither assumes nor shall be under any responsibility for the
correctness of the same.
(b)
The Trustee makes no representation as to, and is not responsible
for, the validity or sufficiency hereof, of the Obligations, or the validity or sufficiency of insurance
to be provided, if any, or, except as herein required, the filing or recording or registering of any
39
document. The Trustee shall be deemed not to have made representations as to the security
afforded hereby or hereunder or as to the validity or sufficiency of such document. In the absence
of its own bad faith, willful misconduct or negligence, the Trustee shall not be concerned with or
accountable to anyone for the use or application of any moneys which shall be released or
withdrawn in accordance with the provisions hereof. Except as to defaults described in Sections
7.1(a) and (b) of which the Trustee is deemed to have notice, the Trustee shall have no duty of
inquiry with respect to any default or Event of Default described herein and shall not be deemed
to have notice of any default or Event of Default unless the Trustee has actual knowledge thereof
or receives written notice of a default or a Trust Agreement Event of Default from any Holder.
(c)
The Trustee shall have no responsibility with respect to any
information, statement or recital in any official statement, offering memorandum or other
disclosure or sales material prepared or distributed in connection with the execution and delivery
of the Obligations.
ARTICLE IX
SUPPLEMENTS TO TRUST AGREEMENT AND AMENDMENTS TO
PURCHASE AGREEMENT
Section 9.1
Supplements Not Requiring Consent of Holders. The City acting
through the City Representative and the Trustee may, without the consent of or notice to any of
the Holders, enter into one or more supplements to this Trust Agreement for one or more of the
following purposes:
(i)
To cure any ambiguity or formal defect or omission herein or to
correct or supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters or questions
arising hereunder provided such action shall, in the opinion of counsel delivered to the
Trustee under Section 9.3(a), not materially adversely affect the interests of the Holders;
(ii)
To grant or confer upon the Holders any additional rights, remedies,
powers or authority that may lawfully be granted or conferred upon them;
(iii)
To secure additional revenues or provide additional security or
reserves for payment of the Obligations or to add a Qualified Reserve Fund Instrument and
necessary, related provisions therefor;
(iv)
To comply with the requirements of any state or federal securities
laws or the Trust Indenture Act of 1939, as from time to time amended, if required by law
or regulation lawfully issued thereunder;
(v)
To provide for the appointment of a successor trustee or co-trustee
pursuant to the terms of Section 8.6 and Section 8.11;
(vi)
To permit Obligations in bearer form if the City and the Trustee
receive a Special Counsel’s Opinion that such action will not cause the interest on any
Obligations to become includible in gross income for purposes of federal income taxes;
40
(vii)
To preserve the exclusion of the interest on the Obligations from
gross income for purposes of federal or State income taxes and to preserve the power of
the City to continue to incur obligations (specifically not limited to the Obligations
authorized hereby) the interest on which is likewise exempt from federal and State income
taxes and
(viii)
To adopt procedures for the disclosure of information to Holders and
to others in accordance with any guidelines for such purpose promulgated by the American
Bankers Association or some other similar national organization, as such guidelines may
be made applicable to this Trust Agreement by agreement of the Trustee and the City.
Section 9.2
Supplements Requiring Consent of Holders.
(a)
Other than supplements referred to in Section 9.1 and subject to the
terms and provisions and limitations contained in this Article and not otherwise, the Holders of
not less than a majority in principal amount of the Obligations then Outstanding shall have the
right, from time to time, anything contained herein to the contrary notwithstanding, to consent to
and approve the execution by the City Representative and the Trustee of such supplement as shall
be deemed necessary and desirable by the City and the Trustee for the purpose of modifying,
altering, amending, adding to or rescinding, in any particular respect, any of the terms or provisions
contained herein; provided, however, nothing in this Section or Section 9.1 shall permit or be
construed as permitting a supplement that would:
(i)
extend the stated maturity of or time for paying interest on
any Obligation or reduce the principal amount of or rate of interest payable on any
Obligation without the consent of the Holder of such Obligation;
(ii)
prefer or give a priority to any Obligation over any other
Obligation without the consent of the Holder of such Obligation;
(iii)
reduce
the
principal
amount
of
Obligations
then
Outstanding, the consent of the Holders of which is required to authorize such Supplement,
without the consent of the Holders of all Obligations then Outstanding;
(iv)
increase the principal amount of Obligations then
Outstanding, the request of the Holders of which is required by Section 7.1(d), without the
consent of the Holders of all Obligations then Outstanding; or
(v)
reduce the redemption price of any Obligation upon optional
redemption or reduce any period of time prior to commencement of any optional
redemption period set forth in Section 3.2 without the consent of the Holders of such
Obligation.
(b)
If at any time the City requests the Trustee to enter into a
Supplement pursuant to this Section, the Trustee shall, upon being satisfactorily and specifically
indemnified by the City with respect to expenses with respect to such Supplement, cause notice of
the proposed execution of such Supplement to be mailed by first class mail, postage pre-paid, to
all registered Holders of Obligations then Outstanding at their addresses as they appear on the
41
registration books provided for in this Trust Agreement [and to the Insurer]. The Trustee shall not,
however, be subject to any liability to any Holder by reason of its failure to mail, or the failure of
such Holder to receive, the notice required by this Section, and any such failure shall not affect the
validity of such Supplement when consented to and approved as provided in this Section. Such
notice shall briefly set forth the nature of the proposed Supplement and shall state that copies
thereof are on file at the office of the Trustee for inspection by all Holders.
(c)
If within such period as shall be prescribed by the City, following
the mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be
executed by the Holders of not less than the principal amount or number of Obligations
Outstanding specified in subsection (a) for the Supplement in question which instrument or
instruments shall refer to the proposed Supplement described in such notice and shall specifically
consent to and approve the execution thereof in substantially the form of the copy thereof referred
to in such notice as on file with the Trustee, thereupon, but not otherwise, the Trustee and the City
may execute such Supplement in substantially such form, without liability or responsibility to any
Holder of any Obligation, whether or not such Holder shall have consented thereto.
(d)
Any such consent shall be binding upon the Holder of the Obligation
giving such consent and upon any subsequent Holder of such Obligation and of any Obligation
executed and delivered in exchange therefor (whether or not such subsequent Holder thereof has
notice thereof), unless such consent is revoked in writing by the Holder of such Obligation giving
such consent or by a subsequent Holder thereof by filing with the Trustee, prior to the execution
by the Trustee of such Supplement, such revocation. At any time after the Holders of the required
principal amount or number of Obligations shall have filed their consents to the Supplement, the
Trustee shall make and file with the City a written statement to that effect. Such written statement
shall be conclusive that such consents have been so filed.
(e)
If the Holders of the required amount or number of the Obligations
Outstanding shall have consented to and approved the execution of such Supplement as herein
provided, no Holder of any Obligation shall have any right to object to the execution thereof, or to
object to any of the terms and provisions contained therein or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or
the City from executing the same or from taking any action pursuant to the provisions thereof.
(f)
S&P and Moody’s, if maintaining a rating on the Obligations, shall
be provided a copy of any proposed supplement or any amendment to the Purchase Agreement at
least 15 days prior to the execution of such Supplement or amendment.
Section 9.3
Execution and Effect of Supplements.
(a)
In executing any Supplement permitted by this Article, the Trustee
and the City shall be entitled to receive and to rely upon an Opinion of Counsel stating that the
execution of such Supplement is authorized or permitted by this Trust Agreement and complies
with the terms hereof. The Trustee may but shall not be obligated to enter into any such
Supplement that affects the Trustee’s own rights, duties or immunities.
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(b)
Upon the execution and delivery of any Supplement in accordance
with this Article, the provisions hereof shall be modified in accordance therewith and such
Supplement shall form a part hereof for all purposes and every Holder of an Obligation theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
(c)
Any Obligation authenticated and delivered after the execution and
delivery of any Supplement in accordance with this Article may, and if required by the Trustee
shall, bear a notation in a form approved by the Trustee as to any matter provided for in such
Supplement. The Trustee may execute and deliver new Obligations modified to conform, in the
opinion of the Trustee, to any such Supplement in exchange for and upon surrender of Obligations
then Outstanding upon receipt of a Special Counsel’s Opinion to the effect that such action will
not cause the interest on any Obligations to become includible in gross income for purposes of
federal income taxes.
Section 9.4
Amendments to Purchase Agreement Not Requiring Consent of
Holders. The Trustee may, without the consent of or notice to any of the Holders, consent to and
join with the City in the execution and delivery of any amendment, change or modification of the
Purchase Agreement that is required (i) by the provisions thereof; (ii) to cure any ambiguity or
formal defect or omission therein or to correct or supplement any provision therein which may be
inconsistent with any other provision therein, or to make any other provisions with respect to
matters or questions arising thereunder provided such action shall, in the opinion of counsel
delivered to the Trustee under this Section, not materially adversely affect the interests of the
Holders; (iii) to add a Qualified Reserve Fund Instrument so long as any payments with regard to
the new Qualified Reserve Fund Instrument are paid no sooner, or in an amount greater, than
amounts required to be paid pursuant to Section 3.3(b)(iv) of the Purchase Agreement; and (iv) to
amend the description of the Existing Projects; (v) to preserve the exclusion of the interest on the
Obligations from gross income for purposes of federal or State income taxes and to preserve the
power of the City to continue to incur bonds or other obligations (specifically not limited to the
Obligations authorized hereby) the interest on which is likewise exempt from federal and State
income taxes; and (vi) in connection with any other change in the Purchase Agreement, which in
the opinion of counsel delivered to the Trustee will not materially adversely affect the interests of
the Holders or, in the opinion of the Trustee, the Trustee. In executing any amendment to the
Purchase Agreement, the Trustee shall be entitled to receive and rely on an Opinion of Counsel
stating that such amendment is authorized or permitted under this Trust Agreement and under the
Purchase Agreement and complies with the terms hereof and of the Purchase Agreement.
Section 9.5
Amendments to Purchase Agreement Requiring Consent of Holders.
(a)
Except for amendments, changes or modification to the Purchase
Agreement referred to in Section 9.4 hereof and subject to the terms, provisions and limitations
contained in this Article and not otherwise, the Trustee may consent to and join with the City in
the execution and delivery of any amendment, change or modification to the Purchase Agreement
only upon the consent of the Holders of not less than a majority in principal amount of Obligations
then Outstanding, given as provided in this Section; provided, however, no such amendment,
change or modification may affect the obligation of the City to make payments under the Purchase
Agreement or reduce the amount of or extend the time for making such payments without the
consent of the Holders of all Obligations then Outstanding.
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(b)
If at any time the City shall request the consent of the Trustee to any
such amendment, change or modification to the Purchase Agreement, the Trustee shall, upon being
satisfactorily indemnified by the City with respect to expenses, cause notice of the proposed
amendment, change or modification to be given in the same manner as provided in Section 9.2
with respect to Supplements hereto. Such notice shall briefly set forth the nature of the proposed
amendment, change or modification and shall state that copies thereof are on file at the office of
the Trustee for inspection by all Holders.
(c)
If the consent to and approval of the execution of such amendment,
change or modification is given by the Holders of not less than the aggregate principal amount or
number of Obligations specified in subsection (a) within the time and in the manner provided by
Section 9.2 with respect to Supplements hereto, but not otherwise, such amendment, change or
modification may be consented to, executed and delivered upon the terms and conditions and with
like binding effect upon the Holders as provided in Section 9.2 and Section 9.3 with respect to
Supplements hereto.
ARTICLE X
SATISFACTION AND DISCHARGE
Section 10.1 Discharge.
(a)
If payment of all principal of and premium, if any, and interest on
all of the Obligations in accordance with their terms and as provided herein and in Section 3.7 of
the Purchase Agreement is made, or is provided for in accordance with this Article, and if all other
sums, if any, payable hereunder shall be paid, then the pledges, liens, estates and security interests
granted hereby shall cease. Thereupon, at the request of the City, and upon receipt by the Trustee
of an Opinion of Counsel addressed to the City and the Trustee stating that all conditions precedent
to the satisfaction and discharge of the lien hereof have been satisfied, the Trustee shall execute
and deliver proper instruments (prepared and provided to the Trustee by or on behalf of the City)
acknowledging such satisfaction and discharging the lien hereof and the Trustee shall transfer all
property held by it hereunder, other than moneys or obligations held by the Trustee for payment
of amounts due or to become due on the Obligations, to the City or such other Person as may be
entitled thereto as their respective interests may appear. Such satisfaction and discharge shall be
without prejudice to the rights of the Trustee thereafter to charge and be compensated or
reimbursed for services rendered and expenditures incurred in connection herewith.
(b)
The City may at any time surrender to the Trustee for cancellation
any Obligations previously executed and delivered that the City may have acquired in any manner
whatsoever and such Obligations upon such surrender and cancellation shall be deemed to be paid
and retired.
Section 10.2 Providing for Payment of Obligations.
(a)
Payment of all or any part of the Obligations in authorized
denominations may be provided for by the deposit with the Trustee or a Depository Trustee of
moneys and/or Defeasance Obligations that are not redeemable in advance of their maturity dates.
Amounts in the Debt Service Reserve Account may be included as part of such deposit only if all
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of the Obligations are to be defeased. If moneys are deposited for such purposes, such moneys,
together with amounts then on deposit with the Trustee and available for paying the principal or
redemption price of and accrued interest on the Obligations, shall be fully sufficient to pay when
due the principal of or redemption price of and accrued interest on such Obligations. If moneys
and Defeasance Obligations are deposited, the moneys and the maturing principal of and interest
income on such Defeasance Obligations shall be sufficient, as evidenced by a certificate of an
independent nationally recognized certified public accountant or firm of such accountants, to pay
when due the principal of or redemption price of and interest on such Obligations. The moneys
and Defeasance Obligations shall be held by the Trustee or the Depository Trustee irrevocably in
trust for the Holders of such Obligations solely for the purpose of paying the principal of or
redemption price of and interest on such Obligations as the same shall mature, come due or become
payable upon redemption, and, if applicable, upon simultaneous direction, expressed to be
irrevocable to the Trustee or Depository Trustee as to the dates upon which any such Obligations
are to be redeemed prior to their respective dates.
(b)
Notwithstanding the foregoing, no deposit under subsection (a)
above shall be deemed a payment of such Obligation as aforesaid until the earlier of: (i) proper
notice of redemption of such Obligation shall have been given in accordance with the provisions
of Section 3.6 hereof or, in the event said Obligation is not to be redeemed within the next
succeeding sixty (60) days, until the City shall have given the Trustee irrevocable instructions in
form satisfactory to the Trustee, to notify, as soon as practicable, the Holder of such Obligation in
accordance with Section 3.6 hereof, that the deposit required by subsection (a) above has been
made with the Trustee and that said Obligation is deemed to have been paid in accordance with
this Article and stating the maturity or redemption date upon which moneys are to be available for
the payment of the principal of and the applicable redemption price, if any, on said Obligation,
plus interest thereon to the due date or redemption date thereof or (ii) the maturity of such
Obligation.
(c)
If payment of Obligations is so provided for, the Trustee or the
Depository Trustee shall mail a notice so stating to each Holder of an Obligation so provided for.
(d)
Obligations, the payment of which has been provided for in
accordance with this Section, shall no longer be deemed Outstanding hereunder or secured hereby.
The obligation in respect of such Obligations shall nevertheless continue but the Holders thereof
shall thereafter be entitled to payment only from the moneys or Defeasance Obligations deposited
with the Trustee or the Depository Trustee to provide for the payment of such Obligations.
(e)
No Obligation may be so provided for if, as a result thereof or of any
other action in connection with which the provisions for payment of such Obligation is made, the
interest payable on any Obligations is made includible in gross income for purposes of federal
income taxes. The Trustee and the City may rely upon a Special Counsel’s Opinion to the effect
that the provisions of this paragraph will not be breached by so providing for the payment of any
Obligations.
Section 10.3 Payment of Obligations After Discharge. Notwithstanding the
discharge of the lien hereof as in this Article provided, the Trustee shall nevertheless retain such
rights, powers and duties hereunder as may be necessary and convenient for the payment of
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amounts due or to become due on the Obligations and the registration, transfer, exchange and
replacement of Obligations as provided herein. Nevertheless, any moneys held by the Trustee or
any Paying Agent for the payment of the principal of or premium, if any, or interest on any
Obligation remaining unclaimed for two years after the same shall become due and payable at
maturity or by declaration as provided herein, shall then be paid to the City (without liability for
interest) and the Holders of that Obligation shall be entitled to look only to the City for payment
thereof and all liability of the Trustee or any Paying Agent with respect to such moneys shall cease
at that time. The obligations of the Trustee under this Section shall be subject, however, to the
requirements of any applicable law regarding the disposition of unclaimed property.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Evidence of Acts of Holders.
(a)
Any request, direction, consent or other instrument provided hereby
to be signed and executed by the Holders may be in any number of concurrent writings of similar
tenor and may be signed or executed by such Holders in person or by agent appointed in writing.
Proof of the execution of any such request, direction or other instrument or of the writing
appointing any such agent and of the ownership of Obligations, if made in the following manner,
shall be sufficient for any of the purposes hereof and shall be conclusive in favor of the Trustee
and the City, with regard to any action taken by them, or either of them, under such request or
other instrument, namely:
(i)
The fact and date of the execution by any Person of any such
writing may be proved by the certificate of any officer in any jurisdiction who by law has
power to take acknowledgments in such jurisdiction, that the Person signing such writing
acknowledged before him the execution thereof, or by the affidavit of a witness of such
execution; and
(ii)
The ownership of Obligations shall be proved by the register
of such Obligations.
(b)
Nothing in this Section shall be construed as limiting the Trustee to
the proof specified in subsection (a) above, it being intended that the Trustee may accept any other
evidence that it may deem sufficient.
(c)
Any action taken or suffered by the Trustee pursuant to any
provision hereof, upon the request or with the assent of any Person who at the time is the Holder
of any Obligation, shall be conclusive and binding upon all future Holders of the same Obligation.
Section 11.2 Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Trust Agreement or the
Obligations is intended or shall be construed to give to any Person other than the parties hereto,
the City and the Holders of the Obligations any legal or equitable right, remedy or claim under or
in respect to this Trust Agreement or any covenants, conditions and provisions herein contained.
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Section 11.3 Severability. If any one or more sections, clauses, sentences or parts
hereof shall for any reason be questioned in any court of competent jurisdiction and shall be
adjudged unconstitutional or invalid, such judgment shall not affect, impair or invalidate the
remaining provisions hereof, or the Obligations executed and delivered pursuant hereto, but shall
be confined to the specific sections, clauses, sentences and parts so adjudged.
Section 11.4 Holidays. When the date on which principal of or interest or
premium on any Obligation is due and payable is not a Business Day, payment may be made on
Obligations presented at such place of payment on the next Business Day with effect as though
payment were made on the due date, and, if such payment is made, no additional interest shall
accrue from and after such due date. When any other action is provided herein to be done on a
day named or within a time period named, and the day or the last day of the period falls on a day
other than a Business Day, it may be performed on the next ensuing Business Day with effect as
though performed on the appointed day or within the specified period.
Section 11.5 Governing Law. This Trust Agreement and the Obligations are
contracts made under the laws of the State of Arizona and shall be governed and construed in
accordance with such laws.
Section 11.6 Notices.
(a)
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, consents or other communications required or permitted hereunder shall be
deemed sufficiently given or served if given in writing, mailed by first class mail, postage prepaid
and addressed as follows:
(i)
If to the Trustee, addressed to it at 2036 East Camelback
Road, Phoenix, Arizona 85016, Attention: Corporate Trust Services;
(ii)
If to the registered Holder of an Obligation, addressed to
such Holder at the address shown on the registration books kept pursuant hereto;
(iii)
If to the City, addressed to it at P.O. Box 1466, Mesa,
Arizona 85211, Attention: Deputy City Manager/Chief Financial Officer; and
(iv)
If to S&P, addressed to it at 55 Water Street, New York, New
York 10041.
(v)
If to Moody’s, addressed to it at 7 World Trade Center, 250
Greenwich Street, New York, New York 10007.
(b)
The parties listed above may from time to time by notice in writing
to the others designate a different address or addresses for notices hereunder.
Section 11.7 Counterparts. This Trust Agreement may be executed in several
counterparts, each of which shall be an original and all of which together shall constitute one
instrument.
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Section 11.8 Waiver of Personal Liability. No official, officer, agent, financial
advisor, counsel or employee of the City shall be individually or personally liable for the payment
of the principal amount or redemption price of or interest on the Obligations; but nothing herein
contained shall relieve any such official, officer, agent, financial advisor, counsel or employee
from the performance of any official duty provided by law.
Section 11.9 Binding Effect. This instrument shall inure to the benefit of and shall
be binding upon the parties hereto and their respective successors and assigns subject to the
limitations contained herein. Except as provided herein, the trust under this Trust Agreement shall
not be assigned to any other person, corporation, partnership or trustee unless the Trustee is
required by law to divest, or does divest, itself of its trust department or unless the Trustee shall
sell or assign substantially all of its corporate trust business in which event the trust hereunder
shall be continued by the Trustee’s successor in interest.
Section 11.10 Certain Statutory Notices.
(a)
To the extent applicable by provision of law, the Trustee
acknowledges that this Trust Agreement is subject to cancellation pursuant to Section 38-511,
Arizona Revised Statutes, as amended, the provisions of which are incorporated herein and which
provides that the City may within three (3) years after its execution cancel any contract (including
this Trust Agreement) without penalty or further obligation made by the City if any person
significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf
of the City is at any time while the contract or any extension of the contract is in effect, an employee
or agent of any other party to the contract in any capacity or a consultant to any other party to the
contract with respect to the subject matter of the contract. The Trustee shall take all such actions
as possible to avoid violation of such statute.
(b)
To the extent applicable under Section 41-4401, Arizona Revised
Statutes, the Trustee shall comply with all federal immigration laws and regulations that relate to
its employees and its compliance with the E-verify requirements under Section 23-214(A), Arizona
Revised Statutes. The breach by the Trustee of the foregoing shall be deemed a material breach
of this Trust Agreement and may result in the termination of the services of the Trustee by the
City. The City retains the legal right to randomly inspect the papers and records of the Trustee to
ensure that the Trustee is complying with the above-mentioned warranty. The Trustee shall keep
such papers and records open for random inspection by the City during the Trustee’s normal
business hours by the City. The Trustee shall cooperate with the random inspections by the City
including granting the City entry rights onto its property to perform such random inspections and
waiving its respective rights to keep such papers and records confidential solely to the extent
permitted by law. The City shall, to the extent permitted by law, preserve the confidentiality of
any information, records or papers the City views, accesses or otherwise obtains during any and
every such random inspection, including without limitation, such information.
(c)
To the extent applicable, pursuant to Section 35-393 et seq., Arizona
Revised Statutes, the Trustee hereby certifies it is not currently engaged in, and for the duration of
this Trust Agreement shall not engage in, a boycott of Israel. The term “boycott” has the meaning
set forth in Section 35-393, Arizona Revised Statutes. If the City determines that the Trustee’s
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certification above is false or that it has breached such agreement, the City may impose remedies
as provided by law.
(d)
To the extent applicable under Section 35-394, Arizona Revised
Statutes, as amended, the Trustee hereby certifies it does not currently, and for the duration of this
Trust Agreement shall not use: (i) the forced labor of ethnic Uyghurs in the People’s Republic of
China, (ii) any goods or services produced by the forced labor of ethnic Uyghurs in the People’s
Republic of China, and (iii) any contractors, subcontractors or suppliers that use the forced labor
or any goods or services produced by the forced labor of ethnic Uyghurs in the People’s Republic
of China. The foregoing certification is made to the best knowledge of the Trustee without any
current independent investigation or without any future independent investigation for the duration
of this Trust Agreement. If the Trustee becomes aware during the duration of this Trust Agreement
that it is not in compliance with such certification, the Trustee shall provide the required notice to
the City and resign as Trustee hereunder in accordance with the provisions of Article VIII. If the
City determines that the Trustee is not in compliance with the foregoing certification and has not
taken remedial action, the City shall terminate the Trustee’s role as the Trustee hereunder pursuant
to Article VIII.
Section 11.11 Instructions. The Trustee shall have the right to accept and act upon
Instructions given pursuant to this Trust Agreement by Authorized Officers and delivered using
Electronic Means; provided, however, that the City shall provide to the Trustee an incumbency
certificate listing officers with the authority to provide such Instructions (“Authorized Officers”)
and containing specimen signatures of such Authorized Officers, which incumbency certificate
shall be amended by the City whenever a person is to be added or deleted from the listing. If the
City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion
elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be
deemed controlling. The City understands and agrees that the Trustee cannot determine the
identity of the actual sender of such Instructions and that the Trustee shall conclusively presume
that directions that purport to have been sent by an Authorized Officer listed on the incumbency
certificate provided to the Trustee have been sent by such Authorized Officer. The City shall be
responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee
and that the City and all Authorized Officers are solely responsible to safeguard the use and
confidentiality of applicable user and authorization codes, passwords and/or authentication keys
upon receipt by the City. The Trustee shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Trustee’s good faith reliance upon and compliance with such
Instructions, to the extent consistent with the terms of this Trust Agreement, notwithstanding such
directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to,
in the absence of the Trustee’s bad faith or willful misconduct, assume all risks arising out of the
use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk
of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third
parties; (ii) that it is fully informed of the protections and risks associated with the various methods
of transmitting Instructions to the Trustee and that there may be more secure methods of
transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures
(if any) to be followed in connection with its transmission of Instructions provide to it a
commercially reasonable degree of protection in light of its particular needs and circumstances;
and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use
of the security procedures.
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Section 11.12 Force Majeure. The Trustee shall not be considered in breach of or
in default in its obligations hereunder or progress in respect thereto in the event of enforced delay
(“unavoidable delay”) in the performance of such obligations due to unforeseeable causes beyond
its control and without its fault or negligence, including, but not limited to, “acts of God”,
terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other like occurrences beyond
the control of the Trustee; it being understood that the Trustee shall use reasonable efforts which
are consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
Section 12.1 Applicability of this Article. Notwithstanding anything herein or in
the Purchase Agreement to the contrary, the provisions of this Article shall be applicable and shall
supersede any conflicting provisions herein or in the Purchase Agreement so long as the Policy is
in effect or amounts are owed or owing to the Insurer and the Insurer is not in default or contesting
its obligations under the Policy; provided that to the extent the Insurer has made any payment of
principal of or interest on the Insured Obligations it shall retain its rights of subrogation hereunder
and under the Policy and provided, further, to the extent the Insurer has incurred any charges, fees,
costs and expenses pursuant to Subsection 3.3(d) of the Purchase Agreement, such amounts shall
continue to be due and payable to the Insurer.
Section 12.2 Reporting Requirements.
(a)
All demands, notices and other information required to be given to
the Insurer under this Trust Agreement shall be addressed as follows: __________________,
___________________, Attention: Managing Director - Surveillance, Re: Policy No.
___________-N. In each case in which notice or other communication refers to an Event of
Default or to a claim on the Policy, then a copy of such notice or other communication shall also
be sent to the attention of the General Counsel – Public Finance at the address above and to
______________ and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”
(b)
The City and the Trustee, as applicable, shall furnish, or cause to be
furnished to the Insurer:
(i)
to the extent not otherwise available on the Electronic
Municipal Market Access system of the Municipal Securities Rulemaking Board (or any
successor thereto), annual audited financial statements of the City within 270 days after the
end of the fiscal year of the City (together with a certification of the City that the City is
not aware of any Event of Default hereunder or under the Purchase Agreement), and, upon
request, the annual budget of the City within 30 days after the approval thereof together
with such other information, data or reports as the Insurer shall reasonably request from
time to time;
(ii)
notice of any Event of Default known to the Trustee or the
City within five (5) Business Days after knowledge thereof;
(iii)
prior notice of the advance redemption of any of the Insured
Obligations, including the payment amounts, maturity dates and CUSIP numbers thereof;
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(iv)
notice of the resignation or removal of the Trustee and the
appointment of, and acceptance of duties by, any successor thereto;
(v)
notice of the commencement of any Insolvency Proceeding;
(vi)
notice of the making of any claim in connection with any
Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of
principal or interest with respect to the Insured Obligations;
(vii)
a full original transcript of all proceedings relating to the
execution of any amendment, supplement or waiver to this Trust Agreement or the
Purchase Agreement;
(viii) all information furnished pursuant to the Series 2026
Continuing Disclosure Undertaking (as defined in the Purchase Agreement) shall also be
provided to the Insurer, simultaneously with the furnishing of such information;
(ix)
all reports, notices and correspondence to be delivered to the
Owners under the terms of this Trust Agreement or the Purchase Agreement; and
(x)
notice of the failure of the City to provide notices,
certificates and other information under this Trust Agreement or the Purchase Agreement.
(c)
The Insurer shall be permitted to discuss the affairs, finances and
accounts of the City or any information the Insurer may reasonably request regarding the security
for the Insured Obligations with appropriate officers of the City, and the City shall use
commercially reasonable efforts to enable the Insurer to have access to the facilities, books and
records of the City on any Business Day upon reasonable prior notice.
(d)
The Insurer shall have the right to receive such additional
information as it may reasonably request.
Section 12.3 Defeasance.
(a)
Only Defeasance Obligations as described in clauses (1), (2) or (3)
of the Defeasance Obligations definition hereof, or, subject to the prior written consent of the
Insurer, Defeasance Obligations as described in clauses (4) or (5) of the Defeasance Obligations
definition hereof, shall be used to effect defeasance of the Insured Obligations unless the Insurer
otherwise approves.
(b)
In addition to the items required by Section 10.2, the following shall
be provided the Insurer:
(i)
an escrow trust agreement or other irrevocable instructions;
(ii)
an opinion of Independent Counsel which is also nationally
recognized bond counsel to the effect that the Insured Obligations are no longer
Outstanding; and
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(iii)
a certificate of discharge of the Trustee with respect to the
Insured Obligations.
(c)
The items required by Section 10.2 and the documents referred to in
subsections (b)(i)-(iii) above shall be acceptable in form and substance to the Insurer. The Insurer
shall be provided with final drafts of the above-referenced documentation not less than five (5)
Business Days prior to the funding of the escrow, unless otherwise agreed to by the Insurer in
writing.
Section 12.4 Amendments and Supplements. Any supplemental agreement
permitted by Section 9.1(a) of this Trust Agreement or any supplemental agreement that materially
adversely affects the rights and interests of the Insurer or requires the consent of the Holders of
the Insured Obligations shall be subject to the prior written consent of the Insurer. In determining
whether any amendment, consent, waiver or other action to be taken, or any failure to take action,
under this Trust Agreement would adversely affect the security for the Series 2026 Obligations or
the rights of the Holders of the Insured Obligations, the Trustee shall consider the effect of any
such amendment, consent, waiver, action or inaction as if there was no Policy; provided that,
except as expressly set forth in this Trust Agreement, nothing in this Section shall be deemed to
require the Trustee to make such determination.
Section 12.5 Insurer as Third-Party Beneficiary. The Insurer is recognized as
and shall be deemed to be a third-party beneficiary to this Trust Agreement and the Purchase
Agreement.
Section 12.6 Control Rights.
(a)
The Insurer shall be deemed to be the Holder of all of the Insured
Obligations for purposes of exercising any voting right or privilege or giving any consent or
direction or taking any other action that the Holders of Insured Obligations are entitled to take
pursuant to this Trust Agreement pertaining to (i) defaults and remedies and (ii) the duties and
obligations of the Trustee. In furtherance thereof and as a term of this Trust Agreement and each
Insured Obligation, each Holder of the Insured Obligations appoints the Insurer as its agent and
attorney-in-fact with respect to the Insured Obligations and agrees that the Insurer may at any time
during the continuation of any Insolvency Proceeding direct all matters relating to such Insolvency
Proceeding, including, without limitation, (A) all matters relating to any Claim, (B) the direction
of any appeal of any order relating to any Claim, (C) the posting of any surety, supersedeas or
performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan
of adjustment. In addition, each Holder of the Insured Obligations delegates and assigns to the
Insurer, to the fullest extent permitted by law, the rights of each Holder of the Insured Obligations
in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party
to an adversary proceeding or action with respect to any court order issued in connection with any
such Insolvency Proceeding. The Trustee acknowledges such appointment, delegation and
assignment by each Holder of the Insured Obligations for the Insurer’s benefit, and agrees to
cooperate with the Insurer in taking any action reasonably necessary or appropriate in connection
with such appointment, delegation and assignment. Remedies granted to the Holders of the
Insured Obligations shall expressly include mandamus. The rights granted to the Insurer under
this Trust Agreement or the Purchase Agreement to request, consent to or direct any action are
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rights granted to the Insurer in consideration of its issuance of the Policy. Any exercise by the
Insurer of such rights is merely an exercise of the Insurer’s contractual rights and shall not be
construed or deemed to be taken for the benefit, or on behalf, of the Holders of the Insured
Obligations, and such action does not evidence any position of the Insurer, affirmative or negative,
as to whether the consent of the Holders of the Insured Obligations or any other person is required
in addition to the consent of the Insurer.
(b)
The City shall not enter into any interest rate exchange agreement
or other rate maintenance agreement secured by and payable from Pledged Revenues without the
prior written consent of the Insurer.
(c)
No contract shall be entered into or any action taken by which the
rights of the Insurer or security for or sources of payment of the Insured Obligations may be
impaired or prejudiced in any material respect except upon obtaining the prior written consent of
the Insurer.
(d)
Unless the Insurer otherwise directs, upon the occurrence and
continuance of a Trust Agreement Event of Default, Purchase Event of Default or an event which
with notice or lapse of time would constitute a Trust Agreement Event of Default or Purchase
Event of Default, amounts on deposit in the Improvements Fund shall not be disbursed, but shall
instead be applied to the payment of debt service or redemption price of the Insured Obligations.
(e)
Notwithstanding satisfaction of the other conditions set forth in
Section 4.4 of the Purchase Agreement, no incurrence of Additional Obligations may occur if a
Trust Agreement Event of Default or Purchase Event of Default (or any event which, once all
notice or grace periods have passed, would constitute a Trust Agreement Event of Default or
Purchase Event of Default) exists unless such default shall be cured upon such incurrence unless
otherwise permitted by the Insurer.
Section 12.7 Payment Under the Policy. If, on the third (3rd) Business Day prior
to the related scheduled interest payment date or principal payment date (“Payment Date”) there
is not on deposit with the Trustee, after making all transfers and deposits required under this Trust
Agreement, moneys sufficient to pay the principal and interest with respect to the Insured
Obligations due on such Payment Date, the Trustee shall give notice to the Insurer and to its
designated agent if any (the “Insurer’s Fiscal Agent”) by telephone or telecopy of the amount of
such deficiency by 12:00 Noon, New York City time, on such Business Day. If, on the second
(2nd) Business Day prior to the related Payment Date, there continues to be a deficiency in the
amount available to pay the principal and interest with respect to the Insured Obligations due on
such Payment Date, the Trustee shall make a claim under the Policy and give notice to the Insurer
and the Insurer’s Fiscal Agent (if any) by telephone of the amount of such deficiency, and the
allocation of such deficiency between the amount required to pay interest with respect to the
Insured Obligations and the amount required to pay principal with respect to the Insured
Obligations, confirmed in writing to the Insurer and the Insurer’s Fiscal Agent by 12:00 Noon,
New York City time, on such second (2nd) Business Day by filling in the form of “Notice of Claim
and Certificate” delivered with the Policy.
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(a)
The Trustee shall designate any portion of payment of principal with
respect to the Insured Obligations paid by the Insurer, whether by virtue of maturity or redemption,
on its books as a reduction in the principal amount of Insured Obligations registered to the then
current Owner, whether DTC or its nominee or otherwise, and shall issue a replacement Insured
Obligation to the Insurer, registered in the name of ______________, in a principal amount equal
to the amount of principal so paid (without regard to authorized denominations); provided that the
Trustee’s failure to so designate any payment or issue any replacement Insured Obligation shall
have no effect on the amount of principal or interest payable by the City on any Insured Obligation
or the subrogation rights of the Insurer.
(b)
Upon payment of a claim under the Policy, the Trustee shall
establish a separate special purpose trust account for the benefit of the Owners referred to herein
as the “Policy Payments Account”, over which the Trustee shall have exclusive control and sole
right of withdrawal. The Trustee shall receive any amount paid under the Policy in trust on behalf
of the Owners 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 the Holders of the Insured Obligations in the same
manner as principal and interest payments are to be made with respect to the Insured Obligations
under the sections hereof regarding payment of Insured Obligations. It shall not be necessary for
such payments to be made by checks or wire transfers separate from the check or wire transfer
used to pay debt service with other funds available to make such payments. Notwithstanding
anything herein to the contrary, the City agrees to pay to the Insurer the Insurer Reimbursement
Amounts at the Late Payment Rate. The City hereby covenants and agrees that the Insurer
Reimbursement Amounts are secured by a lien on and pledge of Pledged Revenues and payable
from Pledged Revenues on a parity with debt service due on the Insured Obligations.
(c)
The Trustee shall keep a complete and accurate record of all funds
deposited by the Insurer into the Policy Payments Account and the allocation of such funds to
payment of interest on and principal of any Insured Obligation. The Insurer shall have the right to
inspect such records at reasonable times upon reasonable notice to the Trustee.
(d)
Funds 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 shall promptly be
remitted to the Insurer.
(e)
After payment of reasonable expenses of the Trustee, the application
of funds realized upon default shall be applied to the payment of expenses of the City or rebate
only after the payment of past due and current debt service on the Insured Obligations and amounts
required to restore the Debt Service Reserve Account to the Reserve Requirement.
(f)
The Insurer shall be entitled to pay principal or interest on the
Insured Obligations that shall become Due for Payment but shall be unpaid by reason of
Nonpayment (as such terms are also defined in the Policy), whether or not the Insurer has received
a Notice of Nonpayment (as defined in the Policy) or a claim upon the Policy.
54
(g)
The Insurer shall, to the extent it makes any payment of principal or
interest with respect to the Insured Obligations, become subrogated to the rights of the recipients
of such payments in accordance with the terms of the Policy (which subrogation rights shall also
include the rights of any such recipient in connection with an Insolvency Proceeding). Each
obligation of the City to the Insurer under this Trust Agreement and the Purchase Agreement shall
survive discharge or termination of this Trust Agreement and the Purchase Agreement. Insured
Obligations shall be deemed Outstanding under this Trust Agreement unless and until they are in
fact paid and retired or the above criteria are met. Amounts paid by the Insurer under the Policy
shall not be deemed paid for purposes of this Trust Agreement and the Insured Obligations relating
to such payments shall remain Outstanding and continue to be due and owing until paid in
accordance with this Trust Agreement. This Trust Agreement shall not be discharged unless all
amounts due or to become due to the Insurer have been paid in full or duly provided for.
[Signature page follows.]
[Signature Page to Trust Agreement]
IN WITNESS WHEREOF, the City has caused these presents to be signed in the
name and on its behalf by its duly authorized officer and, to evidence its acceptance of the trusts
hereby created, the Trustee has caused these presents to be signed in its name and on its behalf by
its duly authorized officer, all as of the day and year first above written.
UMB BANK, N.A., as Trustee
By
Authorized Representative
CITY OF MESA, ARIZONA
By
Mayor
ATTEST:
___________________________________
City Clerk
APPROVED AS TO FORM:
___________________________________
Greenberg Traurig, LLP, Special Counsel
Page 1 of Exhibit A
EXHIBIT A
FORM OF OBLIGATION
[Insert Legend of Securities Depository As Appropriate]
UTILITY SYSTEMS REVENUE REFUNDING OBLIGATION, SERIES 2026
EVIDENCING A PROPORTIONATE INTEREST OF THE HOLDER HEREOF
IN INSTALLMENT PAYMENTS OF THE PURCHASE PRICE TO BE PAID
BY THE CITY OF MESA, ARIZONA, PURSUANT TO AN
INSTALLMENT PURCHASE AGREEMENT,
DATED AS OF ________ 1, 2026
AS ASSIGNED TO
UMB BANK, N.A., AS TRUSTEE
No: R-___
Denomination: $________
INTEREST
RATE:
MATURITY
DATE:
DATED:
CUSIP:
_____%
July 1, 20__
__________, 2026
590545 ___
REGISTERED OWNER: ________________________
PRINCIPAL AMOUNT: ________________________
AND
NO/100
DOLLARS
($____,000.00)
The registered owner identified above, or registered assigns, as the registered owner
of this Utility Systems Revenue Refunding Obligation, Series 2026 (this “obligation”), is the
owner of an undivided proportionate interest in the right to receive certain installments of the
“Purchase Price” pursuant to that certain Installment Purchase Agreement, dated as of ________ 1,
2026 (the “Purchase Agreement”), by and between UMB Bank, n.a., a national association
authorized to exercise trust powers in the State of Arizona, in its capacity as seller (the “Seller”),
and the City of Mesa, Arizona, a municipal corporation of the State of Arizona, as purchaser (the
“City”), which installments and certain other rights and interests under the Purchase Agreement
have been assigned to UMB Bank, n.a., in its capacity as trustee (together with any successor
thereto, the “Trustee”), pursuant to that certain Trust Agreement, dated as of _______ 1, 2026 (the
“Trust Agreement”), by and between the City and the Trustee.
The registered owner of this obligation is entitled to receive, subject to the terms of
the Purchase Agreement, on the maturity date set forth above, the principal amount set forth above,
representing a portion of the installments of the Purchase Price denominated as principal coming
due on the Maturity Date set forth above, and to receive on _________ 1, 20__, and semiannually
on July 1 and January 1 of each year thereafter (each an “Obligation Payment Date”) until payment
in full of said portion of principal, the registered owner’s proportionate share of the installments
of the Purchase Price denominated as interest coming due during the six month period (or portion
thereof) immediately preceding each of such dates; provided that the first installment shall be for
Page 2 of Exhibit A
interest from the date of initial execution and delivery to _________ 1, 20__. Said proportionate
share of the portion of such installments designated as interest is the result of the multiplication of
the aforesaid portion of such installments designated as principal by the rate per annum set forth
above.
The proportionate share of the portion of the installments of the Purchase Price
denominated as interest is payable when due to the person in whose name this obligation is
registered at the close of business on the 15th day of the calendar month next preceding each
Obligation Payment Date, except that interest not duly paid or provided for when due shall be
payable to the person in whose name this obligation is registered at the close of business on a
special record date to be fixed for the payment of defaulted interest. Such defaulted interest shall
be payable to the person in whose name such obligation is registered at the close of business on a
special record date for the payment of such defaulted interest established by notice mailed to the
holders of the obligations not less than 15 days preceding such special record date. Such notice
shall be mailed to the holder in whose name this obligation is registered at the close of business
on the fifth day preceding the date of mailing. If the Trustee registers the transfer on any obligation
subsequent to the mailing of such notice and on or before the special record date, any such notice
of payment of defaulted interest shall be binding upon the transferee and a copy of the notice of
payment of defaulted interest shall be delivered by the Trustee to the transferee along with the
obligation or obligations. (Any payment due hereon that shall not be paid when due shall bear
interest at the rate of interest, compounded semiannually, set forth above from the date such
payment is due until the payment is made.)
Principal of and premium, if any, and interest on this obligation are payable in
lawful money of the United States of America that on the date of payment thereof is legal tender
for the payment of public and private debts. Payments of interest will be made by check mailed
by the Trustee as paying agent to the registered address of the person entitled thereto; provided,
however, that the Trust Agreement provides that upon certain circumstances the payments of
interest on this obligation may, at the direction of the person in whose name this obligation is
registered, be made by wire transfer of immediately available funds. The proportionate share of
the portion of the installments of the Purchase Price denominated as principal and any premium
payable upon redemption, if any, when due, shall be paid upon surrender of this obligation at the
designated corporate trust office of the Trustee.
This obligation is one of a series, limited in aggregate principal amount of
$_______,000 (the “Obligations”), which have been executed and delivered under the Trust
Agreement and are limited, special revenue obligations, payable solely from the sources
(particularly the Purchase Agreement) and in the manner described in the Trust Agreement, in
order to finance the acquisition of certain property comprising a portion of the utility systems of
the City. The Obligations are junior in lien to bonds of the City payable from such revenues, and
on a parity with other obligations previously incurred by the City. The payments to be made by
the City pursuant to the Purchase Agreement are to be in an amount sufficient to make the
payments due on the Obligations, and payments by the City under the Purchase Agreement are to
be made from, and secured by, a pledge of certain revenues, proceeds and receipts to be derived
by the City from its water, electrical, natural gas, wastewater and solid waste systems. Under the
restrictions set out in the Purchase Agreement, additional parity obligations may be incurred by
the City payable from such revenues. For a more complete statement of the provisions made to
Page 3 of Exhibit A
secure payment of the Obligations, the revenues from and conditions under which this obligation
is payable, statements of the terms under which the Purchase Agreement may be modified and the
general covenants and provisions pursuant to which this obligation is issued, reference is made to
the Trust Agreement.
This obligation shall not constitute a debt of the City, the State of Arizona or any
political subdivision thereof within the meaning of any provision of the Constitution or laws of the
State of Arizona and shall not constitute or give rise to a pecuniary liability of the City, the State
of Arizona or any other political subdivision thereof or a charge against the general credit or taxing
powers of any of them. This obligation and the interest hereon are enforceable exclusively from
the revenues pledged thereto in the Purchase Agreement, and no holder hereof shall have the right
to compel any exercise of the taxing power of the City to pay this obligation or the interest hereon.
Counterparts or copies of the Trust Agreement and the other documents referred to
herein are on file at the designated office of the Trustee, and reference is hereby made thereto and
to the documents referred to therein for the provisions thereof, including the provisions with
respect to the rights, obligations, duties and immunities of the Trustee, the City, and the registered
owners of the Obligations under such documents, to all of which the registered owner hereof, by
acceptance of this obligation, assents.
The Obligations maturing on or prior to July 1, 20__, are not subject to optional
redemption prior to maturity. The Obligations maturing on and after July 1, 20__, are subject to
redemption, in whole or in part, on any date on or after July 1, 20__, in increments of $5,000 of
principal amount due on a specific maturity date, in any order of maturity, all as directed by the
City, and by lot within a maturity (as provided in the Trust Agreement) by payment of the principal
amount of each Obligation to be redeemed plus interest accrued to the date fixed for redemption,
without premium.
The Obligations maturing on July 1, 20__ are subject to mandatory redemption
prior to their stated maturity, and will be redeemed on July 1 of the respective years set forth below
and in the principal amounts set forth below, by payment of a redemption price equal to the
principal amount of the Obligations then called for redemption plus the interest accrued to the date
fixed for redemption, but without premium, as follows:
Maturing July 1, 20__
Redemption Date
(July 1)
Principal Amount
20__
$___,000
20__
___,000
20__
___,000
20__*
___,000
*Maturity
Page 4 of Exhibit A
Whenever Obligations subject to mandatory redemption are redeemed (other than
pursuant to mandatory redemption) or delivered to the Trustee for cancellation, the principal
amount of the Obligations so retired shall satisfy and be credited against the mandatory redemption
requirements for such Series Obligations for such years as the City may direct.
Notice of redemption shall be mailed not less than 30 days nor more than 60 days
prior to the date set for redemption to each registered owner of a Obligation to be so redeemed at
the address shown on the books of the Trustee, but failure so to mail any such notice or any defect
in such notice as to any Obligation shall not affect the validity of the proceedings for the
redemption of any other Obligation. On the specified redemption date all Obligations called for
redemption shall cease to bear interest and shall no longer be secured by the Trust Agreement
provided funds for redemption are on deposit at the place of payment at that time.
The registered owner of this obligation shall have no right to enforce the provisions
of the Trust Agreement or to institute an action to enforce the covenants thereof, or to take any
action with respect to a default hereof, or to institute, appear in or defend any suit or other
proceedings with respect thereto, except as provided in the Trust Agreement.
The Trust Agreement and other documents referred to therein may be modified or
amended to the extent permitted by and as provided therein. Certain amendments, modifications
or changes that would affect the rights of registered owners of Obligations may be made only with
the consent of a majority of the registered owners of the Obligations then outstanding under the
Trust Agreement, as provided in the Trust Agreement. Any such consent by the registered owner
of this obligation shall be conclusive and binding upon such registered owner and all subsequent
registered owners. However, as to certain other amendments that will not materially adversely
affect the interests of the registered owners, no consent of any owner shall be required.
The Obligations are and shall be executed and delivered only in fully registered
form. Subject to the limitations provided for in the Trust Agreement, this obligation may be
exchanged for a like aggregate principal amount payable at maturity of Obligations of the same
maturity in authorized denominations.
The Obligations are transferable by the registered owner thereof in person or by his
attorney duly authorized in writing at the designated corporate trust office of the Trustee, but only
in the manner and subject to the limitations provided for in the Trust Agreement and upon
surrender and cancellation of this obligation. Upon such transfer a new Obligation or Obligations
of the same maturity and in authorized denominations for the same aggregate principal amount
payable at maturity will be executed and delivered to the transferee in exchange.
The Trustee may require a registered owner, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees required by law
or permitted by the Trust Agreement in connection with any exchange or transfer.
The Trustee and any paying agent may treat the registered owner of this obligation
as the absolute owner for the purpose of receiving payment as herein provided and for all other
purposes and none of them shall be affected by any notice to the contrary.
Page 5 of Exhibit A
As used herein, the term “owner” means the person who at the time of nonpayment
of an Obligation is entitled under the terms of such Obligation to payment thereof.
It is hereby certified and recited that all acts, conditions and things required to exist,
to happen and to be performed precedent to and in the execution and delivery of this obligation
have existed, have happened and have been performed in due form, time and manner as required
by law.
IN TESTIMONY WHEREOF, this obligation has been executed and delivered by
the Trustee, acting pursuant to the Trust Agreement.
Date: _______, 2026.
UMB BANK, N.A., as Trustee
By_____________________________________
Authorized Representative
---------------------------------------------------------------------------------------------------------------------
(INSERT INSURANCE STATEMENT HERE, IF APPLICABLE)
---------------------------------------------------------------------------------------------------------------------
FORM OF ASSIGNMENT
The following abbreviations, when used in the inscription on the face of the within
obligation, shall be construed as though they were written out in full according to applicable laws
or regulations:
TEN COM -- as tenants in common
UNIF GIFT/TRANS MIN ACT -- ________
(Cust.)
TEN ENT -- as tenants by the entireties
Custodian for ___________ Under Uniform
(Minor)
JT TEN -- as joint tenants with right of
survivorship and not as tenants in common
Gifts/Transfers to Minors Act of _________
(State)
Additional abbreviations may also be used, though not in the above list.
ASSIGNMENT
FOR
VALUE
RECEIVED
the
undersigned
sells,
assigns
and
transfers
unto
____________________________________________________________________________
(Please Print or Typewrite Name, Address and Social Security Number or other Federal Tax
Page 6 of Exhibit A
Identification Number of Transferee) the within obligation and all rights thereunder, and
irrevocably constitutes and appoints ____________________ attorney to transfer the within
obligation on the books kept for registration thereof, with full power of substitution in the premises.
Dated: ______________________
Signature Guaranteed:
_________________________________
_______________________________________
(Signature guarantee should be made by
a guarantor institution participating in
the
Securities
Transfer
Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee).
Notice: The signature(s) on this assignment
must correspond with the name(s) as written
on the face of the within obligation in every
particular without alteration or enlargement or
any change whatsoever.
(END OF FORM OF OBLIGATION)
Exhibit B
EXHIBIT B
DELIVERY COSTS REQUISITION
Pursuant to Section 5.5 of the Trust Agreement, dated as of ________ 1, 2026 (the “Trust
Agreement”), between the City of Mesa, Arizona (the “City”), and UMB Bank, n.a., as trustee (the
“Trustee”), the undersigned City Representative (as defined in the Trust Agreement) hereby
requests and authorizes the Trustee pursuant to the Trust Agreement, as custodian of the Delivery
Costs Fund established pursuant to the Trust Agreement, to pay out of the moneys deposited in the
Delivery Costs Fund to the persons listed as payee and in the amounts on the Exhibit hereto.
In connection with the foregoing request and authorization, the undersigned hereby
certifies that:
(a)
Each item for which disbursement is requested hereunder is properly
payable out of the Delivery Costs Fund and none of these items has formed
the basis for any disbursement heretofore made from said Delivery Costs
Fund.
(b)
Each such item is or was a necessary Delivery Cost as defined in the Trust
Agreement.
(c)
This statement and all exhibits hereto shall be conclusive evidence of the
facts and statements set forth herein and shall constitute full warrant,
protection and authority to the Trustee for its actions taken pursuant hereto.
(d)
This statement constitutes approval by the City of the disbursement hereby
requested and authorized.
Dated
City Representative