Loading...
HomeMy WebLinkAboutBANK OF NEW YORK MELLON TRUST COMPANY, N.A. THE (8).A- 2014 -133 -G Quint & Thimmig LLP 04/30/14 05/28/14 05/31/14 RNAL 06/06/14 ESCROW DEPOSIT AND TRUST AGREEMENT by and between the CITY OF SANTA ANA and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Agent Dated June 18, 2014 Current refunding the City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) 7.9014.10 ESCROW DEPOSIT AND TRUST AGREEMENT This Escrow Deposit and Trust Agreement (this "Escrow Deposit and Trust Agreement "), dated June 18, 2014, is by and between the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing pursuant to the laws of the State of California (the "City "), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as escrow agent (the "Escrow Agent "). WITNESSETH: WHEREAS, the City has heretofore caused the execution and delivery of its $12,450,000 Certificates of Participation (1998 City Hall Expansion Project) (the "1998 Certificates ") evidencing and representing the fractional undivided interests of the owners thereof in lease payments (the "1998 Lease Payments ") to be made by the City as the rental for certain property pursuant to a lease agreement, dated as of January 1, 1998 (the "1998 Lease Agreement'), with the Santa Ana Financing Authority (the "Authority ") to finance the expansion of Santa Ana City Hall, currently outstanding in the principal amount of $8,015,000; WHEREAS, the 1998 Certificates were executed and delivered pursuant to the terms of a trust agreement, dated as January 1, 1998 (the "1998 Trust Agreement'), by and among the City, the Authority and Harris Trust Company of California, since succeeded by The Bank of New York Mellon Trust Company, N.A., as trustee thereunder (the "1998 Trustee "); WHEREAS, in order to provide for the repayment of the 1998 Certificates, the Authority leased certain property to the City pursuant to the 1998 Lease Agreement under which the City agreed to make the 1998 Lease Payments in sufficient amounts in each year to pay the full amount of principal and interest with respect to the 1998 Certificates; WHEREAS, the City has determined that, as a result of favorable financial market conditions and for other reasons, it is in the best interests of the City at th s time to refinance the City's obligation to make the 1998 Lease Payments under the 1998 Lease Agreement, and to refinance certain other obligations, and, as a result thereof, to provide for the redemption of the 1998 Certificates and, to that end, the City proposes to lease certain real property and improvements (the "Property ") to the Authority and to lease -back the Property from the Authority pursuant to that certain Lease Agreement, dated as of June 1, 2014 (the "Lease Agreement"); WHEREAS, the City proposes to make the deposit of moneys and to appoint the Escrow Bank for the purpose of applying said deposit to provide for the prepayment of the 1998 Lease Payments in accordance with the instructions provided by this Escrow Deposit and Trust Agreement and of applying said 1998 Lease Payments to the redemption of the 1998 Certificates in accordance with the 1998 Trust Agreement and the Escrow Bank desires to accept said appointment; WHEREAS, to obtain moneys to make such deposit and for other purposes, the Authority proposes to assign and transfer certain of its rights under the Lease Agreement to U.S. Bank National Association, as agent (the "Agent'), on behalf of TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank, an Arizona corporation., Compass Mortgage Corporation, an Alabama corporation and Capital One Public Funding, LLC (collectively, the "Assignees "), pursuant to that certain assignment agreement, dated as of June 1, 2014, by and between the Corporation and the Agent, whereby the Assignees will make a payment of $45,060,000 to or to the order of the City; WHEREAS, the City wishes to make such a deposit with the Escrow Bank and to enter into this Escrow Deposit and Trust Agreement for the purpose of providing the.terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Deposit and Trust Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein set forth, the parties hereto do hereby agree as follows: Section 1. Discharge of 1998 Certificates. The City hereby irrevocably elects to pay and discharge all indebtedness payable by the City under the 1998 Trust Agreement and the 1998 Lease Agreement. Section 2. Appointment of Escrow Bank. The City hereby appoints the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement and in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement, and the Escrow Bank hereby accepts such appointment. Section 3. Establishment of Escrow Fund. There is hereby created by the City with, and to be held by, the Escrow Bank, as security for the payment of the 1998 Lease Payments as hereinafter set forth, an irrevocable escrow to be maintained in trust by the Escrow Bank on behalf of the City and for the benefit of the owners of the 1998 Certificates, said escrow to be designated the "Escrow Fund." All moneys deposited in the Escrow Fund slulll be held as a special fund for the redemption of the 1998 Certificates in accordance with the provisions of the 1998 Trust Agreement. The City hereby irrevocably instructs the Escrow Bank, and the Escrow Bank hereby agrees, to use the moneys on deposit in the Escrow Fund to pay the principal and interest with respect to the 1998 Certificates in accordance with the instructions set forth in Section 6 hereof. If at any time the Escrow Bank shall receive actual knowledge that the moneys in the Escrow Fund will not be sufficient to make any payment required by Section 6 hereof, the Escrow Bank shall immediately notify the City of such fact and the City shall immediately cure such deficiency. The Escrow Bank shall have no liability for such deficiency. Section 4. Deposit into Escrow Fund. (a) The City shall cause to be transferred to the Escrow Bank for deposit into the Escrow Fund the amount of $8,209,630.92 in immediately available funds, derived as follows: (i) $8,021,278.42 from amounts paid by the Assignees; (ii) $188,352.50 from the lease payment fund held by the 1998 Trustee with respect to the 1998 Certificates (the °1998 Lease Payment Fund "). (b) The Escrow Agent shall hold all amounts deposited in the Escrow Fund in cash, uninvested. The moneys held by the Escrow Agent in the Escrow Fund shall be used solely for the purposes set forth herein. -2- (c) The Escrow Agent may rely upon the conclusion of Grant Thornton ELF, as contained in its opinion and accompanying schedules (the "Report ") dated June 18, 2014, that the cash on deposit in the Escrow Fund, will be sufficient to redeem the outstanding 1998 Certificates in full on July 7, 2014, at 100% of the principal amount thereof, together with accrued interest to such date, without premium. (d) The Escrow Agent shall not be liable or responsible for any loss resulting from its full compliance with the provisions of this Escrow Deposit and Trust Agreement. (e) Any money left on deposit in the Escrow Fund after payment in full of the 1998 Certificates, and the payment of all amounts due to the Escrow Agent hereunder, shall be paid to the City. Section 5. Application of 1998 Funds. On the date of deposit of amounts paid by the Assignees in the Escrow Fund pursuant to Section 4, the Escrow Bank, as 1998 Trustee, is hereby directed to transfer all moneys in the 1998 Lease Payment Fund ($188,352.50) to the Escrow Bank for deposit in the Escrow Fund. Section 6. Instnutions as to Application of Deposit. The moneys deposited in the Escrow Fund pursuant to Section 4 shall be applied by the Escrow Agent for the purpose of paying interest with respect to the 1998 Certificates on July 1, 2014, and of redeeming the outstanding 1998 Certificates in full on July 7, 2014, at 100% of the principal amount thereof, together with accrued interest to such date, without premium, as set forth in Exhibit A attached hereto and by this reference incorporated herein. The City has previously requested that the Escrow Bank, in its capacity as 1998 Trustee, and the Escrow Bank, as 1998 Trustee, has agreed, to give timely notice of the redemption of the 1998 Certificates to occur on July 7, 2014. Section 7. Compensation to Escrow Bank. The City shall pay the Escrow Bank full compensation for its duties under this Escrow Deposit and Trust Agreement, including out -of- pocket costs such as publication costs, prepayment or redemption expenses, legal fees and other costs and expenses relating hereto. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be available for said purposes. Section 8. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Escrow Deposit and Trust Agreement unless the City shall have deposited sufficient funds with the Escrow Bank. The Escrow Bank may rely and shall be protected in acting upon the written instructions of the City or its agents relating to any matter or action as Escrow Bank under this Escrow Deposit and Trust Agreement. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of the uninvested moneys held hereunder to accomplish the purposes set forth herein, or any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement or by reason of any non - negligent act, non - negligent omission or non - negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the "whereas" clauses herein shall be taken as the statement of the City, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representations as to the sufficiency of the uninvested moneys to accomplish the purposes set forth herein or to the validity of this Escrow -3- Deposit and Trust Agreement as to the City and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Deposit and Trust Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Deposit and Trust Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Deposit and Trust Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel) may be deemed to be conclusively established by a written certification of the City. The Escrow Bank may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Anything in this Escrow Deposit and Trust Agreement to the contrary notwithstanding, in no event shall the Escrow Bank be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Bank has been advised of the likelihood of such loss or damage and regardless of the form of action. The Escrow Bank agrees to accept and act upon instructions or directions pursuant to this Escrow Deposit and Trust Agreement sent by unsecured e -mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Bank 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 Escrow Bank e -mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Bank in its discretion elects to act upon such instructions, the Escrow Bank's understanding of such instructions shall be deemed controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank'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 Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the risk of interception and misuse by th rd parties. The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated), to the extent permitted by law, to indemnify, protect, save and hold harmless the Escrow Bank and its respective successors, assigns, agents, servants, employees, directors and officers from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Bank (whether or not also indemnified against by any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the retention of the moneys therein and any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement, or as may arise -4- by reason of any act, omission or error of the Escrow Bank made in good faith in the conduct of its duties; provided, however, that the City shall not be required to indemnify the Escrow Bank against its own negligence or misconduct. The indemnities contained in this Section 8 shall survive the termination of this Escrow Deposit and Trust Agreement or the resignation or removal of the Escrow Bank. The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Escrow Bank will furnish the City monthly cash transaction statements which include detail for all investment transactions made by the Escrow Bank hereunder. No provision of this Escrow Deposit and Trust Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Escrow Bank may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed. The City may remove the Escrow Bank initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company doing business in the State of California, 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 to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 8 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. The Escrow Bank may at any time resign by giving 30 days written notice of resignation to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor and, upon the acceptance by the successor of such appointment, release the resigning Escrow Bank from its obligations hereunder by written instrument, a copy of which instrument shall be delivered to each of the City, the resigning Escrow Bank and the successor. If no successor shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Escrow Bank may petition any court of competent jurisdiction for the appointment of a successor Section 9. Amendment. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement which shall become effective when the written consents of the owners of one hundred percent (100 %) in aggregate principal amount of the 1998 Certificates shall have been filed with the Escrow Bank. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement, without the consent of any such owners, but only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein, or (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in the opinion of counsel, shall not materially adversely affect the interests of the owners of the 1998 Certificates or the Assignees, and that such amendment will not cause interest on the 1998 Certificates or with respect to the Lease Agreement to become subject to federal income taxation. In connection -5- with any contemplated amendment or revocation of this Escrow Deposit and Trust Agreement, prior written notice thereof and draft copies of the applicable legal documents shall be provided by the City to each rating agency then rating the 1998 Certificates. Section 10, Severability. If any section, paragraph, sentence, clause or provision of this Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceabillty of such section, paragraph, sentence clause or provision shall not affect any of the remaining provisions of this Escrow Deposit and Trust Agreement. Notice of any such invalidity or unenforceability shall be provided to each rating agency then rating the 1998 Certificates. Section 11. Notice of Escrow Bank and City. Any notice to or demand upon the Escrow Bank may be served and presented, and such demand may be made, at the principal corporate trust office of the Escrow Bank as specified by the 1998 Trustee in accordance with the provisions of the 1998 Trust Agreement. Any notice to or demand upon the City shall be deemed to have been sufficiently given or served for all purposes by being mailed by first class mail, and deposited, postage prepaid, in a post office letter box, addressed to such party as provided in the 1998 Trust Agreement(or such other address as may have been filed in writing by the City with the Escrow Bank). Section 12. Merger or Consolidation of Escrow Bank. Any company into which the Escrow Bank 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 Escrow Bank may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible to act as trustee under the 1998 Trust Agreement, shall be the successor hereunder to the Escrow Bank without the execution or filing of any paper or any further act. Section 13. Execution in Several Counterparts. This Escrow Deposit and Trust Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same instrument. Section 14. Business Days. Whenever any act is required by this Escrow Deposit and Trust Agreement to be done on a specified day or date, and such day or date shall be a day other than a business day for the Escrow Bank, then such act may be done on the next succeeding business day. Section 15. Governing Law. This Escrow Deposit and Trust Agreement shall be construed and governed in accordance with the laws of the State of Califom a. -6- Date 7/1/14 7/7/14 EXHIBIT A PAYMENT AND REDEMPTION SCHEDULE Maturing Called Redemption Principal Principal Interest Premium $188,352.50 $8,015,000 6,278.42 Exhibit A Total Payment $ 188,352.50 8,021,278.42 IN WITNESS WHEREOF the parties hereto have caused this Escrow Agreement to be executed in their respective names by their respective duly authorized officers, all as of the day and year first above written. Attest: Maria D. Huiz Clerk of the Council -7- CITY OF SANTA ANA By /x�l David Cavazos City Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank M Deborah D. Young Vice President