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SERIES 2023 TRUST AGREEMENT
by and between
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
and
CITY OF CHANDLER, ARIZONA
Dated as of _________ 1, 2023
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page
(i)
ARTICLE I
DEFINITIONS
Section 1.1.
Definitions........................................................................................................ 3
Section 1.2.
Interpretation .................................................................................................. 10
Section 1.3.
Obligations Not General Obligation of the City ............................................ 11
ARTICLE II
SPECIAL REVENUE OBLIGATIONS
Section 2.1.
Authorization of the Obligations ................................................................... 11
Section 2.2.
Date; Interest Accrual .................................................................................... 11
Section 2.3.
Maturities and Interest Rates ......................................................................... 11
Section 2.4.
Interest on Obligations ................................................................................... 12
Section 2.5.
Form ............................................................................................................... 12
Section 2.6.
Execution ....................................................................................................... 12
Section 2.7.
Book-Entry Only System ............................................................................... 12
Section 2.8.
Application of Proceeds ................................................................................. 13
Section 2.9.
Transfer and Exchange. ................................................................................. 13
Section 2.10.
Obligations Mutilated, Lost, Destroyed or Stolen ......................................... 14
Section 2.11.
Payment.......................................................................................................... 14
Section 2.12.
Execution of Documents and Proof of Ownership. ....................................... 15
Section 2.13.
Obligation Register ........................................................................................ 16
Section 2.14.
Payment of Unclaimed Amounts ................................................................... 16
ARTICLE III
ACQUISITION FUND; DELIVERY COSTS FUND; RESERVE FUND
Section 3.1.
Establishment and Application of Acquisition Fund. .................................... 16
Section 3.2.
Establishment and Application of Delivery Costs Fund. ............................... 17
Section 3.3.
Reserve Fund ................................................................................................. 18
Section 3.4.
Reserve Fund Guaranty.................................................................................. 20
ARTICLE IV
REDEMPTION OF OBLIGATIONS
Section 4.1.
Redemption Provisions. ................................................................................. 20
Section 4.2.
Selection of Obligations for Redemption ...................................................... 21
Section 4.3.
Notice of Redemption; Effect. ....................................................................... 21
Section 4.4.
Partial Redemption of Obligation .................................................................. 23
ARTICLE V
PAYMENT FUND
TABLE OF CONTENTS
(continued)
Page
(ii)
Section 5.1.
Trustee’s Rights in Purchase Agreement ....................................................... 23
Section 5.2.
Establishment and Application of Payment Fund .......................................... 23
Section 5.3.
Transfers of Investment Earnings to Payment Fund ...................................... 23
Section 5.4.
Surplus ........................................................................................................... 24
Section 5.5.
Separate Funds and Accounts ........................................................................ 24
ARTICLE VI
MONEYS IN FUNDS; INVESTMENT; CERTAIN TAX COVENANTS
Section 6.1.
Held in Trust .................................................................................................. 24
Section 6.2.
Investments Authorized ................................................................................. 24
Section 6.3.
Accounting ..................................................................................................... 25
Section 6.4.
Allocation of Earnings ................................................................................... 25
Section 6.5.
Valuation and Disposition of Investments ..................................................... 25
Section 6.6.
Limitation of Investment Yield ...................................................................... 25
Section 6.7.
Other Tax Covenants ..................................................................................... 26
ARTICLE VII
THE TRUSTEE
Section 7.1.
Appointment of Trustee ................................................................................. 26
Section 7.2.
Liability of Trustee; Standard of Care ........................................................... 26
Section 7.3.
Merger or Consolidation ................................................................................ 27
Section 7.4.
Protection and Rights of the Trustee. ............................................................. 27
Section 7.5.
Compensation of Trustee ............................................................................... 30
Section 7.6.
Removal and Resignation of Trustee. ............................................................ 30
Section 7.7.
Appointment of Agent ................................................................................... 31
Section 7.8.
Commingling ................................................................................................. 31
Section 7.9.
Records .......................................................................................................... 31
ARTICLE VIII
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 8.1.
Amendments Permitted. ................................................................................. 31
Section 8.2.
Procedure for Amendment With Written Consent of Obligation
Owners. .......................................................................................................... 32
Section 8.3.
Disqualified Obligations ................................................................................ 33
Section 8.4.
Effect of Supplemental Trust Agreement ...................................................... 33
Section 8.5.
Endorsement or Replacement of Obligations Delivered After
Amendments .................................................................................................. 33
Section 8.6.
Amendatory Endorsement of Obligations ..................................................... 33
ARTICLE IX
COVENANTS, NOTICES
TABLE OF CONTENTS
(continued)
Page
(iii)
Section 9.1.
Compliance With and Enforcement of Purchase Agreement ........................ 34
Section 9.2.
Observance of Laws and Regulations ............................................................ 34
Section 9.3.
Recordation and Filing ................................................................................... 34
Section 9.4.
Further Assurances......................................................................................... 34
Section 9.5.
Notification to the City of Failure to Make Payments ................................... 34
Section 9.6.
Business Days ................................................................................................ 34
ARTICLE X
LIMITATION OF LIABILITY
Section 10.1.
Limited Liability of the City .......................................................................... 35
Section 10.2.
No Liability of the City for Trustee Performance .......................................... 35
Section 10.3.
Indemnification of the Trustee. ...................................................................... 35
Section 10.4.
Opinion of Counsel ........................................................................................ 36
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES OF OBLIGATION OWNERS
Section 11.1.
Seller’s Rights Held in Trust.......................................................................... 36
Section 11.2.
Remedies Upon Default; No Acceleration .................................................... 36
Section 11.3.
Application of Funds...................................................................................... 37
Section 11.4.
Institution of Legal Proceedings .................................................................... 37
Section 11.5.
Non-waiver .................................................................................................... 37
Section 11.6.
Power of Trustee to Control Proceedings ...................................................... 37
Section 11.7.
Limitation on Obligation Owners’ Right to Sue. ........................................... 38
ARTICLE XII
MISCELLANEOUS
Section 12.1.
Defeasance. .................................................................................................... 38
Section 12.2.
Notices ........................................................................................................... 39
Section 12.3.
Incorporation of State Statutes. ...................................................................... 40
Section 12.4.
Governing Law .............................................................................................. 41
Section 12.5.
Binding Effect and Successors ....................................................................... 41
Section 12.6.
Execution in Counterparts.............................................................................. 42
Section 12.7.
Destruction of Cancelled Obligations ............................................................ 42
Section 12.8.
Headings ........................................................................................................ 42
Section 12.9.
Parties Interested Herein ................................................................................ 42
Section 12.10.
Waiver of Notice ............................................................................................ 42
Section 12.11.
Severability of Invalid Provisions .................................................................. 42
EXHIBIT A
- FORM OF OBLIGATION
EXHIBIT B
- PAYMENT REQUEST FORM
EXHIBIT C
- REIMBURSEMENT REQUEST FORM
SERIES 2023 TRUST AGREEMENT
THIS SERIES 2023 TRUST AGREEMENT, dated as of ______ 1, 2023
(together with any duly authorized, executed and delivered supplement hereto, this “Trust
Agreement”), by and between U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
a national banking association authorized to exercise corporate trust powers in the State of Arizona,
as trustee, or any successor thereto acting as trustee pursuant to this Trust Agreement and in its
capacity as “Seller” pursuant to the hereinafter described Purchase Agreement (the “Trustee”), and
the CITY OF CHANDLER, ARIZONA, a municipal corporation under the laws of the State of
Arizona (the “City”),
W I T N E S S E T H:
WHEREAS, the Mayor and Council of the City have determined that it will be
beneficial to the citizens of the City for the City to finance the costs of the Project (as such term
and all other terms not otherwise defined hereinabove are hereinafter defined); and
WHEREAS, for such purpose, the Mayor and Council of the City requested that
the Trustee sell and execute and deliver the Obligations, and the Trustee has, as described in this
Trust Agreement, caused deposits to be made to the Acquisition Fund and the Delivery Costs Fund;
and
WHEREAS, the City and the Trustee will enter into this Trust Agreement to
facilitate the administration of the financing of the costs of the Project, and the Trustee has full
legal authority and is duly empowered to enter into this Trust Agreement and has taken all actions
necessary to authorize the execution and delivery hereof; and
WHEREAS, for the purpose of obtaining the moneys to provide such deposits,
rights pursuant to the Purchase Agreement have been assigned and transferred to the Trustee for
purposes hereof, and in consideration of such assignment and the execution hereof, the Trustee has
executed and delivered the Obligations, each evidencing a proportionate interest in certain rights
pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration for the Obligations executed, delivered
and Outstanding under this Trust Agreement; the acceptance by the Trustee of the trusts created
herein; the purchase and acceptance of the Obligations by the Owners, and to secure the payment
of principal of and interest on (to the extent provided herein) the Obligations, the rights of the
Owners of the Obligations and the performance and the observance of the covenants and
conditions contained in the Obligations, the Purchase Agreement and herein, and the performance
and the observance of all of the covenants and conditions contained therein, the Trustee hereby
declares an irrevocable trust and acknowledges its acceptance of all right, title and interest in and
to the following described trust estate, which shall be administered by the Trustee according to the
provisions of this Trust Agreement and for the equal and proportionate benefit of the Owners of
the Obligations:
A.
All right, title and interest of Seller in, under and pursuant to the
Purchase Agreement, the Payments and any other amounts payable by the City under the Purchase
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Agreement and the present and continuing right to (i) make claim for, collect or cause to be
collected, receive or cause to be received all such revenues, receipts and other sums of money
payable or receivable thereunder, (ii) bring actions and proceedings thereunder or for the
enforcement of such rights, and (iii) do any and all other things which the Seller is or may become
entitled to do thereunder;
B.
Amounts on deposit from time to time in the funds 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
C.
Any and all other real or personal property of any kind from time to
time hereafter 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 Seller 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 and singular, the trust estate, including all
additional property which by the terms hereof has or may become subject to the encumbrance of
this Trust Agreement, unto the Trustee and its successors and assigns, forever, subject, however,
to the rights of the City, its successors and assigns, under the Purchase Agreement;
IN TRUST, however, for the equal and proportionate benefit and security of the
Owners from time to time of the Obligations executed and delivered hereunder and Outstanding,
none of the Obligations being entitled to priority or distinction one over the other in the application
of revenues from Excise Taxes pledged by the Purchase Agreement to the Payments, regardless of
the delivery of any of the Obligations prior to the delivery of any other of the Obligations, or
regardless of the time or times the Obligations mature or are subject to redemption prior to maturity,
all of the Obligations being co-equal as to the pledge of and lien on revenues from Excise Taxes
pledged for the Payments thereof and sharing ratably, without preference, priority or distinction,
as to the source or method of payment from revenues from Excise Taxes or security therefor and
conditioned, however, that if the City shall well and truly pay or cause to be paid fully and promptly
when due all indebtedness, liabilities, obligations and sums at any time secured hereby, including
interest and attorneys’ fees, and shall promptly, faithfully and strictly keep, perform and observe
or cause to be kept, performed and observed all of its covenants, warranties and agreements
contained herein, 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.
For such purposes, the City and the Trustee hereby agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1.
Definitions. In addition to the terms defined in the first paragraph
hereof and unless the context otherwise requires, the terms defined in this Section shall, for all
purposes of this Trust Agreement, have the meanings herein specified.
“Acquisition Fund” means the fund of that name established pursuant to
Article III and held by the Trustee.
“Additional Parity Obligations” means any additional obligations which
may hereafter be issued or incurred by the City (or any financing conduit acting on behalf of the
City) having a lien upon and payable from revenues from Excise Taxes on a parity with, and in
compliance with the terms of, the then-outstanding Parity Obligations.
“Annual Debt Service” means the amount to be paid in any Fiscal Year with
respect to the Parity Obligations for payment of principal and interest requirements.
“Authorized Denominations” means $5,000 of principal due on a specific
maturity date or integral multiples thereof.
“Available Revenues” means, for any Fiscal Year, revenues from Excise
Taxes actually received in such Fiscal Year.
“Bond Year” means each one-year period beginning on the day after the
expiration of the preceding Bond Year. The first Bond Year shall begin on the date of issue of the
Obligations and shall end on the date selected by the City, provided that the first Bond Year shall
not exceed one calendar year. The last Bond Year shall end on the date of retirement of the
Obligations.
“Bond Yield” means the discount rate that produces a present value equal
to the Issue Price of all unconditionally payable payments of principal, interest and fees for
qualified guarantees within the meaning of Regulations section 1.148-4(f) and amounts reasonably
expected to be paid as fees for qualified guarantees in connection with the Obligations as
determined under Regulations section 1.148-4(b), recomputed if required by Regulations section
1.148-4(b)(4) or 4(h)(3). The present value of all such payments shall be computed as of the date
of issue of the Obligations and using semiannual compounding on the basis of a 360-day year.
“Business Day” means any day of the week other than a Saturday, Sunday
or a day which shall be in the State a legal holiday or a day on which the Trustee is authorized or
obligated by law or executive order to close or a day on which the Federal Reserve is closed as
modified by the effect of Section 9.6.
“Certificate of Completion” means the notice of completion, filed with the
Trustee by the City Representative, stating that the Project has been substantially completed.
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“City Representative” means the City Manager, the Deputy City
Manager/Chief Financial Officer or any other person authorized by the City Manager, the Deputy
City Manager/Chief Financial Officer or the Mayor and Council to act on behalf of the City with
respect to this Trust Agreement.
“Closing Date” means _____ __, 2023.
“Code” means the Internal Revenue Code of 1986, as amended, and any
successor provision thereto.
“Completion Date” means the date on which the Certificate of Completion
is filed with the Trustee by the City Representative.
“Continuing Disclosure Undertaking” means the Continuing Disclosure
Undertaking, dated the Closing Date, from the City.
“Corporate Trust Office” means the office of the Trustee designated in
Section 12.2 or any successor corporate trust office; provided, however, that with respect to
payments on the Obligations at their stated payment dates and any exchange, transfer or other
surrender of the Obligations, the Corporate Trust Office shall mean the corporate trust operations
office of the Trustee in St. Paul, Minnesota, or such other office or location designated by the
Trustee by written notice.
“Defaulted Interest” has the meaning provided in Section 2.11(d).
“Defeasance Obligations” means, to the extent permitted by law, (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, or (4) any combination thereof.
“Delivery Costs” means all items of expense directly or indirectly payable
by or reimbursable to the City or the Trustee relating to the sale and execution and delivery of the
Purchase Agreement, this Trust Agreement and the Obligations, including but not limited to filing
and recording costs, settlement costs, printing costs, reproduction and binding costs, initial fees
and charges of the Trustee, financing discounts, legal fees and charges, insurance fees and charges,
financial and other professional consultant fees, costs of rating agencies for credit ratings, fees for
execution, transportation and safekeeping of the Obligations and charges and fees in connection
with the foregoing.
“Delivery Costs Fund” means the fund of that name established pursuant to
Article III and held by the Trustee.
“Depository Trustee” means any bank or trust company, which may include
the Trustee or its affiliate, designated by the City, with a combined capital and surplus of at least
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Fifty Million Dollars ($50,000,000) and subject to supervision or examination by federal or State
authority.
“Designated Office” means the office designated as such by the Trustee in
writing to 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.
“electronically” or “electronic method” means, with respect to notice, one
transmitted through a timesharing terminal, computer network (including email as a “pdf”
(portable document format) or other replicating image attached to an email) or facsimile machine,
if operative as between any two parties, or if not operative, by telephone (promptly confirmed in
writing), 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.
“Event of Default” means an event of default under the Purchase Agreement
as provided in Section 9 thereof.
“Excise Taxes” means all unrestricted excise, transaction, franchise,
privilege and business taxes, state-shared sales and income taxes, fees for licenses and permits,
and state revenue-sharing, now or hereafter validly imposed by the City or contributed, allocated
and paid over to the City and not earmarked by the contributor for a contrary or inconsistent
purpose. Excise Taxes include, without limitation, all fines and forfeitures. Revenues generated
by the City from development impact fees will not be deemed Excise Taxes for the purposes of
the Purchase Agreement and Trust Agreement. Revenues received by the City from vehicle license
taxes charged by the State of Arizona will not be deemed Excise Taxes for purposes of the
Purchase Agreement and the Trust Agreement. The City may impose taxes for restricted purposes
the revenues from which will not be Excise Taxes and will not be pledged to the payment of the
amounts due pursuant to the Purchase Agreement and the Trust Agreement.
“Fiscal Year” means the fiscal year of the City, currently the period July 1,
through June 30.
“Fitch” means Fitch Ratings, Inc., its successors and assigns, and, if such
corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, “Fitch” shall be deemed to refer to any other nationally recognized securities rating
agency that may be designated by the City by written notice to the Trustee.
“Gross Proceeds” means:
(i)
any amounts actually or constructively received by the City
from the sale of the Obligations but excluding amounts used to pay accrued interest on the
Obligations within one year of the date of issuance of the Obligations;
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(ii)
transferred proceeds of the Obligations under Regulations
section 1.148-9;
(iii)
any amounts actually or constructively received from
investing amounts described in (i), (ii) or this (iii); and
(iv)
replacement proceeds of the Obligations within the meaning
of Regulations section 1.148-1(c). Replacement proceeds include amounts reasonably expected
to be used directly or indirectly to pay debt service on the Obligations, pledged amounts where
there is reasonable assurance that such amounts will be available to pay principal or interest on the
Obligations in the event the City encounters financial difficulties and other replacement proceeds
within the meaning of Regulations section 1.148-1(c)(4). Whether an amount is Gross Proceeds
is determined without regard to whether the amount is held in any fund or account established
under this Trust Agreement.
“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.
“Interest Payment Date” means each January 1 and July 1, while any
Obligations are Outstanding provided that, if any such day is not a Business Day, any payment
due on such date may be made on the next Business Day, without additional interest and with the
same force and effect as if made on the specified date for such payment.
“Interest Portion” means the amounts of each of the Payments in the column
in the Schedule attached to the Purchase Agreement designated “Interest,” denominated as and
comprising interest pursuant to the Purchase Agreement and received by any Owner.
“Investment Property” means any security, obligation (other than a tax-
exempt bond within the meaning of Code section 148(b)(3)(A)), annuity contract or investment-
type property within the meaning of Regulations section 1.148-1(b).
“Issue Price” means the issue price of the Obligations determined as
provided in the Regulations and as indicated in the Tax Certificate.
“Market Value” means the indicated bid value of the investment or
investments to be valued as shown in The Wall Street Journal or any publication having general
acceptance as a source of valuation of the same or similar types of securities or any securities
pricing service available to or used by the Trustee and generally accepted as a source of valuation
(on which the Trustee may conclusively rely, without liability).
“Maximum Annual Debt Service” means the greatest Annual Debt Service
in any Fiscal Year. For the purposes of calculating the Maximum Annual Debt Service with
respect to any Fiscal Year in connection with the incurrence of Additional Parity Obligations and
whether the City is required to fund the Reserve Fund, (i) the interest falling due during such Fiscal
Year may be reduced to the extent that such interest is payable from the proceeds of the Additional
Parity Obligations proposed to be incurred or other amounts set aside for such purposes at the time
7
such Additional Parity Obligations are incurred) and (ii) the principal (or mandatory sinking fund,
installment purchase price, lease-rental or similarly denoted principal payment obligation)
payments or deposits required with respect to the Outstanding Parity Obligations during such
period shall be computed on the assumption that no portion of such Parity Obligations shall cease
to be Outstanding during such Fiscal Year except by reason of the application of such scheduled
payments. Further, for purposes of the aforementioned calculation of Maximum Annual Debt
Service, to the extent the interest on any Outstanding Parity Obligations or the Additional Parity
Obligations proposed to be incurred is payable pursuant to a variable interest rate formula, the
interest rate on such Parity Obligations for Fiscal Years when the actual interest rate on such Parity
Obligations cannot yet be determined shall be assumed to be equal to the higher of (i) the average
annual interest rate on such Parity Obligations over the last five Fiscal Years or since the date of
execution and delivery of such Parity Obligations if less than five years; or (ii) if the terms of such
Parity Obligations provide for conversion of the interest rate payable on such obligations to a fixed
interest rate for the remainder of their term to maturity, an interest rate per annum determined in
accordance with the provisions of such obligations as if the interest rate payable thereon were
being converted to a fixed interest rate for the remainder of their term to maturity.
“Moody’s” means Moody’s Investors Service, Inc., its successors and
assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally
recognized securities rating agency that may be designated by the City by written notice to the
Trustee.
“Nonpurpose Investment” means any Investment Property acquired with
Gross Proceeds and which is not acquired to carry out the governmental purposes of the
Obligations.
“Notification” shall have the meaning provided in Section 10.3.
“Obligations” means the City of Chandler, Arizona Excise Tax Revenue
Obligations, Series 2023, executed and delivered pursuant hereto.
“Outstanding” refers to Obligations issued in accordance with this Trust
Agreement, excluding: (i) Obligations which have been exchanged or replaced, or delivered to the
Trustee for credit against a mandatory redemption installment; (ii) Obligations which have been
paid; (iii) Obligations which have become due and for the payment of which moneys have been
duly provided to the Trustee; and (iv) Obligations for which there have been irrevocably set aside
with a Depository Trustee sufficient moneys or obligations permitted by the Purchase Agreement
bearing interest at such rates and with such maturities as will provide sufficient funds to pay the
principal of and premium, if any, and interest on such Obligations, provided, however, that if any
such Obligations are to be redeemed prior to maturity, the City shall have taken all action necessary
to redeem such Obligations and notice of such redemption shall have been duly mailed in
accordance with the proceedings under which such Obligations were issued or irrevocable
instructions so to mail shall have been given to the Trustee.
“Owner” or any similar term, when used with respect to an Obligation
means the person in whose name such Obligation shall be registered.
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“Parity Obligations” means the 2015 Agreement, the 2016 Refunding
Agreement, the 2017 Agreement, the 2019 Agreement, the 2021 Agreement and the Purchase
Agreement and any Additional Parity Obligations.
“Payment Fund” means the fund of that name established pursuant to
Article V and held by the Trustee.
“Payment Request Form” means the form set forth in Exhibit B which is
attached hereto and made a part hereof.
“Payments” means the Payments required to be paid by the City pursuant
to Section 1(c) of the Purchase Agreement and as set forth in the Schedule to the Purchase
Agreement.
“Permitted Investments” means any investment permitted by Section 35-
323, Arizona Revised Statutes, as amended, or any successor provision thereto.
“Project” means the [construction, expansion and improvement of certain
capital improvement projects to the City’s water and wastewater system].
“Project Costs” means, with respect to the Project, all architectural,
engineering, soils, survey, archaeology, demolition, construction management fees, development
fees, contingencies and other related costs of installation, construction and other matters necessary
for the Project and all costs incurred by the Trustee or the City with respect to the transaction to
which this Trust Agreement pertains.
“Purchase Agreement” means the Series 2023 Purchase Agreement, dated
as of _______ 1, 2023, by and between the City and the Seller.
“Rebate Payment” means any payment within the meaning of Regulations
section 1.148-3(d)(1) with respect to a Nonpurpose Investment.
“Rebate Requirement” means, for each Bond Year, at any time the excess
of the future value of all Receipts over the future value of all Rebate Payments. For purposes of
calculating the Rebate Requirement the Bond Yield shall be used to determine the future value of
Receipts and Rebate Payments in accordance with Regulations section 1.148-3(c). The Rebate
Requirement is zero for any Nonpurpose Investment meeting the requirements of a rebate
exception under section 148(f)(4) of the Code or Regulations section 1.148-7.
“Rating Agency” or “Rating Agencies” means S&P, Moody’s and Fitch or
any other nationally recognized securities rating agency requested by the City to rate the
Obligations.
“Receipt” means any receipt within the meaning of Regulations section
1.148-3(d)(2) with respect to a Nonpurpose Investment.
“Regular Record Date” means the close of business on the fifteenth day of
the month preceding each Interest Payment Date.
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“Regulations” means sections 1.148-1 through 1.148-11 and section
1.150-1 of the regulations of the United States Department of the Treasury promulgated under the
Code, including and any amendments thereto or successor regulations.
“Reimbursement Request Form” means the form set forth in Exhibit C
hereof.
“Reserve Fund” means the City of Chandler [Water and Wastewater Project]
Reserve Fund (2023) established pursuant to Article III hereof.
“Reserve Fund Guarantor” shall mean the issuer of the Reserve Fund
Guaranty.
“Reserve Fund Guaranty” shall mean a letter of credit, surety bond or
similar arrangement representing the irrevocable obligation of the Reserve Fund Guarantor to pay
to the Trustee upon request made by the Trustee up to an amount stated therein for application as
provided in Section 3.4 hereof.
“Reserve Fund Guaranty Agreement” shall mean the reimbursement
agreement, loan agreement or similar agreement between the City and a Reserve Fund Guarantor
with respect to repayment of amounts advanced under the Reserve Fund Guaranty.
“Reserve Fund Guaranty Coverage” shall mean the amount available at any
particular time to be paid to the Trustee under the terms of the Reserve Fund Guaranty.
“Reserve Fund Requirement” means, if the Reserve Fund is required to be
funded, an amount equal to the lesser of (a) ten percent (10%) of the stated principal amount of
the Obligations at original issuance, (b) the Maximum Annual Debt Service requirement of the
Obligations at original issuance, or (c) one hundred twenty-five percent (125%) of the average
Annual Debt Service requirement of the Obligations at original issuance; provided, however, that
at the time of issuance of any Additional Parity Obligations the Reserve Fund Requirement shall
be increased so that the total amount held in the Reserve Fund shall not exceed the lesser of (i) ten
percent (10%) of the stated principal amount of the Outstanding Parity Obligations at original
issuance, (ii) the Maximum Annual Debt Service requirement of the Outstanding Parity
Obligations, or (iii) one hundred twenty-five percent (125%) of the average Annual Debt Service
requirement of the Outstanding Parity Obligations. During the 36-month buildup of the Reserve
Fund described in Section 3.3, if funding of the Reserve Fund is required, the Reserve Fund
Requirement on any date shall be that portion of the Reserve Fund Requirement which was
required to have been deposited by such date. If the Reserve Fund is not required to be funded,
the Reserve Fund Requirement is $0.00.
“Reserve Fund Value” means the aggregate of the Reserve Fund Guaranty
Coverage and the value of moneys and investments credited to the Reserve Fund, the value of
investments to be the Market Value.
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“Responsible Officer” means, when used with respect to the Trustee, 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 customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office or other office of the Trustee because
of such person’s knowledge of and familiarity with the particular subject and having direct
responsibility for the administration of this Trust Agreement.
“Securities Depository” means a “clearing agency” (securities depository)
registered under Section 17A of the Securities Exchange Act of 1934, as amended.
“Seller” means the Trustee in its separate capacity as Seller pursuant to the
Purchase Agreement.
“Special Counsel’s Opinion” means an opinion signed by an attorney or
firm of attorneys of nationally recognized standing in the field of law relating to municipal bonds
selected by the City.
“Special Record Date” has the meaning provided in Section 2.11(d).
“State” means the State of Arizona.
“Tax Certificate” means the Certificate Relating To Federal Tax Matters
executed and delivered by the City on the Closing Date.
“2015 Agreement” means the Agreement, dated as of December 1, 2015,
by and between the City and U.S. Bank Trust Company, National Association (successor in interest
to U.S. Bank National Association).
“2016 Refunding Agreement” means the Agreement, dated as of September
1, 2016, by and between the City and Zions Bank, a division of ZB, National Association.
“2017 Agreement” means the Agreement, dated as of December 1, 2017,
by and between the City and U.S. Bank Trust Company, National Association (successor in interest
to U.S. Bank National Association).
“2019 Agreement” means the Agreement, dated as of December 1, 2019,
by and between the City and U.S. Bank Trust Company, National Association (successor in interest
to U.S. Bank National Association).
“2021 Taxable Agreement” means the Agreement, dated as of December 1,
2021, by and between the City and U.S. Bank Trust Company, National Association (successor in
interest to U.S. Bank National Association).
Section 1.2.
Interpretation.
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(a)
Any reference herein to the Mayor and Council of the City 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 imparting the singular
shall include the plural and vice versa and the use of 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.
Section 1.3.
Obligations Not General Obligation of the City. The Obligations
shall be payable solely out of the revenues and other security pledged hereby and shall not
constitute an indebtedness or general obligation of the City within the meaning of any State
constitutional provision or statutory limitation and shall never constitute or give rise to a pecuniary
liability of the City or be a charge against the City’s general credit or a charge against the general
credit or the taxing powers of the State or any political subdivision thereof.
ARTICLE II
SPECIAL REVENUE OBLIGATIONS
Section 2.1.
Authorization of the Obligations. The Trustee is hereby
authorized and directed to execute and deliver to the original purchaser thereof, the Obligations in
the principal amount of $____,000, evidencing proportionate ownership interests in the Purchase
Agreement and the Payments. In no event shall the Obligations be deemed liabilities, debts or
obligations of the Trustee.
Section 2.2.
Date; Interest Accrual. Each Obligation shall be dated the Closing
Date, and interest with respect thereto shall be payable from such date or from the most recent
Interest Payment Date to which interest has previously been paid or made available for payment
with respect to the Outstanding Obligations.
Section 2.3.
Maturities and Interest Rates. The Obligations shall be in
Authorized Denominations. The Obligations shall mature on the dates and in the principal
amounts, and interest with respect thereto shall be computed at the rates, as shown below:
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Maturity Date
(July 1)
Principal
Amount
Interest
Rates
Section 2.4.
Interest on Obligations. Interest on the Obligations shall be
payable semiannually on January 1 and July 1 of each year commencing ______ 1, 20___, to and
including the date of maturity or prior redemption of the Obligations. Except for the initial period,
said interest shall represent the portion of the Payments designated as interest and coming due
during the six-month period preceding each Interest Payment Date with respect to the Obligations.
The proportionate share of the portion of the Payments designated as interest with respect to any
Obligation shall be computed by multiplying the portion of Payments 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), except that the first portion of the Payments designated
as interest shall be for interest from the Closing Date to ________ 1, 20___.
Section 2.5.
Form. The Obligations shall be in fully registered, certificated form,
substantially in the form set forth in Exhibit A hereto.
Section 2.6.
Execution. The Obligations shall be executed by and in the name
of the Trustee by the manual signature of an authorized representative of the Trustee. If any
representative whose signature appears on any Obligation ceases to be such representative before
the Closing Date, such signature shall nevertheless be as effective as if the representative had
remained in office until the Closing Date. Any Obligation may be executed on behalf of the
Trustee by such person as at the actual date of the execution of such Obligation shall be the proper
authorized representative of the Trustee although at the nominal date of such Obligation such
person shall not have been such authorized representative of the Trustee. No Obligation shall be
valid or become obligatory for any purpose or shall be entitled to any security or benefit under this
Trust Agreement unless and until executed and delivered by the Trustee. The execution by the
Trustee of any Obligation shall be conclusive evidence that the Obligation so executed has been
duly authorized and delivered hereunder and is entitled to the security and benefit of this Trust
Agreement.
Section 2.7.
Book-Entry Only System. The Trustee and the City may from time
to time enter into, and discontinue, an agreement with a 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
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the name of a Securities Depository (or its nominee), neither the Trustee nor the City shall 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. It is hereby acknowledged that the City intends to enter into an
agreement with DTC in connection with the execution and delivery of the Obligations, 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.” The Trustee shall not have any responsibility or obligation to DTC participants or
the persons for whom they act as nominees with respect to the Obligations regarding accuracy of
any records maintained by DTC or DTC participants, the payments by DTC or DTC participants
of any amount in respect of principal, redemption price or interest on the Obligations, any notice
which is permitted or required to be given to or by Owners hereunder (except such notice as is
required to be given by the City to the Trustee or to DTC), or any consent given or any other action
taken by DTC as Owner.
Section 2.8.
Application of Proceeds. The proceeds received by the Trustee
from the sale of the Obligations ($__________) shall forthwith be applied by the Trustee as follows:
(1)
$__________ shall be deposited in the Acquisition Fund; and
(2)
$__________ shall be deposited in the Delivery Costs Fund
Section 2.9.
Transfer and Exchange.
(a)
Any Obligation may, in accordance with its terms, be transferred
upon the registration books for the Obligations required to be kept pursuant to the provisions of
Section 2.13 by the person in whose name it is registered, in person or by his duly authorized
attorney, upon surrender of such Obligation for cancellation, accompanied by delivery of a written
instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Obligation
or Obligations shall be surrendered for transfer, the Trustee shall execute and deliver a new
Obligation or Obligations in fully registered form of the same maturity and interest rate and for a
like aggregate principal amount.
(b)
Obligations may be exchanged at the Designated Office for a like
aggregate principal amount of Obligations of Authorized Denominations of the same maturity and
interest rate. In connection with any such exchange or transfer of Obligations, the Owner
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, other than one imposed by the City (which will not
be payable by the Trustee), or any fee or expense of the Trustee or the City with respect to such
exchange or transfer.
(c)
The Trustee may, but shall not be obligated to, exchange or register
the transfer of an Obligation (i) if the Obligation is to be redeemed, in whole or in part, or
(ii) during a period of fifteen (15) days preceding the giving of a notice of redemption. If an
Obligation subject to redemption is to be transferred after having been selected for redemption,
any notice of redemption which has been given to the transferor shall be binding on the transferee
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and a copy of the notice of redemption shall be delivered by the Trustee to the transferee along
with the duly registered Obligation or Obligations.
(d)
Prior to any transfer of the Obligations outside the book-entry
system (including, but not limited to, the initial transfer outside the book-entry system) the
transferor shall provide or cause to be provided to the Trustee all information necessary to allow
the Trustee to comply with any of its usual, applicable tax reporting obligations. The Trustee shall
conclusively rely on the information provided to it and shall have no responsibility to verify or
ensure the accuracy of such information.
Section 2.10. Obligations Mutilated, Lost, Destroyed or Stolen. If any
Obligation shall become mutilated, the Trustee, at the expense of the Owner of said Obligation,
shall execute and deliver a new Obligation of like tenor, maturity and amount in exchange and
substitution for the Obligation so mutilated, but only upon surrender to the Trustee of the
Obligation so mutilated. Any mutilated Obligation so surrendered to the Trustee shall be cancelled
by it and redelivered to, or upon the order of, the Owner of such Obligation. If any Obligation
shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to
the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity satisfactory to
the Trustee shall be given, the Trustee, at the expense of the Owner of such Obligation, shall
execute and deliver a new Obligation of like tenor, maturity and amount and numbered as the
Trustee shall determine in lieu of and in substitution for the Obligation so lost, destroyed or stolen.
The Trustee may require payment of an appropriate fee for each new Obligation delivered under
this Section and of the expenses which may be incurred by the Trustee in carrying out the duties
under this Section. Any Obligation issued under the provisions of this Section in lieu of any
Obligation alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to
the benefits of this Trust Agreement with all other Obligations secured by this Trust Agreement.
The Trustee shall not be required to treat both the original Obligation and any replacement
Obligation as being Outstanding for the purpose of determining the principal amount of
Obligations which may be executed and delivered hereunder or for the purpose of determining any
percentage of Obligations Outstanding hereunder, but both the original and replacement
Obligation shall be treated as one and the same. Notwithstanding any other provision of this
Section, in lieu of delivering a new Obligation for an Obligation which has been mutilated, lost,
destroyed or stolen, and which has matured, the Trustee may make payment with respect to such
Obligation upon receipt of the aforementioned indemnity.
Section 2.11. Payment.
(a)
Payment of interest due with respect to any Obligation on any
Interest Payment Date shall be made to the persons appearing on the registration books for the
Obligations maintained by the Trustee as the Owner thereof as of the Regular Record Date
immediately preceding such Interest Payment Date, such interest to be paid by check mailed on
the date due by first class mail to such Owners at the address thereof as it appears on such
registration books, payable in lawful money of the United States of America.
(b)
The principal and redemption price, if any, with respect to the
Obligations shall be payable in lawful money of the United States of America upon surrender when
due at the Designated Office.
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(c)
Interest and, if arrangements for surrender are made with the Trustee,
principal and redemption price, if any, payable to any Securities Depository or to any Owner of
$1,000,000 or more in principal amount of Obligations shall be paid by wire transfer in
immediately available funds to an account in the United States of America if the Owner makes a
written request of the Trustee at least twenty (20) days before the Interest Payment Date specifying
the account address without presentment or surrender of the Obligations except as set forth below.
The notice may provide that it shall remain in effect for subsequent payments until otherwise
requested in a subsequent written notice. Notwithstanding the foregoing, the final payment of
interest and principal to the Owner will be payable at the Corporate Trust Office upon surrender
of the Obligations.
(d)
Any interest on any Obligation which is payable on, but is not
punctually paid or duly provided for on, any Interest Payment Date (“Defaulted Interest”) shall
forthwith cease to be payable to the Owners on the relevant Regular Record Date solely by virtue
of such Owners having been such Owners. Such Defaulted Interest at the same rate as the
Obligations shall thereupon be paid, together with interest thereon at the same rate per annum as
such Defaulted Interest, by the Trustee (out of funds provided to it by the City) to the persons in
whose names such Obligations are registered at the close of business on a special record date for
the payment of such portion of Defaulted Interest as may then be paid from the sources herein
provided (the “Special Record Date”). When the Trustee has funds available to pay the Defaulted
Interest and interest thereon, the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest and interest thereon which shall be not more than fifteen (15) nor less than ten
(10) days prior to the date of the proposed payment by the Trustee. The Trustee shall promptly
cause notice of the proposed payment of such Defaulted Interest and interest thereon and the
Special Record Date therefor to be mailed, first class postage prepaid, to each Owner of an
Obligation at his address as it appears in the registration books by the Trustee for the Obligations
not less than ten (10) days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and interest thereon and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest and interest thereon shall be paid to the persons in
whose names the Obligations are registered on such Special Record Date.
Section 2.12. Execution of Documents and Proof of Ownership.
(a)
Any request, direction, consent, revocation of consent or other
instrument in writing required or permitted by this Trust Agreement to be signed or executed by
the Obligation Owners may be in any number of concurrent instruments of similar tenor, and may
be signed or executed by such Owners in person or by their attorneys or agents appointed by an
instrument in writing for that purpose, or by any bank, trust company or other depository for such
Obligations. Proof of the execution of any such instrument, or of any instrument appointing any
such attorney or agent, and of the ownership of the Obligations shall be sufficient for any purpose
of this Trust Agreement (except as otherwise herein provided), if made in the following manner:
(1)
The fact and date of the execution by any Owner or the
attorney or agent thereof of any such instrument and of any instrument appointing any such
attorney or agent, may be proved by a certificate, which need not be acknowledged or
verified, of an officer of any bank or trust company located within the United States of
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America, or of any notary public, or other officer authorized to take acknowledgments of
deeds to be recorded in such jurisdictions, that the persons signing such instruments
acknowledged the execution thereof. Where any such instrument is executed by an officer
of a corporation or association or a member of a partnership on behalf of such corporation,
association or partnership, such certificate shall also constitute sufficient proof of his
authority.
(2)
The fact of the ownership of the Obligations by any person
and the amount, the maturity and the numbers of such Obligations and the date of his
holding the same be proved on the registration books maintained pursuant to Section 2.13.
(b)
Nothing contained in this Article II shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept any other evidence of the
matters herein stated which the Trustee may deem sufficient. Any request or consent of the Owner
of any Obligation shall bind every future Owner of the same Obligation in respect of anything
done or suffered to be done by the Trustee in pursuance of such request or consent.
Section 2.13. Obligation Register. The Trustee will keep or cause to be kept, at
the Designated Office, sufficient books for the registration and transfer of the Obligations which
shall at all times during regular business hours on any Business Day be open to inspection by the
City and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations
as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the
Obligations as hereinbefore provided.
Section 2.14. Payment of Unclaimed Amounts. In the event any check for
payment of interest on an Obligation is returned to the Trustee unendorsed or is not presented for
payment within two (2) years from its payment date or any Obligation is not presented for payment
of principal at the maturity or redemption date, if funds sufficient to pay such interest or principal
due upon such Obligation shall have been made available to the Trustee for the benefit of the
Owner thereof, it shall be the duty of the Trustee to hold such funds, without liability for interest
thereon, for the benefit of the Owner of such Obligation who shall thereafter be restricted
exclusively to such funds for any claim of whatever nature relating to such Obligation or amounts
due thereunder. The obligation of the Trustee to hold such funds shall continue for two years and
six months (subject to applicable escheat laws) following the date on which such interest or
principal payment became due, whether at maturity or the date fixed for redemption, or otherwise,
at which time the Trustee shall surrender such unclaimed funds so held to the City, whereupon any
claim of whatever nature by the Owner of such Obligation arising under such Obligation shall be
made upon the City.
ARTICLE III
ACQUISITION FUND; DELIVERY COSTS FUND; RESERVE FUND
Section 3.1.
Establishment and Application of Acquisition Fund.
(a)
The Trustee shall establish a special trust fund designated as the
“City of Chandler, Arizona Series 2023 Acquisition Fund” (herein referred to as the “Acquisition
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Fund”), shall keep such fund separate and apart from all other funds and moneys held by it and
shall administer such fund as provided in this Trust Agreement.
(b)
(1)
Upon receipt of a duly executed Payment Request Form
requesting disbursement from the Acquisition Fund, the Trustee shall remit to the payee
designated in the Payment Request Form, the amount requested to be paid in such Payment
Request Form for Project Costs within three (3) Business Days following submission of
such Payment Request Form. Notwithstanding the foregoing, the Trustee shall apply
moneys on deposit in the Acquisition Fund to reimburse the City for any Project Costs
incurred or advanced by the City within three (3) Business Days of receipt of a duly
executed Reimbursement Request Form. The Trustee has no duty or obligation to confirm
that such disbursements constitute Project Costs and may rely conclusively on such
Payment Request Form without making any independent investigation in connection
therewith.
(2)
Should any shortfall or deficiency occur in the Acquisition
Fund, the City shall immediately pay such amounts to the Trustee in addition to the
Payments otherwise due pursuant to the Purchase Agreement.
(3)
Amounts in the Acquisition Fund shall be used to pay
principal of and interest on the Obligations if insufficient funds are otherwise available to
make such payments when due.
(4)
On the Completion Date, all remaining moneys in the
Acquisition Fund shall be transferred to the Payment Fund and applied by the Trustee to
the Payments due from the City on the next succeeding Interest Payment Date, and the
Acquisition Fund shall be closed.
(5)
Any amount remaining in the Acquisition Fund upon the
occurrence of an Event of Default shall not be disbursed as provided in this Section, but
shall be immediately transferred to the Payment Fund and used to pay principal and interest
with respect to the Obligations.
Section 3.2.
Establishment and Application of Delivery Costs Fund.
(a)
The Trustee shall establish a special trust fund designated as the
“City of Chandler, Arizona Series 2023 Delivery Costs Fund” (herein referred to as the “Delivery
Costs Fund”), shall keep such fund separate and apart from all other funds and moneys held by it
and shall administer such fund as provided in this Trust Agreement.
(b)
Amounts in the Delivery Costs Fund shall be disbursed for the
payment of Delivery Costs. Disbursements from the Delivery Costs Fund shall be made by the
Trustee upon receipt of a requisition for disbursement (on which the Trustee is entitled to rely
conclusively, and it shall not be required to make any independent investigation in connection
therewith) executed or approved by the City Representative. Each such certificate shall set forth
the amounts to be disbursed for payment, or reimbursement of previous payments, of Delivery
Costs and the person or persons to whom said amounts are to be disbursed.
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(c)
On the earlier of __________ 1, 2024, or when all Delivery Costs
associated with the Obligations have been paid (as shown by a certificate of a City Representative,
if requested by the Trustee), the Trustee shall transfer any amounts remaining in the Delivery Costs
Fund to the Payment Fund and the Delivery Costs Fund shall be closed.
Section 3.3.
Reserve Fund. The Trustee shall establish a special fund
designated as the “City of Chandler, Arizona Series 2023 Reserve Fund” (hereinafter referred to
as the “Reserve Fund”). So long as the aggregate amount of revenues from Excise Taxes pledged
and received by or on behalf of the City in the immediately preceding Fiscal Year is at least two
times the Maximum Annual Debt Service requirement for the current or any future Fiscal Year for
all Outstanding Parity Obligations, then the City is not obligated to fund the Reserve Fund. If such
revenues from Excise Taxes are less than two times such Maximum Annual Debt Service
requirement, the City shall, in addition to the other Payments required under the Purchase
Agreement, pay to the Trustee for deposit into the Reserve Fund, on the first day of each month
commencing the first month after the Available Revenues are below the required amount, one
thirty-sixth (1/36th) of the Reserve Fund Requirement, until the amount in the Reserve Fund equals
the Reserve Fund Requirement. If at the close of any Fiscal Year, Available Revenues are less
than two times such Maximum Annual Debt Service requirement, the City shall so notify the
Trustee in writing. Such notification shall contain specifics as to the amount of the Reserve Fund
Requirement and the payments that will be due each month. The Trustee shall have no duty to
monitor or determine the amount of Available Revenues.
In lieu of funding the Reserve Fund with cash payments or in combination with
funding with cash payments, the City may deliver to the Trustee a Reserve Fund Guaranty as
described in Section 3.4. The Trustee is authorized and directed to execute (if requested by the
City), deliver and comply with all of the terms and conditions of any Reserve Fund Guaranty and
Reserve Fund Guaranty Agreements and related restrictions or directions in connection with the
Obligations and any Additional Parity Obligations. The Trustee shall have no obligation to
confirm that any Reserve Fund Guaranty meets the requirements of this Trust Agreement. If the
City provides a Reserve Fund Guaranty in combination with the funding of cash payments, the
City shall notify the Trustee in writing as to the amount of the cash payments that will be due each
month thereafter. To the extent the City directs the Trustee to enter into any Reserve Fund
Guaranty and Reserve Fund Guaranty Agreement, the City shall be deemed to have determined
that such Reserve Fund Guaranty and Reserve Fund Guaranty Agreement meet the requirements
of this Trust Agreement.
The Reserve Fund shall be an integrated and indivisible common Reserve Fund
established and required hereunder for all Parity Obligations except to the extent that the City
establishes a separate reserve fund for any Additional Parity Obligations or no reserve fund is
required for any Additional Parity Obligations. Amounts in the Reserve Fund shall be available
to be applied as provided herein.
Amounts in the Reserve Fund shall be drawn out by the Trustee and used to make
payment of principal and interest on the Obligations, and on any Parity Obligations secured by the
common reserve fund, in the event that amounts in the Payment Fund or other funds held for
payment of principal and interest on such Parity Obligations are insufficient.
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In the event that after the initial completed funding of the Reserve Fund the Reserve
Fund Value is less than the Reserve Fund Requirement, the City shall, in addition to the other
Payments provided under the Purchase Agreement, immediately pay to the Trustee an amount
sufficient to cause the Reserve Fund Value to equal the Reserve Fund Requirement.
In connection with the execution and delivery of any Additional Parity Obligations,
if the above conditions requiring the funding of the Reserve Fund have occurred and if the City
elects to fund the reserve fund with respect to such Parity Obligations, the Reserve Fund shall be
funded in an amount equal to the Reserve Fund Requirement which applies after the execution and
delivery of such Additional Parity Obligations or the City shall deliver to the Trustee a Reserve
Fund Guaranty complying with the requirements of Section 3.4 hereof, or a combination of the
foregoing. Notwithstanding the foregoing, the City reserves the right to not require a reserve fund
with respect to Additional Parity Obligations or to establish a separate reserve fund for any or all
executions and deliveries of Additional Parity Obligations which may, in lieu of the Reserve Fund
created herein, be funded (if the above conditions for funding the Reserve Fund occur) with the
Reserve Fund Requirement applicable to such issue or covered by a Reserve Fund Guaranty or a
combination thereof, provided that amounts to be paid into any such separate reserve fund or to
pay the Reserve Fund Guarantor, other than from proceeds of such issue, shall be made on a parity
with payments into the Reserve Fund hereby established and shall not exceed, in any bond year,
the proportionate deficit payment allocable to such separate reserve fund. For the purposes hereof,
“proportionate deficit payment” means an amount which bears the same proportion to the deficit
in a given separate reserve fund that the amount available to remedy deficits in the Reserve Fund
and all separate reserve funds bears to the aggregate deficit or deficits in the Reserve Fund and all
separate reserve funds.
With respect to the Obligations or any Parity Obligations with respect to which a
Reserve Fund Guaranty is then in effect, if on the Business Day preceding any day on which
Payments or other debt service is due on the Obligations or Parity Obligations there are not to the
knowledge of the Trustee on deposit in the applicable payment fund and the Reserve Fund
sufficient moneys to pay all Payments or debt service to become due on such date, the Trustee
shall immediately notify the Reserve Fund Guarantor of such deficiency and shall do all things
necessary under the terms of the Reserve Fund Guaranty to realize and receive on or before such
date or as soon thereafter as is practicable moneys in the amount of such deficiency. All amounts
received by the Trustee as payments under the Reserve Fund Guaranty shall be deposited to the
Reserve Fund.
To the extent any moneys have been withdrawn from the Reserve Fund by the
Trustee, no portion of the revenues from Excise Taxes shall be considered surplus revenues or
available to the City until such Excise Taxes, or other available moneys, have first been applied to
the extent required to reimburse the Reserve Fund for any such withdrawal or to increase the
Reserve Fund Value to the Reserve Fund Requirement. If a Reserve Fund Guaranty is in effect
with respect to any obligations, reimbursements to the Reserve Fund for such obligations shall be
applied, first, to the extent a Reserve Fund Guaranty Agreement so requires, to pay to the Reserve
Fund Guarantor any amounts owed to it pursuant to the Reserve Fund Guaranty Agreement and
then to the Reserve Fund.
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If on any January 1 or July 1, the Reserve Fund Value exceeds the Reserve Fund
Requirement, such excess shall be transferred to the Payment Fund or other applicable payment
fund in proportion to the amounts next to come due on Parity Obligations for which a separate
reserve fund is not established or for which no reserve fund is required or to reimburse any amounts
drawn on the Reserve Fund Guaranty and any interest thereon except, with respect to the
Obligations or any issue of Additional Parity Obligations with respect to which a Reserve Fund
Guaranty is in effect, as may otherwise be provided in the Reserve Fund Guaranty Agreement.
Any investment earnings allocated to the Reserve Fund after deduction of amounts
to be set aside for rebate to the federal government pursuant to this Trust Agreement shall be used
first to cause the amount on deposit in the Reserve Fund to equal the Reserve Fund Requirement
or to reimburse any amounts drawn on the Reserve Fund Guaranty and any interest thereon and,
to the extent not necessary for such purpose, shall be transferred by the Trustee to the Payment
Fund or to any other payment fund for Outstanding Parity Obligations for which a separate reserve
fund is not established.
Section 3.4.
Reserve Fund Guaranty. If at any time the City shall deliver to the
Trustee (a) a Reserve Fund Guaranty, (b) an opinion of counsel delivered pursuant to Section 10.4
hereof stating that the delivery of such Reserve Fund Guaranty to the Trustee is authorized under
this Trust Agreement and complies with the terms hereof and thereof, (c) evidence that the Reserve
Fund Guarantor is rated “AA” or better by the Rating Agencies rating the Obligations, and (d) a
letter from each Rating Agency stating that (i) the issuance of the Reserve Fund Guaranty to the
Trustee and (ii) if a Reserve Fund Guaranty is then in effect with respect to the Reserve Fund, the
substitution of the proposed Reserve Fund Guaranty for the Reserve Fund Guaranty then in effect,
will not, by itself, result in a reduction or withdrawal of its rating on the Parity Obligations, and if
such rating shall be in effect on the date of such issuance and, if applicable, substitution, then the
Trustee shall accept such Reserve Fund Guaranty and promptly surrender the previously held
Reserve Fund Guaranty, if any, to the issuer thereof for cancellation.
ARTICLE IV
REDEMPTION OF OBLIGATIONS
Section 4.1.
Redemption Provisions.
(a)
The Obligations maturing before or on July 1, 20__, are not subject
to redemption prior to their stated maturity dates. The Obligations maturing on or after July 1,
20__, are subject to redemption in such order and from such maturities as may be selected by the
City and by lot within any maturity by such methods as may be selected by the Trustee from
redemptions made at the option of the City pursuant to Section 7 of the Purchase Agreement, in
whole or in part on any date, on or after July 1, 20__, at a redemption price equal to the principal
amount of Obligations or portions thereof to be redeemed, together with accrued interest to the
date fixed for redemption, but without premium.
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(b)
The Obligations maturing on July 1, 20__, shall be redeemed on July
1 of the years indicated and in the amounts indicated at a price equal to the amount thereof plus
interest accrued to the date of redemption, but without premium:
Year Redeemed
Principal Amount Redeemed
A remaining principal amount of $____,000 of such Obligations shall be paid on July 1, 20__.
(c)
Whenever Obligations subject to mandatory redemption are
purchased, redeemed (other than pursuant to mandatory redemption) or delivered by the City to
the Trustee for cancellation, the principal amount of the Obligations represented thereby so retired
shall satisfy and be credited against the mandatory redemption requirements for such Obligations
for such years as the City may direct in writing. No surrender of the Obligations shall be necessary
in accordance with a mandatory prepayment described in this Section that does not represent final
maturity.
Section 4.2.
Selection of Obligations for Redemption. The Obligations shall
be redeemed only in the principal amounts of $5,000 each or integral multiples thereof. The City
shall, at least forty-five (45) days prior to the redemption date, notify the Trustee of such
redemption date and of the maturities of the Obligations and the principal amount of the
Obligations of any such maturity to be redeemed on such date. For the purposes of any redemption
of less than all of the Obligations of a single maturity, if the Obligations are not held in a book-
entry-only system as described in Section 2.7, the particular Obligations or portions of Obligations
of such maturity to be redeemed shall be selected by the Trustee by lot in accordance with its
standard procedures not more than forty-five (45) nor less than thirty (30) days prior to the
redemption date by such selection methods as the Trustee shall in its sole discretion deem
appropriate and fair; provided, however, that such selection methods shall provide for the selection
of Obligations or portions thereof for redemption in principal amounts of $5,000 or integral
multiples thereof such that any $5,000 Obligation or $5,000 portion of an Obligation of such
maturity shall be as likely to be called for redemption as any other such $5,000 Obligation or
$5,000 portion thereof. The Trustee shall promptly notify the City in writing of the Obligations
so selected for redemption, and the City will provide the Trustee within thirty (30) days a
recomputed payment schedule for the Purchase Agreement.
Section 4.3.
Notice of Redemption; Effect.
(a)
The Trustee shall cause notice of any redemption of Obligations
hereunder, other than redemption at maturity, to be mailed to the Owners of all of the Obligations
to be redeemed at the addresses appearing in the Register kept for such purpose pursuant to Section
2.13. Each such notice shall (1) be sent no more than sixty (60) nor less than thirty (30) calendar
days prior to the redemption date, (2) identify the Obligations to be redeemed (specifying the
CUSIP numbers, if any, assigned to the Obligations), (3) specify with respect to the Obligations
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being redeemed their date of issue, their maturity date, their redemption date and their redemption
price, (4) set forth the name, address and telephone number of the person from whom information
pertaining to the redemption may be obtained, and (5) state that on the redemption date the
Obligations to be redeemed will be payable at the Designated Office, that from that date interest
will cease to accrue and that no representation is made as to the accuracy or correctness of the
CUSIP numbers printed therein or on the Obligations. No defect affecting any Obligation, whether
in the notice of redemption or the delivery thereof (including any failure to mail such notice), shall
affect the validity of the redemption proceedings for any other Obligations.
(b)
If at the time of mailing of notice of an optional redemption
Obligations, there has not been deposited with the Trustee moneys or Defeasance Obligations
sufficient to redeem all Obligations subject to such redemption and the requirements of (e) below
are not satisfied, then such notice shall state that the redemption is conditional upon the deposit of
moneys or Defeasance Obligations sufficient for the redemption with the Trustee and satisfaction
of such requirements not later than the opening of business on the redemption date, and such notice
will be of no effect and such Obligations shall not be redeemed unless such moneys or Defeasance
Obligations are so deposited and such requirements in (e) below are met.
(c)
Any notice of redemption shall be mailed by first class mail, postage
prepaid; provided that any notice of redemption given to any Owner of $1,000,000 or more in
aggregate principal amount of Obligations also shall be transmitted electronically. A certificate of
the Trustee shall conclusively establish the mailing or delivery of any such notice for all purposes.
(d)
Notice having been mailed in the manner provided in (a) above, the
Obligations and portions thereof called for redemption shall become due and payable on the
redemption date, and upon presentation and surrender thereof at the place or places specified in
that notice, shall be paid at the redemption price, plus interest accrued to the redemption date.
(e)
If the money or Defeasance Obligations for the redemption of all of
the Obligations and portions thereof to be redeemed, together with interest accrued thereon to the
redemption date, is held by the Trustee on the redemption date, so as to be available therefor on
that date, then from and after the redemption date those Obligations and portions thereof to be
redeemed shall cease to bear interest and no longer shall be considered to be Outstanding hereunder.
If those moneys shall not be so available on the redemption date, those Obligations and portions
thereof shall continue to bear interest, until they are paid, at the same rate as they would have borne
had they not been called for redemption.
(f)
All moneys deposited in the Payment Fund and held by the Trustee
for the redemption of particular Obligations shall be held in trust for the account of the Owners
thereof and shall be paid to them, respectively, upon presentation and surrender of those
Obligations.
(g)
The Trustee also agrees to send notice of any redemption to the
Municipal Securities Rulemaking Board (the “MSRB”), currently through the MSRB’s Electronic
Municipal Market Access system, in the manner required by the MSRB, but no defect in said
further notice or record nor any failure to give all or a portion of such further notice shall in any
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manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed
above.
Section 4.4.
Partial Redemption of Obligation. Upon surrender of any
Obligation redeemed in part only, the Trustee shall execute and deliver to the Owner thereof, at
the expense of the City, a new Obligation or Obligations of Authorized Denominations equal in
aggregate principal amount to the unredeemed portion of the Obligation surrendered and of the
same maturity.
ARTICLE V
PAYMENT FUND
Section 5.1.
Trustee’s Rights in Purchase Agreement. The Trustee holds in
trust hereunder all of its rights and duties in the Purchase Agreement, including but not limited to
all of the rights to receive and collect all of the Payments and all other amounts required to be
deposited in the Payment Fund pursuant to the Purchase Agreement or pursuant hereto. All of the
Payments and such other amounts to which the Seller may at any time be entitled shall be paid
directly to the Trustee in trust, and all of the Payments collected or received by the Trustee shall
be held by the Trustee in trust hereunder in the Payment Fund for the benefit of the Owners.
Section 5.2.
Establishment and Application of Payment Fund.
(a)
The Trustee shall establish a special trust fund designated as the
“City of Chandler, Arizona Series 2023 Payment Fund” (herein referred to as the “Payment Fund”).
So long as any Obligations are Outstanding, the City shall have no beneficial right or interest in
the Payment Fund or the moneys deposited therein, except only as provided in this Trust
Agreement, and such moneys shall be used and applied by the Trustee as hereinafter set forth.
(b)
Not less than ten (10) Business Days prior to each Interest Payment
Date, the Trustee shall notify the City of the amount required to be paid, after taking into account
amounts which will be transferred to the Payment Fund in accordance herewith, on or before such
Interest Payment Date, so that a sufficient amount will then be on deposit for both principal and
interest represented by the Obligations then due. All amounts received by the Trustee as Payments
pursuant to the Purchase Agreement or as transfers pursuant hereto shall be deposited in the
Payment Fund.
(c)
All amounts in the Payment Fund shall be used and withdrawn by
the Trustee solely for the purpose of paying the principal and interest represented by the
Obligations as the same shall become due and payable, in accordance with the provisions of
Articles II and IV.
Section 5.3.
Transfers of Investment Earnings to Payment Fund. Except as
otherwise directed by the City, the Trustee shall, on or before the next Interest Payment Date
occurring on July 1, transfer any income or profit on the investment of moneys in the funds
hereunder to the Payment Fund.
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Section 5.4.
Surplus. Any surplus remaining in any of the funds created
hereunder, after redemption and payment or provision for redemption and payment of all
Obligations, including accrued interest and redemption premium, if any, and payment of any
applicable fees, expenses or indemnities to the Trustee, or provision for such redemption and
payment having been made to the satisfaction of the Trustee, shall be withdrawn by the Trustee
and remitted to the City.
Section 5.5.
Separate Funds and Accounts. Monies and investments properly
paid into and held in the funds and accounts established hereunder shall not be subject to the claims
of the owners of any Parity Obligations, except to the extent applicable for the Reserve Fund or
moneys drawn on a Reserve Fund Guaranty, and the Owners of the Obligations shall have no claim
or lien upon any monies or investments properly paid into and held in the funds and accounts
established under the proceedings for any Parity Obligations other than the Reserve Fund (unless
a separate reserve fund is established) or monies drawn on a Reserve Fund Guaranty (unless a
separate reserve fund guaranty is obtained).
ARTICLE VI
MONEYS IN FUNDS; INVESTMENT; CERTAIN TAX COVENANTS
Section 6.1.
Held in Trust. The moneys and investments held by the Trustee
under this Trust Agreement are irrevocably held in trust for the benefit of the Owners of the
Obligations and for the purposes herein specified, and such moneys, and any income or interest
earned thereon, shall be expended only as provided in this Trust Agreement and shall not be subject
to levy or attachment or lien by or for the benefit of any creditor of the City or any Owner of the
Obligations.
Section 6.2.
Investments Authorized. Upon written order of the City
Representative, moneys held by the Trustee hereunder shall be invested and reinvested by the
Trustee, to the maximum extent practicable in Permitted Investments. The City Representative
shall direct such investment in specific Permitted Investments. Such investments, if registrable,
shall be registered in the name of the Trustee and shall be held by the Trustee. The Trustee may
purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this
Section. Such investments and reinvestments shall be made giving full consideration to the time
at which funds are required to be available. The Trustee may act as purchaser or agent in the
making or disposing of any investment. Absent timely and specific written direction from the City
Representative, the Trustee shall hold any cash held by it hereunder uninvested. In no event shall
the Trustee be liable for the selection of investments. The Trustee may conclusively rely upon
such written direction from the City Representative as to both the suitability and legality of the
directed investments and such written investment direction shall constitute a certification that such
directed investment constitutes a Permitted Investment. 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 Code of Federal Regulations 12 and hereby notifies
the Trustee that no brokerage confirmations need be sent relating to the security transactions as
they occur. The Trustee also is specifically authorized to implement its automated cash
investments system to assure that cash on hand is invested and to charge reasonable cash
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management fees, which may be deducted from income earned on investments. The Trustee may
elect, but shall not be obligated, to credit the funds and accounts held by it with moneys
representing income or principal payments due on, or sales proceeds due in respect of, Permitted
Investments in such funds and accounts, or to credit to Permitted Investments intended to be
purchased with such moneys, in each case before actually receiving the requisite moneys from the
payment source, or to otherwise advance funds for account transactions. The City acknowledges
that the legal obligation to pay the purchase price of any Permitted Investments arises immediately
at the time of the purchase. Notwithstanding anything else in this Trust Agreement, (i) any such
crediting of funds or assets shall be provisional in nature, and the Trustee shall be authorized to
reverse any such transactions or advances of funds in the event that it does not receive good funds
with respect thereto, and (ii) nothing in this Trust Agreement shall constitute a waiver of any of
the Trustee’s rights as a securities intermediary under Uniform Commercial Code Section 9-206.
Section 6.3.
Accounting. The Trustee shall furnish to the City, not less than
semiannually, an accounting (which may be in the form of its customary statement) of all
investments made by the Trustee. The Trustee shall not be responsible or liable for any loss
suffered in connection with any investment of funds made by it in accordance with Section 6.2.
Section 6.4.
Allocation of Earnings. Any income, profit or loss on such
investments shall be deposited in or charged to the respective funds from which such investments
were made, and any interest on any deposit of funds shall be deposited in the fund from which
such deposit was made, except as otherwise provided herein. At the direction of the City
Representative, any such income, profit or interest shall be transferred and applied if necessary to
pay amounts due pursuant to Section 148 of the Code.
Section 6.5.
Valuation and Disposition of Investments. For the purpose of
determining the amount in any fund, all Permitted Investments credited to such fund shall be
valued at Market Value. The City acknowledges that values shall be determined in accordance
with the price provided by pricing services and sources relied upon by the Trustee and the Trustee
does not have any duty to independently value any asset or an obligation other than the price
provided by pricing services and sources relied upon by Trustee. The Trustee may sell or present
for redemption, any Permitted Investment so purchased by the Trustee whenever it shall be
necessary in order to provide moneys to meet any required payment, transfer, withdrawal or
disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall
not be liable or responsible for any loss resulting from such investment.
Section 6.6.
Limitation of Investment Yield. In the event the City is of the
opinion that it is necessary to restrict or limit the yield on the investment of any amounts paid to
or held by the Trustee hereunder in order to avoid the Obligations, or any of them, being considered
“arbitrage bonds” within the meaning of Section 148 of the Code, the City Representative may
issue to the Trustee a written certificate to such effect along with instructions directing the Trustee
to take such action with respect to investments hereunder as the City instructs so to restrict or limit
the yield on such investment in accordance with the specific instructions contained in such
certificate. The Trustee shall have no responsibility with respect to arbitrage or investment yield
in connection with the Obligations except to comply within a reasonable time with written
investment direction of the City in accordance with this Section and Section 6.2.
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Section 6.7.
Other Tax Covenants. In consideration of the acceptance and
execution of the Purchase Agreement by the Trustee and the purchase by the Owners, from time
to time, and in consideration of retaining the exclusion of the portion of each Payment denominated
as and comprising interest pursuant to the Purchase Agreement and received by the Owners for
federal income tax purposes, the City shall, from time to time, neither take nor fail to take any
action, which action or failure to act is within its power and authority and would result in such
portion of each such Payment becoming subject to inclusion in gross income for federal income
tax purposes under either laws existing on the date of execution of the Purchase Agreement or such
laws as they may be modified or amended or tax laws later adopted. The City shall comply with
such requirement(s) and will take any such action(s) as are necessary to prevent such portion of
each such Payment from becoming subject to inclusion in gross income for federal income tax
purposes. Such requirements may include but are not limited to making further specific covenants;
making truthful certifications and representations and giving necessary assurances; complying
with all representations, covenants and assurances contained in certificates or agreements to be
prepared by special counsel; to pay to the United States of America any required amounts
representing rebates of arbitrage profits relating to the Obligations; filing forms, statements and
supporting documents as may be required under the federal tax laws; limiting the term of and yield
on investments made with moneys held pursuant to this Trust Agreement and limiting the use of
the proceeds of the Obligations and property financed thereby.
ARTICLE VII
THE TRUSTEE
Section 7.1.
Appointment of Trustee. The City hereby authorizes and directs
the Trustee to, and the Trustee shall, execute and deliver the Purchase Agreement, as Seller, and
receive all moneys required to be deposited with the Trustee hereunder and shall allocate, use and
apply the same as provided in this Trust Agreement. The City shall maintain as the Trustee a bank
or trust company with a combined capital and surplus of at least Fifty Million Dollars
($50,000,000), and subject to supervision or examination by federal or State authority, so long as
any of the Obligations are Outstanding. If such bank or trust company publishes a report of
condition at least annually pursuant to law or to the requirements of any supervising or examining
authority above referred to then for the purpose of this Section the combined capital and surplus
of such bank or trust company shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
Section 7.2.
Liability of Trustee; Standard of Care. Except with respect to its
authority and power generally and authorization to execute this Trust Agreement, the recitals of
facts, covenants and agreements herein, in the Purchase Agreement and in the Obligations shall be
taken as statements, covenants and agreements of the City, and the Trustee assumes no
responsibility for the correctness of the same, or makes any representations as to the validity hereof
or sufficiency of this Trust Agreement, the Purchase Agreement or the Obligations or shall incur
any responsibility in respect hereof or thereof, other than in connection with the duties or
obligations herein or in the Obligations assigned to or imposed upon it. Prior to the occurrence of
an Event of Default, or after the timely cure of an Event of Default, the Trustee shall perform only
such duties as are specifically set forth in this Trust Agreement and no implied obligations or
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covenants should be read into this Trust Agreement against the Trustee. After the occurrence of
an Event of Default, the Trustee shall exercise such of the rights and powers vested in it, and use
the same degree of care and skill in such exercise, as a prudent person would exercise under the
circumstances in the conduct of its own affairs.
Section 7.3.
Merger or Consolidation. Any company into which the Trustee
may be merged or converted or with which it may be consolidated or any company resulting from
any merger, conversion or consolidation to which it shall be a party or any company to which the
Trustee may sell or transfer all or substantially all of its corporate trust business, provided that
such company shall be eligible under Section 7.1, shall be the successor to the Trustee without the
execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
Section 7.4.
Protection and Rights of the Trustee.
(a)
The Trustee shall be protected and shall incur no liability in acting
or proceeding in good faith upon any resolution, notice, telegram, request, consent, waiver,
certificates, statements, affidavit, voucher, bond, requisition or other paper or document which it
shall in good faith believe to be genuine and to have been passed or signed by the proper board or
person or to have been prepared and furnished pursuant to any of the provisions of this Trust
Agreement, and the Trustee shall be under no duty to make any investigation or inquiry as to any
statements contained or matters referred to in any such instrument, but may accept and rely upon
the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall
not be bound to recognize any person as an Owner of any Obligation or to take any action at his
request unless such Obligation shall be deposited with the Trustee and satisfactory evidence of the
ownership of such Obligation shall be furnished to the Trustee. The Trustee may consult with
counsel with regard to legal questions, and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or suffered by it hereunder in
good faith in accordance therewith.
(b)
Whenever in the administration of its duties under this Trust
Agreement, the Trustee shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) shall be deemed to be conclusively proved and
established by the certificate of the City Representative and such certificate shall be full warranty
to the Trustee for any action taken or suffered under the provisions of this Trust Agreement upon
the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such
matter or may require such additional evidence as to it may seem reasonable.
(c)
The Trustee may become the Owner of the Obligations with the
same rights it would have if it were not Trustee; may acquire and dispose of other bonds or
evidence of indebtedness of the City with the same rights it would have if it were not the Trustee
and may act as a depository for and permit any of its officers or directors to act as a member of, or
in any other capacity with respect to, any committee formed to protect the rights of Owners of
Obligations, whether or not such committee shall represent the Owners of the majority in principal
amount of the Obligations then Outstanding.
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(d)
The recitals, statements and representations by the City contained in
this Trust Agreement, the Purchase Agreement or the Obligations shall be taken and construed as
made by and on the part of the City and not by the Trustee, and the Trustee does not assume, and
shall not have, any responsibility or obligation for the correctness of any thereof.
(e)
The Trustee may execute any of the trusts or powers hereof and
perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall
be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the
Trustee shall not be answerable for the default or misconduct of any such attorney, agent, or
receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise
of any discretion or power under this Trust Agreement or for anything whatever in connection with
the funds and accounts established hereunder, except only for its own willful misconduct or
negligence.
(f)
No provision in this Trust Agreement shall require the Trustee to
risk or expend its own funds or otherwise incur any financial liability (including, without limitation,
any and all environmental 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 indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.
(g)
The Trustee shall not be accountable for the use or application by
the City or any other party of any funds which the Trustee has released in accordance with the
terms of this Trust Agreement.
(h)
The Trustee makes no representation or warranty, express or implied,
as to the title, value, design, compliance with specifications or legal requirements, quality,
durability, operation, condition, merchantability or fitness for any particular purpose or fitness for
the use contemplated by the City of the Project. In no event shall the Trustee be liable for incidental,
indirect, special or consequential damages in connection with or arising from the Purchase
Agreement or this Trust Agreement for the Project.
(i)
Notwithstanding any provision in this Trust Agreement or the
Purchase Agreement to the contrary, the Trustee shall not be required to take notice or be deemed
to have notice of any default or an Event of Default, except an Event of Default under
Section 9(a)(i)(A) of the Purchase Agreement, unless a Responsible Officer of the Trustee has
actual notice thereof or is specifically notified in writing of such default by the City or the Owners
of at least twenty-five percent (25%) in aggregate principal amount of all Obligations then
Outstanding.
(j)
The Trustee shall have the right to accept and act upon instructions
of directions pursuant to this Trust Agreement sent by unsecured email, facsimile transmission or
other similar unsecured electronic methods, provided, however, that, the Trustee shall have
received an incumbency certificate listing persons designated to give such instructions or
directions and containing specimen signatures of such designated persons, which such incumbency
certificate shall be amended and replaced whenever a person is to be added or deleted from the
listing. If the City elects to give the Trustee email or facsimile instructions (or instructions by a
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similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the
Trustee’s understanding of such instructions shall be deemed controlling. The Trustee cannot
determine the identity of the actual sender of such Instructions and the Trustee shall conclusively
presume that directions that purport to have been sent by an officer listed on the incumbency
certificate provided to the Trustee have been sent by such officer. The City shall be responsible
for ensuring that only authorized representatives transmit such Instructions to the Trustee and that
the City and all authorized representatives 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 reliance upon and compliance with such instructions
notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction.
The City agrees to assume all risks arising out of the use of such electronic methods to submit
instructions and directions to the Trustee, including without limitation the risk of the Trustee acting
on unauthorized instructions, and the risk of interception and misuse by third parties.
(k)
The Trustee shall not be liable to the parties hereto or deemed in
breach or default hereunder if and to the extent its performance hereunder is prevented by reason
of force majeure. The term “force majeure” means an occurrence that is beyond the control of the
Trustee and could not have been avoided by exercising due care. Force majeure shall include acts
of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar
occurrences.
(l)
The Trustee shall have no responsibility or liability with respect to
any information, statements or recitals in any offering memorandum or other disclosure material
prepared or distributed with respect to the execution and delivery of the Obligations.
(m)
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 Project.
(n)
Before taking any action under this Trust Agreement relating to an
Event of Default or in connection with its duties under this Trust Agreement other than making
payments of principal and interest on the Obligations as they become due, the Trustee may require
that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it
may be put and to protect it against all liability, including, but not limited to, any liability arising
directly or indirectly under any federal, state or local statute, rule, law or ordinance related to the
protection of the environment or hazardous substances and except liability which is adjudicated,
to have resulted from its negligence or willful misconduct in connection with any action so taken.
(o)
The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Owners of not less
than a majority in aggregate principal amount of the Obligations then Outstanding 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.
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(p)
In acting or omitting to act pursuant to the Purchase Agreement or
any other documents executed in connection herewith or therewith, 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 VII and Section 10.3.
Section 7.5.
Compensation of Trustee. The City shall from time to time,
pursuant to a fee schedule agreed to between the City and the Trustee (which fee schedule may be
amended in writing), pay to the Trustee reasonable compensation for its services, including but
not limited to advances to, and reasonable fees and expenses of, independent appraisers,
accountants, consultants, counsel, agents and attorneys-at-law or other experts employed by it in
the exercise and performance of its powers and duties hereunder. When the Trustee incurs
expenses or renders services after the occurrence of an Event of Default, such expenses and the
compensation for such services are intended to constitute expenses of administration under any
federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor
relief law.
Section 7.6.
Removal and Resignation of Trustee.
(a)
The City (but only if no Event of Default has occurred and is
continuing) or the Owners of a majority in aggregate principal amount of all Obligations
Outstanding, at any time upon thirty (30) days’ prior written notice, and for any reason, may
remove the Trustee and any successor thereto, but any such successor shall be a bank or trust
company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or examination by federal or State
authority. If such bank or trust company publishes a report of condition at least annually, pursuant
to law or the requirements of any supervising or examining authority above referred to, then, for
the purposes of this Section, the combined capital and surplus of such bank or trust company shall
be deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published.
(b)
The Trustee may at any time resign by giving written notice to the
City. Upon receiving such notice of resignation, the City shall promptly appoint a successor trustee
by an instrument in writing; provided, however, that in the event that the City does not appoint a
successor trustee within thirty (30) days following receipt of such notice of resignation or its giving
notice of removal, the retiring Trustee may petition the appropriate court having jurisdiction to
appoint a successor trustee. Any resignation or removal of the Trustee and appointment of a
successor trustee shall become effective upon acceptance of appointment by the successor trustee.
The Trustee and the City shall execute any documents reasonably required to effect the transfer of
rights and obligations of the Trustee to the successor trustee subject, however, to the terms and
conditions herein set forth, including, without limitation, the right of the predecessor Trustee to be
paid and reimbursed in full for its reasonable charges and expenses (including reasonable fees and
expenses of its counsel) and the indemnification under Sections 7.4 and 10.3. Upon such
acceptance, the successor trustee shall mail notice thereof to the Owners of the Obligations at their
respective addresses set forth on the registration books for the Obligations maintained pursuant to
Section 2.13.
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Section 7.7.
Appointment of Agent. The Trustee may appoint an agent or
agents to exercise any of the powers, rights or remedies granted to the Trustee under this Trust
Agreement and to hold title to property or to take any other action which may be desirable or
necessary.
Section 7.8.
Commingling. The Trustee may commingle any of the funds held
by it pursuant to this Trust Agreement in a separate fund or funds for investment purposes only;
provided, however, that all funds or accounts held by the Trustee hereunder shall be accounted for
separately notwithstanding such commingling by the Trustee.
Section 7.9.
Records. The Trustee shall keep complete and accurate records of
all moneys received and disbursed under this Trust Agreement, which shall be available for
inspection by the City, or any of its agents, at any time, upon reasonable prior notice, during regular
business hours. The Trustee shall provide the City Representative with semiannual reports of
funds transactions and balances in accordance with Section 6.3 hereof.
ARTICLE VIII
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 8.1.
Amendments Permitted.
(a)
This Trust Agreement and the rights and obligations of the Owners
of the Obligations and the Purchase Agreement and the rights and obligations of the parties thereto,
may be modified or amended at any time by a supplemental or amending agreement which shall
become effective when the written consent of the Owners of a majority in aggregate principal
amount of all Obligations then Outstanding, exclusive of Obligations disqualified as provided in
Section 8.3, shall have been filed with the Trustee. No such modification or amendment shall (1)
extend or have the effect of extending the fixed maturity of any Obligation or reducing the interest
rate with respect thereto or extending the time of payment of interest, or reducing the amount of
principal thereof or reducing any premium payable upon the redemption thereof, without the
express consent of the Owner of such Obligation, or (2) reduce or have the effect of reducing the
percentage of Obligations required for the affirmative vote or written consent to an amendment or
modification of this Trust Agreement or the Purchase Agreement, or (3) modify any of the rights
or obligations of the Trustee without its written assent thereto. Any such supplemental or
amending agreement shall become effective as provided in Section 8.2.
(b)
This Trust Agreement and the rights and obligations of the Owners
of the Obligations, and the Purchase Agreement and the rights and obligations of the parties thereto,
may be modified or amended at any time by a supplemental or amending agreement, without the
consent of any such Owners, but only (1) to provide for additions or modifications to the Project,
(2) to add to the covenants and agreements of any party, other covenants to be observed, or to
surrender any right or power herein reserved to the Trustee (for its own behalf) or the City, (3) to
secure additional revenues or provide additional security or reserves for payment of the
Obligations, (4) 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, (5) to provide for the appointment of a successor trustee pursuant to the terms
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hereof, (6) 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 issue
bonds or incur other obligations the interest on which is likewise exempt from federal and State
income taxes, (7) to cure, correct or supplement any ambiguous or defective provision contained
herein or therein, (8) to facilitate the incurrence of Additional Parity Obligations, (9) with respect
to rating matters, or (10) in regard to questions arising hereunder or thereunder, as the parties
hereto or thereto may deem necessary or desirable and which shall not materially adversely affect
the interests of the Owners of the Obligations as evidenced by a Special Counsel’s Opinion
delivered by the City to the Trustee. Any such supplemental or amending agreement shall become
effective upon execution and delivery by the parties hereto or thereto as the case may be. The
Trustee may rely upon a Special Counsel’s Opinion as conclusive evidence that any such
supplemental or amending agreement complies with this Section.
Section 8.2.
Procedure for Amendment With Written Consent of Obligation
Owners.
(a)
This Trust Agreement and the Purchase Agreement may be
amended by supplemental or amending agreement as provided in this Section in the event the
consent of the Owners of the Obligations is required pursuant to Section 8.1. A copy of such
supplemental or amending agreement, together with a request to the Owners of the Obligations for
their consent thereto, shall be mailed by the Trustee to each Owner of an Obligation at the address
thereof as set forth on the registration books for the Obligations maintained pursuant to Section
2.13, but failure to mail copies of such supplemental or amending agreement and request shall not
affect the validity of the supplemental or amending agreement when assented to as provided in this
Section.
(b)
Such supplemental or amending agreement shall not become
effective unless there shall be filed with the Trustee the written consent of the Owners of a majority
in principal amount of all Obligations then Outstanding (exclusive of Obligations disqualified as
provided in Section 8.3) and a notice shall have been mailed as hereinafter in this Section provided.
The consent of an Owner of an Obligation shall be effective only if accompanied by proof of
ownership of the Obligations for which such consent is given, which proof shall be such as is
permitted by Section 2.12. Any such consent shall be binding upon the Owner of the Obligation
giving such consent and on any subsequent Owner (whether or not such subsequent Owner has
notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a
subsequent Owner by filing such revocation with the Trustee prior to the date when the notice
hereinafter in this Section provided for has been mailed.
(c)
After the Owners of the required percentage of Obligations shall
have filed their consents to such supplemental or amending agreement, the Trustee shall mail a
notice to the Owners of the Obligations in the manner hereinbefore provided in this Section for the
mailing of such supplemental or amending agreement of the notice of adoption thereof, stating in
substance that such supplemental or amending agreement has been consented to by the Owners of
the required percentage of Obligations and will be effective as provided in this Section (but failure
to mail copies of said notice shall not affect the validity of such supplemental agreement or
consents thereto). A record, consisting of the papers required by this Section to be filed with the
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Trustee, shall be conclusive proof of the matters therein stated. Such supplemental or amending
agreement shall become effective upon the mailing of such last-mentioned notice, and such
supplemental or amending agreement shall be deemed conclusively binding upon the parties hereto
and the Owners of all Obligations at the expiration of sixty (60) days after such filing, except in
the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal
action or equitable proceeding for such purpose commenced within such sixty (60) day period.
Section 8.3.
Disqualified Obligations. Obligations owned or held by or for the
account of the City or by any person directly or indirectly controlled by, or under direct or indirect
common control with the City (except any Obligations held in any pension or retirement fund)
shall not be deemed Outstanding for the purpose of any vote, consent, waiver or other action or
any calculation of Outstanding Obligations provided for in this Trust Agreement and shall not be
entitled to vote upon, consent to, or take any other action provided for in this Trust Agreement;
provided, however, that in determining whether the Trustee shall be protected in relying upon any
such approval or consent of an Owner, only Obligations which a Responsible Officer of the Trustee
actually knows to be owned or held by the City, or by any person directly or indirectly controlled
by, or under direct or indirect common control with the City (except any Obligations held in any
pension or retirement fund) shall be deemed not to be Outstanding unless all Obligations are so
owned, in which case such Obligations shall be considered Outstanding for the purpose of such
determination.
Section 8.4.
Effect of Supplemental Trust Agreement. From and after the time
any supplemental or amending agreement becomes effective pursuant to this Article VIII, this
Trust Agreement or the Purchase Agreement, as the case may be, shall be deemed to be modified
and amended in accordance therewith, the respective rights, duties and obligations of the parties
hereto or thereto and all Owners of Obligations Outstanding, as the case may be, shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such modification and
amendment, and all the terms and conditions of any supplemental or amending agreement shall be
deemed to be part of the terms and conditions of this Trust Agreement or the Purchase Agreement,
as the case may be, for any and all purposes.
Section 8.5.
Endorsement or Replacement of Obligations Delivered After
Amendments. The Trustee may determine that Obligations delivered after the effective date of
any action taken as provided in this Article shall bear a notation, by endorsement or otherwise, in
form approved by the Trustee, as to such action. In that case, upon demand of the Owner of any
Obligation Outstanding at such effective date and presentation of his Obligation for the purpose at
the office of the Trustee, a suitable notation shall be made on such Obligation. The Trustee may
determine that the delivery of substitute Obligations, so modified as in the opinion of the Trustee
is necessary to conform to such Obligation Owners’ action, which substitute Obligations shall
thereupon be prepared, executed and delivered. In that case, upon demand of the Owner of any
Obligation then Outstanding, such substitute Obligation shall be exchanged at the Designated
Office of the Trustee, without cost to such Owner, for an Obligation of the same character then
Outstanding, upon surrender of such Outstanding Obligation.
Section 8.6.
Amendatory Endorsement of Obligations. The provisions of this
Article shall not prevent any Obligation Owner from accepting any amendment or supplement as
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to the particular Obligations held thereby, provided that proper notation thereof is made on such
Obligations.
ARTICLE IX
COVENANTS, NOTICES
Section 9.1.
Compliance With and Enforcement of Purchase Agreement.
The City shall perform all obligations and duties imposed on it under the Purchase Agreement and
shall not do or permit anything to be done, or omit or refrain from doing anything, in any case
where any such act done or permitted to be done, or any such omission of or refraining from action,
would or might be an Event of Default. The City, immediately upon receiving or giving any notice,
communication or other document in any way relating to or affecting any such action will deliver
the same, or a copy thereof, to the Trustee.
Section 9.2.
Observance of Laws and Regulations. The City shall well and
truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter
imposed on it by contract, or prescribed by any law of the United States of America, or of the State,
or by any officer, board or commission having jurisdiction or control, as a condition of the
continued enjoyment of any and every right, privilege or franchise now owned or hereafter
acquired by the City, including its right to exist and carry on business as a political subdivision, to
the end that such rights, privileges and franchises shall be maintained and preserved, and shall not
become abandoned, forfeited or in any manner impaired.
Section 9.3.
Recordation and Filing. The City shall file this Trust Agreement
(or a memorandum thereof or a financing statement with respect thereto), and all such documents
as may be required by law (and shall take all further actions which may be necessary or be
reasonably required by the Trustee, provided the Trustee shall have no duty or obligation to request
such actions), all in such manner, at such times and in such places as may be required by law in
order fully to preserve, protect and perfect the security of the Trustee and the Owners. The Trustee
has no duty or obligation to determine the sufficiency of any such filings.
Section 9.4.
Further Assurances. The Trustee (at the reasonable request of the
City) and the City shall make, execute and deliver any and all such further resolutions, instruments
and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate
the performance of this Trust Agreement and the Purchase Agreement and for the better assuring
and confirming unto the Owners the rights and benefits provided herein.
Section 9.5.
Notification to the City of Failure to Make Payments. The
Trustee shall notify the City of any failure by the City to make any Payment or other payment
required under the Purchase Agreement to be made to the Trustee, in writing and within one (1)
Business Day of any such failure. Such notice shall not be a prerequisite for the occurrence of an
Event of Default.
Section 9.6.
Business Days. Except as otherwise required herein, if this Trust
Agreement or the Purchase Agreement requires any party to act on a specific day and such day is
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not a Business Day, such party need not perform such act until the next succeeding Business Day,
and such act shall be deemed to have been performed on the day required.
ARTICLE X
LIMITATION OF LIABILITY
Section 10.1. Limited Liability of the City. Except for the payment of Payments
from revenues from Excise Taxes when due in accordance with the Purchase Agreement 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 Owners with respect to this Trust Agreement or the terms, execution, delivery or
transfer of the Obligations or the distribution of Payments to the Owners by the Trustee.
Section 10.2. No Liability of the City for Trustee Performance. The City shall
have no obligation or liability to any of the other parties or to the Owners with respect to the
performance by the Trustee of any duty imposed upon it under this Trust Agreement.
Section 10.3. Indemnification of the Trustee.
(a)
To the extent permitted by law, the City shall indemnify and save
the Trustee, in its capacity as Trustee and Seller, and its officers, directors, agents and employees,
harmless for, from and against all claims, losses, costs, expenses, liability and damages, including
legal fees and expenses, arising out of: (1) the use, maintenance, condition or management of, or
from any work or thing done on, the Project or any portion thereof or interest therein by the City;
(2) any breach or default on the part of the City in the performance of any of its obligations under
this Trust Agreement and any other agreement made and entered into for purposes of the Project
or any interest therein; (3) any act of negligence of the City or of any of its agents, contractors,
servants, employees or licensees with respect to the Project; (4) any act of negligence of any
assignee of, or purchaser from, the City or of any of its or their agents, contractors, servants,
employees or licensees with respect to the Project; (5) the acquisition of the Project or any interest
therein; (6) the actions of any other party, including but not limited to the operation or use of the
Project or interest therein by the City; (7) the ownership of the Project or interest therein; (8) the
exercise and performance by the Trustee of its powers and duties hereunder, under the Purchase
Agreement or the Obligations or in connection with any document or transaction contemplated
herewith or therewith; or (9) any untrue statement or alleged untrue statement of any material fact
or omission or alleged omission to state a material fact necessary to make the statements made, in
light of the circumstances under which they were made, not misleading in any official statement
or other offering circular utilized in connection with the sale of the Obligations, including the costs
and expenses of defending itself against any claim of liability arising under this Trust Agreement.
No indemnification will be made under this Section or elsewhere in this Trust Agreement for
willful misconduct or negligence by the Trustee, or by its officers, agents, employees, successors
or assigns. As security for the payment of amounts due under Section 7.5 and this Section, the
Trustee shall be secured under this Trust Agreement by a lien prior to that for the Obligations. The
obligations of the City hereunder for indemnification under this Section shall remain valid and
binding notwithstanding, and shall survive, the maturity and payment or redemption of the
Obligations or resignation or removal of the Trustee or the termination of this Trust Agreement.
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(b)
Promptly after determining that any event or condition which
requires or may require indemnification by the City hereunder exists or may exist, or after receipt
of notice of the commencement of any action in respect of which indemnity may be sought
hereunder, the Trustee shall notify the City in writing of such circumstances or action (the
“Notification”). Failure to give such notification shall not affect the right of the Trustee to receive
the indemnification provided for herewith. Upon giving of the Notification, the Trustee shall
cooperate fully with the City in order that the City may defend, compromise or settle any such
matters or actions which may result in payment by the City hereunder. The City shall give the
Trustee notice of its election within fifteen (15) days after receiving the Notification whether the
City, at its sole cost and expense, shall represent and defend the Trustee in any claim or action
which may result in a request for indemnification hereunder. If the City timely gives the notice
that it will represent and defend the Trustee thereafter, the Trustee shall not settle or compromise
or otherwise interfere with the defense or undertakings of the City hereunder. The City shall not
settle or compromise any claim or action against the Trustee without the written approval of the
Trustee, except to the extent that the City shall pay all losses and the Trustee shall be fully released
from such claim or action. If the City either fails to timely give its notice or notifies the Trustee
that the City will not represent and defend the Trustee or the Trustee believes in good faith that
there are defenses available to it that are not available to the City or that are adverse to or in conflict
with those available to the City and that the Trustee believes in good faith cannot be effectively
asserted by common counsel, the Trustee may defend, settle, compromise or admit liability as it
shall determine in the reasonable exercise of its discretion, at the expense of the City. In the event
the City is required to and does indemnify the Trustee as herein provided, the rights of the City
shall be subrogated to the rights of the Trustee to recover such losses or damages from any other
person or entity.
Section 10.4. Opinion of Counsel. Before being required to take any action, the
Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which opinion
shall be made available to the other parties hereto upon request, which counsel may be counsel to
any of the parties hereto, or a verified certificate of any party hereto, or both, concerning the
proposed action. If it does so in good faith, the Trustee shall be absolutely protected in relying
thereon.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES OF OBLIGATION OWNERS
Section 11.1. Seller’s Rights Held in Trust. As provided herein, the Trustee
holds in trust hereunder all of the Seller’s rights in and to the Purchase Agreement, including
without limitation all of the Seller’s rights to exercise such rights and remedies conferred on the
Seller pursuant to the Purchase Agreement as may be necessary or convenient to enforce payment
of the Payments and any other amounts required to be deposited in the Payment Fund and
enforcement of the pledge of revenues from Excise Taxes for the payment of the Obligations.
Section 11.2. Remedies Upon Default; No Acceleration. If an Event of Default
shall happen, then and in each and every such case during the continuance of such Event of Default,
the Trustee may, or upon request of the Owners of a majority in aggregate principal amount of the
Obligations then Outstanding and receiving indemnity satisfactory to it shall, exercise one or more
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of the remedies granted pursuant to the Purchase Agreement; provided, however, that
notwithstanding anything herein or in the Purchase Agreement to the contrary, there shall be no
right under any circumstances to accelerate the maturities of the Obligations or otherwise to declare
any of the Payments not then past due or in default to be immediately due and payable.
Section 11.3. Application of Funds. All moneys received by the Trustee
pursuant to any right given or action taken pursuant to the provisions of this Article XI or Section
9 of the Purchase Agreement and any moneys held as part of the trust estate shall be applied by
the Trustee in the order following:
First, to the payment of the fees, costs and expenses of the Trustee and then
of the Obligation Owners in declaring such Event of Default, including reasonable
compensation to its or their agents, attorneys and counsel and any outstanding fees and
expenses of the Trustee,
Second, to the payment of the whole amount then owing and unpaid with
respect to the Obligations and, in case such moneys shall be insufficient to pay in full the
whole amount so owing and unpaid with respect to the Obligations, then to the payment of
such principal and interest without preference or priority of principal over interest, or of
interest over principal, or of any installment of interest over any other installment of interest,
ratably to the aggregate of such principal and interest. [[For discussion – existing document
prioritize interest payments over principal payments]]
Section 11.4. Institution of Legal Proceedings. If one or more Events of Default
shall happen and be continuing, the Trustee in its discretion may, and upon the written request of
the Owners of a majority in aggregate principal amount of all Obligations then Outstanding, and
upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or
the rights of the Owners of the Obligations by a suit in equity or action at law for the specific
performance of any covenant or agreement contained herein.
Section 11.5. Non-waiver. Except as otherwise provided in this Article, the
Obligation Owners have the right to institute suit to enforce and collect the Payments as provided
in the Purchase Agreement. No delay or omission of the Trustee or of any Owner of any of the
Obligations to exercise any right or power arising upon the happening of any Event of Default
shall impair any such right or power or shall be construed to be a waiver of any such Event of
Default or an acquiescence therein, and every power and remedy given by this Article to the
Trustee or the Owners of the Obligations may be exercised from time to time and as often as shall
be deemed expedient by the Trustee or the Obligation Owners.
Section 11.6. Power of Trustee to Control Proceedings. In the event that the
Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial
proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon
the request of the Owners of a majority in aggregate principal amount of the Obligations then
Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the
Owners of the Obligations, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that the Trustee shall
not discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at
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law or in equity, without the consent of the Owners of a majority in aggregate principal amount of
the Obligations Outstanding.
Section 11.7. Limitation on Obligation Owners’ Right to Sue.
(a)
No Owner of any Obligation issued hereunder shall have the right
to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this
Trust Agreement, unless (1) such Owner shall have previously given to the Trustee written notice
of the occurrence of an Event of Default hereunder; (2) the Owners of at least a majority in
aggregate principal amount of all Obligations then Outstanding shall have made written request
upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name; (3) said Owners shall have tendered to the Trustee indemnity
satisfactory to it against the costs, expenses, and liabilities to be incurred in compliance with such
request; and (4) the Trustee shall have refused or omitted to comply with such request for a period
of sixty (60) days after such written request shall have been received by, and said tender of
indemnity shall have been made to, the Trustee.
(b)
Such notification, request, tender of indemnity and refusal or
omission are hereby declared, in every case, to be conditions precedent to the exercise by any
Owner of Obligations of any remedy hereunder; it being understood and intended that no one or
more Owners of Obligations shall have any right in any manner whatever by his or their action to
enforce any right under this Trust Agreement, except in the manner herein provided, and that all
proceedings at law or in equity with respect to an Event of Default shall be instituted, had and
maintained in the manner herein provided and for the equal and proportionate benefit of all Owners
of the Outstanding Obligations.
(c)
The right of any Owner of any Obligation to receive payment of said
Owner’s proportionate interest in the Payments as the same become due, or to institute suit for the
enforcement of such payment, shall not be impaired or affected without the consent of such Owner,
notwithstanding the foregoing provisions of this Section or any other provision of this Trust
Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Defeasance.
(a)
If and when any Outstanding Obligation or portion thereof shall be
paid and discharged in any one or more of the following ways:
(1)
By paying or causing to be paid the principal of and interest
and redemption premium, if any, with respect to such Obligations Outstanding, as and when the
same become due and payable;
(2)
By depositing with a Depository Trustee, in trust for such
purpose, at or before maturity, money which, together with the amounts then on deposit in the
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Payment Fund is fully sufficient to pay or cause to be paid such Obligations Outstanding, including
all principal, interest and redemption premium, if any; or
(3)
By depositing with a Depository Trustee, in trust for such
purpose, any Defeasance Obligations which are noncallable in such amount as shall be certified to
the Trustee and the City in a report by an independent firm of nationally recognized certified public
accountants acceptable to the Trustee and the City, as being fully sufficient, together with the
interest to accrue thereon and moneys then on deposit in the Payment Fund together with the
interest to accrue thereon, to pay and discharge or cause to be paid and discharged such Obligations
(including all principal, interest and redemption premium, if any) at their respective maturity or
prior redemption dates, which deposit may be made in accordance with the provisions of Section 7
of the Purchase Agreement;
notwithstanding that any Obligations shall not have been surrendered for payment, all obligations
of the Trustee and the City with respect to such Outstanding Obligations shall cease and terminate,
except only the obligation of the Trustee to pay or cause to be paid, from funds deposited pursuant
to subsections (2) or (3) of this Section and paid to the Trustee by the Depository Trustee, to the
Owners of the Obligations not so surrendered and paid all sums due with respect thereto, and in
the event of deposits pursuant to subsections (2) or (3), the Obligations shall continue to represent
direct and proportionate interests of the Owners thereof in such funds.
(b)
Any funds held by the Trustee, at the time of one of the events
described in paragraph (a) of this Section, which are not required for the payment to be made to
Owners or for the payment of any other amounts due and payable by the City hereunder or under
the Purchase Agreement, shall be paid over to the City.
(c)
Any Obligation or portion thereof in Authorized Denominations
may be paid and discharged as provided in this Section; provided however, that if any such
Obligation or portion thereof is to be redeemed, notice of such redemption shall have been given
in accordance with the provisions hereof or the City shall have submitted to the Trustee instructions
expressed to be irrevocable as to the date upon which such Obligation or portion thereof is to be
redeemed and as to the giving of notice of such redemption; and provided further, that if any such
Obligation or portion thereof will not mature within sixty (60) days of the deposit referred to in
paragraph (a) subsections (2) or (3) of this Section, the Trustee shall give notice of such deposit
by first class mail to the Owners.
(d)
No Obligation may be provided for as described in this Section 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 Obligation is thereby made includable in gross
income for federal income tax purposes. The Trustee, the Depository Trustee, and the City may
rely upon an opinion of Independent Counsel which is nationally recognized bond counsel to the
effect that the provisions of this subsection will not be breached by so providing for the payment
of any Obligations.
Section 12.2. Notices. All written notices to be given under this Trust Agreement
shall be given by overnight delivery or courier or by mail or personal delivery to the party entitled
thereto at its address set forth below, or at such address as the party may provide to the other party
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in writing from time to time. Notice shall be effective upon deposit in the United States of America
mail, postage prepaid or, in the case of personal delivery, upon delivery to the address set forth
below:
If to the City:
City of Chandler, Arizona
175 S. Arizona Avenue
Chandler, Arizona 85225
Attention: Dawn Lang, Deputy City Manager/
Chief Financial Officer
If to the Trustee:
U.S. Bank Trust Company, National
Association
2222 E. Camelback Road, Suite 110
Phoenix, Arizona 85016
Attention: Global Corporate Trust
All notices, approvals, consents, requests and any communications to the Trustee
hereunder must be in writing in English and must be in the form of a document that is signed
manually or by way of an electronic signature (including electronic images of handwritten
signatures and digital signatures provided by DocuSign, Orbit, Adobe Sign or any other electronic
signature provider acceptable to the Trustee). Electronic signatures believed by the Trustee to
comply with the ESIGN ACT of 2000 or other applicable law shall be deemed original signatures
for all purposes. If the City chooses to use electronic signatures to sign documents delivered to
the Trustee, the City agrees to assume all risks arising out of its use of electronic signatures,
including without limitation the risk of the Trustee acting on an unauthorized document and the
risk of interception or misuse by third parties. Notwithstanding the foregoing, the Trustee may in
any instance and in its sole discretion require that an original document bearing a manual signature
be delivered to the Trustee in lieu of, or in addition to, any document signed via electronic signature.
Section 12.3. Incorporation of State Statutes.
(a)
As required by the provisions of Section 38-511, Arizona Revised
Statutes, as amended, notice is hereby given that the City may, within three years after its execution,
cancel any contract, 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 of any other party to the contract in any capacity or a consultant to any other party of
the contract with respect to the subject matter of the contract. The cancellation shall be effective
when written notice is received by all other parties to the contract unless the notice specifies a later
time. The Trustee covenants not to employ as an employee, an agent or, with respect to the subject
matter of this Trust Agreement, a consultant, any person significantly involved in initiating,
negotiating, securing, drafting or creating this Trust Agreement on behalf of the City within three
years from the execution of this Trust Agreement, unless a waiver of Section 38-511, Arizona
Revised Statutes, as amended, is provided by the City. No basis exists for the City to cancel this
Trust Agreement pursuant to Section 38-511, Arizona Revised Statutes, as amended, as of the date
hereof.
41
(b)
To the extent applicable under Section 41-4401, Arizona Revised
Statutes, as amended, 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, as amended. 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. 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 during normal business
hours by the Trustee. 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.
(c)
To the extent applicable under Section 35-393 et seq., Arizona
Revised Statutes, as amended, 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, as amended. If the City
determines that the Trustee’s certification above is false or that it has breached such agreement,
the City may remove the Trustee hereunder 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 VII. 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 VII.
Section 12.4. Governing Law. This Trust Agreement shall be construed and
governed in accordance with the laws of the State.
Section 12.5. Binding Effect and Successors. This Trust Agreement shall be
binding upon and inure to the benefit of the parties and their respective successors and assigns.
Whenever in this Trust Agreement either the City or the Trustee is named or referred to, such
reference shall be deemed to include successors or assigns thereof, and all the covenants and
agreements in this Trust Agreement contained by or on behalf of the City or the Trustee shall bind
and inure to the benefit of the respective successors and assigns thereof whether so expressed or
not.
42
Section 12.6. Execution in Counterparts. This Trust Agreement may be
executed in several counterparts, each of which shall be an original and all of which shall constitute
but one and the same Trust Agreement.
Section 12.7. Destruction of Cancelled Obligations. Whenever in this Trust
Agreement provision is made for the surrender to or cancellation by the Trustee and the delivery
to the City of any Obligations, the Trustee may destroy such Obligations and, upon the City’s
request, deliver a certificate of such destruction to the City instead.
Section 12.8. Headings. The headings or titles of the several Articles and
Sections hereof, and any table of contents appended to copies hereof, shall be solely for
convenience of reference and shall not affect the meaning, construction or effect of this Trust
Agreement. All references herein to “Articles”, “Sections”, and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Trust Agreement; and the words “herein”,
“hereof”, “hereunder” and other words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or subdivision hereof.
Section 12.9. Parties Interested Herein. Nothing in this Trust Agreement or the
Obligations, expressed or implied, is intended or shall be construed to confer upon, or to give or
grant to, any person or entity, other than the City, the Trustee and the Owners, any legal or
equitable right, remedy or claim under or by reason of this Trust Agreement or any covenant,
condition or stipulation hereof, and all covenants, stipulations, provisions and agreements in this
Trust Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit
of the City, the Trustee and the Owners of the Obligations.
Section 12.10. Waiver of Notice. Whenever in this Trust Agreement the giving
of notice by mail or otherwise is required, the giving of such notice may be waived in writing by
the person entitled to receive such notice and in any case the giving or receipt of such notice shall
not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 12.11. Severability of Invalid Provisions. In case any one or more of
the provisions contained in this Trust Agreement or in the Obligations shall for any reason be held
to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or
unenforceability shall not affect any other provision of this Trust Agreement, and this Trust
Agreement shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein. The parties hereto hereby declare that they would have entered into this
Trust Agreement and each and every other section, paragraph, sentence, clause or phrase hereof
and authorized the delivery of the Obligations pursuant thereto irrespective of the fact that any one
or more sections, paragraphs, sentences, clauses or phrases of this Trust Agreement may be held
illegal, invalid or unenforceable.
[Signature page follows.]
[Signature page to Series 2023 Trust Agreement]
IN WITNESS WHEREOF, the parties have executed this Trust Agreement as of
the day and year first above written.
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By ...............................................................................
Authorized Representative
CITY OF CHANDLER, ARIZONA
By ...............................................................................
Mayor
ATTEST:
........................................................................
City Clerk
A-1
EXHIBIT A
(Form of Obligation)
Number: R-.....
Principal Amount: $.....................
Unless this Obligation is presented by an authorized representative of The Depository Trust
Company of New York, a New York corporation (“DTC”), to the Trustee (or any successor
registrar) for registration of transfer, exchange, or payment, and any Obligation issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), any transfer, pledge, or other use hereof for value or otherwise
by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.*
EXCISE TAX REVENUE OBLIGATION, SERIES 2023
Evidencing a Proportionate Interest of the Owner
Hereof in Payments to be Made by
THE CITY OF CHANDLER, ARIZONA
to
___________________________________,
as Trustee
Interest Rate:
Maturity Date:
Dated Date:
CUSIP:
..........%
July 1, 20....
______ __, 2023
158855 .......
REGISTERED OWNER:
CEDE & CO.*
PRINCIPAL AMOUNT:
.......................................................................................... DOLLARS
THIS IS TO CERTIFY THAT the registered owner identified above, or registered
assigns, as the registered owner of this Excise Tax Revenue Obligation, Series 2023 (this
“Obligation”) is the owner of an undivided, participatory, proportionate interest in the right to
receive certain “Payments” under and defined in that certain Series 2023 Purchase Agreement,
dated as of ______ 1, 2023 (the “Purchase Agreement”), by and between U.S. Bank Trust
Company, National Association (the “Trustee”), and the City of Chandler, Arizona, a municipal
corporation under the laws of the State of Arizona (the “City”), which Payments and other rights
and interests under the Purchase Agreement are held by the Trustee in trust under that certain
Series 2023 Trust Agreement, dated as of ______ 1, 2023 (the “Trust Agreement”), by and between
* Included only while DTC is the Securities Depository.
A-2
the City and the Trustee. The Trustee maintains a corporate trust office for payment and transfer
of this Obligation (the “Designated Office”).
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 payments due designated as principal coming due and to
receive semiannually on January 1 and July 1 of each year commencing _____ 1, 20__ (the
“Interest Payment Dates”), until payment in full of said portion of principal or redemption prior
thereto, the registered owner’s proportionate share of the Payments designated as interest coming
due during the period commencing on the last date on which interest was paid and ending on the
day prior to the Interest Payment Date or, if no interest has been paid, from the Dated Date
specified above. Said interest is the result of the multiplication of said principal by the interest
rate per annum set forth above. Interest shall be calculated on the basis of a 360-day year composed
of twelve (12) months of thirty (30) days each.
Said amounts representing the registered owner’s share of the Payments designated
as interest are payable in lawful money of the United States of America by check mailed when due
by first class mail by the Trustee to the registered owner in whose name this Obligation is
registered at the close of business on the fifteenth (15th) day of the calendar month next preceding
the Interest Payment Date at the address thereof as it appears on the registration books for the
Obligations maintained by the Trustee. Said amounts representing the registered owner’s share of
the Payments designated as principal are payable when due upon surrender of this Obligation at
the Designated Office. Principal, interest or redemption premium, if any, payable to any owner of
$1,000,000 or more in principal amount of the series of obligations of which this Obligation is a
part (the “Obligations”) may be paid by wire transfer in immediately available funds to an account
in the United States of America if the owner makes a written request of the Trustee at least twenty
(20) days before the date of payment specifying the account address without presentment or
surrender of this Obligation at the Designated Office except that the final payment of principal and
interest, when due, will be paid upon surrender of this Obligation at the Designated Office. The
notice may provide that it shall remain in effect for subsequent payments until otherwise requested
in a subsequent written notice.
The Trustee has no obligation or liability to the registered owners of the Obligations
for the payment of interest or principal pertaining to the Obligations. The Trustee’s sole
obligations are to administer, for the benefit of the registered owners of the Obligations, the various
funds and accounts established pursuant to the Trust Agreement. (The recitals, statements,
covenants and representations made in this Obligation shall be taken and construed as made by
and on the part of the City, and not by the Trustee, and the Trustee does not assume, and shall not
have, any responsibility or obligation for the correctness of any thereof.)
This Obligation has been executed and delivered by the Trustee pursuant to the
terms of, and for the purposes described in, the Trust Agreement. The City is authorized to enter
into the Purchase Agreement and the Trust Agreement under the laws of the State of Arizona and
by a resolution of the Mayor and Council of the City adopted on [October 19, 2023]. Reference
is hereby made to the Purchase Agreement and the Trust Agreement (copies of which are on file
at the Designated Office) for further definitions, the terms, covenants and provisions pursuant to
A-3
which the Obligations are delivered, the rights thereunder of the registered owners of the
Obligations, the terms under which the Trust Agreement or the Purchase Agreement may be
modified or supplemented, the rights, duties and immunities of the Trustee and the security for,
and the rights and obligations of the City under the Purchase Agreement (including with respect
to certain obligations secured and to be secured on a parity with the security for the Payments and
to certain limitations on such security), to all of the provisions of which Purchase Agreement and
Trust Agreement the registered owner of this Obligation, by acceptance hereof, assents and agrees.
(To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions of
the Trust Agreement and the Purchase Agreement may be amended by the parties thereto with the
written consent of the owners of a majority in aggregate principal amount of all Obligations then
outstanding, and may be amended without such consent under certain circumstances but in no
event such that the interests of the owners of the Obligations are adversely affected, provided that
no such amendment shall impair the right of any owner to receive in any case such owner’s
proportionate share of any Payment thereof in accordance with such owner’s Obligation.)
The obligation of the City to make the Payments does not represent or constitute a
general obligation of the City for which the City is obligated to levy or pledge any form of taxation
nor does the obligation to make the Payments under the Purchase Agreement constitute an
indebtedness of the City, the State of Arizona or any of its political subdivisions within the
meaning of any constitutional or statutory debt limitation or restriction or otherwise.
Neither the Trustee nor the registered owners of the Obligations shall have any right
under any circumstances to accelerate the maturities of the Obligations or otherwise declare any
of the Payments not then past due or in default to be immediately due and payable. (This
Obligation represents an interest in a limited obligation of the City (as described herein), and no
member of the Mayor and Council, officer or agent, as such, past, present or future, of the City
shall be personally liable for the payment hereof.)
The Obligations are executed and delivered only in fully registered form in
denominations of $5,000 of principal due on a specific maturity date or integral multiples thereof.
The Obligations shall not be transferable or exchangeable, except as provided in the Trust
Agreement.
This Obligation may be exchanged for an Obligation or Obligations of like
aggregate principal amount in authorized denominations having the same maturity date and
interest rate.
This Obligation is transferable by the registered owner hereof, in person or by his
attorney duly authorized in writing, at the Designated Office, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Trust Agreement and upon
surrender and cancellation of this Obligation. Upon such transfer a new Obligation or Obligations,
of authorized denomination or denominations, for the same aggregate principal amount will be
delivered to the transferee in exchange therefor. The City and the Trustee may treat the registered
owner hereof as the absolute owner hereof for all purposes, whether or not this Obligation shall be
overdue, and the City and the Trustee shall not be affected by any notice to the contrary.
A-4
The Trustee may require a registered owner, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes or governmental charges
required by law in connection with the exchange or transfer.
The Trustee may, but shall not be obligated to, exchange or register the transfer of
this Obligation (i) if this Obligation has been selected for redemption, in whole or in part, or
(ii) during a period of fifteen (15) days preceding the giving of a notice of redemption. If this
Obligation is transferred after having been selected for redemption, any notice of redemption
which has been given to the transferor shall be binding on the transferee, and a copy of the notice
of redemption shall be delivered by the Trustee to the transferee along with the duly registered
Obligation or Obligations.
The registered owner of this Obligation shall have no right to enforce the provisions
of the Trust Agreement or the Purchase Agreement or to institute any action to enforce the
covenants thereof, or to take any action with respect to a default thereunder or hereunder, or to
institute, appear in or defend any suit or other proceedings with respect thereto, except as provided
in the Trust Agreement.
The Obligations maturing before or on July 1, 20__, are not subject to optional
redemption prior to maturity. The Obligations maturing on or after July 1, 20__, are subject to
redemption in such order and from such maturities as may be selected by the City, in whole or in
part on any date on or after July 1, 20__, at a redemption price equal to the principal amount of
each Obligation to be redeemed, together with accrued interest to the date fixed for redemption
but without premium.
The Obligations maturing on July 1 of the following years shall be redeemed on
July 1 of the years indicated and in the principal amounts indicated at a price equal to the principal
amount thereof plus interest accrued to the date of redemption, but without premium:
Year Redeemed
Principal Amount Redeemed
Term Obligation Maturing July 1, 20__
(maturity)
Whenever Obligations are purchased, redeemed (other than by mandatory
redemption) or are delivered by the City to the Trustee for cancellation, the principal amount of
the Obligations so retired shall satisfy and be credited against the mandatory redemption
requirements therefor in any order specified by the City.
If less than all of the outstanding Obligations of any maturity are to be redeemed,
the Obligations (or portions hereof) to be redeemed will be selected by the Trustee by lot or in any
customary manner as determined by the Trustee. Redemption shall be in authorized
denominations or any integral multiples thereof.
A-5
The Trustee shall give notice of any redemption of this Obligation as provided
above no more than 60 nor less than 30 calendar days prior to the redemption date to the registered
owner at its address shown on the registration books maintained by the Trustee. A certificate of
the Trustee shall conclusively establish the mailing of any such notice for all purposes.
If at the time of mailing of the notice of redemption there has not been deposited
with the Trustee moneys or eligible securities sufficient to redeem all Obligations subject to
redemption and other requirements set forth in the Trust Agreement are not met, such notice shall
state that it is conditional, subject to the deposit of moneys sufficient for the redemption and
satisfaction of such conditions. If Obligations or portions thereof are subject to redemption and if
on the redemption date moneys for the redemption thereof are held by the Trustee and those other
conditions are met, thereafter those Obligations or portions thereof to be redeemed shall cease to
bear interest, and shall cease to be secured by, and shall not be deemed to be outstanding under,
the Trust Agreement. The failure to receive any notice of redemption, or any defect in such notice
in respect of any Obligation, shall not affect the validity of redemption of any Obligation.
It is hereby certified, recited and declared that all conditions, acts and things
required by the Constitution and laws of the State of Arizona to happen, to be done, to exist and to
be performed precedent to and in the execution and delivery of this Obligation have happened,
have been done, do exist and have been performed in regular and due form and time as required
by law.
This Obligation shall not be entitled to any security or benefit under the Trust
Agreement until executed by the Trustee.
IN WITNESS WHEREOF, this Obligation has been executed and delivered by the
Trustee, acting pursuant to the Trust Agreement.
Date of Execution: ......................................
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By................................................................................
Authorized Representative
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ...................................... (the “Transferor”),
hereby sells, assigns and transfers unto ...................................... (the “Transferee”), whose address
is ............................................................................ and whose social security number (or other
federal tax identification number) is
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE
............................................................................
............................................................................
the within certificate and all rights thereunder, and hereby irrevocably constitutes and
appoints ...................................... as attorney to register the transfer of the within certificate on the
books kept for registration and registration of transfer thereof, with full power of substitution in
the premises.
Date: .....................................................
............................................................................
NOTICE: No transfer will be registered and no
new certificate will be issued in the name of the
Transferee, unless that signature(s) to this
assignment correspond(s) with the name as it
appears on the face of the within certificate in
every
particular,
without
alteration
or
enlargement or any change whatever and name,
address and the Social Security Number or
federal employee identification number of the
Transferee is supplied
The following abbreviations when used in the inscription on the face of the within certificate,
shall be construed as though they were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
TEN ENT -
as tenants by the entireties
JT TEN -
as joint tenants with right of
survivorship and not as tenants in common
UNIF GIFT/TRANS MIN ACT - ................................. Custodian for .................................
(Cust.)
(Minor)
under Uniform Gifts/Transfers to Minors Act of .................................
(State)
Additional abbreviations may also be used though not in list above.
B-1
EXHIBIT B
Payment Request Form
Application No. ..........
The Trustee is hereby requested to pay from the “Acquisition Fund” established by
the Series 2023 Trust Agreement, dated as of _____ 1, 2023 (the “Trust Agreement”), between the
City of Chandler, Arizona (the “City”), and U.S. Bank Trust Company, National Association, as
trustee (the “Trustee”) to the person or corporation designated below as “Payee,” the sum set forth
below such designation, in payment of the costs of acquisition of the Project (as such term and
other undefined terms used herein are defined in the Trust Agreement) described below. The
amount shown below is due and payable under a purchase order or contract with respect to such
costs described below and has not formed the basis of any prior request for payment.
Payee: ..................................................................................
Address or Wiring Instructions: .........................................................................
Amount: .........................................................................
Description of costs or portion thereof authorized to be paid to the
Payee: ......................................................................
The City acknowledges that it has received and inspected items related to such costs
and has found each item thereof so described to be in good condition, in conformity with the City’s
specifications and satisfactory for the City’s purposes and in accordance with the applicable
purchase order or contract. Notwithstanding anything herein to the contrary, the City shall not be
deemed to have waived or released the Payee from any liability or obligation to the City in the
event the City’s acknowledgment herein is discovered to be inaccurate in any respect as to any
item described above.
By execution of this Payment Request Form, the City requests and approves the
payment of the amount stated above to Payee set forth above.
DATED: ........................, 20....
....................................................................................
City Representative
Please forward payment to Payee at the following address:
C-1
EXHIBIT C
Reimbursement Request Form
Application No. ..........
The Trustee is hereby requested to pay from the “Acquisition Fund” established by
the Series 2023 Trust Agreement, dated as of _______ 1, 2023 (the “Trust Agreement”), between
the City of Chandler, Arizona (the “City”), and U.S. Bank Trust Company, National Association,
as trustee (the “Trustee”), to the City, the sum set forth below as reimbursement of (all/a portion)
of the costs of acquisition of the Project (as such term and all other undefined terms used herein
are defined in the Trust Agreement) described below. Payment of the amount, shown below was
made
by
the
City
on
....................,
20....,
as
evidenced
by ............................................................................, attached hereto, as full/partial payment
of ............................................................................, also attached hereto. The amount shown
below was paid by the City and has not formed the basis of any prior request for payment.
The City acknowledges that it has received and has inspected items related to such
costs and has found each item thereof so described to be in good condition, in conformity with the
City’s specifications and satisfactory for the City’s purposes. Notwithstanding anything herein to
the contrary, the City shall not be deemed to have waived or released any entity named on the
attached documentation, from any liability or obligation to the City in the event the City’s
acknowledgment herein is discovered to be inaccurate in any respect as to any item described
below.
Amount: ........................................
Description of costs or portion thereof for which reimbursement is hereby requested:
DATED: .................................., 20....
....................................................................................
City Representative
Dated Received: ....................................., 20....