SR-6-I (100)~~ • ~ -
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CA:RMM:mox227/hpw
City Council Meeting 1D-29--91
~ STAFF REPORT
TO: Mayar and City Council
FROM: City Attorney
~
0 CT 2 9 199~
Santa Monica, California
SLTBJECT: Resolution Authorizing Issuance af Wastewater
Revenue Bonds For The Hyperion Project and
Approving Forms of Noti.ces, Indenture, Preliminary
~fficial Statement and Other Matters Related Thereta
INTRODIICTION
This staff report requests that the City Council adapt the
attached resolution pertaining to the issuance of up to $35
~
million of Wastewater Enterpr~se Revenue Bonds 1991 Series A for
the purpose of financing a portion flf the City's contribution to
the costs of the upgrade of the Hyperion Wastewater Treatment
Plant ("Hyperion Plant"} as more specifical~y defined in the
Preliminary Official Statement, attached hereto and incorparated
herein by reference.
BACKGROUND
The City i.s required by its agreement with City of Los
Arigeles pertaining to sewage treatment at Hyperion Plant,
("Hyperion Agr~ement") tfl pay a proportionate share of the
capital costs of alteration, impravement, relocation, replacement
or reconstruction of the Hyperion Plant and the connecting sewers
in Los Angeles between the C~ty and the Hyperion Plant. A
portion of the graceeds of the 1991 Series A Bonds wiil be
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~C~ ~, 9 ]991
applied by the City to the costs of the upgrade of a portian af
the Hyperion Plant.
The City Council gave concegtual approval to a long range
fur~ding strategy for the Wastewater Fund in June 1989. Based on
extensive consultations with outside financial and legal
consultants over the past two years, staff presented a specific
financing plan to the City Council in a study session on
September 24, 1991. On 4ctaber 1, 1991, the City Council
approved a revised Wastewater Fund rate structure, and on October
8, 1991, adopted the necessary implementing resolution.
DIBCUSSION
The attached resolution authorizes the City ta Proceed with
aI1 steps necessary for issuance of the Wastewater Enterprise
Revenue Bonds (Hyperion Project), 1991 Series A(The Honds).
Such band issuance would be in the aggregate principa3 amount of
not to exceed $35 mi~lion, on the terms and conditions and
subject ta the ~imitations set forth in the Indenture relating to
such Bcnds.
Also attached to this staff report are copies of the
following documents necessary for the issuance of the Bonds:
1. Indenture with Bank of America Natianal Trust and
Savings Association, as Trustee;
2. Notice Invitinq Bids to be used in connection with
salicitation of bids for the Bonds;
3. Natice af Intention to SeZ2 reZating to the pubZic sale
of the Bonds;
- 2 -
4. The Preliminary Official Statement to be used in
connection with the af~ering and saZe of the Bonds.
The attached resolutian approves all of the above documents
substantially in the form presented to this meeting, and
authorizes execution and delivery of these documents by specified
City officials and employees.
The preparatian, executifln and de~ivery of a final Official
Statement, the execution and delivery of any additional documents
and the perforlnance af such acts as may be necessary or desirable
to effect the offering, sale and issuance of the bonds is aiso
authorized and approved by the attached resalution.
BUDGET ANn FINANCIAL IMPACT
The Bonds wi~l be special obligations af the City, payable
solely from the rates, fees and charges received by the City from
the aperatian of the City's wastewater collection, treatment and
disposal system (The "Enterprise"), including any proceeds of
insurance and investmerst earnings.
The General Fund af the City is r-ot liable, and the credit
or taxing pawer of the City is not pledged for the payment of the
Bonds.
The princigal and interest on the Bonds shall nat be a debt
of the City, nor a legal or eq~itable pledge, charge, lien or
encumbrance upon any progerty of the City or upon any of its
incom~, receipts, ar revenues, except the revenues described
above from the Wastewater Enterprise and such ather amounts held
by the Trustee and pledged to the payment of such obligations as
provided in the xndenture.
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RECOI+IIYiENDATI ON
It is respectfully recammended that the City Council adopt
the attached resalution authorizing the affering, sale and
issuance af the Wastewater ~nterprise Revenue Bonds (Hyperion
ProjectJ 1991 Series A, and all documents and actians necessary
for such proceedings, including approval of dacuments
substantialZy in the form attached hereto.
PREPARED BY: Robert M, Myers, City Attorney
Linda A. Moxon, Deputy City AttQrney
Attachments: 1. Resolutian Authorizing Issuance of $35 Million
Wastewater Enterprise Revenue Sonds,
(Hyperion ProjeCt) 199~ Series A)
2. Indenture
3. Notice Invitinq Bids
4. Notice af Intention ta Se~1
5. Preliminary Official Statement
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RESOLUTION NO.
RESOLUTI~N OF THE CITY COUNCIL DF THE CITY OF
SANTA MONICA AIITHORIZING THE ISSIIANCE OF N~T
TD EXCEED $35,GOO,Q00 AGGREGATE PRTNCIPAL
AMDUNT OF CITY OF SANTA MONICA WASTEWATER
ENTERPRISE REVEN[1E BaN~S (HYPERION PROJECT},
3991 SERIES A, APPRDVING THE FORMS dF A NOT~CE
INVITING BID$ AND A NOTICE OF INTENTION TO
SELL, THE EXECUTI~N AND DELIVERY OF AN
INDENTURE AND THE PREPARATION OF AN OFFICIAL
STATEMENT AND OTHER MATTERS RELATED THERETO.
WHEREAS, the City of Santa Monica (the "Ca,ty") is a
municipal corporation and charter city, duly arganized and existing
under a freeholders~ chart~r pursuant to which the City has the
right and power to make and enforce all laws and reguZations in
respect to mun~cipal affairs and certain other matters in
accordance w~.th and as more particularly provided in sections 3, 5
and 7 of ar~icle XI of the Constitutian of the State of Califarnia
and sectian 400 of the Charter af the City;
AHEREAS, the City Council af the City, acting under and
F?ll~SU~Tlt ~O the powers reserved to the City e~nder article XI of the
Constitution of the State af California and section 400 af the
Charter of the C~ty has enacted the Santa Monica Revenue Bond Act
(being Chapter 6.5 af Article TI af the Municipal Cade of the
City), relating to re~enue bands, which incorporates, to the extent
made applicable by said Act, the Re~enue Bond Law of 1941, being
Chapter 6 of Division 2 of Tit1e 5 of th~ California Government
Cade, as enacted and as thereafter amended (callectively, the
"Law"};
WHEREAS, the City now owns and operates facilities far
the coilection of sewage, waste and storm water, including
drainage, and has certain rights in facilities for the treatment
and disposal of sewage and wastewater, including the Hyperion
Treatment Plant, and the City has determined that it is neeessary
that funds be raised by the City for the purpose of f inancing a
portian of the City's share of upgrading the Hyperion Treatment
P~ant;
WHEREAS, the City is empowered pursuant to the Law to
f~nance the aforementioned upgrade through the issuance of its
revenue bonds, and the City proposes ta issue its Wastewater
Enterprise Revenue B~nds (Hyperion Project), 1991 Series A(the
"Bonds"), in an aggregate principal amount of not to exceed
$35,000,000, to ass~st in financing such upgrade;
WHEREAS, in order to prov~ae for the authentication and
delivery of the Bands, to establish and declare the terms and
conditions upon which the Bonds are to be issued and secured and to
secure the payment of the principal thereaf, premium, ~f any, and
interest thereon, the City proposes to enter ii'1tD an ~ndEnture with
Bank af America Natianal Trust and Savings Association, as Trustae
(such Indenture, in the farm p~esented to this meeting, with such
changes, znsertions and amiss~.ons as axe made pursuant to this
Resolution, being referred to herein as the "Indenture");
WHEREAS, there ha~e been prepared and st~bmitted ta this
meeting forms of :
(1) the Indenture;
(2) the Not~ce Inviting Bids to be used in
cannection with the solicitation of bids for the Bonds (such
Notice Inviting Bids in the forn~ presented to this meeting,
I.AI -10770 1 2 4ff233-2-GPH-I W LOl91
with such changes, insertions and omissions as are made
pursuant to this Resalution, being referred to h~r~in as the
"Notice Inviting Bids");
(3 ~ the Notice of Intention to Sell relating to the
pub~ic sale of the Bands (such Notice of Intention to Sell in
the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this
Resalution, being referred to herein as the "Notice of
Intention to Sell"); and
(4) tha Preliminary Official Statement ta be used
zn cannection w~th the offering and sale af the Bonds (such
Preliminary Official Statement in the form presented to this
meeting, with such changes, insertions and omissions as are
made pursuant to this Resolution, being referred to herein as
the "Preliminary official Statement"); and
WHEREAS, the City desires to praceed to issue and sell up
to $35,OOD,000 aggregate principal amount of the Bonds and to
authorize the executian of such dacuments and the perfarmance of
such acts as may be necessary or desirable t~ effect the ~ffering,
sale and issuance o€ the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the City Cauncil af the
City of Santa Manica as follows:
Section 1. Subject to the provisions af Sect~on 2
hereof, the issuance of the Bonds, in the aggregate principai
amount of not to exceed $35,000,000, on the terms and canditions
set forth in, and subject to the limitations specified in, the
Indenture, is hereby authorized and approved, The Bands shall be
LAl-1~T70 1 3 40233-2-GPH-30110191
dated, shall mature on the date, shall be issuEd in the farm, and
shall be as atherwise pro~ided in the Indenture, as the same shall
be completed as provlded in this Resolution. The Bonds shall bear
interest at the rate established by offerYng the Bonds at public
sale pursuant ta the Notice Inviting Bids.
Section 2. The Indenture, in substantially the form
submitted to this meeting and made a part hereof as thaugh set
farth in full herein, be and the same is hereby approved. The
Mayor af the City (the "MayQr") and the City Clerk are, and each of
them is, hereby authorizEd and directed, for and in the name of the
City, to execute and deliver the Indenture in the farm presented to
this meeting, with such changes, insertions and omissions as the
City Attorney and Or~ick, Herrington & Sutcliffe ("Bond Counsel")
may require or appro~e, such requirement or approval to be
conclusz~ely evidenced by the execution of the Indenture by the
Mayor; pro~ided, hawever, that such changes, insertions and
om~ssions shall be consistent with the terms af the Bonds
established by offering the Bonds at public sale pursuant to the
Notice Inviting Bids.
Section 3. The Notice Inviting Bids, in substantially
the form submitted ta this meeting and made a part hereof as though
set forth in fuli herein, be and the same is hereby approvEd. The
Director of Finance af the City is hereby authorized and directed,
for and in the name af the City, to furnish or cause ta be
furnish~d to prospective bidders far the Bonds the Notice Inviting
Bids in the form presented to this meeting, with such changes,
1~nf-lo~~o i 4 am_33-2-GPH-~or~a91
insertions and omissions as the City Attorney and Bond Counsel may
require or approve.
Section 4. The tex-ms and conditions of the offering and
sale of the Bonds shall be as specified in the Notice Invitinq
Bids. Sealed bids for the purchase of the Bonds shall be received
by the City at the time and place set forth in the Notice Inviting
Bids. The City Manager and Director of Fina~ce of the City, and
each of them, is hereby autharized and directed, for and in the
name af the City, to accept the ~owest bid for the Bands, ar to
reject all bids therefor, ~n accordance with the terms of the
Notice Inviting Bids.
Section 5. The Notice of Intention to 5e11, in the form
submitted ta this meeting and made a part hereof as though set
forth here~n, be and the same is hereby approved. The Director of
Finance of the City is hereby autharized and directed~ for and in
the name of the City, to cause the Notice of Intention to Sell, in
the form presented ta this meeting, to be published anee in The
Bond Buyer (or in such other financial publication generally
circulated throughout the State of California ar reasonably
expected to be disseminated amonq prospecti~e bidders for the Bonds
as the Director of Finance af the City shall apprave as being in
the best interests of the City) at ~east 15 days prior ta the date
set for the opening of bids in the Notice Inviting Bids, with such
changes, insertions and ~missions as the City Attorney and Bond
Cour~sel may require ar appr~ve, such requirement ar approval to be
conclusively evidenced by such publishing of th~ Notice of
Intention to Sell.
LA 1-10770 1 5 4D233-2-GPli- 3 0/1 Ql41
Section 6. The Preliminary Dfficial Statement, in
substantially the form presented to this meeting and made a part
hereof as though set forth in ful~ herein, with such changes
therein as may be appraved by th~ Director of Finance af th~ City,
be and the same is hereby approved, and the use af the Preliminary
~fficial Statement in connectian with the offer~ng and sale of the
Bonds is hereby authorized and appraved.
Sectian 7. The preparation and delivery of a final
Official Statement (the "Official Statement"), and its use in
connectian with the offering and sale of the Bonds, be and the same
is her~by autharized and approved. The Official Statement shall be
in substantial~y the form of the Prelim~nary Official Statement
with such changes, insertians and omissions as may be approved by
the Mayor, such approval ta be conclusively evidenced by the
execution and delivery thereof. The Mayor is hereby authorized and
directed to execute the final Official Statement and any amendment
or suppZement thereto, for and in the name of the City.
Seotion S. The Director of Finance af the City is hereby
autharized and d~.rected to furnish, or cause to be furnished, to
praspective bidders for the Bonds, a reasonabJ.e numbar of capies af
the Preliminary Official Statement, and the Director of Finance of
the City is also authorized and directed, after any proposal for
the purchase of the Bonds has been accepted on behalf of the City,
t~ furnish or cause to be furnished to the purchaser in connection
with the resale of the Bands, as many copies of the Official
StatemEnt as said purchaser shall need, pro~ided that no charge
LA 1-10770 1 6 40233-2-GYH-I Q! ] 0l91
shall be imposed for the first 500 capies of the Official
Statement.
section 9. The Mayor, the City Clerk, the City Manager,
the City Attorney and the Director of Finance of the City are, and
each of them hereby is, authoriaed and directed to execute and
deli~er any and al~ documents and instruments and to do and cause
to be done any and all acts and things necessary or proper for
carrying out the issuance of the Bands and the transactions
contemplated by the Indenture, the Notice ~nviting Bids, the Nvtice
of Intention to Sell, the Official Statement and this Resolutian.
section 10. All actions heretofore taken by the May~r,
the City Clerk, the City Managar, the City Attorney and the
Director of Finance af the City with respect to the issuance and
sale of the Sonds, or in connection with or related to any of the
agreements or documents referenced herein, are hereby appraved,
canfirmed and ratified.
Section 11. The City Counc~l shali certify to the
adopt~on of this Resoiution and thenceforth and thereafter the same
shalZ be in full force and effect.
APPROVED AS TO FORM
ROBERT M. MYERS
City Attarney
i.A1-1077a ] 7 40233-2-GPH-10110/91
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INDENTURE
by and between
BANK OF AMERICA NATIDNAL TRUST
AND SAVINGS ASSOCIATION, as Trustee
and the
CYTY OF SANTA MONICA
RELATING TO THE CITY OF SANTA MONICA
WASTEWATER ENTERPRISE REVENUE BONDS
INCLUDING $
(HYPERION PROJECT)
1991 SERIES A
Dated as of Noveinber 1, 1991
TABLE OF CONTENTS
Paqe
ARTICLE I
DEFINITIONS; EQUAL SECURITY; CERTIFICATES AND OPINIONS
SECTION ~. Q1. Definitians . . . . . . . . . . . . . . . . . 2
SECTION 1.a2. Equal Security . . . . . . . . . . . , . 2fl
SECTION 1.03. Content of Certificates and Opinions .... 20
ARTICLE II
THE B~NDS
SECT~ON 2.01. Authorization; Terms of 1991 Series A
Bands . . . . . . . . . . . . . . . . . . . 21
S~CTION 2.02. Farm of 199~ Series A Bonds ....... .. 24
SECTION 2.03. Execution of Bands . . . . . . . . . . . . . 24
SECTIOiV 2.04. Transfer of Bonds . . . . . . . . . . . . . . 24
SECTION 2.05. Exchange of Bands . . . . . . . . . . . . . . 25
SECTION 2.06. Bond Register . . . . . . . . . . . . . . . . 25
SECTION 2.07. Temporary Bonds . . . . . . . . . . . . . . . 25
SECTION 2.08. Bonds Mutilated, Last, Destroyed or
Stolen . . . . . . . . . . . . . . . . . . . 26
SECTION 2.09. Book-Entry 1991 Series A Bonds ..... .. 26
ARTICLE III
ISSUE OF 1991 SERIES A BONDS;
ADDITIONAL SERIES OF BONDS
SECTION 3.01. Issuance af 1991 Series A Bands ...... . 29
SECTION 3.02. App~ication of Proceeds of 1991
Series A Bonds . . . . . . . . . . . . . . . 29
SECTION 3.43. Improvement Fund . . . . . . . . . . . . . . 30
SECTION 3.04. Issuance af Additional Series of
Bonds -- General . . . . . . . . . . . . . . 32
SECTION 3.05. Issuance of Additional Series of Bonds
for Refunding . . . . . . . . . . . . . . . 33
SECTION 3.06. Proceedings for the Issuance of
Additianal Series of Bands . . . . . . . . . 34
SECTION 3.07. Additional Bonds . . . . . . . . . . . . . . 37
SECTION 3.08. Validlty of Bonds . . . . . . . . . . . . . . 37
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption . . . . . . . . . . . . . 37
SECTION 4.02. Selection of Bonds for Redemption .. .... 38
SECTIDN 4.03. Notice of Redemption . . . . . . . . . . . . 38
SECTI~N 4.04. Partial Redempt~on of Bond . . . . . . . . . 39
SECTION 4.05. Effect of Redemption . . . . . . . . . . . . 39
1.A1-110d7 1 1 4D233-2-GPH-10l17191
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ARTICLE V
REVENUES AND FUNDS
SECTION 5.01. Pledge ~f Revenues . . . . . . . . . . . . . 40
SECTI4N 5.02. Receipt and Deposit of Re~enues in the
Revenue Fund . . . . . . . . . . . . . . . 4 0
SECTION 5.03. Establishment and i~'iaintenance of Funds
for Revenues . . . . . . . . . . . . . . . . 40
SECTION 5.04. Redemption Fund . . . . . . . . . . . . . . 45
SECTION 5.05. Deposit and Tnvestment of Maneys in
Funds; Interest Rate Swaps . . . . . . . . . 45
ARTICLE VI
COVENANTS OF THE CITY
SECTION 6.01. Payment of Principal and Interest .... .. 47
SECTION 6.02. Against Encumbrances . . . _ . . . . . . . 47
SECTION 5.Q3. :~,ga~nst 5a~e or Dther Disposit~dn of
Property . . . . . . . . . . . . . . . . . . 47
SECTTON 6.04. Operation and Maintenance of Local
System . . . . . . . . . . . . . . . . . . . 4 8
SECTION &.05. Liens and C~aims . . . . . . . . . . . . . . 48
SECTTON 6.06. Insurance . . . . . . . . . . . . . . . . . . 48
SECTIDN 6.07. Books and Accounts; Financial
Statements . . . . . . . . . . . . . . . . . 49
SECTION 6.08. Enterprise Budgets . . . . . . . . . . . . . 5~
SECTION 5.09. Maintenance of Revenues . . . . . . . . . . . 50
SECTION 6.1a. Payment of Taxes, Etc. . . . . . . . . . . . 51
SECTION 6.11. Acquisition and Construction of
Praj ect . . . . . . . . . . . . . . . . . . 51
SECTION 6.12. Eminent Domain Praceeds . . . . . . . . . . . 51
SECTI~N b.13. Amounts of Rates and Charges . . . . . . . . ~2
SECTION 6.14. Compliance with Indenture . . . . . . . . . . 53
~ECTION 6.15. Observance of Laws and Regulatiar-s ... .. 53
SECTION 6.7.6. Prosecut~an and Defense of Suit~ .... _. 53
SECTION 6.i7. Rebate and Tax Covenants . . . . . . . . . . 54
SECTION 6.18. Governmental Approvals . . . . . . . . . . . 55
SECTION 6.19. Hyperian Agreement . . . . . . . . . . . . . 55
SECTION 6.20. Incontestability of Bonds . . . . . . . . . . 55
SECTION 6.2~. Further Assurance~ . . . . . . . . . . . . . 55
ARTICLE V~I
EVENTS OF DEFAULT AND REMEDIES OF BONDt}WNERS
5ECTION 7.D1. Events of Default; Acceleration;
Waiver of Default . . . . . . . . . . . . . 56
SECTION 7.02. Application of Funds Upon
Acceleratian . . . . . . . , . . . . . . . 57
SECTION 7.03. SuYts at Law or in Equity and
Mandamus . . . . . . . . . . . . . . . . . . 58
SECTION Z . 04 . Non-waiver . . . . . . . . . . . . . . . . . 59
LS1-11067 1 11 40233-2~'iPH-]0117191
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SECTION 7.05. Actions by Trustee as
Attorney-in-Fact . . . . . . . . . . . . . . 59
SECTION 7.06. Remedies Not Exclusive . . . . . . . . . . . 59
SECTION 7.07. Power of Trustee to Control
Proceedinqs . . . . . . . . . . . . . . . . 60
ARTICLE VIII
THE TRUSTEE
SECTION 8.a1. Appointment and Dutias of Trustee ... ... 50
SECTION 8.02. Authorization of Trustee . . . . . . . . . . 61
SECTION 8.03. Fees and Expenses . . . . . . . . . . . . . . 62
SECTION 8.04. Liability of Trustee . . . . . . . . . . . . 6Z
SECTION 8.05. Rights of Trustee to Rely Upon
Documents . . . . . . . . . . . . . . . . . 63
ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 9.01. Amendments Permitted . . . . . . . . . . . . 64
SECTION 9.02. Procedure for Amendment with Written
Consent of Sondowners . . . . . . . . . . . 55
SECTTON 9.03. Disqualified Bonds . . . . . . . . . . . . . 55
SECTION 9.04. Effect of Supplemental indenture .... .. ~7
SECT~ON 9.05. Endorsement or Rep~acement of Bonds
Issued $efore Amendments . . . . . . . . . . 67
SECTION 9.06. Amendatory Endorsement of Bonds ..... .. 67
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharge of Indenture . . . . . . . . . . _ 67
SECTIQN 10.02. Discharge of Liability an Bands ...... 69
SECTION 10.03. Payment af Bonds after Discharge af
Indenture . . . . . . . . . . . . . . . . . 69
ARTICLE XI
M~SCELLANEOUS
SECTION 11.D1. Lzability of City Limited to
Revenues . . . . . . . . . . . . . . . . . 59
SECTION ~1.02. Successar Is Deezned Included in Al1
References to Predecessor . . . . . . _ . . 70
SECTION 11.03. Limitation of Rights to Parties and
Bondowners . . . . . . . . . . . . . . . . . 7 p
SECTION 11.04. Waiver o€ Notice . . . . . . . . . . . . . . 70
S~CTION 11.05. Destruction of Bonds . . . . . . . . . . . . 70
SECTION 11.06. Se~erability of Inval~d Provisians ,.. .. 71
SECTION 11.07. Notice to City and Trustee ...,... .. 71
SECTION 11.08. E~idence of Rights of Bandowners .... .. 71
SECTION 11.09. Credit Provider Provisions . . . . . . . . . 72
I.A1-11067 1 11 ~ 40233-2-GPH-10117l91
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SECTION 11.10. Article and Section Headings and
References . . . . . . . . . . .
SECTION 11.11. Funds and Accounts . . . . . . .
SECTION 11.12. Waiver of Personal Liability ..
SECTION 11.13. Governing Law . . . . . . . . .
SECTIDN 11.14. Business Day . . . . . . . . . .
SECTION 11.15. Effective Date of Inder~ture ..
SECTION 11.16. Execution in Counterparts ...
EXECUTION . . . . . . . . . . . . . . . . . .
EXHIBIT A- Form of 1991 Series A Bond .....
I.Al-11i167 I
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. . . . . . 72
. . . . . . 72
. . . . . . 73
. . . . . . 73
. . . . . . 73
. . . . . . 73
. . . . . . 79
. . . . . . A-1
40233-2-GPH-l0~17141
INDENTURE
THIS INDENTURE made and entered into as af 1, 1991
(the "Indenture") by and between BANK OF AMERTCA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association duly organized
and existing under and by virtue of the laws of the United States
of Amer~ca (the "Trustee") and the CITY OF SANTA MONICA, a
municipal corporatian and charter city duly organized and existing
under and by virtue of the Constitution and laws af the State of
California (~he "Ca~ty~~ ) ;
W I T N E 5 S E T H:
WHEREAS, the City is a municipal corpo~atian and charter
city, duly arganized and existing under a freeho~ders~ charter
pursuant to which the City has the r~qht and power to make and
enforce all lak7s and regulations in respect to municipal affairs
and certain ather matters in accordance with and as more
particularly prov~ded in sect~ans 3, 5 and 7 of article XI af the
Constitution of the Stat~ af California and sectian 400 of the
Charter of the City;
WH~REAS, the City Council of the City, acting under and
pursuant to the powers reserved to the City ~nder article XI of the
Constitution of the State of California and section 400 of the
Charter af the City, has enacted Chapter 6.5 af Article I~ of the
Municipal Cade of the City, relating ta revenue bonds, wh~ch
incorpora~es~ ta the extent made applicabla by the Law, as
hereinafter defin~d, the Revenue Bond Law of 1941, being Chapter 6
of Division 2 0~ Title 5 of the California Go~ernment Code, as
enacted and as thereafter amended;
WHEREAS, the City naw owns and aperates facilities for
the collection of sewage, waste and storm water, including
drainage, and has certain r~ghts in faci~ities for the treatr~ent
and disposa~ of sewage, waste [and storm] water, all of which are
inc~uded in and c~mprise the Enterprise~ as hereinafter defined,
and the City has determined that it is necessary that funds be
raised by the City for the purpose af constructYng and financing
certain improvements to and extensions of said Enterprise;
wHEREAS, the City is empowered pursuant ~.o the Law, as
hereinafter defined, to finance the aforementioned impro~ements
through the issuance of its revenue bonds, and tha City has
authoriaed the issuance of its Wastewater Enterprise Re~enue Bonds
(Hyperion Project}, 1991 S2ries A(the "1991 Seri~s A Bonds"), in
an aggregate principal amount of dollars
($ ), ta assist in financing such improvements;
WHEREAS, in arder to provide far the a~thentication and
de~ivery of the Bonds (as hereinafter defined), to establish and
IA1-11067 1 40?33-2-GPH-14117191
dec~ar~ the terms and conditions ugon which the Bonds are to ~e
issued and secured and to secure the payment af the principal
thereaf, premium, if any, and interest therean, the City has
authorized the executian and delivery of this Indenture;
WHEREAS, a11 acts and proceedings required by iaw
necessary to make the Bonds, when executed by the City,
authenticated and deli~ered by the TX~StEE and duly issued, the
valid, binding and legal obligations of the City payable in
accordance with their terms, and to constitute this Indenture a
valid and binding agreement of the parties hereto for the uses and
purposes herein set forth in accardance with its terms, have been
dane and tak~n, and the execution and delivery of this Indenture
have been in all respects d~ly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order
to secure the payment of thE principal of, premium, if any, and the
interest on all Bonds at any time issued and outstanding under this
Indenture, according to their tenor, and to secure the performance
and observance of all the co~enants and conditions therein and
herein set forth, and to declare the terms and conditions upon and
subject to which the Bonds are ta be issued and received, and in
consideration af the premises and of the mutual covenants herein
contained and of the purchase and acceptance of the Bonds by the
owners thereo~, and for other valuable considerations, the receipt
~hereof is hereby acknowledged, the City daes hereby covenant and
agree with the Trustee, for the benefit af the respective awners
from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONSf E¢UAL SECURITY; CERTIFICATES AND OPINIONS
SECTION 1.01. Definitions. Unless the context otherwise
requires, the terms defined in this section shall for all purposes
hereof and of any Supplemantal Indenture and of any certi~icate,
opinion, request or other doc~ment herein or therein mentianed have
the meanings here~n specified:
Acereted Value
"Accreted Value" means, with respect ta any Capital
Appreciation Bonds, as of the date of calculation, the initial
a~vunt thereof plus the interest accrued thereon to such date of
calculatian, from the date of initial delivery at the approximate
in~erest rate thereof compounded semiannually, as determined in
accordance with the table of accreted values far any Capital
Appreciation Sond prepared by the City at the t~me of sale thereof,
assuming in any year that such Accreted Value increases in equal
daiZy a~ounts on the basis of a year af three hundred sixty {3601
days composed of twe~ve (12} months of thirty (30} days each.
IA1-11067 1 2 40233-2-GPH-10/17/91
Add~tional Bands
The term "Additional Bonds" means bonds, n~tes or ather
obligations af the City payable from Revenues and ranking on a
pax~ty with the Bonds and authoriz~d to be issued under and
pursuant to Section 3.07.
Annual Debt Service
The term "Annual Debt Service" means the su~ vf such
principal and interest becoming due an the Bonds, ca~culated as
pravided in the definition of Maximum Annual Debt Service, as
computed for the Fisca~ Year or other twelve-month period to which
raference is made,
Authorized Officer. Responsible Officer
The terms "authorized officer" and "responsib~e officer"
of the Trustee mean and include the chairman of the board of
directors, the president, every vice president, every assistant
vice president, the cashier, every ass~stant cashier, every trust
afficer, and every officer and assistant afficer af the Trustee~
other than those specifically above mentioned, to whom any trust
matter is referred because of his knowledge of, and familiarity
with, a particular subject.
Averaae Annual Debt Service
The term "Av~rage Annual Debt Service" means total Debt
ServYCe~ di~ided by the number of twelve-month periods ending on
June 30 (including any fractional periods} rQmaining until the last
maturity date of any Outstanding Bond.
Beneficial Owner
The term "Beneficial Owner" means, whenever used with
respect ta a 1991 Series A Band, the person whase name is recorded
as the beneficiai owner of such 1991 Series A Bond or a portion af
such 1991 Series A Bond by a Participant on the recards of such
Participant ar such person's subrogee.
Bond Obliaatian
The ter~a "Bond Obligation" means, as af any given date of
calculat~on, ~1) with respect to any Outstanding Current Interest
Bond, the principal amount of such Bond, and (2) with re~pect to
any outstanding Capital Appreciation Bond, ~he Accreted Value
thereof as of tha January 1 ar July ~ next preceding such date of
calculation (un~ess such date af calculation is a January 1 or
July 1 in which case as of such date).
Bondowner, Owner
LA1-11Ub7 1 3 40233-2-GPH-lOr17/91
The term "Bondowner" ar "Owner" means any person who
shall be the registered owner of any outstanding Bond, including
DTC, or any successnr securities depositary for the 1991 Series A
Bonds, or its nominee, as the sale registered owner of Book-Entry
Bonds, or, a~f such Outstandzng Band shall have a maturity of one
year or less and sha11 have been issued in bearer form, shall mean
the bearer of such Bond.
Bond Reserve Fund
The term "Band Reserve Fund" means the fund by that nam~
established pursuant ta Section 5.03.
Bond Reserve Fund Policy
The term "Bond Reserve Fund Policy" means a policy af
insurance ar surety bond issued by a Municipal Bond Insurer,
obligations insured by which have a rating by Moody's and S&P of
"A" or better, or a Letter of Credit issued by a Qualified Bank, to
satisfy all or a portion of the Required Reser~e.
Bonds
The term "Bonds" means the City of Santa Monica
Wastewater Enterprise Re~enue B~nds authorized by, and at any time
outstandinq pursuant to, this Indenture or any Supple~enta].
Indenture, including any Additional Bonds authorized by, and at any
time outstanding pursuant to~ this Indenture and any Supplemental
Indenture, and inciudes bands, notes or other evidences of
indebtedness payable from Revenues on a parity with the Outstanding
Bvnds.
Bvvk-Entry Bonds
The term "Boak-Entry Bands" means the 1991 Series A Bonds
registered in the name of the nominee of DTC, ar any successor
securities depository for the 1991 Series A Bonds, as the
registered owner thereaf pursuant to the terms and provisions of
Section 2.09.
Business Day
The term "Business Day" means any day other than (1) a
Saturday, 5unday ar day upon which commercial banks in Los Angeles,
California are authorized or required to be c~osed and (2) for
purposes af payments and other actions relating to Bonds secured by
a~etter of Credit, a day upan which commercial banks in the city
in which is lacated the office of the Qualified Bank at which
demands for payment under the Letter af Credit are to be presented
are auth~rized to be closed.
Capital Appreciation Bonds
U 5-11067 1 4 40233-2-GPH-I W 17191
The term "Capital Appreciation Bands" means Bonds
designated as Capital Appreciation Bonds in the Supplemental
Indenture providing far the issuance of such Bonds and on which
interest is compounded and paid at maturity or an prior redemption.
Cede & Co.
The term "Cede & Co." means Cede & Co., the naminee of
DTC, and any successor nominee of DTC with respect to the 1991
Series A Bpnds.
Certificate of the Citv
The term "Certificate af the City" means an instrument in
writing signed by the City Manager or Finance Director of ~he City
or by their respecti~e designees (which designation is evidenced by
a writing delivered to the Trustee). Any such instrumen~ and
supporting opinions or representations, if any, may, but need not,
be combined in a single instrument with any other instrument,
opinion or representation, and the two or more so co~nbined shall be
read and construed as a single instrument. If and to the extent
required by the provisions of Section 1.03, each Certificate af the
City shall include the stat~ments provided for in Section 1.03.
Charter
The term "Charter" means the Charter of the City as it
now exists or as it may hereafter be amended, and any new or
successor Charter.
City
"City" means the City o€ 5anta Monica, a municipal
corporation and charter city, duly organized and existing under and
by virtue of the Constitution and laws af the State.
Code
Z'he term "Code" means the Internal Revenue Code of 198~.
Costs of Issuance
"Casts of Issuance" means a1i items of expense directly
or indirectly payable by Qr reimbursable to the City and related to
the authorization, executian and delivery of the Indenture and the
related sale of the Bonds, including, but not ~imited to, casts of
preparation and reproductian of documents, costs of rating '
agencies, filing fees, initial fees and charges of Trustee
(includinq Trustee counsel fees), fees and charges of the City,
legal fees and charges, fees and expenses of consultants and
professionals, fees and expenses of any f~nancial advisor, fees and
charges for prepaxation, execvtian and safekeeping of the Bonds and
1AS-11067 1 5 44233-2-GPH-10117191
any ather charge, cost or fee in cannection with the ariginal sale,
execution and delivery of the Bands.
Credit Provider
The ter~ "Credit Provider" refers to a M~nicipal Band
Insurer that has issued an autstanding policy vf municipal band
insurance ar a Qualified Bank that is the issuer of an outstanding
Letter of Credit which, in each case, sacures payment of principal
of, and interest on, ar tender price of, all or a portion of a
Series af Bonds; provided that this term shall not refer to a
Reserve Provider.
Current Interest Bonds
The texm "Current Interest Bands", as to the 1991
Series A Bonds, means all of such 1991 Series A Bonds anc3 as to
Bonds of subsequent Series means Bonds designated as Current
Interest Bands in the Supplemental Indenture providing for the
issuance of s~ch Saries of Bands and which pay interest at Ieast
semiannually ta the Owners thereof excluding the first payment of
interest thereon.
Debt Service
The term "Debt Service" means the sum of all principal
and interest becoming due an the Bands, calculated as provided in
the definition af Maximum Annual Debt Service.
DTC
The term "DTC" means The Depository Trust Company, a
limited-purpflse t~ust company arganized under the laws of the State
of New Yark, and its successors as securities depositary far the
1991 Series A Bands including any such successor appointed pursuant
to Section 2.09.
Enterprise
The term "Enterprise" means the whole and each and every
part of the municipal wastewater collectian, treatment and disposal
system af the Gity, including the City's interest in the Hyperion
Plant pursuant to the Hyperion Agreement, and all of said presently
existing ~unicipal wastewater system of the City and al], additions,
betterments, and extensions to said wastewater system or any part
thereof hereafter made.
Event of Default
The term "Event of Default" means an event of that name
described in Section 7.01.
Federal Securities
r..a~-iio~> > 6 aoz~s-z-Gr~-~ai~~9~
~
The term "Federal Securities" means United States
treasury notes, bonds, bills ar certificates of indebtedness, or
obligatians for which the fvll faith and credit of the United
States of A~nerica are pledged for the payment of principal and
interest (including obligations a.ssued or held in book-entry form
and securities which represent an undivided interest in such direct
obligations), and also any securities now ar hereafter authorized,
bath the principal of and interest on which is guaranteed directly
by the full faith and credit of the Unit~d States of America.
~'isca~ Year
The term "Fiscal Year" means the pariod beginning on
July 1 of each year and ending on the next succeeding June 3U, or
such other fiscal year as may be adopted by the City for its
general accounting purposes.
Generally Accepted Accountinq Princibles
"Generally Accepted Accounting Principles" means the
un~form accaunting and ~eporting procedures set forth in
publications of the American Institute af Certified Public
Accountants or its successor and the Governmental Accounting
Standards Board or its successor, or by any ather general~y
accepted authority on such procedures, and includes, as
applicable, the standards set forth by the Financial Accaunting
Standards Board or its successor.
Hyperion Agreement
The term "Hyparion Agreement" means the Jaint Pawers
Agreement, made and entered into February 21, 1964, by and between
The City of Los Ange~es and the City governing the treatment af
sewage at the Hyperion Plant, and as such agreement may be amended,
modified or restated and shall include any agreement between such
parties governing the treatment of sewage at the Hyperion Plant
that repiaces or supersedes the existing Hyperion Agreement.
Hyperion Plant
The term "Hyperian Plant" means the Hyperion Treatment
Plant and appurtenant ~acilities lacated at 12000 Vista del Mar,
Los Angeies, California, tagether with any wastewater col~ection,
treatment and disposal facilities related to the Hyperion Plant,
and in which facilities the City has an interest pursuant to the
Hyperion Agreement, and any alteration, expansion, improvement,
relocatian, replacement or reconstruction thereof.
Improvement Fund
The ter~ "Improvement Fund" means the fund designated the
"City of Santa Monica Wastewater Enterprise Revenue Bond
Improvement Fund" estabiished pursuant to Section 3.03.
I.A1-k1067 I 7 40233-2-GPH-1Dl17191
Indenture
The term "Tndenture" means this indenture, dated as of
1, 1991, by and between the Trustee and the City, as
ariginally executed or as it may from time to time be supplemented
or amended by any Supplemental Indenture deliv~red pursuant to the
pravisions hereof.
Ind~pendent Certified Pub~ic Accauntant
The term "Independent Certified Public Accauntant" means
any certified public accountant or firm of such accountants
appointed and paid by the City, and who, or each of whom --
(i) is in fact independ~nt and not under domination o~
the City;
(ii} does not have any substantial interest, direct or
~ndirect, with the City; and
(iii) is not connected with the City as an officer ar
employee of the City, but who may be regularly retained to
make annual or other audits of the boaks of or reports to the
City.
Information Services
The term "Information Services" means Financial
Infarmatian, Inc.'s "Daily Called Bond Service," 30 Montgomery
Street, 10th Floor, Jersey City, New Jersey 07302, Attentian:
Editor; Kenny Information Ser~ices' "Called Bond Ser~ice," 55
Broadwayr 16th Flaor, New York, New York 10005; Moody's "Municipal
and Government~" 99 Chureh Street, 8th Floor, New York, New York
10007, AttEntian: Municipal News Reports; and S&P's "Called Bond
Record," 25 Broadway, 3rd Floar, New York, New Yark 10004; or, in
accordance with then-current guidelines af th~ Securities and
Exchange C4mmi.ssion, such other addresses and/or such other
services providing information with respect to called bonds, ar no
such services, as the City may designate in a written Request of
the City delivered to the Trustee.
Interest Fund
The term "Interest Fund" means the fund by that name
established pursuant to Section 5.03.
Law
The term "Law" means the Charter, the Santa Mqnica
Revenue Bond Act ~being Chapter 6.5 of Article ~I of the 5anta
Monica Municipa~ Code) and al~ laws of the State af Califarnia
supplementa~ thereto, inc~.uding the Revenue Bond Law of 1941, to
the ~xtent made applicable by the Santa Manica Revenue Bond Act.
LAI-11057 1 $ 40233-2-GPH-10117191
a
Whenever reference is made in
is made to the Law as in force
Supplemental Indenture, unless
Leqal Investments
this Indenture to the Law, reference
on the date of this Indenture or any
tha cantext otherwise requires.
The term "Legal Investments" means }aonds, notes,
certificates of indebtedness, bills~ acceptances ar other
securities in which funds of the City z~ay now or hereafter be
lega~~y invested as pravided by the law in effect at the time of
such investment.
Letter of Credit
The term "Letter of Credit" means an irrevocabZe and
unconditional letter of credit, a standby purchase agreement, a
line of credit ar other similar credit arrangement issued by a
Qualified Bank to secure payment of Variable Rate Indebtedness,
Tender Indebtedness or a Series of Bands or to satisfy aZl or a
portion of the Required Reserve.
Letter af Credit Aqreement
The term "Letter of Credit Agreament" means an agreement
b~tween the City and a Qualified Bank pursuant to which the
Qual~fai.ed 8ank agrees to issue a Letter of Credit
and which sets forth the repayment obligatian of the City ta the
Qualified Bank on account af any payment under the Letter of
Credit.
LocaZ System
The term "Local System" means all of the Enterprise
except the City's interest in the Hyperion Plant.
Maximum Annual Debt Service
The term "Maximum Annual Debt Ser~ice" means, at any
point in time, with respect to B~nds then Outstanding, the maximum
amaunt of principal and interest becoming due in the then current
or any future Fiscal Year, calculated as provided in this
definition. For purposes of calculating Maximum Annual Debt
Service, the following assumptions are to be used to calcula~.e the
principai and interest laecoming due in any Fiscal Year:
(i) in determining the principal amvunt due in each
year, payment shall (unless a different subsectian af this
definition applies far purposes of determining principal
maturities or amortization} be assumed ta be made in
accardance with any amortizatian schedule established for such
debt, inc~uding any Minimum Sinking Fund Account Payments or
any scheduled redemption or payment of Bonds on the basis of
Accreted Vaiue, and for such purpase, the redemption payment
~,~-~ ~os~ i 9 aaz3s-z-crr~-~a~i~r9i
or payment of Accreted Value shall be deemed a principa~
payment and interest that is compounded and paid as Accreted
Value shall be deemed due an the scheduled redemption or
payment date af such Capital Appreciatian Bond;
{ii} if any outstanding Bonds constitute Tender
Indebtedness or if Bonds then proposed to be issued wouid
constitute Tender Indebtedness, then for purposes of
determining the amounts of principal and interest due in any
Fiscal Year on such Bonds, the options or obligations of the
owners of such Bonds to tender the same for purchase or
payment prior to their stated maturity or maturities shall be
treated as a principal maturity occurring on the first date on
which owners of such Bands may or are required to tender such
Bands except that any such option or obligation to tender
Bands shall ba ignored and nat treated as a principal
maturity, if (1) such Bonds are rated in one af the three
highest long-term rating categories (without reference to
gradations such as "plus" or f'minus") by Moody~s and by 5&P or
such Bonds are rated in the highest short-term, note or
commercial paper rating categories by Maady's at~d by S&P and
(2) the ob~igation, if any, the City may have under a Letter
of Credit Agreement with respect to such Bonds, other than its
obligations on such Bands, shall either be subordinated to the
obligation of the City on the Bands or be incurred under the
canditions and meeting the tests for the issuance of
Additional Bonds set forth herein;
(iii) if any outstanding Bonds constitute Variable Rate
Indebtedness, the '1~1t~rE5t rate on such Bonds shall be assumed
to be 110~ of the greater of (a) the daaly average interest
rate an such Bonds during the 12 months ending with the month
preceding the date of calculation, or such shorter period that
such Bands shall have been Duts~anding, ar (b) the rate of
interest on such Bonds on the date of calculation; and
{iv) if Bonds proposed to be issued wi~l be Variable Rate
Indebtedness~ then such Bands sha].1 be assumed to bear
interest at the rate quoted in The Band Buyer - 25 Revenue
Bond Index far the last week of the month preceding the date
af sale of such Additional Bonds, as published in The Bond
Buver, or if that index is no langer published, another
similar index selected by the City. or if the City faiZs ta
select a replacement index, an interest rate equal to 80~ of
the yield for outstanding United States Treasury bonds having
an equiva~ent maturity as the Additional Bonds propased ta be
issued, vr if there are no such Treasury bonds having
equivalent maturities, 80~ of the 3owest prevai~ing prime rate
of the five largest commercial banks in the United States
ranked by assets.
i,A 1-11067 1 ]. Q 40233-2-GPH-IO117l91
With respect to the assumptions required to be made pursuant to
this definition, the Trustee may conclusively rely on a Certificate
of the City as to such assumptions.
Mayor
The term "Mayar" means thE Mayar of the Ci.ty.
Minimum Si.nkinq Fund Account Payments
The term "Minimum Sinking Fund Account Payments" means
the aggregate amounts required by this Indenture and any subsequent
Supplemental Indenture ar Supplemental Indentures to be deposited
in Sinking Fund Accaunts for the payment of Term Bonds_
Moody's
The tarm "Moady's" means Moody's Investors 5ervice, Inc.,
a corporation duly arganized and existing under and by virtue of
the laws of the State of Delaware, and its successors and assigns,
except that if such corporation shall be dissQlved or liquidated or
shall no ~onger per~orm the functions of a securities rating
agency, then the term "I~~ady's" sha11 be deemed to rEfer to any
other nationa~ly recognized securities rating agency selected by
the City.
M~znicipa~ Bond Insurer
The term "Municipal Bond Insurer" means any ins~rance
campany or companies which has or have issued a policy of municipal
band insurance insuring payment of the principal of and interest on
any of the Bonds of any Series or a Bond Reserve Fund Policy and
are so designated as such in this Indenture or a Supplemental
Indenture.
Net Revenues
The term "Net Revenues" means, for any Fiscal Year or
other period, the Revenues during such Fiscal Year ar period, less
the Operatian and Maintenance Casts of the Enterprise during such
Fiscal Year or period.
1991. Series A Bands
The tarm "1991 Series A Bonds" means the $
principal amount of the City of Santa M4nica Wastewater
Revenue Bonds (Hyperion Project), 1991 Series A issued
hereto.
Enterprise
pursuant
I.AI-11067 1 ~ ~ 40233-2-GPH-i0117l91
1991 Series A Expense Fund
The term "1991 Series A Expense Fund" means the fund by
that name established pursuant to Section 3.02.
Operation and Maintenance Costs of th~ Enterprise
The term "Operation and Maintenance Costs of the
Enterprise" means the reasonable and necessary costs of operating
and maintaining the Enterprise, calculated in accordance with
Generally Accepted Accaunting Principles, including (among other
things) salaries and wages, fees for services, costs of materials,
suppiies and fuel, reasonalale expenses of management, legal fees,
accounting fees, repairs and other expenses necessary to maintain
and preserve the Entarprisa in good repair and working order, and
reasonable amounts for administration, ovarhead, insurance, taxes
(if any~ and other simi~ar casts, and the payment of pensian
charges and proportionate payments to such campensatian and ather
ins~rance or outside reserve funds as the City may establish or
require with xespect to employees of the City, which costs shall
include operation and maintenance costs attributabl~ to the
Hyperion Plant and payable by th~ City pursuant to the Hyperion
Agreement, but ~xc~uding in alI cases {i) depreciatian and
obsolescence charges or reserves therefar, {ii) amartizatian of
intangibles or other bookkeepinq entries af a similar nature,
(iii) costs of capita~ additions, replacements, betterments,
extensions or impravements to the Enterprise {including such
capital costs attributable ta the Hyperian Plant and payable by the
City pursuant to the Hyperion Agreement), which under Generally
Accepted Accaunting Principles are chargeable tv a capita~ account
or to a reserve for depreciatian, and (iv) charges for the payrnent
of principal and interest on any revenue bonds or other
indebtedness heretofore or hereafter issu~d for Enterprise
purposes.
Opinion of Counsel
The term "Opinion of Counsel" means a written opinian of
counsel (who may be cflunsel for the City) retained by the City and
wha ~s acceptable to the Trustee. If and to the extent required by
the provisions of Section 1.Q3, each Opinion of Counse~ shall
include the 5tdt~lll~IltS provided for in Section 1.03.
Outstandinq
The term "outstanding," when used as of any particular
time with reference to Bonds, means (subject to the pravisions of
Section 9.03) all Bonds theretofore executed, issued and delivered
by the City under this Indenture except --
(1) Bonds theretofore cancel~ed by the Trustee or
surrendered to the Trustee for cancellation;
i.n~-i~ob~ i 12 aaz3~x-crs-~ai~~i
(2) Bonds for the payment or redemption of which funds
or securities in the necessary amount (as set forth in Section
10.01} shall have theretofore been deposited with a fiduciary
(whether upon or prior to the maturity or redemption date of
such Bonds), provided that, if such Bonds are to be redeemed
prior to the maturity thereof, notice of such redemption shall
have been given as in Article IV provided or provision
satisfactory to the Trustee shall have been made far the
giving of such natice; and
(3) Bonds in ~ieu ~f or in substitutian for which other
Bonds shali have been executed, issued and delivered by the
City pursuant to Section 2.08.
Participant
The term "Participant" means any ent~ty which is
r~cognized as a participant by DTC in the baak-entry system of
mazntaining records with respect to Book-Entry Bonds.
Payment Date
The term "Paymant
and principa~, payment date
interest an the Bonds is due
required ta be redeemed from
Payments.
Permitted ~nvestments
following:
Date" means any interest, or interest
an which payment of the principal of or
ar ~n which any Term Bonds are
any Minimum Sinking Fund Account
The term "Permitted Investments" means any of the
(1J Fed~ral Securiti~s;
{2} Bonds, consolidated bands, collateral trust
debentures, consoiidated deb~ntures or ather abligations
issued by federal land banks or fed~ra~ intermediate credit
banks established under the Federal Farm Loan Act, as amended;
debentures and consolidated debentures issued by the Central
Bank for Cooperatives and banks for cooperatives established
under the Farm credit Act of 1933, as amended; bonds or
debentures of the Federal Home Loan Bank Board established
under the Federal Home Loan Bank Act and bonds of any federal
home loan bank established under said act; bvnds, deb~ntur~s,
participation certificates or other obligations of the
Government Nat~onal Mortgage Associatian or the Federal
Nationa~ Mortgage Association established under the National
Housing Act, as amended; and also any securities naw or
hereafter authorized, both the principal of and interest on
which is guaranteed indirectly by the fuli faith and credit af
th~ United States of America;
LAI-11067 1 ~ 3 40233-2-GPFI-10/17l91
(3} Time certificates of depasit or negatiable
certificates of deposit issued by a state or natianally
chartered bank ar trust company, including the Trust~e, or a
state or federal savings and ioan association, pravided that
such certificates af deposit shail be {i} continuously and
fully insured by the Federal Deposit Insurance Corporation or
(ii) issued by any bartk or trust campany organized under the
laws of any state of the United States, or any national
banking associatian (including the Trustee), hav~ng a combined
capital and surplus of at least $100,000,000, and such
certificates shall have maturities of six months or less, or
(iii) cantinuously and fully secured by such securities as are
described in clauses (1} or (2) above, which securities shall
have a market value (exclusive of accrued interest) at all
times at least equal to the principal amount Qf such
certificates of deposit;
(4) Bankers' acceptances which are issued by a bank ar
trust company organized under the ~aws of any state af th~
United States or any national banking association (including
the Trustee} rated "A" or higher by Moody's and S&P; provided,
that such banker's aeceptances may not exceed 270 days'
maturity;
(5) Any repurchase agreement with any bank or trust
company ozganized under the ~aws Qf any state of the United
States or any natianal banking association (including the
Trustee) or government bond dealer reporting to, trading with
and recognized as a primary dea~er by, the Federal Reserve
Bank of New Yark, which agreement is secured by any one or
more af the securities described in clauses (1) ar (2) above,
provided the underZying securities are required by the
repurchasa agreement to be held by any such bank, trust
company ar primary dealer having a cambined capital and
surplus of at least $1a0,Obp,000 and being independent of the
issuer af such repurchase agreement, and provided the
securities are continuausly maintai~ed at a market value of
not less than the amount so invested;
(6) Commercial paper of "prime" quality of the highest
ranking or of the highest ~~tter and numerical rating as
pravided by Maody's and 5&P, which commercial paper is limited
to issui.ng corporations th~t are arganized and operating
within the United States of America and that have total assets
in excess of five hundred million dollars ($500,000,000} and
that have an "A" ar higher rating far the issuer's debentures,
other than commercial papex, as provided by Moady's and S&P;
provided that purchases af eligible commercial paper may nvt
exceed one hundred eighty (180) days' maturity nor represent
more than ten percent (10$J of the outstanding commercial
paper of an issuer carporation;
I.A1-13067 1 1 4 49Q33-2-GPH-l~117f91
(7) Bonds, notes, warrants or other evidence of
indebtedness of any of the states af the United States or of
any political subdivision or public agency thereof which are
rated in one of the two highest short-term ar Iong-term rating
categories by Moody's and S&P;
(8) Any investment agree~~nt with (i} any bank ar trust
campany organized under the laws of any state o~ the United
States of America or any national banking assaciation
(including the Trustee3 or g~vernment band dealer reporting
to, trading with and recagnized as a primary dealer by, the
Federal Reserve Bank of New York, having a combined capital
and surplus of at least $100,000,000, ar (ii) any corporation
that is organized and operating within the United States of
America and that has total assets in excESS of five hundred
million dallars ($500,OOO,D4D) and that has an "A" or higher
rating for its debt, ather than commercial paper, as provided
by Moody'~ and S&P;
(9) Investments in a money market fund (including a tax-
exempt money market fund) rated "AAAm" o~ "AAAm-G" or better
by S& P or which invests only in Federal Securities.
Policy Costs
The term "Policy Casts" means the amounts owing to a
Reserve Provider, incZuding the principal amount of any draw on a
Bvnd Reserve Fund Policy, interest thereon and reasanable expenses
incurxed by the Reserve Provider ~n enforcing payment of Policy
Costs, as more fully set forth in the agreement pursuant to which
such Bond Reserve Fund Po~icy is issued.
Principal Fund
The term "Principal Fund" means thE fund by that name
established pursuant ta Section 5.03.
Pro7ect
The term "Project" ~eans any additions, enlargements,
betterments, extensions and other improvements ta or relatad ta,
anc3 the equipping of, the Er~terprise, including additions,
enlargements~ betterments, extensions and ather improvements to or
related to, and the equipping of, the Hyperion Plant, to the extent
that the City is required to pay for the same pursuant to the
Hyperion Agreement.
Proportionate Basis
The term "Proportianate Basis," when used with respect to
the redemption of Bands, means that the amount of Bonds of each
maturity t~ be redeemed sha11 be determined as nearly as
practicable by multiplying the tata~ amaunt of funds avaiiable for
~.n~-~ia7 i 15 sozaa-2-crH-ianrs~
redemption by the ratia which the amount af Bond obligation of
Bands of such maturity bears to the amount of all Sand obligation
of Bonds to be redeemEd, provided that if the amount available for
redemption of Bonds of any maturity is insufficient to redeem a
multiple of $5,000 principal amQUnt or Accreted Value payable at
maturity, such amount shall be applied to the redemption of the
highest possible integral mu~tiple (if any) of $5,000 principal
amount or Accreted Value payable at maturity. For purposes of the
fareqaing, Term Bonds sha11 be deemed to mature in the years and in
the amaunts of the Minimum Sinking Fund Account Payments and
Capital Appreciation Bonds and Current Inter~st Bonds maturing or
subject to Minimum Sinking Fund Accaunt Payments in the same year
shall be treated as separate maturities. When used with respect to
the payment or purchase of Bonds, "Proportianate Basis" shall have
the saine meaning set farth abo~a except that "pay" or "purchase"
sha11 be substituted for "redeem" or "redemption" and "paid" or
"purchased" shall be substituted far "redeemed."
Qualified Bank
The term "Qualified Bank" means a state ar national bank
or trust company ar savings and loan association or a foreign bank
with a domestic branch or agency which is organized and in good
standing under the laws of the United States or any state thereof
or any fareign country, which has a capital and surplus af
$50,000,000 ar more and which has a short term debt rating of ~he
highest ranking ar of the highest letter and numerical rating as
provided by Moody's or by S&P.
Qualified Independ~nt Consultant
The term "Qualified Independent Consultant" means a
persan or a firm who or which engages in the business of advising
the managemant of public agencies concerning the operation and
financing of public utilities, including pub~ic wastewater
co~lection, treatment and disposal systems, and also including
ad~~ce and consultation generally concerning the use and operati~n
of public utilities, including public wastewater collection,
treatment and disposal systeats, and which person or firm, by reason
af his ar i~s know~ec~ge and exparience, has acqt~ired a reputation
as a recognized consu~tant. Such Quaiified Independent Consultant
may include a persan or firm rendering prafessiona~. engineering ar
accounting services in addition to his ar its accupatian as a
public utility cansultant and may include any person or firm
regularly employed by the City as a consultant to the City.
Rebate Fund
The term "Rebate Fund" means the fund des~.gnated the
"1991 Series A Bonds Rebate Fund" ~stablished pursuant to
Section b.17.
Redemption ~'und
u~-~ia6~ i 16 aaa3~-z-crsaai~r9s
The term "Redempti~n Fund" means the fund by that name
estab~ished pursuant to Section 5.04.
Representation Letter
The term "Representation Letter" means the Letter of
Representations fram the City and the Trustee to DTC, or any
successar securities depository far the ~991 Series A Bonds, in
which the City and the Trustee make certain representatians with
respect to the 1991 Series A Bonds, the payment with respect
thereto and delivery of notices with respect thereto.
Required Reserve
The term "Required Reserve" m~ans, as of any date af
calculation, an amount equal to the least of (i) Maximum Annual
Debt Service on all Bonds Dutstanding, (ii) 125~ of Average Annual
Debt Service an a~~ Bonds Outstanding, and (iii) the amaunt af
proceeds af Bonds permitted to be held in the Reserve F~nd by the
arb~trage bond regulations issued by the United States Department
of the Treasury, as such regulations are, at the time, applicable
and in effect, without the imposition of yield restrictions (as
shown by a Certificate of the City delivered to the Trustee at the
time of issuance of a particular Series of Bonds}; provided,
however, that such Required Reserve or a porti~n thereof may be
provided by one or more Bond Reserve Fund Policies.
Reserve Account
The term "Reserve Accaunt" means the 1991 Series A
Reserve Account established pursuant to Section 5.U3(c) and each
account established in the Reserve Fund with respect to each Series
of Bonds issued hereunder.
Reserve Provider
The term "Reserve Provider" means the issuer of a Band
Reserve Fund Policy.
Revenue Fund
The term "Revenue Fund" means the fund designated the
"City of Santa Monica Wastewater ~nterprise Fund" established
pursuant ta Section 5.02.
Revenues
The term "Revenues" means, for any Fiscal Year or other
pera.od, all rates, fees and charges received for, and all other
income and receipts derived by the City from, the operation of the
Enterprise or arising fram the Enterprise determined in accordance
with Generally Accepted Accounting Principles, including all
proceeds of insurance cavering business ~nterruption lass relating
1A1-11057 1 1 7 40233-2-GP}i-10117r91
ta the Enterprise, investment earnings on amounts held in the
R~venue Fund and Reserve Fund and ail other money hawsoever derived
by the City from the operatian of the Enterprise ~r arising from
the Enterprise, but excluding cannection fees and charges,
refundable depasits made to establish credit and advances or
contributions in aid af constructifln; pravided, hawever, that
Revenues shall include connection fees and charges collected during
such Fiscal Year or other period, but only to the extent that such
connection fees and charges cauld be properly expended on a Praject
for which the proceeds af Subject Bdnds were used or are available
to be used.
Securities De~ositories
The term "Securities Depositories" means the fallowing:
The Depository Trust Company, 7~1 Stewart Avenue, Garden City, New
York 11534, Fax-(515) 227-4b39 or 4190; Midwest Securities Trust
Company, Capital 5tructures-Cali Notification, 440 South LaSalle
Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia
Depasitory Trust Company, Reorganization Division, 1900 Market
Street, Philadelphia, Pennsy~vania 19103, Attention: Bond
Department, Dex-(215) 496-5058; or, in accardance with then-current
guidelines af the Securities and Exchange City, to such other
addresses and/or such other securities depositories, or no such
depasitories, as the City may designate in a Written Request of the
City delivered to the Trustee.
Serial Bonds
The term "Serial Bonds" as to the 1991 Series A Bonds
means 1991 Series A Bonds designatEd as Serial Bonds herein and as
to Bonds of subsequent 5eries means Bonds designated as Serial
Bonds in the Supplemental Indenture providing for the issuance af
such Series and for which no Minimum Sinking Fund Account Payments
are provided.
Series
The term "Series" means the initial series of Sonds
executed, authenticated and delivered on the date of initial
issuance of the Bonds and identified pursuant to this Indenture as
the 1991 Series A Bands, any additiona~ series of Bonds issued
p~rsuant to Sectians 3.04, 3.05 and 3.06, and any Additional Bonds
issued pursuant to a Supplemental Indenture and identified as a
separate Series of Bands.
Sinkinq Fund Accounts
The term '~Sink~ng Fund Accounts" means the 1991 Series A
Sinking Fund Account established pursuant to Section 5.02 and any
special accaunt established by any Supplemental Indenture in the
Principal Fund (established pursuant to Section 5.02) for the
payment of Term Bonds.
i.n~-iio6~ ~ 18 aoz3s-z-crx-iart~mi
S&P
The term "S&P" means Standard & Poar~s Corpvratian, a
carparatian duly organized and existing under and by virtue of the
laws of the State of New York, and its successors and assigns,
except that if such corporation shall be dissolved or liquidated or
shall no longer perform the functions ot a securities rating
agency, then the term "S&P" shall be deemed ta refer to any other
nationa~ly recognized securities rating agency selected by the City
and approved by the Trustee.
Sub~ect Bonds
The term "Subject Bonds" means, for any Fiscal Year or
other period, each Series of Bonds, any portion of the proceeds of
which were expend~d ar are available ta be expended for a Project,
and with respect to which (i) any af such Bonds were Outstanding
during such Fiscal Year or other period~ or (ii) if such Bonds were
refunded with the praceeds of refunding Bands, any of such
refunding Bonds were outstanding d~ring s~ch Fiscal Year or ather
period.
Supplemental Indentura
The term "Supplemental
amendatory of or supplementa~ to
the extent that such Supplemental
authorized hereunder.
Tndenture" means any indenture
this Indenture; but only if and to
Indenture is specifically
Tax Certificate
The term "Tax Certificate" means the Tax Certificate
executed and delivered by the City at the time of issuance and
delivery of the 1991 Series A Bonds, as the same may be am~nded or
supplemented in accordance with its terms.
Tender Indebtedness
The term "Tender Indebtedness" means any Bonds or
port~ons of Bonds a feature of which is an option, on the part af
the Bandowners, or an abligation, under the terms of such Sonds~ ta
tender all or a portion af such Bonds to the City, the Trustee or
oth~r fiduciary or agent far gayment or purchase and requiring that
such B~nds or portions of Bonds be purchased if properly presented.
Term Bonds
The term "Term Bands", as to the 1991 Serias A Bonds,
means 1991 Series A BOi'ff35 designated as Term Bonds herein, and, as
to Bonds af subsequent Saries, means Bonds designated as Term Bonds
in the Supplemental Indenture praviding for the ~ssuance of such
Series and which are payable at or before their specified maturity
date or dates from Min~mum Sinking Fund Account Payments
1A1-11OG7 1 ~ g 40233-2-GPH-10117l91
established for that purpose and calculated to retire such Bonds on
or before their specified maturity date or dates.
Trustee
The term "Trustee" means Bank of America National Trust
and Savings Assaciation, its successars and assigns, and any other
corporat~an or associatian which may at any time be substituted in
its piace, as provided in Section 8.01.
Variable Rate Indebtedness
The term "Variable Rate Indebt~dness" means any portion
of indebtedness the interest rate on which is not fixed at the time
of incurrence of such indebtedness, and has not at some subsequent
date been fixed, at a single numerical rate for the entire term of
the indebtedness.
Written Request of the City~ Written Requisition of the
City, Written Statement of the City
The terms "Written Request of the City," "Written
Requisition of the City" and "Written Statement of the City" mean,
respect~.vely, a written request, requisitian or statement signed by
or an behaif of the City by the City Manager or the Finance
Director of the City or by their respective designees (which
designation is evidenced by a writing delivered to the Trustee}.
SECTION 1.02. Equal Security. Yn consideration of the
acceptance of the Bonds by those who shal~ hold the same from time
to time, this Indenture shall be deemed to be and shall constitute
a contract between the City, the Trustee and the Owners from time
to time of the Bonds to secure the full and final payment of the
interest and princ~pal on the Bands, subject to the agreements,
conditions, covenants and terms contained herein; and the covenants
and agreements herein set forth to be performed on behalf of the
City or the Trustee shall be for the equal and proportionate
benefit, security and protection of all Owners of the Bonds without
preference, priority or distinctzon as to security or otherwise ~f
any of the Bands o~er any of the others by reason of the Series,
number ar date thereof or the time of issue, sale, execution or
delivery thereof~ or atherwise for any cause whatsoever, except as
expressly provided therein or herein.
SECTIDN 1.03. Contant of Certificates and Oninions.
Every certificate or opinion with respect to compliance with a
condition or cavenant provided for in this Indenture, including
each Certificate of the City, shall include (a) a statement that
each person flr persons making or giving such certificate or opinion
have read such cavenant or condition and the definitions herein
relating thereto; (b) a brief statement as ta the nattxre and scope
of the examination or investigation upon which the statements or
opinians contained in such certificate ar apinian are based; (c) a
I.A1-11067 1 ~ Q 40233-2-GPH-101i7l91
statement that, in the opinion of the signers, they have made or
caused to be made such examination or investigation as is necessary
to enable them to express an infarmed opinian as to whether or not
such covenant or condition has beEn complied with; and (d) a
statement as to whether, in the opinion of the signers, such
condition or co~enant has been complied with.
Any such certificate nr opinion made or given by an
officer af the City may be based, insofar as it relates to ~egal,
accounting or Enterprise matters, upon a certificate or opinion of
or representations by counsel, accountants or consultants, unless
such afficer knaws, or in the exercise of reasonable care shauld
have known, that the certificate or opinion or representations with
respect to the matters upan which his certificate ar opinion may be
based, as aforesaid, are er~oneous. Any such certificate ar
opinion made or gi~en by counsel, accountants or consu~tants may be
based, insofar as it relates to factual matters, informatian with
re~pect to which is in the possession of the City, upon the
certificate or opinion of or representations by an officer or
afficers of the City, unless such counsel, accountant or consulta~t
knows, or in the exerclse of reasonable care should have known,
that the certificate or opinion or representations with respect to
the matters upon which his apinion may he based as aforesaid are
erroneous.
ARTICLE IT
THE BONDS
SECTI~N 2.01. Authorization; Terms of 1991 Series A
Bonds. {a) Bonds may be issued he~eunder from time to time in
order to obtain funds for the purposes authorized herein. The
Bonds sha11 be issued under the Law for the purpase of financing ar
refinancing the acquisition, construction, financing, improvement
and development of the Enterprise. The aggregate principal amount
of Bonds which may be issued hereunder is nat limited (subject,
however, ta the right of the City, which is hereby reserved, to
limit or restrict the aggregate principal amount of Bands which may
at any time be issued and Outstanding hereunder) and consists or
may consist of one or more Series of varying denominations, dates,
maturities, interest rates and other provisians, all issued and to
be issued pursuant to this Indenture and the Law, subj~ct to the
limitations contained in Sections 3.04, 3.05, 3.06 and 3.07. This
Indenture constitutes a cantinuing agreemen~ with the Qwners of all
of the Bonds issued or to bE issued hereunder and then ~utstanding
to secure the full and final payment of the principa~ of and the
premiums, if any~ and the interest on a~l Bonds which may from time
to time b~ executed and deiivered hereunder, subject to the
covenants, agreements, provisions and conditions herein contained.
The Bonds are designated generally as the "City af Santa Monica
Wastewater Enterprise Revenue Bands", each Series thereof to bear
such additional designation as may be necessary or apprapriate to
us-»o~~ i 21 aaz33-z-crxaai7m~
distinguish such Series from every other Series of Bonds. The
Bonds may be issued in suct- Series as from time to tzme shail be
established and authorized py the City, subject to the provisions
and conditions herein contained.
(b) An initial Series of Bonds is hereby created and
such Bonds are designated as the "City of Santa Monica Wastewater
Enterprise Revenue Bands (Hyperion Project), 1991 Serias A". The
aggregate principal amaunt of 1991 Series A Bonds which may be
issued and Outstanding under this Indenture shall not exceed
dallars ($ ~, except as may be
otherwise provided in 5ection 2.08.
The 1991 Series A Bonds shall be initially issued
registared in the name of "Cede & Co.," as naminee of The
Depository Trust Company, New York, New Yark, and shall be
evidenced by one 1991 Series A Band maturing on each maturity date,
to be in a denomination correspanding to the total principa~
designated to mature on such date. Registered ownership of the
199I Series A Bands, ar any porti~n thereof, may not thereafter bE
transferred except as set forth in Section 2.09 of this Indenture,
The 1991 Series A Bonds shall be issued as fu1ly
registered Bonds without coupons in the deno~ination of $5,000 or
any integral multiple thereaf; provided that no 1991 Series A Bond
shall have princzpal maturing on more than one principal maturity
date. The 1991 Series A Bonds shall be dated as of ,
1991 and shall accrue interest from such date. The 1991 Series A
Bonds sha11 mature on January 1, on the following dates and in the
following amaunts and shall bear interest at the following rates
per annum payable on 1~ 1991 and semiannually thereafter
an January ~ and Ju~y 1 in each year, calculated on the basis of a
360-day year consisting of twelve 34-day consecutive months:
Maturity Date Principal Int~rESt
January 1 Amount Rate
1993 $ ~
1994
1995
1995
1997
1998
1999
~ooo
2ooi
Zao2
aao~
2004
2005
2006
2011
i.AI-I1067 1 2 Z 40233-2-GPIi-1W17l9Y
The 1991 Series A Bonds are hereby designated Current Interest
Bands.
The 1991 Series A Bonds maturing by their terms on or
prior to Jan~ary 1, 20 are hereby designated Serial Bonds, and
1991 Series A Bands maturing by their terms on January 1, 2Di are
hereby designated Term Bonds.
The principal of and premium, if any~ on the 1991
Series A Bonds shall be payable in Iawful money of the United
States of America to the Owner thereof, upon the surrender thereof
at the pr~ncipal corporate trust office of the Trustee, in San
Francisca, Califarnia. The interest on the 199I Series A Bonds
shall b~ payable in like lawful money to the person whose name
appears on the bond registration baaks of the Trustee as the Owner
thereof as of the clase of business on the 15th day af the month
immediately preceding an interest payment date, whether or not such
day is a Business Day, such interest to be paid by check mailed to
such Owner at such address as appears on such registration books or
at such address as he may have filed with the Trustee for that
purpose.
Each 1991 Ser~es A Bond sha11 bear interest from the
interest payment date next preceding the date of authentication
thereof unless it is authenticated as of a day during the period
from the 16th day of the manth next preceding any interest payment
date to the interest payment date, inclusiva, in which event it
shall bear interest from such interest payment date, or unless it
is authenticated ~n or befare 15, 1991, in which event
it shall bear interest from 1, 1991; provided, howe~er,
that if, at the time of authentication o€ any ~991 Series A Bond,
interest is in default an Outstanding Bonds, such Bond shall bear
interest from the interest payment date to which interest has
previously been paid or made available far payment on the
Outstanding Bonds and shall be payable ta the Owners thereof of
record as of a special date as shail be established by the Trustee
following such default.
Only such af the I991 5eri~s A Bonds as shall bear
thereon a certificate of authentication in the form herein r~cited,
executed by the Trustee, sha11 be valid or obligatory for any
purgose or entitled to the benefits of this Indenture, and such
certificate of the Trustee shall b~ conclusive evidence that the
1991 Series A Sonds so authenticated have been duly authenticated
and delivered hereunder and are entitled to the benefits af this
Indenture.
The 1991 Series A Bands shall be subject to redemption
as provided in Article IV.
The Trustee shall assign each 1991 Series A Bond
authenticated and registered by it a distinctive letter, or number~
I.AI-11067 1 2 3 40233-2-0PH-10l1Tl91
or letter and num~er, and shall maintain a record thereaf which
shall be available to the City for inspection.
(c) The City has reviewed al~ proceedings heretofore
taken relative to the authorization ~f the 1991 5eries A Bonds and
has found, as a resuZt of such review, that all conditions, things
and acts required by law ta exist, happen ar be perfcrmed precedent
ta and in the issuance of the 1991 Series A Bonds do exist, have
happened and ha~e been performed in due time, form and manner as
required by law, and the City is autharized, pursuant to each and
every requirement of law, to issue the 1991 Series A Bonds in the
mannEr and form provided in this Indenture.
SECTION 2.02. Form of 1991 Series A Bonds. The 1991
Series A Bonds and the Trustee's certificates of authentication and
registration and the form of assignment to appear thereon shall be
in substantia~ly the fnrms set forth in Exhibit A attached hereto,
with necessary or apprapriate variatians, omissions and insertions
as permitted ar required by this Indenture, including placement of
a portion of the farm of the Band on the re~erse side thereof.
SECTION 2.03. Execution of Bonds. The Bonds shall be
executed on behalf of the City by the manual or facsimile signature
of the Mayor and under the seal of the City attested by the manual
or facsimile signature of the City Clerk. Such seal may be in the
form of a€acsimile of the City's seal and may be imprinted or
impressed upan the Bonds. The Sonds shall then be delivered to the
Trustee for authentication by it. In case any of the officers who
shal~ have signed or attested any of the Bonds shall cease to be
such officer ar officers before the Bonds so signed or attested
shall have been authenticated or delivered by the Trustee ar issued
by the City, such Bonds may nevertheless be authenticated,
delivered and issued and, upon such authentication, deli~ery and
issue, sha~l be as binding upon the City as thaugh those who signed
and attested the same had continued to be such officers, and alsa
any Bond may be signed and attested an behalf of the City by such
persons as on the actuaZ date of the execution of such Bond shall
be the Mayor or the City Clerk although at the nom~nal date of such
Bond any such person shall not have been such officer.
Except as may be provided in any Supplementa~ Indenture,
only such of the Bonds as shall bear thereon a certificat~ of
authentication and registration in the form set forth in Exhibit A,
executed by the Trustee, sha21 be valid or obligatory for any
purpose or entitled ta the benefits of this Indenture, and such
certificate of the Trustee shall be conc~usive evidence that the
Bonds so authenticated have been duly authenticated and delivered
hereund~r and ar~ entitled ta the benefits of this Indenture.
SECTION 2.04. Transfer of Bonds. Any Bond may, in
accardance with its terms, be transferred, upan the books required
to be kept pursuant ta the provisions of Section 2.06, by the
person in whose name it is registered, in person or by his du~y
ir,~a~a~~ i 24 aoz33-2-cra-ianr9i
authori2ed attorney, upon surrender of such Bond for canCellation
at the principal corporate trust office of the Trustee in San
Francisco, California, accompanied by delivery o~ a written
instrument of transfer in a form approved by the Trustee du~y
executed.
Whenever any Band or Bonds shall be surrendered for
transfer, the City sha11 execute and the Trustee shall authenticate
and deliver a new Bond or Bonds of the same Seri~s, tenor and
mat~rit~, for a Zike aggregate principal amount. The Tr~stee sha~2
require the payment by any Bandawner req~esting any such transfer
of any tax or other go~ernmental charge required tn be paid with
respect to such transfex.
The TrusteE shalZ not be require~ to transfer {ij any
Bond during the period commencing on the date fifteen days prior to
the date the Trustee selects Bands for redemption and ending on
such date of selection (or any other period as is provided by
Supplemental Indenture), or (ii) any Bond selected for redemption.
SECTION 2.05. Exchanqe of Bonds. Bonds may be
exchanged at the principal corporate trust office af the Trustee in
San ~rancisco, Ca~ifornia, for a like aggregate principal am~unt of
Bonds of other authorized denominations af the same Series, tenor
and ~aturity. The Trustee sha~1 require the payrnent by the
Bondowner requesting such exchange of any tax ar other governmental
charge required ta be paid with respect to such exchange.
The Trustee sha~l not be required to exchange (i} any
Bond during the period commencing on the date fifteen 3ays prior to
the date the Trustee selects Bonds for redemptio~ and ending on
such date of se~ection (or any ather period as is provided by
Supplemental Indenture), or {ii) any Bond selected for redemption.
SECTION 2.06. Bond Reqister. The Trustee wilZ keep or
cause ta be kept, at the principal corparate trust office of the
Trustee in San Francisco, California, suff icient books for the
registratiQn and transfer of th~ Bonds, which shall during regular
business hours of the Trustee b~ open to inspection by the City;
and, upon presentation for such purpose, the Tzustee sha12, undez
such reasonable regulations as the Trustee may prescribe, register
or transfer or cause t~ be registered or transferred, on said
books, Bonds as hereinbefore provided.
SECTION 2.07. Tem~orary Bonds. The Bonds ~ay he
initially issued in temporary form exchangeable for definitive
Bonds when ready for deli~ery. The temporary Bands may be printed,
iithographed or typewritten, sha11 be of such denaminations as may
be determined by the City, sha11 be in reg~stered farm without
coupons and may contain such reference ta any of the provisivns af
this Ind~nture as may be appropriate. Every temporary Bond shall
be exacuted by the City and be authenticated by the Trustee upon
the same canditions and in substantially the same manner as the
~~-~~o~~ ~ z5 am.~3-a-cPx-iai~,9~
definitive fully registered Bonds. If the City issues temporary
Bonds it will execute and furnish definit~ve Bonds without delay,
and thereupon the temporary Bonds may be surrendered, for
cancellation, in exchange therefor at the principal corporate trust
office of the Trustee in San Francisco, California, and the Trustee
shall deliver in exchange for such temparary Bonds definitive Bonds
of an equal aggregate principal amount of Bonds of the same Series,
tenar and maturity or matur~ties. Until so exchanged, the
temporary Bonds shal~ be entitled to the same benefits under this
Indenture as definitive Bonds executed and delivered hereunder.
SECTION 2.08. Bonds Mutilated, Last. Destroved or
Stolen. If any Band shall become mutilated, the City, at the
expense af the Owner of said Band~ shall execute, and the Trustee
shall thereupon authenticate and deliver. a new Bond af like tenar
in exchange and substitution for the Bond so mutilated, but anly
upon surrender to the Trustee of the Bond so mutilated. Every
mutilated Bond sa surrendered to the Trustee shall be cancelled by
it and delivered to, or upon the order of, the City. If any Band
shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the City and the Trustee
and, if such evidence be satisfactary to both and indemnity
satisfactory to them sha1~ be given, the City, at the expense of
the Owner, shall execute, and the Trustee shall thereupon
authenticate and deliver a new Band in lieu af and in substitution
for the Bond so last, destroyed or stol~n. The City may require
payment of a sum not exceeding the actual cost of preparing each
new Bond issued under this Section and of the expenses which may be
incurred by the City and th~ Trustee in the premises. Any Bond
issued under the pravisions of this Section in exchange for any
Bond mutilated or in lieu of any Bond alleged to be lost, destroyed
ar stalen shall constitute an original additional contractual
obligation on the part af the City, whether ar not the Band so
mutilated or so alleged to be lost, destroyed or sto~en be at any
time enforceable by anyone, and shall be equal~y and
proportianate~y entitled to the benefits of this Indenture with all
other Bands secured by this Indenture. Neither the City nor the
Trustee shall be required to treat both the original Bond and any
duplicate Bond as being Outstanding for the purpose of determining
the principal amount af Bonds which may be issued hereunder or f~r
the purpose of determining any percentage af Bonds Outstanding
hereunder, but both the ariginal and duplicate Bond shall be
treated as one and the same.
SECT~ON 2.fl9. Boak-Entry 1991 Series A Bonds.
(i) Except as provided in subparagraph (iii) af this Section 2.09,
the registered Owner af all Qf the 1991 Series A Bonds shall be DTC
and the 1991 Series A Bonds shall b~ registered in the name af C~de
& Co., as nominee for DTC. Any additional Series ~f Bonds ~ssued
under a Supplemental Indenture may also be registered in the name
of Cede & Ca., as nominee of DTC, as provided in such Supplemental
Indenture. Notwithstanding anything to the cantrary contained in
this Indenture, payment of semiannual interest with respect to any
LAI-11067 1 z ~ 40233-2-GPH-16/17191
1991 Series A Bond registered as of each recoxd date in the name of
Cede & Co. shall be made by wire transfer of same-day funds to the
account of Cede & Co. on the Payment Date far the 1991 Series A
Sonds at the address indicated on the record date or special record
date for Cede & Co. in the Bond register or as otherwise provided
in the Representation Letter.
{ii) The 1991 Series A Bonds shall be initially issued in the
form of separate single fully registered 1991 Series A Bonds in the
amaunt of each separate stated maturity af the 1991 Series A Bonds.
Upon initial issuance, the ownership of such 1991 Series A Bands
shaZl be registered in the B~nd register in the name of Cede & Co.,
as nominee af DTC. The Trustee and the City may treat DTC (o~ its
nomine~) as the sole and exclusive Owner of the 1991 Series A Bonds
registered in its name for the purposes of payment of the Band
Obligatian, prepayment price ~r interest with respect to the 1991
Series A Bonds, selecting the 1991 Series A Bonds or portions
thereof to be prepaid, giving any notice permitted or required to
be given to Owners af 1991 Series A Bonds under this Indenture,
registering the transfer of 1991 Series A Bonds, abtaining any
consent or ather actian ta be taken by Owners and for all other
purpases whatsoever, and neither the Trustee nor the City shall be
affected by any notice to the contrary. Neither the Trustee nor
the City shall have any responsibility or obligation to any
Participant, any person claiming a beneficial ownership interest in
the 1991 Series A Bonds under or through DTC ar any Participant. or
any ather person which is not shawn on the Bond register of the
Trustee as be~ng an Owner, with respect ta the accuracy of any
records maintain~d by DTC or any Participant; the payment by DTC or
any Participant of any amount in respect of the B~nd Obligation,
prepayment price or interest with respect to the 1991 Series A
Bonds; any notice which is permitted or required ta be given to
owners under this zndenture; the selectian by DTC or any
Participant of any person to receive payment in the e~ent of-a
partial pr~payment of the 199~ Series A Bands; or any consent given
or other action taken by DTC as Owner. The Trustee shall pay all
Bond Obligativn, premium, if any, and int~rest with respect to the
1991 Series A Bonds, anly ta DTC, and all such payments shall be
val~d and effsctive to fully satisfy and discharge the City's
obligations with respect to the Bond Obligation, premium, if any,
and interest with respect to the 1991 Series A Bonds to the extent
of the sum or sums so paid. Except under the conditians af (iii)
below, no person other than DTC shall receive an executed 199~
Series A Bond far each separate stated mat~rity. Upon delivery by
DTC to the Trustee of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and
subject to the provisions herein with respect to record dates, the
term "Cede & Ca_" in this rndenture shall refer to such new nominee
af DTC .
(iii} In the event (i) DTC, including any successor as
securities depositary for the ~991 Series A Bands, determines not
to eontinue to act as sect~rities depositary for the 1991 Series A
l.lt 1-11067 1 2 7 40233-2-GPFi-]fl117141
Bonds, or ~ii) the City determines that the incumbent securities
depository shall no longer so act, and delivers a written
certificate to the Trustee to that effect, the~ the City wil~
discontinue the bovk-entry system with the incumbent securities
depository for the 1991 Series A Bonds. If the City determines to
replace the incumbent securities depository for the ~991 Series A
Sond with another qualified securities depositary, the City shall
prepare or direct the preparation of a new single, separate fully
registared 1991 Series A Band fox the aggregate outstanding
principal amount of 1991 Series A Bonds of each maturity~
registered in the name of such successor or substitute qualified
securities depository, ar its na~inee, ar make s~ch other
arrangement acceptable to the City, the Trustee and the successor
securities depasitory for the 1991 Series A Bonds as are not
incansistent with the terms of this Indenture. If the City fails
to identify another qualified successar securities depository for
the ~991 Series A Bonds to repiace the incumbent sec~rities
depository, then the 1991 Series A Bonds shall no longer be
restricted to being registered in the Bond register in the name of
the incumbent securities depository ar its nominee, but shall be
registered in whatever name or names the incumbent securit~es
depositary for the 1991 Series A Bonds, or its nominee. Tn such
event the Trustee shall authenticate and deliver a sufficient
quantity of 1991 Series A Bonds as to carry aut the transfers and
exchanges provided in this Sectian and Sections 2.04, 2.05 3nd
2.08. All such 1991 Series A Bonds shall be in fully registered
farm in denaminations authorized by this Indenture.
(iv) Notwithstanding any ather provisian of this Indenture to
the cantrary, so long as any 1991 Series A Bond is registered in
the name of DTC, or its nominee, a~l payments with respect to the
Bond Obligation, premium, if any, and interest with respect to such
1991 Series A Bond and all notices with respect to such 1991
Series A Bond sha~l be made and given, respectively, as pravided in
the Representation Letter.
(v) In connectian wi~h any nat~ce or other co~munication to
be provided to Owners af Book-Entry Bonds pursuant to this
Indenture by the City or the Trustee with respect to any consent or
other action to be taken by Owners, the City or the Trustee! as the
case may be, shall establish a record date far such consent or
other action and give DTC notice of such recard date nat less than
~5 calendar days in advance af such record date ta the extent
possible.
ARTICLE III
ISSUE OF 1991 SERIES A BONDS;
ADDITIONAL SERIES OF BONDS
LAl-11d67 1 2 $ 40233-2-GPH-IW17l91
SECTION 3.D1. Issuance of 1991 Series A Bonds. At any
time after the execution gf this Indenture, the City may se11 and
execute and the Trustee may authenticate and, upon a Written
Request or Certificate of the City, deliver 1991 Series A Bonds in
the aggregate principa~ amount of dollars
($ ) -
SECTION 3.02. Applicatian of Prviceeds of 1991 Series A
8onds. {a) The proceeds received from the sale af the 1991
Ser~es A Bands shall be deposited with the Trustee, who shall
f~rthwith set aside such praceeds in the following respective
€unds:
(1} The Trustee shall deposa.t in the Interest
Fund, to be established pursuant to Section 5.03, the amount
of dollars ($ } plus
accr~ed interest received on the 1991 Series A Bonds which
amounts, together with interest thereon, shall ]oe sufficient
to pay the total amount of interest payable on the 1991
Series A Bonds to and including 1, 19_.
(2) The Trustee sha11 depasit in the Band Reserve
Fund to be established purs~ant to Section 5.03, $ ,
an amount equal to the Required Reserve.
(3) The Trustee shail deposit in a separate fund
to be known as the "1991 Series A Expenses Fund", which the
Trustee hereby agrees to establish and maintain, an amount
equal to $ The money in the 1991 Series A
Expenses F~nd shall be used and disbursed in the manner
provided herein for the purpose af paying all Costs of
Issuance incidenta~ to or connected with the issuance of the
1991 Series A Bonds (or for making reim}3ursements to the City
or any other person, firm or corporation far such Costs of
Issuance theretofore paa.d by him or'it). Any balance af
m~ney remaining in the 1991 Seriss A Expenses Fund after the
payment of all Costs of Issuance incidental to or connected
with the issuance af the 1991 Series A Bonds or on
, whichever is earlier, shal~ be transferred by the
Trustee to the Bond Reserve Fund to the extent ~ecessary at
that time to restore the Bond Reserve Fund to the amount of
the Required Reserve, and any then remaining balance of money
shalZ be transferred by the Trustee to the Impro~~ment Fund
established pursuant ta Section 3.03.
(b) Before any payment is made by the Trustee to pay
Costs of Issuance from the 1991 Series A Expenses Fund, the City
sha11 cause to be filed with the Trustee a Written Requisition of
the City showing with respect to each paym~nt to be made--
(~) the item number of the payment;
~i-izo6~ i 29 aoa33-2-crtt-ia~7mi
(2) the name and address of the person to wham payment
is due;
(3) the amount ta be paid; and
(4) the purpose for which the obligatian to be paid was
incurred.
Each such Written Requisition shall state, and shall be
sufficient avidence to the Trustee--
(y) that obligations in the stated amounts have been
incurred by the City and that each item thereof is a Cost of
Issuance of the 199~ Series A Bonds; and
(z) that ther~ has not been filed with ar served upon
the City notice of any lien, right ta lien or attachment
upon, or claim affecting the right to receive payrnent af, any
of tha moneys payable to any af the persons named in such
Written Requisition, which has not been re~eased or wi11 not
be released simultaneously with the payment of such
obligation.
Upon receipt of each such Written Requisition, the
Trustee will pay the amounts set forth in sueh Written Requisition
as directed by the terms thereof. The Trustee need not make any
such payment if it has received notice of any lien~ right to lien
or attachment upon, ar claim affecting the right to receive payment
of, any of the moneys to be so paid, which has not been released or
will not be reieased simultaneously with such payment.
When all of said Costs of Issuance have been paid, a
Certificate of the City stating such fact shall be delivered to the
Trustee by the City.
(4) The Trustee shall deposit in the Improvement Fund,
to be established pursuant to Section 5.03, the re~ainder of th~
proceeds of the 1991 Series A Bonds.
SECTION 3.03. Improvement Fund. (a) The Trustee shall
establish and maintain, in trust, so lang as any Bonds are
Outstand~ng, a separate fund knawn as the "City of Santa Monica
Wastewater Enterprise Revenue Bond Tmpravement Fund" (herein called
the "Improvement Fund"). The maneys in the Improvement Fund shall
be applied to the costs of acguisition, construction, expansion,
improvement, financing and refinancing of the Project and the
expenses incident thereto or connected therewith, inc3uding, if
necessary, interest to the extent permitted by law, reimbursement
to the City for expenses incurred prior to the issuance of the 1991
Series A Bonds or in cannection with the Project, architectura~,
engineering and inspection fees and expenses, apparatus, equipment
and furnishings for the Project, testing and inspectian, surveys,
insurance premiums, losses during constructian not insured against
LA1-11067 1 ~ ~ 44233-2-GPH-10117f91
because of deductible amounts, the fees and expenses of the
Trustee, expenses in connection with the preparation, issuance,
sale and d~livery ot the Bonds, legal, accounting and consultant
fees and expenses, and similar expenses.
(b) Before any payment is made by the Trustee to pay
casts of the Project from the Improvement Fund~ the City shall
cause to be filed with the Trustee a Written Requisition af the
City showing with respect to each payrnent to be made--
(Y) the item number of the payment;
(2) the name and ad~ress of the person ta whom payment
is due;
(3) the amount to be paid; and
(4) the purpose for which the obiigation to be paid was
incurred.
Each such Written Requisition shall state, and shall be
sufficient evidence ta the Trustee--
(y) that obligations in the stated amounts have bee~
incurred by the City and that each item thereof is a cost of
the Froject; and
(z) that there has not been f iled with or served upan
the City notice flf any lien, right to lien or attachment
upon, or claim affecting the right to receive payment of, any
of the moneys payable to any of the persons named in such
Written Requisition, which has not been released ar will not
be released simultaneously with the payment of such
obligation.
Upon receipt of each such Wr~tten Requisition, the
Trustee wi11 pay the amounts set forth in such Written Requisit~on
as directed by the terms thereof. The Trustee need not make any
such payment if it has received notice af any lien, right to lien
or attachment upon, or claim affecting the right to receive payment
of, any af the moneys to be so paid, which has not been released or
will not be released simuitaneausly with such payment.
Upon completion of the acquisitian, construction and
improvement of the Project, and the payment of all costs relating
thereto, a Certificat~ of the City stating such fact shall be
delivered to the Trustee by the City. Any balance of money
remaining in the Improvement Fund after receipt by the Truste~ af
such Certificate shall be transferred by the Trustee, first, to the
Sond Reserve Fund to the extent necessary at that time ta restore
the Band Reserve Fund to the amount of the Required Reserve, second
to th~ Interest Fund and Principal Fund an amount sufficient to pay
the principal of and interest an the Bonds during the then current
LA1-11(167 1 31 40233-2-GPl-I-]0117/91
Fiscal Year, and third, to the City for deposit to the capital
reserve fund in the Revenue Fund and used for capital expenditures
related to the Enterprise.
SECTION 3.04. Issuance of Additional Series of Bonds --
General. In addition to the 1991 Series A Bonds, the City may,
subj~ct to the requirements of the Law, by Supplemental Indenture
establish ~ne or more other Series of Bonds payable from Revenues
on a parity with the 1991 Series A Bonds and secured by a lien upon
and pledge ~f Revenues equal to the lien and pledge securing the
1991 Series A Bands~ and the City may issue and the Trustee may
authenticate an~ de~iver Bonds of any Series so established, in
such principal amount and for such lawful purpose or purposes
(including refunding af any Bonds issued hereunder and then
Outstandinq} as shall be determined by the City in said
Supplemental Indenture, but anly upon compliance by the City with
the provisians of Section 3.fl5, and subject ta the Following
specific conditions, which are hereby made conditions prec~dent to
the issuance of any such additional 5eries of Bands:
(a) The City shali not be in default under this
Indenture or any Supplemental Indenture.
(b) The Supplemental Indenture pra~iding tor the
issuance of such additional Series af Bonds shall require
that the Bond Reserve Fund to be established pursuant to
Section 5.02 b~ increased, if and to the extent necessary,
forthwith upon the receipt of the proceeds of the sale of
such additional Series of Bonds to an amaunt at least equal
to the Required Reserve; provided, however, that such
increase may be provided by ane ar more Bond Reserve Fund
Policies. Said deposit may be made from such proceeds or any
ather source, as pro~ided in said Supplemental Indenture.
(c) The Bonds of such additional Series shall be
payable as to principal annually on January 1 of each year in
which principal fa33s due, pravided that Term Bonds af any
Series shall have a principal maturity date of Janua~y 1.
The Bonds of such additional Series that are Current Interest
Bonds shall be payable as ta interest semiannually on
January 1 and July 1 of each year excepting the first year,
provided that the first installment of interest may be
payable on either January 1 or July 1 and shall b~ for a
per~od of not langer than twelve manths and that the interest
shall be payable thereafter semiannually an January 1 and
July 1, and further provided that interest on any Bonds
canstituting Variable Rate Indebtedness or Tender
Indebtedness may be payable on such Payment Dates as shall be
specified in the Supplemental Indenture providing for the
i~suance of such Bonds.
(d) Fixed seria~ maturities or mandatory Minimum
Sinking Fund Accaunt Payments, ar any combination thereof,
i.ni-zia6~ i 32 4oza~-z-crx-fai~mi
shall be estab2ished in amaunts sufficient to prav~de for the
retirement of all of the Bonds of such additional Series an
or before their respective maturity dates.
(e) The aggregate principal amount of Bands issued
hereunder sha~l not exceed any Zimitation imposed by law or
by any Supplemental Indenture.
(f} The representatians and estimates set forth in the
certificates and written reports required by Section
3.06(c}(1) can b~ mada by the parties required to give such
certificates and written reports.
SECTION 3.05. Issuance af Additional Series of Bonds
far Refundinq. In addition to the 1991 Series A Bonds, the City
may, subject to the requirements of the Law, by Supplemental
Indenture establish one or more other Series of Bonds payable from
Revenues on a parity with the ~991 Series A Bonds and secured by a
lien ~pon and pledge of Revenues equal to the lien and pledge
securing the 1991 Sezies A Bands, and the City may issue, and the
Trustee may authenticate and deliver, Bands of any Series so
established, for the purpose of refunding any Bonds issued
hereunder and then Outstanding, but on~y upon compliance by the
City with the provisions af Section 3.06, and sub~ect to the
following specific cpnditions, which are hereby made canditions
precedent to the issuance of any such add~tional Serzes of Bonds:
(a) The Supplemental Indenture providing for the
issuance of such additional Series of Bonds shall require
that the Bond Reserve Fund t~ be established pursuant tv
Section 5.02 be increased, if necessary, forthwith upon the
receipt af the proceeds af the sale of such additianal SEries
af Bonds to an amount at least equal to the Required Reserve;
provided, however, that such increase may be provided by one
or more Bond Reserve Fund Palicies. Sa~d deposit may be made
from such praceeds ar any other source, as provided in said
Supplemental ~ndenture.
(b) The Bonds af such additianal Series shall be
payable as to principal annually on January 1 0~ each year in
which principal fal~s due, provided that Term Bonds af any
Series shall have a pr~ncipal maturity date of January 1.
The Bonds of such additional Series that are Current Inter~st
Bonds shall be payable as to interest semiannually on
January 1 and July 1 af each year excepting the first year~
provided that the first installment of interest may be
payable on either January 1 or July 1 and shall be for a
period af not longer than twelve months and that the interest
shall be payable thereafter semiannually on January 1 and
July 1, and further provided that interest on any Bonds
constituting Variable Rate Indebtedness or Tender
Indebtedness may be payable on such Payment Dates as shall
Ut-11067 l ~ 3 40233-2-GPH-lU117191
be specified in the Supplemental Indenture providing for the
issuance af such Bands.
(c) Fixed seria~ maturit~es ar mandatory Minimum
Sinking Fund Account Fayments, or any combination thereaf,
shall be established in amounts sufficient to pravide far the
retirement af all of the Bonds of such additional Series on
or before their ~espectivs maturity dates.
(d) The aggregate principal amount of Bonds issued
hereunder sha11 not exceed any limitatian imposed by ~aw ar
by any Supplemental Indenture.
(e) The praceeds of the Bonds of such additional Series
shall be used, together with any other availab~e maneys, to
refund {by defeasan~e, current refunding or crossover
refunding) al~ or a portion af the Bonds then Outstanding,
and the Average Annual Deht Service for the Bonds of such
additional Series (during the period fram their issuance to
their last maturity date) sha~l be equal ta or less than the
Average Annual Debt Service on the Bonds to be refunded
(during the period from the issuance of the additional Series
ta the last maturity date of the Bonds to be refunded}.
{fj The statements set forth in the certificate
required by 5ectian 3.06{c}(2) can be made by the pa~ty
required to give such certificate.
SECTION 3.a6. Proceedinas for the Issuance of
Additional Series of Bonds. Whenever the City shall determine to
issue an additiona~ Series of Bonds pursuant to Section 3.04 or
3.U5, as the case may be, the City shall execute a Supplem~ntal
Inde~ture providing for the issuance of such additional Series of
Bonds, specifying the maximum principal amount of Bonds of such
Series and prescr~bing the terms and cQnditions af such additiona~
Series of Bonds, including the terms and conditians of any Letter
of Credit Agreement with respect to the Letter of Credit securing
such additional Series of Bonds, if any.
Such Supplemental Indenture shall prescribe the form or
forms of Bonds of such additional 5eries and, subject to the
provisians of Section 3.04 or 3.05, as the case may be, sha11
provide far the distinctive designation, denominations, methods of
execution and numbering, dating, maturity dates, interest rates,
interest payznent dates, provisions for redemptian priar ta maturity
and methods and places of payment of principal and interest.
The City may by such 5uppl~mental Indenture prescribe
any other provisions respecting the Bo~ds of such Series not
inconsistent with the terms of this Indenture, including
registration, transfer and exchange provisians, provisions ~or the
payment of principal and interest and sinking fund provisions.
LAL-11067 L 34 46233-2-GP}i-1(1l37191
Before such additional Series of Bonds shall be issued
and delivered, the City shall file the following documents with the
Trustee:
(a) An Opinion af Counsel setting forth (1) that such
counsel has examined the Supplemental Indenture and fo~nd it
to be in compliance with the requirements of this Indenture;
(2} that the execution and delivery of the additiohal Series
of Bonds has been duly authorized by the City; and (3} that
said additional Series of Bonds, when duly executed by the
City and, if required, authenticated and delivered by the
Trustee, wili be valid and binding special obligations of the
City, payable from Revenues as provided herein.
(b) If such additional Series of Bands are being issued
pursuant to Section 3.44, a Certificate of the City that the
requirement of Section 3.04(a) has been met.
{c) The required certificates and reports under
subparagraph {Z) or (2} be~ow:
(1) If the addational Series of BondS are being
issued pursuant to Section 3.D4, the follawing
certificates:
(A) A Certificate of the City setting forth
(i} for any period of 12 consecutive calendar
months out of the 18 calendar mnnths next preceding
the authentication and delivery of such Series of
Bonds, the Net Revenues for such 12-month period,
and (ii) the Annua~ Debt 5ervice for such 12-month
period, and demonstrating that far such 12-manth
peXiod, Net Revenues equaled at least 120~ of
Annual Debt Service for such 12-manth periad;
(B) A written report of a Qualified
Independent Cansultant setting forth for the next
Fiscal Year, or if interest w~th respect to such
Series of Bonds is being capitalized from the
proceeds of such Series of Bonds, the Fiscal Year
following the Fzscal Year in which such interest is
capitalized in full, estimates of (i) Revenues,
(ii) Operation and Maintenance Costs of the
Enterprise, and (iii) Net Revenues; provided,
however, far purpases af such estimate, the
determination of Revenues may take ~nto account any
increases (and shall be adjusted for any decreases)
in rates, fees and charges for wastewater servic~s
and facilities furnished by the Enterprise which
have been authorized by the City to be implemented
and wh~ch will b~ effective prior to the time of
issuance of the additional Series of Bonds proposed
to be issued;
~i-sio6~ i 35 aoz33-z~rt~-iarn9~
(C) A Certif icate of the City setting far~h
(i) the estimates of Net Revenues, as set forth in
the written report of th~ Qualified Independent
Consultant pursuant to paragraph (B) above, for
such Fiscal Year, (ii) the Annual Debt Service for
such Fiscal Year, and demonstrating that th~
estimated Net Revenues set forth in (i) above is at
least equal to 120~ of Annual Debt Service for the
carresponding Fiscal Year as set forth in (ii)
above.
Said certificate ar certificates or written report shall
be filed after the sale of the additional Series of
Bands propased to be issued (but prior to the deli~ery
thereof and receipt o€ payment therefor), and sha~l,
with respect to such additianal Series o~ Bonds, be
based upon the actual interest rate or rates determined
at the time of sale thereof.
~2) If the additional Series of Bonds are being
issued pursuant to Section 3.05, a certificat~ of an
Independent Certi£ied Public Accountant that the
requirements of paragraph (e) of Sectian 3.05 have been
met. 5aid certificate shall be filed after the sale of
the additional Series of Bonds proposed to be issued
(but prior to the delivery thereaf and receipt of
payment therefor), and sha11, with respect to such
additional 52ries of Bonds, be based upon the actual
interest rate or rates determined at the time af sale
thereo~.
(d) Said Supplemental Inde~ture, duly executed ar
certified and appraved by the Trustee.
Upon the delivery to the Trustee of the foregoing
instruments, the Trustee shall authenticate and de~iver said
additiona~ Series of Bands, ~n the aggregate principal amount
specified in such Supplemental Indenture, to, or upon the Written
Request of, the City, when such additianal 5eries of Bonds shall
have been presented to it for that purpose.
None of the lim~tations or restrictions on the ~ssuance
of additional Series of Bonds set forth in this Section shall be
applicable ta a~y additianal Series af Bonds whi~h are ta be issued
solely for the purpose vf refunding and ratiring all vf the Bands
issued hereunder and th~n Outstanding, and nothing in this
Indenture cantained shall limit the issuance of any additianal
Series af Bonds if, after the issuance and delivery af such
additional Series vf Bonds, nane of the Bonds th~retofore
authorized hereunder wi11 be Outstanding or the City shall ha~e
discharged the entire indebtedness on aZl Bonds Outstanding in one
of the ways authorized by Article X.
LA1-11067 1 3 6 4Q233-2-CPH-10J17191
SECTION 3.07. Additianal Bonds. So long as any of the
Sonds remain Outstanding, the City will not issue any Additional
Bonds or obligations payable from Revenues an a parity with the
Bonds, except gursuant to Sectians 3.04, 3.05 and 3.06.
SECTION 3.08. Validity af Bonds. Th~ va~idity of the
authorization and issuance of the Bonds shall not be dependent on
or affected ~n any way by any proceedings taken by the City for the
improvement of the Enterprise, ar by any cantracts made by the City
in connection therewith, or the failure ta construct the Praject,
the Enterprise or any part thereof. The recital contained in the
Bonds that the same are regular~y issued pursuant to the Law shall
be conclusive evidence of their vaiidity and of compliance with the
provisions of law in their issuance.
ARTICLE IV
SECTION 4.01. Terms of Redemption. (a)(1} The City
shall have the right, on any date, to redeem the 1991 Series A
Bonds, as a whole, or in part by lot within each maturity so that
Annual Debt Service for a~l years in which 1991 Series A Bonds
shall mature after such redemption shall be as nearly equal as
practical, from proceeds of insurance or proceeds af eminent domain
praceedings, upon the terms and conditions of, and as provided for
in, 5ections 6.06 and 6.12, respectively, at the principal a~nount
thereof and acczued interest thereon to the date fixed for
redemption, without premium. (2) 1991 Series A Bonds due on or
after January 1, 2003 shall be subject to redemption prior ta their
respective statEd maturities, at the option af the City, from and
to the extent of any source af available funds, as a whole on any
date an or after January 1, 2002, ar in part on any interest
payment date on or after January 1, 2042 of such maturities or
partions of maturities and of such tenar as shall be determined by
the City if Iess than all af the 1991 Series A Bonds are to be
ca~led for prior redemption and by lot within any such maturity and
tenar if less than all of the 1991 5eries A Bqnds of such maturity
and tenar be redeemed, at the principal amount thereof and accrued
interest thereon to the date fixed for redemption, plus a premium
(expressed as a percentage of such principal am~unt) as set forth
in the following schedules;
REDEMPTION OF BONDS
Bonds Redeemed
on or a~ter
January 1
and prior to
January 1
Premium
20b2
2003
2004
2003
2U04
and thereafter
2~
1$
0$
IA 1 J 1U67 1 ~ 7 40233-2-GPH-1~117l9i
(3) 199~ Series A T~rm Bonds maturing on January 1, 20_ and
payable from the 199~ series A Sinking Fund Account, are further
subject to redemption priar to their respective stated maturities,
from the 1991 Series A Sinking Fund Account, on each January 1 on
or after January 1, 24~, and by lot within a~y such maturity if
less than all of the 1991 Series A Bonds of such maturity and tenor
be redeemed. upon payment of the principal amount thereof and
accrued interest therean to the date fixad far redemption, without
premium, but aniy in amounts equal to, and in accordance with, the
schedule of the principal amounts of ~991 Series A Bonds to be
redeemed in each such year from said I991 Series A S~nking Fund
Accaunt, as set forth in Section 5.03(b). (4) The City shall give
the Trustee written natice at least forty-five days before any date
fixed for the redemption af Bonds to be redeemed pursuant to
subsection (a)(2} above, of the fact and date of redemption and af
the principal amount of Bands and the maturities or partions
thereof ta be redeemed.
(b) Any Series af Bonds, other than 1991 Series A Bands,
may be made subject to redemption prior ta maturity, as a wh~~e ar
in part, at such time or times, and upon payment of the principa~
amaunt or, in the case of Capital Appreciation Bonds, the Accreted
Value thereof plus such premium or premiums, if any, as may be
determined by the City at the time such Series is authorized and as
shall be set forth in the Supplementai Indenture authorizing such
Series.
SECTION ~.02. Selection of Bonds far Redemption.
Whenever ~ESS than all of the Bonds of any one maturity and tenor
of any Series are called for redemption and such Bonds are
redeamable by lot, the Trustee shall select the Bonds of such
~aturity and tenor to be redeemed, from the Outstanding Bonds of
such maturity and tenor, by lat ar by any ather manner which the
Trustee deems fair and equitable. For purposes of such selection,
Bonds shall be deemed tv be composed of $5,004 portions (af
principal in the cas~ of Current Interest Bonds or af Accreted
Value at maturity in the case of Capital Appreciation Bonds) and
any such partion may be redeemed separately. The Trustee shall
promptly notify the City in writing of the numbers af the Bonds so
selected for redemption.
SECTIDN 4.03. Notice of Redemption. Notice a€
redemption shall be mailed by the Trustee. not ~ess than thirty
(3~) nor more than sixty (~0) days prior ta the redemption date, to
(i) the respective Owners ~f any Bonds designated for redemption at
their addresses appearing on the bond registration boaks af th~
Trustee, (ii} the Securities Depasitories and {iii} one or more
Information Services. Each notice of redemption shall state the
date of such notice, the Saries af Bonds to be redeemed, the date
af issue of such Series of Bonds, the redemption date, the
redemption price including, in the case of Capital Appreciation
Bonds, the Accreted Value thereof, the place or places of
redemption (including the name and appropriate address or addresses
L-1-l1067 1 3 $ 40233-2-GPH-10/17191
of the Trustee}, the CUSIP number (if any) of the maturity or
maturities, and~ if less than all of any such maturity is to be
redeemed, the distinctive cert~ficate numbers of the Bands af such
maturity, to be redeemed, and, in the case of Bonds to be redeemed
in part only~ the respective portions of the principal amount
thereof ta be redeEmed. Each such notice shall also state that on
said date there will become due and payable on each of said Bonds
the principal amount thereof or of said specified portion of the
principal amount thereof in the case of a Bond to be redeemed in
part only~ together with interest accrued thereon to the redemption
date, and the preminm, if any, thereon (such premium ta be
specified) and that from and after such redemption date interest
thereon shall cease to accrue, and shall require that such Bonds be
then surrenderEd at the address or addresses of the Trustee
specified in the redemption notice.
Failure by the Trustee to gi~e natice pursuant to this
Section 4.03 to any one ar more of the Information S~rvices or
Securities Depositories, or the insufficie~cy of any such notices
shall nat affect the sufficiency of the proceedings for red~mption.
Neither fai~ure by the Trustee ta mail notice of redemption
pursuant to this Seetion 4.03 to any one ar more of the respective
Owners of any Bonds designated far redemption nor any defect in
such notice shall affect the sufficiency of the proceedings for
redemption with respect to the Owners to whom such notice was
mailed.
Notice of redemp~ion of Bonds shall be given by the City
or, at the request of the City, by the Trustee far and on behalf
and at the expense af the City.
SECTION 4.04. Partial Redemptian of Band. Upon
surrender of any Bond redeemed in part on~y, the City shall execute
and the Trustee shall authenticate and deliver to the Owner
thereof, at the expense of the City, a new Sond or Bands of
authorized denominations equal in aggregate principal amount to the
unredeemed portian of the Bond surrendered and of the same Series,
tenor, interest rate and maturity.
SECTION 4.05. Effect of Redemption. When notice of
redemptian has been duly given as aforesaid, and moneys for payment
of the redemption price are held by the Trustee, the Bands s~
called for zedemption shall, on the rEdemption date designated in
such notice, become due and payable at the redemption price
specified in such noti~e; and from and after ~he date sa designated
interest oh the Bonds so called for redemption shall cease to
accrue, said Bonds shall cease to be entitled to any benefit or
security under this Indenture, and the Owners af said Bonds shall
have no rights in respect thereaf except to rece~ve payment of the
redemption price thereof. The Trustee shall, upon surrender for
payment of any af said Bonds, pay such Bands at the redemption
price as aforesaid, together with accrued ~nterest thereon. ~
1,A1-Z1067 1 ~ ~ 4ff233-7-GPH-lOV17191
All Bands redeemed p~rsuant to the provisions af this
Articie shall be cancel~ed upan surrender, and na Bonds shall be
issued in place thereof.
ARTICLE V
REVENUES AND FUNDS
SECTION 5.01, Pledqe af Revenues. (a) All Revenues and
any other amounts (including proceeds af the sale of the Bonds)
held by the Trustee in any fund ar accaunt established hereunder
{other than amounts on depasit in the Rebate ~'und created pursuant
to Section 5.17) are hereby irrevocably pledged to the payment of
the interest an and principal of the Bands as provided herein, and
the Revenues shall. not be used ~or any other purpose while any af
the Bonds remain outstanding; pravided, however, that ~ut of the
Revenues and other moneys there may be applied s~ch sums for such
purposes as are permitted hereunder. This pledge shall canstitute
a:Ei~st pledge of and charge and lien upon the Revenues and all
athar amounts hald by the Trustee in the funds and accounts
established hereunder (other than amounts an deposit in the Rebate
Fund created pursuant to 5ection 6.17) for the payment of the
interest an and principal of the Bonds in accordanca with the terms
hereof and thereof.
SECTION 5.02. Receipt and Depasit of Revenues ~n the
Revenue Fund. In arder to carry out and effectuate the piedge,
charge and lien contained herein, the City aqrees and cavenants
that all Revenues received by it shall be deposited when and as
received in the City of Santa Monica Wastewater Enterprise Fund
(the "Revenue Fund") which fund the City agrees and covenants ta
maintain so long as Bonds shall be Outstanding, and all money on
deposit in the Revanue Fund shall be applied and used only as
provided herein, and shall be accounted fnr separate and apart from
all other moneys, funds or other resources of the City.
SECTION 5.03. Establishment and Maintenance of Funds for
Revenues. So long as the interest and principal of the Sonds and
a12 charges to protect or secure them are paid when due, the City
shall pay as they became due and payabie all Operatian and
Maintenance Costs of the Enterprise (inciuding amounts reasonably
required to be set aside in cantingency reserves for ~peration and
Maintenance Costs of the Enterprise the payment of which is nat
immediately required). Thereafter, subject to Section 6.17, all
money in the Revenue Fund shall be transferred to the Trustee to
the extent necessary and deposited in one or more of the following
respective special funds at the times therein specified. The
Trustee shall establish and maintain, in trust, so long as any
Bonds are outstanding, the Interest Fund, Principal Fund, and Bond
Reserve Fund.
U1-11067 1 4 4 40233-2-GPH-l0117191
All Revenues in each of said funds shall be held in trust
by the Trustee and shall be applied, used and withdrawn only for
the purposes authorized in this Indenture. Such amounts shall be
so transferred to and deposited in the fallowing respective funds
in the following order of priority, the requirements of each 5UGh
fund at the time of d~pas~t to be satisfied before any transfer is
madE to any fund subs~quent in priority:
(a) Interest Fund. On or befare the fifth Business Day
preceding each January 1 and July 1, commencing January 1,
1992, the City shal~ pay to the Trustee for deposit in the
Interest Fund (the initial payment inta which is provided for
in section 3.02} an amount which, together with other amounts
Qn deposit in the Interest Fund and available for payment
thereof, is equal to the ~nterest becoming due and payable on
the Outstanding Bands (except for Bands constituting Variable
Rate Indebtedness) on the following January 1, or Ju~y l,
respectively. With respect to Bonds constituting Variable
Rate Indebtedness, on or before the second Business Day
preceding each interest payment date for such Sonds (or on
such other day as shall be provided in the Supple~ental
Indenture under which such Bonds constituting Variabie Rate
Indebtedness are issued), the City shal~ pay ta the Trustee
far deposit in the Interest Fund an amount which, tagether
with other amounts on deposit in the Interest Fund and
avai~able for pa}nment thereof, is equal ta the interest
becoming due and payable on the Outstanding Bonds constituting
Variable Rate Indebtedness on the following interest payment
date. Na deposit need be made into the Interest F~nd if the
amount contained therein is at least equal to the interest to
become due and payable on the next interest payment date upon
a~l of the Bonds issued hereunder and then Outstanding {but
exc~uding any ~vneys on depQSit in the Interest Fund that were
deposited therein in order to pay interest on any futura
interest payment dat~s following said next interest payment
date). Moneys in the Interest Fu~d shaZ~ be used and
withdrawn by the Trustee solely for the purpose of paying the
interest on the Bonds as it shall become due and payable
{inoluding a~crued interest on any Bvnds purchased or redeemed
prior ta maturity pursuant to this Indenture).
(b) Principa~ Fund; Sinkinq Fund Accaunts. On or befare
the fifth Business Day preceding each January 1, cammencing
January 1, 19_, the City sha~l pay to the Trustee for deposit
in the Principal Fund an amount which, tagether with other
amounts on deposit in the Principal Fund and avai~able for
payment thereof, is equai to (i) the amount af Bond ob~igatian
becoming due and payable on the Outstanding Serial Bonds of
all 5eries ha~ing maturity dates on the next succeeding
January 1, plus (ii} the Minimum Sinking Fund Account Payments
to be paid on the next succeeding January 1 into the
respective Sinking Fund Accounts for the Term Bands of all
Series far which Sinking Fund Accounts shall have been created
I.A1-11067 1 4 1 40233-2-GPH-10117191
and for which mandatory redemptian is required from such
Sinking Fund Accounts on the next succeeding January 1, plus
(iii) if any Letter of Credit Agreement has been entered into,
an a parity with the Bonds, sufficient amaunts ta pay when due
the oblzgations of the City under such Letter of Credit
Agreement due on or prior to the second succeeding January 1.
A11 af the aforesaid Minimum Sinking Fund Account Paymants
shall be made without priority of any payment inta any one
such Sinking Fund Account over any other such payment. In the
event that the moneys in the Principal Fund on any January 1
are not equal to the amount of Bond ObJ.igation ta become due
and payable an the Outstanding Serial Bonds of all Series on
such January ~ plus the amount of Bnnd Obiigation and
redemptian premium on the Outstanding Term Bonds required to
be redeemed or paid at maturity on such January 1 and the
obligations af the C~ty under said Letter of Credit
Agreements, then such moneys shall be applied on a
Proportionate Basis and in such proportion as sa~d Serial
Bands, said Term Bonds and said Letter of Credit Agreement
obligations shall bear to each other, after first deductinq
for such purposes from said Term Bands any of said Term Hands
required to be redeemed as shall have been redeemed or
purchased during the twelve-month period ending an said
January 1 and commencing on tha immediately preceding
January 2 and after deducting for such purposes said Letter of
Credit Agreement obligations amounts paid with respect to
principal due thereunder during the previous annual period
commencing on the immediately preceding January 2. In the
event that the Revenues shall not be sufficient ta pay in full
all Minimum Sinking Fund Account Payments required to be paid
at any one time inta all such Sinking Fund Accounts, th~n
payments into al~ such Sinking Fund Accounts shall be made on
a Proportionate Basis, in such proportion that the respective
Minimum Sinking Fund Accaunt Payments required to be made into
each Sinking ~'und Account bear to the aggregate of a~l of the
Minimum Sinking Fund Account Payments required to be made into
all such Sinking F~nd Accounts.
Na depasit need be made into the Principal Fund so long
as there shall be in such ~und (i) moneys sufficient ta pay
the Bond Obligations of all Serial Bonds issued hereunder and
then Outstanding and maturing by their terms on the next
succeeding January 1 plus (ii} the aggregate of all Minimum
Sinkinq Fund Accaunt Payments required to be made on the next
succeeding January 1, plus (iii) moneys sufficient ta pay said
Letter of Credit abligations due in the twe3ve-manth period
ending on the second succeeding ,Tanuary 1.
All maneys in the Principal Fund shall be used and
withdrawn by the Trustee salely for the purpose of gaying tha
Bond Obligation of the Bonds and said Letter of Credit
AgreemEnt obligatians when due and payable, exc~pt that all
moneys in any sinking Fund Account shalz (except as otherwise
I.A1-11067 1 4 2 40233-2-GPH-30Ii7l91
provided in Article VII hereof) be used and withdrawn by the
Trustee only to redeem or to pay at maturity Term Bonds af the
Series for which such Sinking Fund Account was created, as
provided herein or in any Supplemental Indenture.
The Trustee shall establish and hold within the Principal
Fund a 1991 Series A Sinking Fund Account, which the City
hereby c~venants and agrees to cause to be main~ained, for
payment of the principal af the Term 1991 Series A Bonds. The
Trustee, on or before the fifth Business Day preceding
January 1 of each year (commencing on or before the fifth
Business Day preceding January 1, 20 }, shall deposit in the
1991 Series A 5inking Fund Account from the Principal Fund
moneys in an amount which shal~ be sufficient to call and
redeem or ta pay at maturity,~as the case may be, the
principal of Term 1991 Series A Bonds in the following
respective principal amounts on the next succeeding January 1
in each of the f411aw~ng years:
Principal Amount
of 1991 Series A
Term Bonds
January 1 ta be Retired
$
~
* Maturity
If, prior ta November 1 in any year, Term 1991 Series A
Bonds of any maturity shall have previausly been redeemed or
purchased by or an behalf of th~ City, and delivered to the
Trustee for cancellat~on, in an amount in excess af the principa~
amount of the 199~ Series A Bands identif~ed in the preceding
paragraph, there shall be deemed to have been a reduction ot the
remaining amounts stated in the preced~ng paragraph an a
Proportionate Basis. The City hereby co~enants and agrees with
the Owners of the 1991 Series A Bonds to call and redeem 199~
Series A Bonds from the 1991 Series A Sinking Fund Aecount
pursuant to this Section 5.03 and pursuant to Section 4.01{a}{3),
on January 1 in each of the years, and in the amounts, stated in
the preceding paragraph.
(c) Bond Reserve Fund; Reserve Accounts. On ar before
the tenth day of each month, beginning on or before
I.A1-11067 1 4 3 40233-2-GPS-IU117J91
, 1991, the City shall pay to the Trustee for deposit in the
Bond Reserve Fund (the initial payment into which is
provided for in Section 3.02) one~twelfth (1/12} of the
aggregate amaunt of each unreplenished prior withdrawal from
the Band Reserve Fund unti~ there is on deposit in the Bond
Reserve Fund a balance equal ta the Required Reserve {or
such larger balance as may be required by any Supplemental
Indenture). If a Bond Reserve Fund Po~icy satisfies all or
a portion of the Required Reserve and a drawing is made on
the Bond Reserve Fund Policy, on or before the tenth day of
each month following such drawing, the City shall pay tfl the
Trustee or to the Reserve Provider, with notice to the
Trustee, an amaunt at least equal to ane-twelfth (1/12) af
the aggregate amaunt of Policy Costs owing with respect to
such Bond Reserve Fund Policy. If the Trustee receives such
payment, it shall immediately remit the same to the Reserve
Provider. No deposit need be made inta the Sond Reserve
Fund so long as thEre shall be in the Bond Reserve Fund an
amount equal to the R~quired Reserve, or when and if the sum
of the amounts contained (excluding all Band Reserve Fund
Policies) therein and in the Interest Fund and in the
Principal Fund is at least equal to the sum of the aggregate
principal amount of all af the Bands then a~tstanding and
all of the interest then due or thereafter to become due on
al~ such Bonds. The Truste~ sha11 establish and hold within
the Bond Reserve Fund a 1991 Series A Reserve Account with
respeet to the ~99~ Series A Bands and a similar account for
each addit~onal Series of Bonds issued hereunder. Each
Reserve Account shall be funded in an amount equal to the
pro rata portion of the Required Reserve allacable to the
Series to which it relates. Moneys in the respective
Reserve Accounts within the Bond Reserve Fund shall be ~sed
and withdrawn by the Trustee solely and the Trustee shall
withdraw such maneys far the purpose of paying the principal
of, Minimum Sink~ng Fund Account Payments with respect to,
and interest on the corresponding Series of Bonds to which
such Reserve Account relates in tha event that no ather
moneys are available therefar, or far payment or redemption
of ail of the Bonds of such Series then Outstanding. Funds
or a Band Reserva F~nd Policy on deposit in a Reserve
Account shall be applied salely to the payment of the 5eries
of Bonds to which such Reserve Account relates and shall n~t
be available for payment of any other Series of Bonds.
Fal~awing applicatian of all other funds held in the Reserve
Account relating to a Series of Bonds, the Trustee shail
draw under any Bond Reserve Fund Policy issued with respect
ta such Series af Bonds, in a timely manner and pursuant ta
the terms af such Bond Reser~e Fund Policy, to the extent
n~cessary in order to obtain sufficient funds an or prior to
the date such funds are needed to pay the Bond Obligation
of, Minimum Sinking Fund Account Payments with respect to,
and interest an such Series of Bands when due. If and to
the extent that mare than one Bond Reserve Fund Policy
LA1-11467 1 ~ 4 40233-2-GPH-10117191
satisfies the portion of the Required Reserve relating to a
Series of Bonds, drawings under such Bond Reserve Fund
Policies and payment of Policy Costs with respect to such
Bond Reserve Fund Policies shall be made on a pro rata basis
(calculated by reference to the maximum amounts af such Bond
Reserve Fund Policies). Depasits to the Bond Reser~e Fund
shall be applied on a pra rata basis to the respective
Reserve Accounts, calculated by ~eference to the amounts
required to be maintained in such Reserve Accounts, and
within each Reserve Account first to the pra rata payment af
Policy Costs and upon satisfaction of such Policy CoSts to
satisfying any portian of the Required Reserve to be
maintained within such Reserve Acco~nt not cavered by a Bond
Reserve Fund Policy. So long as the City is nat in default
hereunder, and in each Reserve Accaunt there is a balance
equal to the pro rata portion of the Required Reserve
a~loeable to the Series of Bonds for which such Reserve
Account was established, any amaunt in the Bond Reserve Fund
in excess of the Required Reserve shall be withdrawn by the
Trustee semiannually, on June 20 and December 20 af each
year and transferred ta the City for depasit in thE Revenue
Fund or, during the period of construction of the Project or
any pQrtian thereof, the Impravement Fund. The City shall
advise the Trustee upon the issuance of Additinnal Bonds of
the portion of the Required Reserve to be maintained in each
Reserve Account which portion sha~l not be less than such
Series pra rata portion of the Required Reserve.
Al1 moneys remaining in the Revenue Fund on the
tenth day af each January and July, after the setting aside
and transferring of all of the amounts required to be set
aside or transferred by the City by the pravisions of
subsections (a), (b) and (c} above, may be used and
withdrawn by the City for any Iawful purpose of the City.
SECTION 5.04. Redemption Fund. The Trustee shall
establish, maintain and hold in trust, so long as any Bands are
Outstanding, a separate fund ta be known as the "Redemption Fund"
which sha~l be disbursed and applied only as herein authorized.
The Trustee shall deposit in the Redemption Fund amaunts rece3ved
by the Trustee at least ons day before the redemptian date which
are to be applied to the redempt~on of Bonds pursuant to Article
IV (other than pursuant to Section 4.01(a}(3) of said Article
IV), Maneys in th~ Redemptian Fund shall be used to pay the
principal and premium, if any, of Bands redeemed pursuant to
Article IV (other than pursuant to Section 4.41(a)(3j af said
Article IV).
SECTION 5.05. Deposit and Investment of Moneys in
Funds; Interest Rate Swaps. All moneys held by the City in the
Re~enue Fund may be invested in Legal Investments, maturing not
later than the date on which such maneys are required for payment
by the City. All moneys held by the Trustee and allocated to any
IA1-11067 1 4 5 40233-2rCPH-l011?191
of the funds ar accounts held by it, subject to the restrictions
set forth in the Tax Certificat~, may be invested, at th~ written
direction of the City, in Permitted Investments maturing not
later than th~ date on which such moneys are required for payment
by the Trustee, except that monays in the Bond Reserve Fund may
be invested in Permitted In~estments which mature nat more than
five years from the date of investment or the final date of
maturity of the Outstanding Bonds, whichever is earlier. In the
absence af directian from the City with respect to such
inves~ment, th~ Trustee shall invest such moneys in Permitted
Investments described in paragraph (9) af the definition thareof.
For the purpase of determining the amount vf money in the Band
Reserve Fund, all investments of moneys therein shall be valued
semi-annually an June 20 and December 20 at the market value of
such investments. All interest received on any moneys so
invested by the City or the Truste~ shall be deposited in and for
the purpose of the Revenue Fund, except that all interest
received on any moneys so invested in the Principal Fund or
Interest Fund shall remain in such fund and further except that
prior to receipt by the Trustee of notice of completian of
construction of the Project or any portion thereof all interest
received an any moneys so invested in the Improvement Fund or in
the Bond Reserve Fund shall remain in, or be transf~rred ta and
deposited in, the Improvement Fund. Upon completion of
canstruction of the Project or any such portion thereof, the City
shall file with the Trustee a Certificate or Written Statement of
the City stating the fact and date af such completion of
construction.
The Trustee may sell or present for redemption any
obligations so purchased by it whenever it shall be necessary in
order to provide moneys to m~~t any payment, and the Trustee
shall nat be l~able or responsible for any lass resulting from
such investment.
The Trustee may act as principal ar agent in the
acquisition or dispasition of any investment.
The Trustee may commingle any of the moneys held by it
pursuant t~ this Indenture for investment purposes on~y;
provided, however, that the Trustee shall accaunt separately for
the moneys b~longing to each fund or accaunt established pursuant
to this Indenture and he~d by it.
The City may and the Trustee shall, upon the Written
Request or Statament af the City, and provide~ that the Trustee
is suppZied with an Opinion of Counsel to the effect that such
action is permitted under the laws of the State of California,
enter into an interest rate swap agreement corresponding to the
interest rate or rates payable on a series of Bonds or any
portion thereof and the amaunts received by the City ar the
Trustee, if any, pursuant ta such a swap agraement may be applied
to the depflsits required hereunder. The entity with which the
I.A1-11067 1 4 6 40233-2-GPH-kU117J91
City or the Trustee may contract for an interest rate swap is
limited to entities that are rated in one af the two highest
short~term or long-term debt rating categories by Moody's and
S&P. If the City so designates, amounts payable under the
interest rate swap agreement shall be made an a parity basis with
payments on the Bonds and, in such event, the City shall pay to
the Truste~ for deposit in the Interest Fund, at the times and in
the manner provided by Section 5.03, the amounts to be paid under
such interest rate swap agreement~ as if such amounts were
additianal interest due an the Bonds to which such interest rate
swap relates.
ARTICLE VI
COVENANTS OF THE CITY
SECTION 6.01. Pavment of Principal and Interest. The
City will punctually pay or cause to be paid the principal and
interest (and premium, if any) to became due in respect of every
Bond issued hereunder at the times and places and in the manner
pravid~d herein and in the Bonds, in strict conformity with the
terms of the Bonds and of this Yndenture, but solely from
Revenues, as provided herein.
SECTION 6.p2. Aqainst Encumbrances. The City will not
mortgage or otherwise encumber, pledge or place any charge upon
the Enterprise ar any part thereaf, or upon any of the Revenues,
prior to or on a parity with the Bonds, provided that Letter of
Credit Agreements entered into in connection with Variable Rate
indebtedness ar Tender Indebtedness may be payable on a parity
with the Bonds.
So lang as any Bonds are Outstanding, the City will not
issue any bonds or obligations payable from Reven~es ar secured
by a pledg~, lien or charge upoh Revenues prior to or on a parity
with the Bonds, ather than the Bonds, prav~ded that Letter of
Credit Agreements entered into in connection with Variable Rate
Indebtedness or Tender Indebtedriess may be payable on a parity
with the Bonds.
Nothing in this Indenture, and particularly nothing in
the prec~ding two paragraphs, sha~l prevent the City from
autharizing and issuing bonds, notes, warrants, certificates or
other obligations or evidences of indebtedness which as to
grinc~pal ~r interest, or both, (~} are payabZe fro~ Revenues
after and subordinate ta the payment from Revenues of the
principal af and interest on the Bonds, or (2) are payable frvm
moneys which are not Revenues as such term is defined in this
Indenture.
SECTION 6.03. Aaainst Sa~e or Other Dispasition of
Propertv. The City wil~ not sell, Iease or otherwise dispose ot
~i-i~ob~ i 47 aoz3s-a-cpx-iai~r~i
the Enterprise or any part the~eaf essential to the proper
maintenance af the Revenues, and will not enter into any
agreement or lease which would impair the operation of the
Enterprise or any part thereaf necessary to secure adequate
Revenues for the payment of the Bonds; nravided, that any real or
personal property which has become nonoperative or which is not
needed far the efficient and praper operation of the Local
System, or any material or equipment which has become worn aut,
may be so~d if such sale will not reduce the Net Revenues below
the requirements to be maintained under Section 6.13.
SECTI~N 6.~4. Qperation and Maintenance of Lacal
System. The City wil~ maintain and preserve the Local System in
good repair and working order at all times from the Revenues
available for such purposes, in conformity with standards
customarily followed for municipal wastewater collection,
treatment and disposal systems of like size and character. The
city will from time to time maks all necessary and proper
repairs, renewals, replacements and substitutions to the
properties of the Local System, so that at all times business
carried on in cannection with the Enterprise shall and can be
properly and advantageausly conducted in an efficient manner and
at reasanable cost, and will operate the Loca~ System in an
efficient and economical manner, consistent with the protection
of the Owners of the Bonds, and wil~ not cammit or allow any
waste with respect ta the Enterprise.
SECTION 5.05. Liens and Claims. The City shaZl keep
tha Local System and all parts thareof free from judgments, from
mechanics' and materialmen's liens and fram all liens and claims
of whatsoever nature or character, to the end that the security
pravided pursuant to this Indenture may at ail times be
maintained and preserved, and the City shall keep the Enterprise
and ~he Revenues free from any liability which might hamper the
City in conducting its business ar operating the Enterprise.
SECTi4N 6.06. Insurance. (a) The City shall pracure
and maintain such insurance relating to the Enterprise which it
shall deem advisable or necessary to protect its interests and
the interests of the Trustee, which insurance shall afford
protection in such amounts and against such risks as are usually
covered in connection with municipal wastewater collection,
treatment and dispasal systems similar to the Enterprise;
pravided, that any such ~nsurance may be maintained under a
self-insurance proqram so long as such self-insurance program is
maintained in th~ am~unts and manner usually maintained in
cannectian with municipal wastewater collection, treatment and
disposal systems similar to the Enterprise and is, in the opinion
of an independent insurance consultant, financially sound. All
poiicies of ~nsurance required to be maintained herein shall
provide that the Trustee shall be a~oss payee and shall be given
thir~y (30) days^ written not~ce of any intended cancellation
thereof or reduction af coverage provided thereby. The City
L.AI-1L06'] 1 ~$ 4U233-2-[3PH-10/17191
shall pramptly advise the Trustee in writing if any change in the
insurance coverage occurs. No later ~han January 1 of each year,
the City shall provide the Trustee with a Written Statement
cert~fying that the City is maintaining the insurance required by
this Section 6.06.
(b) In the event of any damage to or destruction of
the Enterpr~se ca~sed by the perzls covered by the insurance
provided pursuant to subsection (a), above, the proceeds of such
insurance received by the Trustee shall be applied ta the repair,
reconstruction or replacement of the damaged or destroyed portion
of the Enterprise; and the City shall cause such repair,
reconstruction or replacement to begin promptly after such damage
or destruction shall occur and ta continue and to be properly
completed as expeditiously as possible, and the Trustee shall pay
out of the proceeds af such insurance all costs and expenses in
cannection with such repair, reconstruction or replacement so
that the same shall be completed and the Enterprise shall be free
and c~ear af all claims and liens. If the proceeds received by
the Trustee by reason of any such loss shall exceed the casts of
such repair, reconstruction or replacement, the Trustee shall
transfer such excess to the City far deposit in the Revenue Fund
an~ such excess shall be treated as Revenues. Natwithstanding
the foregoing, if the proceeds af such insurance are sufficient
to enable the City to retire all outstanding Bonds, whether at
ma~urity or on redemption prior to mat~r~ty ar any combinatian
thereof, the City may elect not to repair, reconstruct or replace
the damaged or destroyed portion vf the Enterprise, and
thereupon, upon receipt of a written Request of the City, the
proceeds of such insurance shall be applied by the Trustae within
thirteen months to redeem Bonds gursuant to Section ~.01(a)(1).
(c) The City shall procure, and maintain at all times
while any flf the Bonds shall be Outstanding, adequate fidelity
insurance or bonds on all of its officers, employees and agents
handling or responsible for any Revenues or ~unds of the
Enterprise, such insurance or bonds to be in an aggregate amaunt
at least equal to the maximum amount of such Revenues or funds at
any one ti~e in the custady of all such officers and employees flr
in the amount of ane mi~~~on dnllars ($1,ODO~000), whichever is
less.
(d) The City may purchase, on all or any of the Bonds
of any Series, insurance assuring the Bondowners th~t the
principa~ of and interest on the insured Bonds will be paid when
due and payable. The purchase of any such insurance shall not
constitute a prEference or priority of the insured Bonds over any
Bonds not so insured, and a11 Bonds outstanding, irrespective of
the providing of s~ch insurancE on some of the Bonds, shall be
equally and pr~portionately secured hereby.
SECTION 6.07. Boaks and Accounts; Financlal
Statements. (a) The City will keep proper books of record and
lA1-13067 1 4 9 4Q233-2-GPH-10.17/91
accounts of the Enterprise, separate from all other records and
accounts of the City, in which compl~te and correct entries shall
be made of all transactions relating to the Enterp~ise. Such
baaks of record and accounts shal~ at all times during business
hours be subject to the inspection of the Trustee or af any Owner
of Bonds then Outstanding or their representatives authorized in
writing, at reasonable hours and under reasonable conditiQns.
(b) The City will prepare and file with the Trustee
annual3y within six months after the close af each Fiscai Year,
so long as any of the Bands are Outstanaing, financial statements
of the Enterprise far the preceding Fiscal Year, prepared in
accordance with Generally Accepted Accounting Principles applied
an a consistent basis from year to year (which financial
statements shall include a statement showing the balances in each
fund required to be established under the provisions of this
Indenture), including a balance sheet, statement of income,
stat~ment of retained earnings and contributed capital, and
statement of changes in financial position, which financial
statements sha~l be examined by and include the certi~icate or
opinion of an Independent Certified Pub~ic Acc~untant. Such
financial statements shall be accompanied by a Certificate ~f the
City stating that no Event of Default has occurred or is
continuing as of the end of each Fiscal Year, or speci~ying the
nature of the Events of Default, if any, which have occurred and
are continuing.
SECTION 6.08. Enterprise Budqets. The City shall
prepare an annual budget for the Enterprise ~or each Fiscal Year.
Such budgat shall set forth in reasonable detail the Revenues
anticipated to be derived in such Fiscal Year and the
expenditures ant~cipated to ~e paid or provided for therafram in
such Fisca~ Year including, without ~imitat~on, the amounts
required to provide for the payment af the principal of and
interest and redemption premium, if any, on the Bonds during such
Fiscal Year, to pay or provide f~r Operation and Maintanance
Casts of the Enterprise far such Fiscal Year, to make up any
deficiencies in any fund or account anticipated for the then
current Fiscal Year, and ta pay or provide for the payment of a31
other claims ar obligat~Qns required to be paid fram Revenues in
~~ch Fiscal Year, and shall shaw that Net Revenues shall be at
Ieast adequate to satisfy the requirements of Section 6.13. The
City shall supply to the Trustee a copy af the annual budget far
the Fiscal Year cavered by such budget. The Trustee shall
provide a copy of such budget to any Owner requesting the same.
SECTION 5.09. Mazntenance of Revenues. The City shall
not acquire, constr~ct, aperate or maintain, and shall not within
the scape af its powers permit any ather public or private
corporation, political subdivisian, district or agency or any
persan whatsoever to acquire, construct, operate or maintain,
w~thin the City or any part thereof, any system ar utility
competitive with the Enterprise. The City w~ll have in aff~ct,
1A1-! 1067 l ~j ~ 40233-2-GPH-10117l91
or cause ta have in effect, at all times an ordinance or
resolutian requiring all customers of the Enterprise to pay the
fees~ rates and charges applicable to the services and facilities
furnish~d by the Enterprise. The City wiil not pro~ide any
wastewater service of the Enterprise free af charge to any
persan, f~rm ar carporation, or to any public agency (including
the United States of .'~nerica, the State of California and any
public corporation, political subdivision, city, county, district
or agency af any thereaf), except (i) far free use ~y the City
and its ag~ncies, (ii) to the extent that any such free use is
required by the terms of any existing contract ar agreement and
(iii) for incidental insignificant free use so lang as such free
use does not prevent the City from satisfying the other cavenants
af this Indenture, including, without limitation, Section 6.13
her~of .
SECTION 6.14. Payment of Taxes, Etc. The City will
pay and discharge, or cause to be paid and discharged, all taxes,
assessments and other governmental charges which may hereafter be
lawfully imposed upon the City on account of the Enterprise or
any portaor~ thereof or upon any Revenues and whieh, if unpaid,
might impaYr the security of the Bonds, when the same shall
become due, but nathing herein contained shall require the City
to pay any such tax, assessment or charge so long as it shall in
goad faith contest the validity thereof. The City will duly
observe and confarm with all valid requirements of any
gavernmental authority rElative to the Enterprise or any part
thereof.
SECTION 6.11. Acquisition and Constructian of Pro~ect.
The City will commence and will cantinue to completian the
acquisition and construction of the Project (to the extent such
Praject relates to tha Local System} proposed to be financed from
any Series of Bonds, in a timely manner in aecordance with sound
engineering practice, and said acquisitian and canstructian
completed in a sound and aconomical manner and in canPormity with
law.
SECTION 5.12. Eminent Domain Proceeds. If a17. or any
part of the Enterprise shall be taken by or t~nder threat of
eminent damain praceedings, the net proceeds realized by the City
{excluding any portion thereof payable tv the Uniteci States of
America or the State of Califarnia or required by the United
States of America or the State of California to be deposited in a
restricted fund) shall be depasited by the City in a special fund
in trust and appZied and disbursed by the City subject ta the
follawing conditions:
(a) If such eminent domain proceedings have had a
material adverse effect upon the Revenues and the security
of the Bonds, the City shall by resolution det~rmine to
apply such pr~ceeds for one of the follawing purposes:
1A F-1 [067 1 51 40Z33-2-GPH-10117l41
{~y The City may determine to appiy such proceeds
to t~e purchase, defeasance or redemption of Bonds then
putstanding. In that event, the City shall transfer
such proceeds to the Trustee who shall apply s~ch
proceeds on a Praportianate Basis to the redemption,
defeasance or purchase of Bonds af each Series then
Outstanding in the proportion which the Bond Obligation
amo~nt af each Series bears to the aggregate Bond
Obligation amount of all Bonds then Outstanding.
(2) The City may determine to apply such proceeds
to the cast of additions or improvements to or
extensions of the Enterprise if (A) the City first
secures and files with the T~uStEE a written report of
a Qualified Independent Consultant showing (i} the loss
in annual REVEhu~Si if any~ suffered, or to be
suffered, by the City by reason of such eminent domain
proceedings, (ii} a general description of the
additions, improvements or extensions then proposed to
be acquired by the Ci~y fr~m such proceeds, and
(iii) an estimate af the additianal Revenues to be
derived from such additions, improvements ar
extensions; and (B) such written report states that
such additiona~ Revenues will sufficiently offset the
loss af Revenues resulting from such eminent domain
proceedings s~ that the abality of the City to meet its
obligations hereunder will nat be substant~ally
impaired. The City shall then promptly proceed with
the constructian of the additions, improvements or
extensions substantially in accordance with such
written repart. Payments for such construction sha11
be made by the City trom such proceeds. Any ba~ance of
such proceeds not required by the City for the purposes
aforesaid shal~ be depasited in thE Revenue ~und and
applied as provided in Sections 5.01 and 5.02.
(b) If such eminent da~ain proceedings have had no
material affect upon the Revenues and the security of the
Bonds, and a Qualified Independent Consultant so concludes
in a written repart filed with the Trustee, the City may
determine to apply such proc~eds to the costs of additions
or impravements to or extensions of the Enterprise or may
deposit such proceeds in the Revenue Fund, to be applied as
provided in Sections 5.01 and 5.02.
SECTION 6.13. Amounts of Rates and Charges. (a) The
City will, at all times while any of the Bonds remain
Outstanding, establish, fix, prescribe and collect rates, fees
and charges in connection with the wastewatex services and
facilities furnished by the Enterprise which wi~l be sufficient
ta yield during each Fiscal Year, after making reasonable
allawances for cantingencies and error in the estimates, Net
Revenues equal ta at least one hundred and twenty percent (120$j
~,~-iioa~ i ~ 2 aoz3~-~-c~aai7~i
of th~ estimated Debt Service far such Fiscal Year. The City may
make adjustments fra~ time to time in such rates, f~es and
charges and may make such classificatian thereof as it deems
necessary, but shall not reduce the rates, fees and charges then
in effect unless the Net Revenues from such reduced rates, fees
and charges will at all times be sufficient to meet the
requirements of this section.
SECTION 6.14. Com~liance with Indenture. The City
wi~1 faithfully observe and perform a~l the covenants, conditions
and requirements of this Indenture, and wi~l not suffer ar permit
any default ta occur hereunder, or do ar permit to be done, in,
upon or about the Enterprise, or any part thereof~ anythinq that
might in any way w~aken, diminish or impair the security intended
to be given pursuant to this Indenture.
SECTION 6.15. Observance of Laws and ReQUlations. The
City shall comply promptly, fu1Zy and faithfully with and abide
by any statute, law, ordinance, arder, rule or regulation,
judgment, decree, di~ection or requ~rement naw in force or
hereafter enacted, adopted or entered by any co~petent
gavernmental authority or agency applicable ar with respect to or
affecting the acquisition, canstruction or recanstructian af the
Enterprise or any part thereof or applicable or with respect to
ar affecting the operation, manner, use or condition of the
Enterprise or any part ar parcel thereof or adjoining public
ways; provided that the City need not compl~ with any such
statute, ~aw, ard~nance, rule, regulatian, judgment, decrae,
direction or requirement if and sa lang as the City in goad faith
sha~l be contesting or permitting or causing to be contested the
app~icability or validity there~f by apprapriate pr~ceedings
diligently prasecuted, even though such contest may result in the
impasition of a li~n ar charge against the Enterprise or the
Revenues, if (1) the City shail effectively prevent foreclosure
or enforcement of any such lien or charge and (2) the foreclosure
or enforcement af any such lien or charge shal~ be stayed, and if
said stay thereafter expires, the City shal~ farthwith discharge
such Iien or charge Qr cause the same to be discharged, so that
pending such proceedings the Enterprise and the Revenues thereof
shal~ not be affected thereby, and the security of the Bonds
shall nat be impaired.
SECTION 6.16. Prosecution and Defense of Suits. The
City shall pramptly from time to time take such actian as may be
necessary ar proper to remedy az cure any defect in or c~oud upon
the titZe to the Enterprise hereafter developing, and sha12
prosecute all such suits, actions and other proceadings as may be
appropriate far such purpases and, to the extent permitted by
law, shall indemnify and save the Trustee and e~ery Bondowner
harmless from all ~oss, cast, damage and expense, including
attorneys' fees, which they or any af them may incur by reason of
any such defect, cloud, suit, action or proceeding.
IA1-13067 1 ~ 3 40233-2-GPH-101t7191
SECTION 6.17. Rebate and Tax Covenants.
(a) The Trustee shall establish and maintain, in
trust, a separate fund knawn as the "I991 Series A Rebate Fund"
(herein called the "Rebate Fund"). There shall be depasited in
the Rebate Fund such amounts as are required to be deposited
therein pursuant to the Tax Certificate. All money at any time
depasited in the Rebate Fund shall be he~d by the Trustee in
trust, to the extent required to satisfy the Rebate Requirement
(as def~ned in the Tax Certificate), for payment ta the United
States of America. Notwithstanding anything to the contrary
cantained herein, all maaunts required ta be deposited into or on
deposit in the Rebate Fund shal~ be governed exclusively by this
Section and by the Tax Certificate {which is incorporated herein
by reference). The Trsutee shall be deemed conclusively to have
complied with such provisions if it follaws the Written Request
of the City, and shall have no liability or responsibility to
enforce compliance by the City with the terms of the Tax
Certifieate.
(by The City shall not use or permit the use of any
praceeds of 1991 Series A Bonds or any funds of the City,
direetly or indirectly, to acquire any securities or obligations,
and shall not take or germit to be taken any ather action or
actions, which would cause any 1991 Series A Bonds to be
"arbitrage bonds" within the meaning of Sectian 148 of the Code
or "federally guaranteed" within the meaning of Section 149(b) of
the Code and any such applicable requirements promulgated from
time ta time there~nder and under Section 103(c) of the Internal
Revenue Code of 1954, as amended. The City shall observe and not
vialate the requiremants of Section 148 of the Code and any such
applicable regulations. The City sha~l comply with all
requirements of Sections 148 and 149{d) of the Cade to the extent
applicable to the 1991 Series A Bonds. In the event that at any
time the City is of the opinian tha~ for purpvses of this Section
it is necessary to restrict or to limit the yield on the
investment of any moneys held by the Trustee under this
Indenture, the City shall sa instruct the Trustee in writing, and
the Trustee shall take such action as may be necessary in
accordance with such instructions.
The City sha~l not use or permit
proceeds of the 1991 Series A Bonds or any
direct3y or indirectly, in any manner, and
to take any action that would cause any of
Bonds to be treated as an obligation not d{
~03(aj af the Code.
the use of any
funds af the City,
shall not take or omit
the 199~ Series A
escribed in Section
(c) Notwithstanding any provisions of this Section, if
the City shal~ provide to the Trustee an opinion of natianally
recognized bond counsel that any specified action required under
this Section is no langer required or that some further er
different action is required to maintain the exclusion from
CA i-11067 1 'rj ~} 40233-2-GPH-1 ~li7l9i
federal income tax or interest with respect to the 1991 Series A
Bonds, the Trustee and the City may canclusive~y rely on such
apinion in complying with the requirements af this Sectian, and,
notwithstanding Article VIIII hereof, the cavenants hereunder
shall be deemed to be madified to that extent.
SECTION 6.18. Governmental Ab~rovals. The City will
pez~orm any construction, reconstructions and restorations of,•
improvements, betterments and extensians ta, and equippings and
f~rnishings af, and will operate and maintain the Local System at
standards required in order that the same may cant~nue to be
approved by the proper and competent authority or autharities of
the State af Californ~a as a public municipal wastewater system.
SECTION 5.19. Hyperion Aqreement. The City will
faithfully observe and perform all of its cavenants, and the
conditians and requirements applicable to it, under the Hyperion
Agreement and will not suffer or permit any default to occur
thereunder. The City will take such action as is reasonably
necessary to ensure that The City of Los Angeles observes and
performs all of its covsnants, and ~he conditions and
requirements applicable to it, under the Hyperion Agreement, if
and to the extent that the non-performance or non-observance
thereaf would materiaily adversely affect the Owners. The City
shall not enter into or consent or agree to any amendment,
madification, restatement, replacement or supersedinq of the
Hyperion Agreement unless and untkl the City Council of the City
finds and determines that such amendment, modification,
restatement, replacement or superseding will not materially
impair the security for the Bonds.
SECTION 6.20. Incantestabilitv of Bonds. From and
aft~r the sale and delivery of any of the Bonds by the City, the
Bonds shall be incantestable by the City.
SECTION 6.21. Further Assurances. Whenever and so
often as requested sa to da by the Trustee, the City will
promptly execute and de~iver or cause to be executed and
delivered all such ather and further instrtiments, dacuments or
assurances, and promptly do or eause to be done all such other
and further things, as may be necessary or reasonably required in
order to further and more fu11y vest in the Trustee and the
Bondowners all rights, interest, powers, benefits, privileges and
advantages conferred or intended ta be conferred upo~ them by
this Indenture.
I.AI-i 1057 1 5 5 40233-2-GPH-10li7r91
ARTICLE VYI
EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS
SECTION 7.01. Events o~ Defau~t: A~celeration; Waiver
of Defau~t. If ~ne ar more of the fallowing events (herein
called "Events of Default~') sha~l happen, that is to say--
(a) if defau~t shall be made in the due and punctual
payment of the principa~. af, or the premium (if any) on, any
Bond when and as the same shall become due and payab~e,
whether at maturity as tY~erein expressed, by proceedings for
redemption, by deciaration or otherwise, or if default shall
be made in the redemptian frvm any Sinking Fund Account of
any Term Bonds in the amaunts and at the times prov~ded
therefor;
(b} if default shall be made in the due and punctual.
paymant of any installment of interest on any Bond when and
as such interest installment shall become due and payable;
(c} if default shall be made by the City in the
obser~ance of any of the other covenants, agreements or
conditions on its part in this Indenture or in the Bands
cantained, and such default shall have continued for a
period of sixty days after written notice thereof,
specifying such default and requiring the same ta be
remedied, shall have been given to the City by the Trustee
or by a Credit Pravider~ or to the City and the Trustee by
the ~wners of not less than twenty-five percent (25$) of the
Band Obligation; or
(d) if the City shall file a petition or answer
seeking reorganization or arrangement under the federal
bankruptcy laws or any other applicable ~aw of the United
States of America, ar if a court of competent jurisdiction
sha~l approve a petitian, filed with or without the consent
of the City, as the case may be, seeking reorganization
under the federal bankruptcy laws or any other applicable
law of the United States of America, or if, under the
provisions of any other law for the re~ief or aid af
debtors, any court af competent jurisdiction shall assume
custody or cantrol of the City or of the whole or any
substantial part of the property of either; then and in each
and every such case during the continuance of such Event of
Default, the Trustee may, and upon the written request af
the Owners of not less than a majority in aggregate amount
of the Bond abligation or of a Credit Provider shal~, upon
notice in writing to the City, dec~are the principa~ af all
of the Current Interest Bonds then Outstandinq, and the
~nterest accrued thereon, and af all Capital Appreciatian
Bonds then Outstanding, in the amount of the Accreted Value
thereaf, to be due and payable immediately, and upon any
i.,~~-iio~ ~ 56 ao23~-~-c~x-~ai~rns
such declaration the same shall become and shall be
~mmediately due and payable, anything in this Indenture or
in the Bonds contained to the contrary notk*ithstanding.
This provision, hawever, is subject to the condition
that if, at any time aftar the principal of the Bonds shall have
been so declared due and payable, and before any judgment or
decree ~or the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the City shall deposit with
the Trustee a sum sufficient to pay all principal and Accreted
Value af the B~nds maturing prior to such declaration and all
matured installments of interest (if any) upon all the Currant
Interest Bonds, with interest on such overdue payments of
principal and Accreted Value and interest installments at the
rate or rates of interest borne by the respective Bonds, and the
reasonable expenses of the Trustee, and any and all other
defaults known to the Trustee (other than in the paya-ent of
principal and Accreted Value of and interest on the B~nds due and
payable solely by reasan of such declaration) shail have been
made good or cured to the satisfact~on of the Trustee, or
provision deemed by the Trustee ta be adequate shall have been
mad~ therefor, then, and in every such case, {i} if such
declaration sha~l have been made by the Trustee, the Trustee, or
(ii) if such declaratian shall have been ma~e upon the written
request of Bondowners, the Owners of not lESS than a majority in
aggregate amount of the Band Obligatian of the Bands than
outstanding, or (ii~) if such declaration shall have been made
upon the written request af a Credit Prov~der, such Credit
Pravider, may, by written notice to the City and, in cases (ii)
and (iii} abave, to the Trustee~ on behalf of the Owners of alI
af the Bonds, rescind and annul such declaration and its
consequences; but no such rescission and annulrnent shall extend
to or shall affect any subsequent default, or shal~ ~mpazr or
exhaust any right or power cansequent thereon.
SECTTON 7.02. Application of Funds Upon Acceleration.
All of the Revenues, including all sums in al~ of the funds
provided for in Sections 3.02, 3.03, 5.02, 5.D3 and 5.04 upon the
date of the declaration af acceleration as provided in Sectian
7.01 and al~ sums thereafter received by the City or the Trustee
hereunder, shall, if received by the City, be transmitted to the
Trustee and be applied by the Trustee in the ord~r following,
upon prasentation o~ the several Bonds, and the stamping thereon
of the paym~nt if only partial~y paid~ or upan the surrender
thereof if fully paid--
First, to the payment of the costs and expenses of the
Trustee, including but not 1$mited ta reasanable
compensation to its agents, attarneys and ca~nsel; and,
thereafter, to the paysnent of the costs and expenses of the
Bondown~rs in declaring such Event of Default, includinq
reasanable compensation ta their agents, attorneys and
counsel;
IAI-11467 t 57 a0233-2-cPH-]N17l41
Secand, to the payment a~ thE whole amaunt af Bond
Ob~igation then owing and unpaid upon the Bands, with
interest on, with respect to the Current Interest Bands, the
overdue principal and installments af interest, and, with
respect to the Capital Appreciation Bonds, the Accreted
Value thereof, at the rate ar rates of interest borne by the
respective Bonds~ and in case such maneys shall be
insufficient to pay in full the whole amount sa awing and
unpaid upan the Bonds, then to the payment of such principal
and interest and Accreted value withaut preference ar
priority of principal over interest, or of interest aver
principal, ar of any installment af interest over any other
installment of interest, ratably to the aggregate of such
principal and interESt and Accreted Va~ue; and
Thxrd, to the payment of all Policy Costs, and in case
such maneys shall be insufficient to pay in full a21 Policy
Costs owing and unpaid, then to the paym~nt of such Po~icy
Costs pro rata (calculated by refer~nce to the maximum
amounts available under the respective Band Reserve Fund
Policies).
SECTION 7.03. Suits at Law ar in Equity and Mandamus.
In case ane or more of the Events af Defau~t shall happen, then
and in every such case the Owner of any Bond at the time
Outstanding shall be entitled to proceed to protect and enforce
the rights vested in such Owner by this indenture by such
apprapriate ~udicial proceeding as such Owner shall deem most
effectual to protect and enforce any such right, either by suit
in equity or by action at law, whether for the specific
performance of any covenant or agreement contained in this
Indenture, or in aid o€ the exercise of any power granted in this
Indenture, or ta enforce any athe~ iegal or equitab~e right
vested in the Owners of Bonds by this Indenture or by law;
provid~d, however, that na such Bondowner shall have the right to
institute any such judicial pzoceeding pursuant to this Section
unless (a) such Owner shall have previausiy given ta the Trustee
written notice of the occurrence of an Event af Default
hereunder; (b) the Owners of at least a majority in aggregate
amaunt of Bond Obligation of the Bonds then Outstanding shall
have made written request to the Trustee to exercise the powers
herein granted or ~o institute such actian, suit ar proceeding ~n
its own name; (c) such Owner or said Owners shall have tendered
to the Trustee reasonable indemnity against the costs, expenses
and ~iabilities to be incurred in co~pliance with such request;
and (d) the Trustee shal~ have refused or omitted to comply with
such request for a per~od of sixty {60) days after such written
request shalZ have been recei~ed by, and said tender af ind~mnity
shall have been made to, the Trustee. The provisions of this
Indenture shall constitute a contract with the Owners of the
Bonds, and such contract and dutias of th~ City and of the
officers and employees of the City and shal~ be enforceable by
LA 1-1 I067 I ~$ 40233-2-GPH-30117l91
any Bondowner by mandamus or other appropriate suit, action or
proceeding in any court af competent jurisdict~on.
SECTIDN 7.04. Non-waiver. Nathing in this Article or
in any other provision af this Indenture, ar in the Bonds, shall
affect ar impair the obligation of the City, which is abs~lute
and unconditianal, ta pay the principal of and the interest (and
premiu~, if any) an the Bonds to the respective Owners of the
Bands at the respective dates of maturity, or upon call for
redemptian, as herein provided, but only out of the Revenues
herein pledged for such payments, or affect or impair the right
of action, which is a~so absolute and unconditional, of such
Owners to institute suit to enforce such payment by virtue af the
cantract embadied in the Bonds.
A waiver of any default or breach of d~ty or cantract
by any Sondowner shall nat affect any subsequent default or
breach of duty ar contract, or impair any rights or remedies on
the subsequent default ar breach. No delay or amission of the
Trustee or of any Owner of any of the Bonds to exercise any right
or pawer arising upon the happening of any Event of Default shall
impair any such right or power or shall be canstrued to be a
waiver of any such Event of Defau~t or an acquiescence therein,
and every power and remedy given by the Law ox this Article to
the Trustee ar to the Owners af Bonds may be exercised from time
t~ time and as often as shall be dEemed expedient by the Trustee
or the Owners of Bonds.
If a suit, action or proceeding to enforce any right or
exercise any remedy is abandoned or determined adversely to the
Bondowners, the City and the Bondowners shal~ be restored to
their former positions, rights and remedies as if such suit,
action or proceeding had not been brought or taken.
SECTION 7.05. Actions by Trustee as Att~rney-in-Fact.
Any suit, acti~n or proceeding which any owner of Bonds shall
have the right to bring to enforce any right or remedy hereunder
may be brought by the Trustee far the equal benefit and
protection of all Owners of Bonds s~milarly situated
(notwithstanding any conditians upan the bringing af any such
actian, suit or proceeding set forth in Section 7.03) and the
Truste~ is hereby appointed (and the successive respective ~wners
of the Bonds issued hereunder, by taking and holding the sa~e,
shal~ be conc~usively deemed so to have appointed itj the true
and lawful attorney-in-fact of the respective Owners of the Bonds
far the puxpose of bringing any such suit, action, or praceeding
and ta do and perform any and aIl acts and things for and in
behalf of the respective Owners of the Bands as a class ar
classes, as may be necessary or advisable in the opinian of the
Trustee as such attorney-in-fact.
SECTIDN 7,d6. Remedies Not Exclusive. No remedy
herein conferred upan or reserved to the Trustee ar ta the Owners
lA1-11067 1 5 9 40233-2-GPH-10117/91
of Bonds is intended to be exclusive of any other remedy. Every
such remedy shali be cumulative and shall be in addition to every
other remedy given hereunder or naw or hereafter existing, at law
or in equity or by statute or otherwise and may be exercised
without exhausting and without reqard to any other remedy
conferred by the Law or any other law.
SECTION 7,07. Power af 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 prace~dings or
otherwise, purs~ant to its duties hereunder, whether upan its own
discretion ar upon the request of the Owners of at least a
majority in aggregate amount of the Bond Obligatian, it shall
have full power, in the exercise of its discretion far the best
interests of the Owners af the Bonds, with respect ta the
continuance, discontinuance, withdrawa~, compromise, settlem~nt
or other dispQSal of such action; provided, hawever, that the
Trustee shall not, unless there no langer continues an Event of
Default hereunder, discontinue, withdraw, compramise or settle,
or otherwise dispose of any Iitigation pendinq at law or in
equity, if at the time there has been filed Wlth it a written
request signed by the 4wners of at least a majority in aggregate
amount of the Bond Obligation hereunder opposing such
discontinuance, withdrawal, compromise, settlement or other
disposal of such litigatian.
ARTICLE VIII
THE TRUSTEE
SECTIDN 8.01. Appointment and Duties of Trustee.
Bank of America National Trust and Savings Associativn, a
nationai banking association duly organized and existing~under
and by virtue of the laws of the United States af America, hareby
accepts the trusts imposed upon it as Trustee hereunder for the
purpose of receiving all moneys which the City is required to
depasit with the Trustee hereunder and agrees ta allvcate, use
and app~y the same as pravided in this Indenture and atherwise to
hold aIl the offices and to perform all the functiflns and duties
provided in this ~ndenture to be held and performed by the
Trustee and agrees to perform such duties and obligations,
subject ta the terms and canditions sat farth in this Indenture.
The City agrees that it will maintain a Trus~ee having an office
in California, so long as any Bonds are Outstanding and unpaid.
The Trustee shall, priar to an Event of DefauZt, and
after the curing of a1Z Events of Default which may have
occurred, perform such duties and only such duties as are
specifically set forth in this Indenture. The Trustee shall,
during the existence of any Event of De€ault (which has not been
cured), exercise sueh of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill ~n
r~i-i~o6~ i 60 soz3~-z-crKaai~r~i
their exercise, as a prudent man WpUYd exarcise or use under the
circumstances in the conduct af his own affairs.
So long as there is no Event af Default hereunder, the
City may re~ove the Trustee, by giving written notice ta such
Trustae and by giving Bondowners natice by mail, first class
postage prepaid, of such removal, and any successar thereta, and
may appoint a successar or successors thereto; pravided that any
such success~r shal~ be a bank or trust campany daing business
and having an office in California, having a cambined capital and
surplus of at least ane hundred million dallars ($100,OOD,fl 00),
and subject to supervision or examination by federal or state
authority. If such bank or trust company publishes a repart of
conditian at ~east annually, pursuant to law or to the
requirements of any supervising or examining authority above
referred to, then for the purpase 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 farth in its mast
recent report of condition so published.
The Trustee may at any time resign by giving written
notice to the City and by giving the Bondowners notice by mail,
first class postage prepaid, of such resignation. Upon receiving
such notice of resignation, the City shall promptly appoint a
successor Trustee by an instrument in writing. Any resignatian
vr remaval of the Trustee and appaintment Qf a successor Trustee
shall become effective upon acceptance of appointment by the
successar Trustee. If no successor Trustee shall have been
appointed and ha~e accepted appaintment within forty-fi~e days of
giving notice of removal or natice of resignation as aforesaid,
the resigning Trustee or any Bandowner (on behalf of himself and
ali ather Bondowners) may petitian any court of competent
jurisdiction for the appointment of a successor Trust~e, and such
court may thereupon, after such natice (if any} as ~t may deem
proper, appoint such successor Trustee.
Any company into which the Trustee may be merged or
con~ertad or with which it may be consoiidated or any company
~esulting 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 carparate trust
business, provided such company shall be eligible undEr this
Section 8.01, sha31 be the successor ta such Trustee without the
execution or fili~g of any paper or any further act, anything
herein to the contrary notwithstanding.
SECTION 8.02. A~thorization of Trustee. The Trustee
is hereby authorzzed to pay the pr~ncipal of and interest and
redemption premium, if any, an the Bonds when due and payable, or
an call and redemption or on purchase by the Trustee prior to
maturity, and to cancel all Bonds upan payment thereof and to
return the same so cancelled to the City, subject ta the
provisions of Section 11.~5. The Trustee shall keep accurate
i.ai->>oa~ i 61 ao233-~-cPa-iari7~vi
records af all funds administered by it and af all Bands and
interest payments paid and discharged,
The Trustee and its directors, officers, emplayees or
agents may in good faith buy, sell, own, hold and deal in any of
the Bonds and may join in any action which any Owner of a Bond
may be entitlad to take, with like effect as if the Trustee was
not the Trustee under this ~ndenture. The Trustee may in good
faith hold any other form of indebtedness of the City or af the
City, own, accept or negotiate any drafts, bills of exchange,
acceptances or obligations of the City and make disbursements far
the City and enter into any commercial or business arrangement
therewith, without limitation.
SECTION 8.03. Fees and ~xnenses. The City shall
compensate the Trustee for its services rendered pursuant to the
provisions of this Indentur~, and alsa far all reasonab~e
expenses, charges, caunsel fees and other disbursements,
including those of its attorneys, agents and empioyees, incurred
in and abaut the performance af its powers and duties under this
Indenture. The obligations of the City under this 5ectio~ to
compensate the Trustee for services and to pay or reimburse the
Trustee for disbursements, liabilities and advances shall
constitute additional indebtedness hereunder.
SECTION 8.04. Liabilitv of Trustee, The recitals af
facts, covenants and agreements herein and in the Bonds contained
shall be taken as statements, co~enants and agreements of the
City, and the Trustee assumes no responsibility for the
correctness of the same, does not make any representations as to
the validity or sufficiency of this Indenture ar of the Bonds,
and shail not incur any respons~bility in respect thereof, other
than in connectian with the duties or obligations herein or in
the Sonds expressly assigned ~a or imposed upan it. The Trustee
shal~ not be liable in cannection with the performance of its
duties hereunder, ~xcept for its own negligence or default.
The Trustee shall not be liable for any errnr of
judgment made in good faith by a respansible officer, unless it
shall be proved that the Trustee was negligent in ascerta~ning
the pertinent facts.
The Trustee shall not be Iiable with respect to any
action taken ar omitted to be taken by it in good faith in
accordance with the direction of the Owners of not ~ess than a
majority in aggregate amount of Hond Obligations of the Bands at
the tirne Outstanding relating to the time, ~ethod and place of
canducting any prdceeding for any remedy available ta the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture.
The Trustee shal~ be under no obligativn to exercise
any af the rights or powers vested in it by this Indenture at the
1.A1-11067 1 ~ Z 40233-2-GPH-10117191
request, order or direction of any of the Bandawners pursuant to
the provisions of this Indenture unless such Bondawners shall
have offered to the Trustee reasanable security ar indemnity
against the costs, expenses and liabilities which may be incurred
therein ar thereby.
The Trustee shall not be liable far any action taken by
it in good faith and believed by it ta be autharized or within
the discretion or r~ghts or powers conferred upon it by this
Indenture.
The Trustee shall not be deemed to have knowledge af
any Event of Defa~lt hereunder unless and until it shall have
actual knowledge thereof, or shail have received written notice
thereof, at its principal corporate trust office in Los Angeles,
California. Except as otherwise expressly provided herein, the
Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions,
covenants or agreements herein or of any of the documents
executed in connection with the Bonds or the delivery of the
Bonds, or as to the existence of an Event of Default thereunder.
The Trustee shall n~t be responsible for the validity ar
effectiveness of any collateral given to ar held by it. The
Trustee sha1~ not be responsible for the recording or filing of
any document relating to this Indenture or of financing
statements (or cantinuation statements in connection therewith)
or of any supplemental instruments or documents of further
assurance as may be required by ~aw in order to perfect the
security interests in any collateral given to or he~d by it.
No provision of this Indenture shall require the
Trustee to expend or risk its awn funds or otherwise incur any
f~nancial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.
The City further agress ta indemnify, to the extent
permitted by law and without making any representation as to the
enfarceability of this cavenant, and save the Trustee, its
directors, officers, employees and agents harmless against any
liabi~ities which it may incur in the exercise and parfarmance of
its pawers and duties hereunder, including but not limited ta
cos~s and expenses incurred in defending against any claim or
liability, which are not due to its negligence or default.
The provisions of this Section 8.U4 sha~l survive the
resignatian or re~oval of the Trustee, payment of the Bonds and
discharge of this Indenture.
SECTION 8.05. Riqhts of Trustee to Rely Upon
Documents. The Trustee shall be protected in acting upon any
natice, resolution, request, consent, order, certificate, report,
directian, Bond or oth~r paper or document believed by it to be
genuine and to have been signed or presented by the proper party
I.AI-I3067 1 6 ~ 40233-2-GPH-l6117191
or parties. The Trustee may cansult with counsel, who may be
counsel to the City, with regard to legal questions, and the
opinion of such counsel shall be full and complete authorization
and protectian in respect of any actian taken or suffered
hereunder in goad faith and in accordance therewith.
The Trustee shall not be baund ta recognize any person
as the Owner of a Bond unless and until his title thereto is
satisfactorily established, if disputed.
Whenever in the administratian of ~ts duties under this
Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or estahlished prior ta taking or suffering any
action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of
bad faith on the part o€ tha Trustee, be deemed ta be
conclusively proved and established by a Certificate of the City,
and such Certificate shall be full warrant to the Trustee for any
actian taken or suffered under the provisions of this Indenture
or any Supplemental Indenture upon the faith thereQf, 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.
ARTICLE IX
MODIF~CATION OR AMENDMENT OF THE INDENTURE
SECTION 9.Q1. Amendments Pernitted. (a)(1} This
~ndenture and the rights and obligations of the City and of the
Owners of the Bands and ~f the Trustee may be modified or amended
at any time by a Supplemental Indenture which shall become
~inding when the written consents of the Owners of a majority in
aggreqate amount of the Bond Obligation af the Bonds Outstanding
{or, if such Supplemental Indenture is oniy applicable to a
Series of Bonds, such Series of Bonds) then Outstanding,
exclusive of Bonds disqualified as provided in Section 9.03
hereof, and of each Credit Provider (so long as such Credit
Provider is not in defauit under the policy of municipal bond
insurance or Letter of Credit issued by it in connection with any
Series of Bonds) shall have been filed with the Trustee
(provided, that na such Credit Provider sha~l ~nreasonably
withhold consent t~ such modification or amendment}. (2) This
Indenture and the rights and obligations of the City and of the
owners of the Bonds and of the Trustee may also be modified ar
amehded at any time by a Supplementa~ Indenture which sha11
become binding when the written cansents of each Credit Provider
shall have been filed with the Trustee, provided that at such
time the paymen~ af the principal of and interest on all
Outstanding Bonds shall be insured by a policy or policies of
municipa~ band insurance or payable under a Letter of Credit
issued by a Credit Provider. (3) No such modification or
1A1-11067 1 ~ 4 4a233-2-[3PH-1W17191
amendment shall (A) extend the fixed maturities af the Bonds, or
extend the time for making any Minimum Sinking Fund Account
Payments, or reduc~ the rate of interest thareon, or extend the
time af payment af interest, ar reduce the amount of principa~
thereof, or reduce any premium payable on the rede~ption thereof,
without the cansent of the Owner of each Bond so affected, or
(B) reduce the aforesaid percentage of the Bond ~bligation the
consent af the Owners af which is required far the execution of
any amendment or modificatian af this Indenture, or (C) modify
any of the rights or obligatians of the Trustee withaut its
writt~n cansent thereto.
(b) This Indenture and the rights and abligations af
the City and of the Owners of the Bonds may a~so be ~odified or
amended at any time by a Supplemental ~ndenture which shall
become binding upon adoption, without the consent of any
Bondawners or any Credit Provider, but only to the extent
permitted by law and only if the Trustee determinesE which
determinatian may be basEd upon a good faith reliance ~pon an
Opinion of Counsel, that the provisians of such Supplemental
Indenture shall not materially adversely affect the interests of
the Owners, including, without limitation, for any one or more of
the following purposes --
(1) to add ta the covenants and agr~ements of the City
in this Indenture contained other covenants and agreements
thereaftEr to be observed or to surrender any right or power
herein reserved to ar conferred upon the City;
{2} ta cure, correct ar supplement any ambiguous or
defective provisian or omission or mistake cantained in this
Indenture or in regard to questions axising under this
Indenture, as the City may ~eem necessary or desirable; and
(3} to provide for the issuance of additiona~ Series
of Bonds, and ta provide the terms and conditians under
which such additional 5eries of Bonds may be issued, subject
to and in accordance with the provisions of Article ITI.
SECTION 9.42. Procedure for Amendment with Written
Consent of Bondowners. The City may at any time adopt a
Supplemental Indenture amending the provisions o~ the Bonds or o€
this Indenture or any 5upplementa~ Indenture~ to the extent that
such amendment is permitted by Section 9.D~(a)(1j, to take effect
when and as provided in this Section. A capy ~f or a summary o~
the provisions af such Supplemental Indenture, together with a
request to Bondowners and to each Credit Provider for their
consent thereta, shall be mailed, first class postage prepaid, by
the City ta each Owner of Bonds and to each Credit Provider, but
failure to mail copies of such Supplemental Indenture or summary
thereof and request shall not affect the validity of the
Supplemental Indenture when assented to as in this Section
provided.
LA1-11D67 l 6 5 40233-2-GYH-1DI17191
Such Supp~emental Indenture shall nat become effective
unless there shall be filed with the Truste~ the written consents
of the Owners of a majority in aggregate amount of the Bond
4bligation of the Bonds then ~utstanding (exclusive of Bonds
disqualified as pravided in Section 9.03) and af each Credit
Provider and a natice shaZl have been mailed as hereinafter in
this Sectian provided. Each such consent shall be effective on~y
if accompanied by proof of ownership of the Bonds for which such
consent is given, which proof shall b~ such as is permitted by
Section 11.08. Any sUCh cansent shall be binding upon the Owner
of the Bonds giving such consent and on any subsequent ~wner
(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 pro~ided for has been mailed.
Aft~r the Owners of the required percentage of Bond
Obligation and each Credit Provider shall have fi~ed their
consents to the Supplemental Indenture, the City shall mail a
notice to the Bondawners 1n the mannex hereinbefore provided in
this Section for the mailing af the Supple~ental ~ndenture,
stating in substance that the Supp~emental Indenture has been
consented to by the Owners of the required pe~centage of Bond
Obligation and each Credit Pravider and will be effect~ve as
provided in this Section {but failure to mai~ capies of said
notice shall not affect the validity af the Supplemental
Indenture or consents thereto), and proof of the mailing of such
notice shall be filed with the Trustee. A recard, consisting of
the papers required by this Section to be fil~d with the Trustee,
shall be proaf o~ the matters therein stated unti3 ~he contrary
is proved. The Supplemental Indenture shall become effective
upon the filing with the Trustee of the proof af the mailing of
such last-mentioned notice.
Yn lieu of obtaining any demand, request, directian,
consent or waiver in writing, the Trustee may call and hold a
meeting of the Bondowners upon such notice and in accardance with
such rules and regulations as the Trustee considers fair and
reasonable for the purpose of obtaining any such action.
SECTION 9.03. Disqualified Bonds. Bonds owned or held
by ar far the account of the City (but exc~uding Bonds held in
any pension or retirement fund) shall not be deemed Outstanding
for the purpose of any cons~nt or other action or any calculat~on
of Dutstanding Bonds provided for in this Article or Indenture,
and shall not be entitled to consent t~ or take any other action
provided for in this Article or Indenture. For the purpose
hereof no bank arganized under the laws of the Stata of
California and no national banking association doing business in
said State, or elsewhere, sha~l be deemed to be an agency af the
City.
[1~1-11067 l 6 6 4QQ33-2-GPH-]UU17197
The City may adopt appropriate regulations ta require
each Bondowner, befare his consent provided far in this Artic~e
shall be deemed effective, to reveal if the BondS as to which
such consent is given are disqual~fied as provided in this
Section.
SECTION 9.04. Effect of Supplemental Indenture. From
and after the time any Supplemental Indenture beco~es effective
pursuant to this Article, th~s Indenture shall be deemed to be
modified and amendEd in accardance therewith, and the respective
rights, duties and ab~igations under this Indenture of the City,
the Trustee and ali owners of Bands Outstanding shall thereafter
be determined, exercised and en~arced hereunder subject in all
respect~ ta such ~od~fication and amendment, and all the terms
and conditians of any such Supplemental Indenture shall be deemed
to be part of the terms and conditions of this Indenture for any
and all purposes.
SECTION 9.~5. ~ndorsement or RepZacement of Bonds
Issued Before Amendments. The City may determine that Bands
issued and delivered befare the effective date af any actian
taken as provided in this Article shall bear a notation, by
endorsement or otherwise, in form approved by the City, as to
such action. In that cas~, upon demand of the Owner of any Bond
Outstanding a~ such effective date and presentation of his Bond
far the purpose at the office of the City or at such other office
as the City may select and designate far that purpose, a suitable
nvtatian shall ~e made on such Bond. The City may determine that
new Bonds, so madified as in the apinion of the City is necessary
to confarm to such acti~n, sha~l be prepared, executed and
delivered. In that case, upon demand of the Owner of any Sonds
then Dutstanding, such new Bonds shall be exchanged at the
principal corporate trust office of the Trustee in San Francisco,
California, without cost to such Owner, for Bonds of the same
character then Outstanding, upan surrender of such Bnnds.
SECTION 9.06. Amendatorv Endorsement of Bonds. The
provisions of this Article shall not prevent any Bondowner fro~
ac~epting any amendment as to the particular Bonds held by such
Bandowner, provided that due notation thereof is made on such
Bonds.
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharqe of Indenture. If the City
sha~l pay and d~.scharge the entire indebtedness on all Bonds
Outstanding in any one or more of the following ways--
(a} by well and truly paying or causing to be paid the
principal af {inc3.uding redemption premiums, if any) and
r~,~-~ioa~ ~ f 7 ao~3-z-crH-~ori~r9i
interest on all Bonds Dutstanding, as and when the same
hecome due and payable; or
(b) by depositing with the TrUSt~~r an escr~w agent or
other fiduc~ary, in trust, at or before maturity, money
which, together with the amounts then on depasit in the
Principal Fund, the Interest Fund, the Bond Reserve Fund and
the Redemptidn Fund, is fully sufficient to pay or redeem
all Bonds Outstanding, including a~l principal, interest and
red~mption premiums, if any; or
(c) by delivering to the Trustee, far cancellation by
it, all Bonds Dutstanding; or
(d) by depositing with the Trustee, an escraw agent or
ather fiduciary, in trust, Federal Securities in such amaunt
which, in the determination af an Independent Certified
Public Accauntant, who shall certify such determinatian to
the Trustee, shall, together with the income or increment to
accrue thereon and any other moneys of the City made
avai~able for such purpose, be fuily sufficient to pay and
discharge the indebtedness on all Bonds (including all
principal, interest and redemption premiu~s, if any) at or
befare their respective maturity dates;
and if the City shall a~s~ pay or cause to be paid al~ other sums
payable hereunder by the City, including all Palicy Costs, then
and in that case, at the election of the City (evidenced by a
Certificate of the City signifying its intention to pay and
discharge all such indebtedness, which shall be filed with the
Trustee), and notwithstanding that any Bonds shall not have been
surrendered for payment, the pledge of the Revenues and other
funds provided for in this Indenture and all other obligations of
the City under this Indenture shall cease, terminate and be
completely discharged, except only as provided in Section 10.D2,
and the owners of the Bands not so surrendared and paid shall
thereafter be entitled to payment onZy out of the monEy or
F~d~ral Securities deposited with the Trustee, escraw agent or
other fiduciary as aforesaid for their payment; subject, however,
to the provisions af Section 10.03. The discharge of the
obligations of the City under this Indenture shall he without
prejudice to the rights of the Trustee to charge for and be
rei~bursed by the City for any expenditures which ~t may
thereafter incur in cannection herewith.
The City ma~ at any time surrender to the Trustee for
cancellation by it any Bands previously issued and delivered,
which the City may have acquired in any manner whatsoe~~r, and
such Bonds, upon such surrender and cancellation, shall be deemed
to be paid and retired.
SECTION 10.02. Discharqe af Liability on Bonds. Upon
the deposit with the Trustee, an escrow agent or other fiduciary,
1.A1-1 L067 1 ~ $ 40233-2-GPH-10117l91
in trust, at ar befare maturity, of maney or Federal Securities
in the necessary amaunt to pay ar redeem Outstanding Bonds
(whether upon or prior to their maturity or the redemption date
of such Bonds), provided that if such Bonds are to be redeemed
prior to the maturity thereof, notice of such redemption shall
have been given as in Article IV provided or provisian
sat~sfactory t~ the Trustee shall have been made for the giving
af such notice, then all ~iabi~ity of the City in respect of such
Bonds shall cease, determine and be completely discharged, except
only that thereafter tha Owners thereof shall be entitled to
payment of the principal of and interest on such Bonds by the
City, and the City shall remain liable for such payment, but only
out of the ~oney or Federa~ Securities deposited in an escrow
fund estabXished for this purpose and held by the Trustee, an
escrow agent, or other fiduciary~ as aforesaid for their payment,
subject, however, to the provisions of Sectian 1Q.03.
SECTION 10.Q3. Payment of Bonds after Discharqe of
Indenture. Notwithstanding any provisions of this Indenture, any
moneys deposited in trust for the payment of the principal of, or
interest or premium on, any Bonds and remaining unclaimed €or two
years after the principal of alI the ~utstanding Sonds has become
due and payable (whether at maturity or upan call for redemption
ar by declaration as provided in this Indent~re) shall then be
repaid to the City upon its Written Request~ and the Owners af
such Bonds shall thereafte~ be entitled to ~ook on~y ta the City
for payment thereaf~ and a~l liabi~ity of the Trustee ar any
other fiduciary with respect ta such moneys shall thereupon
cease. In the event of the repayment of any such moneys to the
City as aforesaid, the Owners of the Bonds in respect af which
such moneys were deposited shall thereafter be deemed to be
genera~ creditors af the City far amounts equivalent ta the
respective amounts deposited for the payment of such Bonds and so
repaid to the City (without interest thereon).
ARTICLE XI
MISCELLANEOUS
5ECTION 11.01. Liability of City Limi~ed to Revenues.
Notwithstanding anything in this Indenture contained, the City
shall not be required ta advance any moneys derived from the
p~oceeds of any taxes levied or coliected by the City, or from
any saurce af income other than the Revenues, for the payment of
the principal of or interest an the Bonds, for the operatian and
maintenance of the Enterprise, for the performance of any
covenants herein contained or for the payment af any obligations
here~nder, including indemnification. The City may, however,
advance funds for any such purpose, pravided that such funds are
derived from a saurce legally available for such purpase and may
be used by the City for such purpase withaut incurring
indebtedness.
LA1-1L067 1 ~ ~ 40233-2-GP}i-10/17l9i
The Bonds shall be special abligations af the City,
payable salely from the Revenues and other amounts held by the
Trustee as in this Indenture provided. The General Fund ~f the
City is not liabie, and the credit or taxing power of the C~ty is
not pledged~ for the payment of the Bonds or their interest. The
owners of the Bonds shall never have the right to compe~ the
exercise of the taxing power of the City or the forfeiture o€ any
property of the Czty. The principal of and interest on the Bonds
and any premiums upon the redemption af any thereo€ sha~l nat be
a debt of the City, nor a~egal or equitab3e pledge, charge, lien
or encumbrance upon any property af the City or upon any of its
income, receipts or revenues except the Revenues, and other
amounts held by the Trustee, piedged to the payment thereof as in
this Indenture provided.
SECTION 11.fl2. Successor Is Deemed Included in All
References to Predecessor. Whenever in this ~ndenture ar any
Supplementai Indenture either the City or the Trustee is named or
referred to, such reference shall be deemed to include the
successors or assigns thereof, and all the covenants and
agreements in this Indenture contained by or an behalf of the
City or the Trustee shal~ bind and inure to the benefit of the
respective successors and assigns thereof whether so expr~ssed or
nat .
SECTION 11.03. Limitation of Riqhts to Parties and
Bondowners. Nothing in this Indenture or in the Bonds expressed
or impiied is in~ended or shall be construed to give to any
person, other than tha City, the Trustee, the Reserve Provider,
the Credit Provider and the Owners of the Bonds issued heraunder,
any legal or equitable right, rernedy ar claim under or in respect
of this Indenture or any covenant, condition or provision therein
or herein contained; and al~ such covenants, conditions and
provisions are and shall be held to be for the sole and exc~usive
benefit of the City, the Trustee, the Reserve Pravider, the
Credit Provider and the Owners of the Bonds issued hereunder.
SECTION 1Z.04. Waiver of Notice. Whenever in this
Indenture the giving of natice by mail or otherwise is required,
the gi~ing of such notice may be waived in writing by the persan
entitled to receive such natice and in any such case the giving
or receipt of such notice shall not be a condition precedent ta
the validity of any action taken in reliance upan such waiver.
SECTION 11.05. Destruction of Bonds. Whenever in this
Tndenture pro~ision is made for the cancel~atiQn by the Trustee
and the delivery to the City of any Bonds, the Trustee may
destroy such Bonds (in the presEnce of an officer of the City, if
the City shall so require), and deliver a certificate of such
destruction ta the City, unless the C~ty shall, by Written
Request of the City, request the Trustee to instead cancel and
deliver said Bands to the City.
I.H1-11067 l ~] fl 40233-2-GPH-10I17l91
SECTIDN 11.06. Severabilitv of Invalid Pravisi~ns. If
any one or more of the provisians contained in this Yndenture or
in the Bonds shall for any reason be held to be invalid, il~egal
or unenforceable in any respect, then such provision or
provisions shall be deemed severable from the remaining
provisions c~ntained in this Indenture and such invalidity,
illegal~ty or unenforceability shall nat affect any other
provision of this Indenture, and this Indenture shall be
construed as if such invalid or illegal ar ~nenforceable
provision had never been contained herein. The City hereby
declares that it wauld have adopted this Indenture and each and
every other Section, paragraph, sentence, clause or phrase hereof
and authorized the issuance of the Bonds pursuant thereto
irrespective of the fact that any ane ar more Sections,
paragraphs, sentences, clauses or phrases of this Indenture may
be held il~egal, invalid ~r unenforceable. If, by reason of the
judgment af any court~ the Trustee or any successox Trustee is
rendered unable to perform its duties hereunder, and if no
successor Trustee be then appointed, all such duties and all of
the rights and powers of the Trustee hereunder sha11 be assumed
by and vest in the City in trust for the benefit of the
Bondowners.
SECTION 11.07. Notice to City and Trustee. Any natice
to or demand upon the Trustee may be served or presented, and
such de~and may be made, at the principal carporate trust office
of the Trustee in Las Angeles, California, which at the date of
adoption of this Indenture is ~ocated at 555 South Flower Street,
Fifth Floor, Las Angeles~ California 90071, Attention: Corporate
Trust 8514, ar at such other address as may have been filed in
writing by the Trustee wzth the City. Any notice to or demand
upan the City shall be deemed to have been sufficient~y given or
served for all purposas by being deposited, postage prepaid, in a
past office letter box, addressed to the City, [who shou~8 this
go to?], or to the City at such ather address as may be filed in
writing by the City with the Trustee.
SECTION 11.08. Evidence of Riqhts of Bondowners. Any
request, cansent or other instrument required by this Indenture
to be signed and executed by Bondown~rs may be in any nu~ber of
concurrent writings of substantially similar tenor and may be
signed or executed by such Bondowners in person or by an agent or
agents duiy appaint~d in writing. Proof of the execution af any
such request, cansent or other instrument or of a writing
appointing any such agent, shall be sufficient far any purpose of
this Indenture and shall be canclusive in favor of the Trustee
and of the City if made in the manner provided in this Section,
The fact and date of the execution by any person of any
such request, consent ar other instr~ment or writing may be
proved in any manner reasonably acceptable to the Trustee.
t~i-iio6~ i 71 aao.~~2-crxaornrni
The ownership of Bonds sha11 be proved by the bond
regis~ration books maintained pursuant ta Section 2.Qfi.
Any request, consent, vote or declaratian of tha Owner
of any Bond shall bind every future Owner of the same Bond and
the Owner of every Bond issued in exchange therefor ar in lieu
thereof, in respect of anything done or suffered to be done by
the Trustee or the City in pursuance of such request~ consent,
vote or declaratian.
SECTION 11.09. Credit Provider Provisions. Any
provisions herein requiring consent from the Credit Providers
sha11 have no force or effect with respect to a Credit Provider
during any period in which such Credit Provider is in default in
its obligations under the related Letter of Credit oz insurance
policy. The provisions with respect to the Credit Provider and
Reserve Provider ~ay be disr~garded if no Credit Providers or
Reserve Pro~iders are in existence with respect to the
Outstanding B~nds.
SECTI~N 11.10. Article and Sectian Headinqs and
References. The headings or titles of the several Azticles and
Sectians hereof, and any table af contents appended to copies
hereof, shall be solely for convenience of reference and sha11
not aftect the meaning, construction or effect of this Indenture.
All references herein ta "Articles," "Sections" and
other subdi~isions are to the corresponding Articles, Sections or
subdivisions of this Indenture; and the words "herein," "hereof,"
"hereunder" and other words of similar import refer to this
Inc~enture as a whole and not to any particular Article, Section
or subdivision hereof.
SECTION 11.11. Funds and Accounts. Any fund required
by this Indenture to be estabiished and maintained by the City or
the Trustee may be established and maintained in the accounting
records of the City or the Trustee either as a fund or an
account, and may, for the purposes of such records, any audits
thereof and any reports ar statements with respect thereto, be
treated either as a fund or as an accvunt; but all such recards
with respeet ta all such funds shall at all times be maintained
in accardance with Generally Accepted Accounting Principles and
with due regard far the pratection of the security of the Bonds
and the rights of every Owner thereof.
SECTION 1~.12. Waivex of Personal Liabil~ty. No City
member or officer, agent or e~pZayee af the City shall be
individua~ly ar personally liab~,e €or the payment oF the
principal of or interest on the Bands; but nathing herein
contained shall relieve any such City member ar officer, agent or
employee from the performance of any official duty provided by
law.
IAi-11067 1 ~] 2 40233-2-GPH-10117/91
SECTION 11.13. Governinq Law. This Indenture shall be
construed and governed in accordance with the laws of the State
of California.
SECTION 11.14. Business Dav. Except as specif~cally
set forth in a Supplemental Indenture, any payments or transfers
which would otherwise become due on any day which is not a
Business Day shall become due or shall be made an the next
succeeding Business Day.
SECTION 11.15. Effective Date af Indenture. This
Indenture shall take ~ffect upon its execution and delivery.
SECTIDN 11.16. Executian in Counterparts. This
Indenture may be executed in several counterparts, each of which
shall be deemed an original, and all af which shall canstitute
but ane and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Indenture by their officers thereunta duly authorized as of
the day and year first written above.
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as trustee
(Seal)
ATTEST;
By
CITY OF SANTA M~NICA
By
U11-11067 1 7 ~ 4D233-2-GPH-10117191
EXHIBIT A
[FORM OF 1991 SERIES A BOND]
$
No.
CITY OF SANTA MONICA
Dated ~ate
WASTEWATER ENTERPRISE REVENUE BOND
(HYPERION PROJECT)
1991 SERTES A
Interest Rate Maturity Date
Registered Owner:
Principal Sum:
CUSIP Na.
The CITY OF SANTA MONICA, a municipal corporatian and
charter city, du~y organized and existing under and by virtue of
the Canstitution and laws of the State of California (herein
called the "City"}, far value receivEd, hereby pxomises to pay,
but only out of the Revenues (as such term is defined in the
Indenture hereinafter referred ta), to the registered owner set
forth above, or registered assigns, on the matur~ty date set
forth above (subject to any right of prior redemption hereinafter
provided f~r), the principal sum set forth above in lawful money
of the United States of America, and to pay, but only out of
Revenues, interest therean in like lawful money from the interest
payment date next preceding the date of authentication of this
Bond (unless this Bond is authenticated as of a day during the
period from the ].6th day of the month next pxeceding any interest
payment date to and including such interest payment date, in
which event it shall bear interest from such interest payment
date, or unless this BQnd is authenticated on or before
15, 1992, in which event it shali bear interest from
1, 1991) until payment of sueh principa~ sum, at the interest
~ate per annum stated 3bOVe~ payable on July 1, 1992 and
semiannua~ly thereafter on January 1 and July 1~n each year.
The principal (or redemption price) hereof is payable to the
registered awner hereof upon the surrender hereof at the
principal carporate trust office of Bank of America National
Trust and Savi.ngs Association (herein, tog~ther with any
1.A1-11067 1 A- ~ 40233-2-GPH-lOJl7l91
succQSSar as trustee under the Indenture, called the "Trustee"),
in San Franciscfl, California. The interest hereon is payable to
the person whose name appears on the bond registration books of
the Trustee as the registered owner hereaf as of the close of
business on the 15th day of the month immediately preceding an
interest payment date, whether or nflt such day is a business day,
such interest to be paid, except as grovided in the IndEnture, by
check mailed ta such registered owner at his address as it
appears on such registration books. Interest on this Bond shall
be calculated on the basis of a 360-day year comprised of twelve
consecutive 3~-day manths.
This Bond is one of a duly authorized issue of revenue
bonds of the City designated as the "City of Santa Monica
Wastewater Enterprise Revenue Bonds" (herein called the "Bonds"),
of the series and designatian indicated on the face hereof
(herein called the "1991 Series A Bonds"}. Said issue of Bands
is not limited in aggregate principal amount and cansists or may
consist of one or more series of varying denominations, dates,
maturities, interest rates and oth~r provisians, all issued and
to be issued under and pursuant to the provisians of the Charter
af the City, the Santa Manica Revenue Bond Act (being Chapter 6.5
af Article II of thE Santa Monica Municipa~ Code) and all laws af
the State af California supplemantal thereta, including the
Revenue Bond Law af 1941 ta the extent made applicable by said
Charter and said Santa Monica Revenue Bond Act (h~rein
col~ectively called the "Law"), and pursuant to an I~denture,
dated as af 1, 1991 (herein, together with any
supplements or amendments thereto, called the "Indenturer'),
between the Trustee and the City. Reference is hereby made ta
the Indenture (a capy of which is on file at the principal
corgorate trust office of the Trustee in Los Angeles, California)
and to the Law for a description of the terms an which the Bonds
are issued, the provisions with regard to the nature and extent
of the Revenues and the rights thereunder (and limitatians
thereon) of the registered awners of the Bonds and the rights,
duties and immunities af the Trustee and the rights and
obligations of the City thereunder; and a11 the terms of the
Indenture and the Law are hereby incarporated herein and
constitute a contract between the City and the registered owner
o~ this Sond, and to all the provisians thereaf the owner of this
Bond, by his acceptance hereof, cansents and agrees. Each flwner
hereof shall have recourse to all of the pravisions of th~ Law
and the Indenture and shall be boun~ by all of the terms and
conditions thereof.
The Bands are issued to provide funds fo~ the
improvement of the Enterprise, which consists of the municipal
wastawater collection, treatment and dispasal system of the City,
including the City's interest in the Hyperion Plant tas such term
is defined in the Indenture) pursuant to the Hyperion Agreement
(as such term is defined in the Indenture).
U11-11067 1 l~i~ ~ 40233-2-GPF3-10! 17191
AlI Revenu~s and any ather amounts (including praceeds
of the sale of the Bonds) held by the Trustee in any fund or
account established under the Indenture (other than amounts on
deposit in the Rebata Fund created pursuant to the Indenture) are
irrevocably pledg~d to the payment of the interest an and
principal of the Bonds, as provided in the Indenture, and the
Revenues shall nat bs used f~r any other pur~ase whi~e any of the
Bonds remain outstanding; provided, however, that aut of the
Revenuas and other moneys there may ~e applied such sums for such
purposes as are permitted under the Indenture. Said pledge
constitutes a first pledge of and charge and lien upqn the
Revenues and all other amounts held by the Trustee in the funds
and accounts established under the Indenture (other than amounts
an deposit in said Rebate Fund} far the payment of the interest
on and principal of the Bonds in accordance with the terms hereof
and of the Indenture. Additional series of Sonds payable from
the Revenues may be issued on a parity with the Bonds of this
Series, but only subject ta the conditions and ~imit~tions
contained in the Indenture.
The BQnds are special obligations of the City payable
solely from the Revenues and other amounts held by the Trustee,
and the City is not obligated t~ pay them except from the
Re~enuES, and other amaunts held by the Trustee. The General
Fund of the City is not liabie, and the credit ar taxing pawer ~f
the City is not pledged, far the payment a€ the Bonds or their
interest. The Bonds are not a debt of the City nor a legaZ or
equitable pledge, charge, lien ar encumbrance upon any of the
property of the City ~r any a€ its income, receipts or revenues,
except the Revenues, and other amounts held by tha Trustee. The
owner hereof has na right to compel the exercise af any taxing
pawer of the City.
The City shall have the right, an any datE~ to redeem
the 1991 Series A Bands, as a whole, or in part by lot w~thin
each maturity so that Annual Debt 5ervice {as defined in the
Tndenture) for aiI years in which ~991 Series A Bonds shall
mature after such redemptian shall be as near~y equal as
practical, from praceeds of insurance or proceeds of eminent
domain proceedings, upon the terats and conditions of, and as
provided for in, the Indentu~e, at the principal amount thereQf
and accrued interest thereon to the date fixed for rederaption,
without premium.
1991 Series A Bonds due on or after January l, 2003
shall be subject to redemption prior to their respecti~e stated
maturities, at the option of the City, fram and to the extent af
any source of available funds, as a whole on any date on or after
January ~, 2a02, or in part on any interest payment date on or
after January 1, 2002 af s~ch maturities or portions of
maturities and of such tenor as shall be determined by the City
if less than all of the 3991 Series A Bonds are to be called for
prior redemption and hy ~ot within any such maturity and tenar if
LA 1-11067 1 ~i- 3 40233-2~'iPH-10~17J91
Zess than a12 of the 1991 Serie~ A Bands of such maturity and
tenar be redeemed, at the principal amount thereof and accrued
interest thereon to the date fixed for redemption, plus a premium
(e~pressed as a percentaqe of such principal amount) as set forth
in the fallowing schedu~es:
Bonds Redeemed
on or after and priar to
January ~ January 1 Premium
2002 24Q3 2$
2003 2004 1~
2004 and thereafter 0~
1991 Series A Bonds maturing on January 1, 20 are
further subject to redempt~on priar to their respecti~e stated
maturities, from the 199I Series A Sinking Fund Account
established under the Indenture, on each January 1 on or after
January l, 2Q_, and by lot within any such maturity if less than
all af the 1991 Series A Bonds of such maturity and tenor be
redeemed, upan payment of the principal amaunt thereof and
accrued interest thereon to the date fixed for redemption,
without premium, but only in amounts equal to, and in accordance
with, ~he schedu~e o~ the principal amaunts of 199~ Series A
Bands to be redeemed in each such year from said 1991 Series A
Sinking Fund Account, as set forth in the Indenture.
As provided i~ the Indenture, natice of ~edemption
shall be maiied~ not less than thirty nor mare than sixty days
prior to the redempt~on date, to the registered awner af this
Bond.
If this Bond is called for redemption and payment is
duly provided therefor as specifiEd in the Indenture, interest
shal~ cease to accrue hereon from and after the date fixed for
redemption.
The 1991 Series A Bonds are iss~able as fully
registered Bands without caupvns in the denomination of $5,000 or
any integral multiple thereof; provided that no 199~ Series A
Bond shall have the principal ~aturing on more than one principal
payment date.
Subject to the limitations and conditians and upon
payment of the charges, if any, as provided in the Indenture,
1991 Series A Bonds may be exchanged at the principal corporate
trust office of the Trustee in San Francisca, Califarnia, for a
like aggregate principal amount of ~991 Series A Bonds of the
same tenor and maturity af other authorized denominati~ns. This
Bond is transferable by the registered own~r hereof, in person or
by his attorney duly autharized in writing, at the principal
IAI-11067 I pi~4 40233-2-GPF~-14l17141
corporate trust affice of the Trustee in San Francisco,
California, but only in the manner, subject to the limitativns
and upon pay~ent af the charges provided in the ~ndenture, and
upon surrender and cancellation of this Bond. Upan such transfer
a new fully registered Bond or Bonds, of authorized denominatian
or denominatians and of the same series and tenor. for the same
aggregate principal ameunt w~ll be issued to the transferee in
exchange herefor. The Trustee is not required to transfer or
exchange (i) any 1991 Series A Bond during the period commenaing
on the date fifteen days pri~r to the date the Trustee selects
1991 Series A Bonds for redemption and ending on such date of
selection, or (ii) any 1991 Series A Bond selected for
redemptian.
The City and the Trustee may treat the reg~stered owner
hereaf as the absolute ~wner hereof for all purposes, and the
City and the Trustee shall nat be affected by any notice to the
contrary.
The rights and ~biigatians of the City and the owners
of the Bonds may be modified or amended at any time ~n the
manner, to the extent and upon the terms pravided in the
Indenture, but no such madification or amendment shall (1} extend
the fixed maturity of this Bond, or extend the time for making
any minimum sinking fund account payments with respect hereto, or
reduce the rate of interest herean or extend the time of payment
of interest, or reduce the amount of principal hereof or reduce
any premium payable upon the redemption hereof, without the
cansent of the owner hereaf, or (2) reduce the percentage af
Bonds the consent of the registEred owners of which is requir~d
for the amendment or modification of the Indenture; a11 as more
fully set forth in the Inaenture.
It is hereby certified that all of the conditians,
thing and acts required to exist, to have happened or to have
been performed precedent to and in the issuance of this Bond do
exist~ have happened or have been performed in due and regular
time, farm and manner as required by the Law and the laws of the
State of California, and that tha amaunt of this Bond, tagether
with a~i other abligations of the City, does nat excsed any limit
prescribed by the Law ar any laws of the State of California, and
is not in excess of the amaunt of Sonds perraitted to be issued
under the ~ndenture.
This Bond shall not be entitled to any benefit under
the Indenture, or became valid or obligatary for any purpose,
until the certificate of authentication and registration hereon
endorsed shall have been signed by the Trustee.
IN WITNE55 WHEREOF, the City of Santa Monica has caused
this Bond to be executed on its behalf under the o€ficial seal of
said City or a facsimi~e thereof, signed by the manual or
facsimile signatures of its Mayor and attested by th~ manual or
I.AI-1L067 1 pi-'~ 40233-2-GPH-IQI17l91
1
facsimile signature of the City Clerk~ all as af l,
1991.
CITY OF SANTA MONICA
Mayor
(Seal)
Attest:
City Clerk
ta~-i~o6~ i A-6 aoz3~-z-cpx-iai~r9i
. ~ *f
[FORM OF TRUSTEE'S CERTIFICATE O~ AUTHENTICATI4N
AND REGISTRATIDN T~ APPEAR ON 1991 SERIES A]
This Bond is one of the Bonds described in the within-
rnention~d Indenture, which has been authenticated and registered
an the date set forth belaw.
BANK OF AMER~CA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Trustee
By
Authorized Officer
[FORM OF ASSIGNMENT]
For va~ue received the undersigned do(es) hereby sell,
assign and transfer unto
the within-mentioned Registered Band and hereby irrevocably
const~tute(s} and appoint(sj
attarney, to transfer the same on the boaks of the Trustee with
full power of substitution in the premises.
Dated:
STGNATURE GUARANTEED BY:
NOTICE: Signature must be guaranteed by a memb~r firm of the
Nsw Yark Stock Exchange or a commercial bank or trust
company.
U,i-i~oa~ i A-7 aoz3~-2-c~x-ianmi
N,
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NOTICE INVITING BIDS
$33,980,000*
Crty of Santa Monica
Wastewater Enteiprise Revenue Bonds
(Hyperion Project}
~ 991 Series A
DTC BOOK-EN7'RY
NUTICE IS HEREBY G~VEN that sea~ed bids w~l be received by the City vf Sama Momca,
California {the "City") for the purchase of $33,98p,Q00* par value revenue bonds entitled
"Wastewater Enterpnse Revenue Bonds (Hyperian Froject), 1991 Series A" (the "1991 5erxes A
B~nds"). The bids w~ll be recei~ed at the plac~ and up to the time specified below {unless
postponed as described hereiri):
TIME: November 15, 1991
10:00 a.m., Pacific Standard Time
PLACE: Orrick, Herrington & 5utcliffe
777 South Figueroa Street, 32nd Floar
Los Angeies, Califamia 90017
MAILED BIDS: Mailed bids should be addressed to:
The C~ry of Santa Monica, Los Angeles
c/a Greg Harrington
Orrick, Hernngton & Sutcliffe
777 South Figz~eroa Street, 32nd F~onr
Los Angeles, Califemia 90417
All bids must be in an en~eloge clearly marked "Proposal for Wastewater Enterprise Re~enue Bonds
(Hypenon Project}, 1991 Seiies A".
*Prel~rninary, sub~ect to ad~ustment as described herein.
Purpose of tl~e Issue A portion of the graceeds of the 199i Series A Bonds will be appiied
by the City to the costs of the upgrade of the Hypenon Plant {as defined herein) (the "Project"}. The
"Enterpnse" consists of the whole and each and every part of the municipal wastewater collection,
treatment and disposai system of the City, includ.ing the City's incerest in the Hyperion Plant
pursuant to the Hypen~n Agreement (as defined herein), and all additi4ns, betterments and
extensions to said wastewater system or any gart thereof The term "Hyperion P~ant" means the
Hypenon Treatment Plant and appurtenant facilities located at 120[}0 Vista del Mar, Los Angeles,
Califomia, together with any wastewater collecrion, treatment and disposal facilittes related to the
Hyperion Piant, and in which facihues the City has an interest purs~ant to the Hyperion Agreement,
and any alterat~on, expansion, improvement, relocation, replacement orreconstruct~on thereof. The
te~m "Hyperion Agreement" means the Jou~t Powers Agreement, made and entered inta February
21, 1964, by and between The City of Los Angeles {°Los AngeIes") and the City governing the
treatment of sewage at the Hyperion Plant, and as such agreement may be amended, modified or
restated and includes any agreement between such pames go~erning the treatment of sewage at ttie
HyperiQn Plant that replaces or supersedes the existing ~3ypenon Agreement. The Hyperion
AgreeEnent pravides, arnong ather things, that the City may discharge certa.in permitted sewage
flows int~ the sewerage system of I.os Angeles, and that Los Angles wiil convey such sewage to the
Hypenon P1ant for treatment and disposal. The term "Local System" means all of the Enterpnse
except the City's interest in the Hypenon Plant.
Los Angeles is the planning agency, principal owner and operator of the Hyperion Plant. In
February, 19$7, Las Ange~es entered into an amended consent decree with the Un~ted States
Government and the State of Caiifarnia, wherein Los Angeles agreed to upgrade the degree of
treatrrient at the Hyperion Plant This followed an earlier consent decree ~quinng that Los Angeles
discontinue the d~scharge of sewage sludge anto the ocean. Both the onglnal and amended consent
decrees were necessitated by federal and state regu~acory requirements relating ta the eliminarion of
discharges of polIutants into navigable waters. In accardance wittt the pmvisions of federal and
state law, and the amended consent decree, I.QS Angeies is now cairying out a ma~or program of
construction to apgrade and expand the Hyperion Plant. Under the terms of the Hyperion
Agreement, the City is obligated ta share in some of these costs It is estimated by Los Angeles that
the Hypenon upgrade will cost appro~mately $2.899 biilian to compiete over the next ten years.
The Cty's contribut~on to the upgrade, pursuant to the Hyperion Agneement, will be approximately
$63.2 mill~on over the next ten years. The Fro~ect consists of the payment of casts related to the
Hyperion upgrade through Fiscal Year 1993-94. It is anucipated that additional series of bonds will
be ~ssued over the next ten years t~ finance the remau~der of the City's contributian
Authority for Issuance: The 1991 Series A Bonds are being issued pursuant to Secuon 400
of the City Charter of the City af Santa Monica and Chapter b.5 of Axticle II of the Mumcipal Code
of the C~ty, relating to revenue bonds, incorporating certain provisions af the Revenue Bond Law of
1941, being Chapter 6 of Division 2 of Tttle 5 of the California Gavernment Code, and under the
pravisions of the Indenture dated No~ember 1, 1991 (the "Ind~nture") by and between the City and
Bank of America NauonaI Truss and 5avings Associarion, as Trustee {the "Trustee"). The 1991
Senes A Bonds and any bands, notes or other obligations ("Additional Bonds"} of the City payable
fram Revenues {as defined herein} and ranking on a parity with the 1991 A Series A Bonds and
authorized to be issued under and pursuant to the Indenture are ~erein referred to as the "Bonds."
Security: The I991 Series A Bonds are special obligations of the Ciry payable soleIy fram the
Revenues and other amounts held by the Trustee, as provided in the Indenture. The term
"Revenues" means, far any Fiscal Year or other period, as all rates, fees and charges recei~ed for,
and all other income and receipts derived by the Ciry from, the operat~on of the Enterpri~e or arising
from the Enterpnse detennined in accordance with generally accepted accountmg pri~ciples,
including ali proceeds of insurance covering business interruption lvss relating to the Enterprise,
investment eanungs an amounts held in the Re~enue Fnnd and Reserve Fund, establ~shed under t~ie
Indenture, and aIl other money howscever deri~ed by the City from the ogerat~on of the Enterpnse
or ansing from the Enterpnse, bvt excluding connection fees and charges, xefundable depasits azade
ta establish credic and advances or contribut~ons in aid of construction; except as pro~rided in the
Indenture.
The General Fund of the City is not liable, and the credit or taxing power of the City is not
pledged for the payment of the 1991 5enes A Bonds or the~r interest. The ~wners of the i991
5enes A Bands shall never have the right to compel the exercise of the taxing power of tt~e City or
the forfeiture of any property of the City. The pnncipal of and interest on the 1991 Senes A Bonds
and any premiums upon the redemption of any thereof shall not be a debt of the City, nor a legal or
equitable pledge, charge, lien or encumbrance upan any properry of the City or upon any of its
incame, receipts or revenues except the Revenues, and other amaunts held by the Trustee, pledged
w the payment thereof as provided m the Indenture.
Book-Entry 4nly: The 1991 Senes A Bonds will bc issued in book-entry form only,
inirially registered in the name of Cede &. Co., as nominee of the Depositqry Trust Compar~y, New
Yrnr~C, New York {"DTC"). Purchasers will not receive certificates represenang 1991 Series A
Bonds. Indi~idual purchases w~ll be in the principal amount of $S,0(14 and integral multipies
thereof. Payments of principal, interest and redemption premium, if any, will be rnade by the City
(or the Trustee} to DTC for subsequent d~sbursement to DTC parncipants to then be remitted ta the
beneficia~ owners of the 1991 Senes A Bonds.
Interest Payment Dates: The 1991 Series A Bonds will be dated November 1, 1991 and
will bear utterest frorn that datE payable an Juiy 1, 1992 and semiannually ther~after on each Jannary
1 and duly 1 unnl maturity or pnor redempuon.
Principat Amo~nt: T'he aggregate principal amount of the 1991 Senes A Bonds wili mature
eitY~er through seriai maturities or sinking account installments in the following amounts on the
fallowing dates:
Princinal _Amaunt"'
1993
1994
1995
1996
I997
1998
1999
200Q
2001
2002
2003
2004
2005
2006
2007
~
2~
?.OQ9
2010
2Q11
za~2
2a13
201~4
2015
?A16
2017
2018
2Q19
202A
2021
2U22
*Prel~minary; sub~ect to adjustment as described herein.
Prinei~a! Amnunt*
$
3
Adjustment of Princepal Amounts and Amortization Schedule: The principat
amounts set forth abo~e reflect certain estimates of the City and its Financial Advisor with respect to
the iikely interest rates of the winning bidder and the pre~um/dsscount contamed in the w~uining
b~d. After sslecting the w~nning bid, the amort~zati4n schedule may be adjusted as necessary in the
deternunatian of the City's Fynancia~ Ad~isor ~.n $S,OUO increments to r~eflect the actuaI interest rates
and any premium/discaunt in the winnzng bid and ta create a more level annual debt service nn the
1991 Senes A Bonds, and to accommodate certain other requir~ements or preferences of the City.
Such adjustments will not change the aggregate pnncipal amount of the 1991 5eries A Bonds to be
issued frorn the amount set forth above by more than 5% or change the principaI amount due on
such I491 Series A Bonds in any year by more than 10%. The dollar amount bid for the 1991
Ser~es A Bonds by the wmning bidder will be ad~usted, if apphcable, to reflect any such adjus~nerns
in the amoruzation schedule. Any such adjustment wil~ be communicated to the winning bidder
wit}un 26 hours afcer the apemng of the bids.
Serial Bonds and/or Term Bonds: Bidders may provide that all 1991 Series A Bonds be
issued as serial bonds or that any two or more consecutive annual principal amounts be combined
into one or rnore term bonds.
Principal and Interest Pay~ments: Interest on the 1991 Series A Bonds will be payable
semi-annually on July 1 and January 1, beginning J'aly 1, 1992 (each an "~nterest Payment Date").
Principal and redempt~on prer~uum, if any, of the 1991 Series A Bonds will be payabie at matunty or
upon earher redemption to the registered ov~mer Qf each Bond, which will initially be the Uepository
Trust Company, New York, New Yark ("DTC") or its nominee. Transfer of principal and interest
payments to participants of DTC will be the responsibility of DTC, and transfer of grincipal and
interest payments to beneficial owners of the 1991 Series A Bonds by participants of DTC will be
the responsibility of such participants and other nominees of beneficiai owners. The City will not be
responsible or liable far s~ch transfers of payments or for maintaimng, supervising or r~v~ew~ng the
r~ecor~s maintained by DTC, its participants or persvns acting thraugh such participants.
~p#ional Redemption: 1991 Ser~es A Bonds due on or after January 1, 2403 sha11 be
subject to redemption prior ta their respecnve stated maturities, at the apfion of the City, from and to
the extent of any source of available funds, as a whole on any date on or after January 1, 20(}2, ar
in part on any interest payment date on or after January 1, 2002 of snch maturittes or portions of
maturit~es and of sUCh tenor as shall be detemuned by the City if iess than all of the 1991 Senes A
Bonds are to be called far prior redemption and by ~ot within any such matunty and tenor if less than
all af the 199~ Series A Bands of such matunty and tenor be redeemed, at the principai amount
thereof and accrued interest thereon to the date fixed for redemption, plus a premium (expressed as a
percentage of such principal amount) as set forth in the following schedule:
Bonds Redeemed
O~ or After .ianuar~ 1 Prior tq .~anua~;v 1 P=g,,~ium
2QQ2 2D03 2°~'0
20Q3 2004 1 °~o
2004 and thereafter 0%
Man~datory 5inking Fund Redemption: If the successful bidder designates principal
amounts to be combined into one or more term bonds, each such term shall b~ subject to rnandatory
sinking fund redemption ca~mencing on January 1 of the first year which has been combined to
form such term bond and continuing on Janaary 1 in each year thereafter until the stated maturity
date of t~at term bond. 'i~e amount redeemed in any yeaz shall be equal to the principal amount for
each year set forth in tlie ta~le above under the caption "Principat Amount".
4
Natice of Redemption: Notice of Redemption shall be gi~en at Ieast 30 and not more than
60 d.ays ~efore the redempdon date. Such nouce shail be given by the Trustee by mail. So long as
the 1991 Senes a Bonds are in book-entry form only, such notices will be given ar~y to DTC.
TERMS OF SALE
Form of Bic~: Bidders may specify a premium or discount, but the discount shall not exceed
~%a of the par value of the Bonds. The 1991 Senes A Bonds shal~ be sold for immediately avaalabie
fvnds All b~ds must be for not less than all of the 1991 Series A Bonds hereby offered for sale and
each bid shall state that the bidder offers accrued interest to the date ~f deli~ery, the purchase pric~,
which shall nflt be less than 9$% of par, and t~e interest rate or ra.tes not ~o exceed that spec~ed
herein, at which the bidder offers to buy the 1991 Series A Bonds. Each bid, together with such
bidder's good faith check 1n the amount af 1°10 of the principal amount of the 1991 Series A Bonds
(See °Bid Check" herein), must be enclosed in a sealed envelope addressed to the City c% the
D~rectar of Fxnance, with envelope and bid clearly marked "Fraposal af The Ciry of Santa Monica
Wastewater Enterpnse Re~enue Bonds (Hyperion Project}, 1991 Series A". Each bid must be in
accordance with the terms and conditions set forth in thls natice.
Int~rest Rates ared Maximum Discoe~nt: The interest rates must be a multiple of 1!$th ar
1/2Qth of 1%. l~Yo 1991 Senes A Bonds shall have more than one interest rate, and all 1991 Series A
Bonds of ttze same fnaturity shal.I have the same rate. Each 1991 Series A Bond must bear interest at
the rate specified in the bid form from its dated date to its maturity date. The interest rate with
respect tv any maturity or group nf securit~es shall not be mvre than 2°~o higher ihan the interest rate
with respect to any other maturiry or group of rnaturities, and 1991 Series A Bonds with a shorter
maturity may not ha~e an interest rate higher than that of 1991 Series A Bo~ds with a longer
maturity.
Equa~ Op~ortunity: It is the pohcy af the City to provide Minority Busuxess Enterprises
{"MBEs") Women Business Enterprises ("WBEs") and all other business enterprises an equal
opporturuty to participate in the performance of all Ciry contracts. Bidd~rs are requested to assist the
C~ry in impiement~ng this pohcy by taking all reasonable steps ta ensure that all a~ailable businsss
enterpnses, including MBEs and WBEs, have an equal opportunity to parncipate in City contracts.
Winning Bidder: The 1991 Series A Bonds will be awarded on the basis of the lowest
effective interest rate to the G`ity. The lawest rate will }x determined in accordance with the "true"
interest cost method of calculation by doubling the senu-annual rate (compounded semi-annually)
necessary to discaunc debt servioe payments from payment dates to the date of the 1991 5eries A
Bonds and to the ~rice (mcluding any premium) ~ot including interest accrued to the date of
delir~ery. Far the purposes of calculating the true interest cost, the priacipal an~ouni of 199i 5enes
A Bonds desi~mated by the bidder for mandatory sinldng fund redemptian as part of a tenn bond, i.f
arry, s~all be treated as a senaI manu~ity in each yeaz. In the event two or more bids offer tl~e same
lowest hve interest cost, the City reserves the nght to exercise its own discredon and ~udgrnent in
malang the award.
Statement of True Interest Cost: Each bidder is requested, but not required, to state ~n its
Bid Form the true interest cost of its bid whicE~ shall be consider~ed as informati~e only and neather
conclusive nQr binding on e~ther the bidder ar the City.
Right of Rejection: The City reserves the right, in its discretian, co reject any and all bids
and ta wa~ve any irnegulanty ar informality in any bid.
Prompt Award: The City wi~l take actinn awarding the 1991 Series A Bonds or rejecting atl
bids not iater than 26 hours after the time prescnbed for receipt of bids; provided that the awazd may
be made after the expiration of the specified time if the pnrchaser ~as noi given to the Financial
Advfsor nouce in writing of the withdrawal of such f~id.
Certi~cation of Reoffering Price: Simultaneously with or befQre delivery of the 1991
Senes A Bonds, the successful bidder shall f~rnish to the City a wntten statement in form and
substance acceptable to Bond Counsel (a} stating the imtial reoffering prices an each matunry af the
199i Series A Bands to the general pub~ic and the reoffering prices of each maturity of the 1991
Series A Bonds, if any, reoffered to msritntional or other investors with concessions or at ~scounts
finm the reofferusg pnces to general public; (b} cemfying that a bona fide offenng af the 1991 Senes
A Bonds has been made to the public (excluding bond houses, brokers, and other intermediaries),
(c) stating the price at which each 1991 Senes A Bond was sald, or will t~ sold, to anstitutional ar
other investors with fhe concessions or at discount from the prices at whxch bonds were, ar will be,
sold to the general pubiic, and (d) stating the prices at which at Ieast 10% af ttae rema~nder af each
matunty Qf the 1991 Series A Bonds not soid as set fcmh in (c} above were sold, or will be sold, to
the public {excluding band houses, brokers, and other intermedianes) pnar to the sale of any 199I
Series A Bonds of each maturity at other prioes.
Bid Check: With each bid must be submitted a cemfied check or cashier's check in the amount
af $ (1% of the aggregate prineipal amount of 1991 Series A Bonds)
drawn on a bank or trust company transacting business in the State of California, payable to the
order of the City to secure the City from any lass result~ng from the failure of the bidder to comply
w~th the terms af his bid The check of successful bxdder will be cashed and appl~ed to the purchase
price of the 1991 Ser€es A Bonds at the time of del~very. If the purchaser fa~ls to accept ihe 1991
Series A Bonds and pay the full purchase pnce, less the b~d check, on the closing date tl;e Ciry shall
forthwith retain the amonnt of the propnsal check thereof as hquidated damages far such default by
the purchasez, and the ~urchaser shall nat be entided to the return of any pornon thereof. Checks af
the unsuccessful bidders wi11 be returned by the City by mail prampdy a#'ter the date of sale above
specified. No Ynterest w~ll be paid by the City on a bid check submitted by any bidder.
Place of Deli~ery: Deli~ery of the 1941 Series A Bonds wiil be made to the successful
bidder or bidders at the offices af DTC Iocated at 55 Water Street, New York, New York 10041.
Payment for the 1991 Series A Bonds shall be n~ade in immediately availahle funds.
Prompt Deli~ery; Cancef~ation for Late Delivery: It is expected ttiat said 1991 Senes A
Bo~ds will be deli~ered to the successfui bidder or bidders on or about November Z6, 1991. T'he
successful bidder shall pay for the 1991 Series A Bonds on the date of delivery in Los Ar~geles in
immed~ately available funds. Any expenses for pravid~ng federal funds shall be borr~e by the
purchaser. Payment on the deli~ery date shall be made in an amount equa~ to the price bid for the
1991 Series A Bonds plus accre~ed interest from November 1, 1991, less the arnount of the bid
check.
The 1991 Series A Bonds will be issued by mea~s of book-entry system with na physical
dismbuuon of bond certificates to the pubhc. 4ne band certificate foa~ each maturity w~ll be issued ta
DTC and immobilized in its custody. The book-entry system will evidence ownership of the 1991
Ser~es A Bonds in the pnncipal amount of $5,000 or any muItiple thereof, with transfers of
ownership effccted on the recorcls of DTC and its participants. The sUCCessful bidder as a condition
to delivery of the 1991 Series A Bonds, shali be required to deposxt the bond cert~cates with DTC,
registered in the name of Cede & Co , DTC's nominee.
CUSIP I\'umbers: It is anticipated that CLTSIP numbers will b~ printed on the 1991 Series A
Bonds, but neither the failure to print such numbers on any 199I Series A Bond nor any error with
respect thereta shall constatUte cause for a failure or refusaI by the pnrchaser thereof to accept
deiivery of and make payment for the 1991 Senes A Bonds in accordance with the terms thereof.
AlI expenses in reIation to the printing nf CUSiP nvmbers on the 1991 Series A Bonds shall be paid
by the G~ty.
b
California Debt Adr•isory Cammiss'ron Fee: All hidders are adaised that, pursuant to
Secrion 8856 of the G~1i~Qrnia Goverrzment Code, it will be the responsibility of the purcnaser w pay
the statutory fee to California Debt Advisory Co~m,c~ion.
DTC Fee: All fees due DTC shail be paid by the successful bidder or bidders.
Clgsing Papers; Legal Opinion: Each bid will be understood to he conditioned upon ihe
City furnishing to each successful bidder, without charge, concurrent~y with payment far and
delivery of the 1991 Senes A Bonds, the following closing papers, each dated the date of such
delivery:
(a) the unqualified approving apinion of Bond Counsel, dated the date of closing,
subst~ntially in the form attached ta the Offcial State~nent as Appendix E tl~ereta;
(b) an opinifln of the City Attorney, dated the date vf clasing, add~essed to the City and the
purchaser to the effect that:
(1) the City is duly organized and vahdly existing ~nder the Canstitution and laws of the
State of Cahfornia as a charter crty and municxpal corparation;
(2) the r~solution of the CXty approving and authorizing the issuance of the 1991 5eries A
Bonds and tI~e execut~nn and deli~ery of the Indenture and the I991 Scries A Bflnds
was duly adopted at a meeting of the City Council which was called and held pnrsuant
to applicable laws and with all public notice r~quired by applicahle laws and at which a
quorum was piesent and acting throughout;
(3) there is no action, suit, proceeding, or investigation at law or in equiry befare or by any
court, public board or body, pending or, to the best af the City Attorney's knowledge,
threatened agaxnst or affecting the City to restrain or en~oin the issuance or delivery of
the 1391 Sezies A Bands, in any way contesting or affecting any authonty for the
issuance af the 1991 Series A Bonds or the Indenture, or the validity of the 1991
Series A Boncis, or in any way contesung the existence or powers af the Cry with
respect to the issuance of the 199i Senes A Bonds or thc securiry therefor, wherein an
unfavorable decis~on, ruling or finding would adversely affect the transactions
contemplated by the indenture ar the validity of the the 1991 Series A Bonds;
(4) the execution and delivery nf the 1991 Series A Bonds and ihe Indenture, and
compliance rvith t~e provisions thereof, under the circumstances contemplatea ~ereby,
do not and wilt not conflict with or constitute on the part of the City a breach of or
default under any agreement or instrument ta which the City is a parry or by which it is
bound or any existing law, regulation, cae~rt order, consent decree, charter, ar by-iaws
to which the City is subject;
(5) the Indenture and the 1991 Series A Bonds have been duly authorized, executed and
deli~ered by the City and constitute the legal, valid and binding abligation of the City;
7
(6) the information contained in the Official Statement relating to the City is correct and
complete and nothmg has come ta the City Attorney's attenuon whicn would lead tum
to belie~e that the ~nformation in the Official Statement relaung to the City contains any
untrue statement of a matenal fact or amits to state a matenal fact necessary to make the
statement iherein, in light of circumstances under which they were made, not
inisleadu~g.
(c) the opinion of counsel to the T~stee dated the date of closing addressed to the piuchaser
to tFie effect that:
(1) the Trustee has been duly arganized and is validly existing as a natianal banking
associauon under the laws of the United States of America and has all necessary power
w perform its duties under the Indent~u~e;
(Z) the Trustee by ail proper carporate ac~ior- has author~zed ths acceptance of the duties
and obligations af the Trustee under the Indenture;
(3} excl~sive of federal or state securities laws and regnlations, to the best of such
co~nsel's l~owledge, other than routine fihngs requued to be made with go~ernmental
agenc~es in order to preserve the Trustee's authprity to perform a trust busmess, no
consent, appr~~al, auth4rixation or other action by any governmental or regulatory
authority ]~aving jurisdictian over the trust powers of the Trus~ee that has not been
obtained is ar will be reqwred far the perfarmance by the Trustee of its duties under the
Indenture; and
(4} to the best of such counsel's kn~wiedge, there is no litigation pending or threatened
against or affecting the Trustee to restrain or enjoin the Trustee's participation m, or in
any way contesting the powers of the Trustee wii~ respect to the tcansacnons
contemplated by the 1991 Senes A Bonds or the Indenture.
(d} a certificate, dated the date of cIosing, signed by a duly autharized official of the City ta
the effect that as of the date of closing no htigation or proceedang is pending ar threatened against
the Cit~~ (a) affecring the existence of the City or challenging the title of any Councilmem~r of
t~e City or the Mayor af the Ciry to their respective offices, or seelang to pr~hibit, restrain or
enjain the execunon or delivery of the 1991 Series A Bonds or the collection of Revenues
pledged gursnant to the Indenture or the gledge thereof, (b} in any way contesting or affecting
the vahdity or enforceability of the 1991 Senes A Bonds or the Indenture, (c) in any way
cantest~ng the powers of the Ciry or its authoriry tn enter into or perform its obliganons under
any of the foregoing or contesting in any way ttze ca~npleteness, accuracy or faimess of the
Official Staternent, or {d) in which a f naI adverse decision could materially adversely affect the
operations or financial condition of the City or the ability of the City to perform its obligauons
under the Indenture;
(e) a certificate of the Trustee, dated tne date of Qosing, signed by an authonzed officer ~f
the Trustee, in form and substance satisfactory to Bond Ca~tnseI, to the effect that:
(1) the Tr~stee is a nauanal banking associa~ion duly arganized and in goad standing
under the Iaws of the United States of America, is authonzed to carry out corporate
irust powers as Tniste~ and has a~l necessary power and authority to gezform ~ts duues
under the ~ndenture;
(2) to the knowledge of the Tr~stee, no consent, approval, authonzario~ or ather action
by any goverr~rnental or regulatory authonty ha~ing ~urisdict~on aver the tr~st powers
of the Trustee that has not been obtained is or will be required for the perfomnance by
the Tnzstee of its obligations under the Indenture; and
(3) compliance with the provisions af the Indenture has been duly authozized by all
necessary corporate action on the part of the Trustee and, to ~he best knowledge ef the
Trustee, will not in any material respect con#lict with or constintte a br~ach of or
default under 1aw, adn~nistradve reguianon, court decree, resalution, charter, by-laws
or any other agreement or instrument ta which the Trustee in its fiduciary capacity is
sub~e~t or by which it is bound.
(t~ two certified cogies of the Indenture;
(g) two capies of the Pzeliminary Official Statement and two capies of the Official
State~nent, wirh Off cial Sratement executed on behalf of the City by an authorized r~presentative
of the City;
{h} copies of resalutions adapted lay the City and cernfied by the Secretary authorizing or
ratifymg the execution, delivery and appraaal of the Officiai Statemen~
(i) arbitrage cernfication by the Ciry in a form and s~bstance acceptabte to Bond Counsel;
~) a copy of the municipal bond ins~ance poticy issued by with respect to
the ]991 Senes A Bonds, together witt~ ary opimon of counsel appraving the ~ahdity tt~ereof and
such athex related documentanon in connection therewith reasonably required by Bond Courisel;
(k) such addit~anal legal opinions, certificates, proceedings, instruments and other
documents as Bond Counsel may reasonably request to evidence cornpliance by the City with
lega~ reqvi~-ements, the tr-uth and acc~racy, as of t~e time of Closing, of ttje r~epresentaaons
cantained herein and in rhe Official Statement and the due peifor~narice or satisfaction by ~e City
at or pnor to such nme of all agreeznents then to be performed and all conditions then to be
satisfied;
Informatian Available: Requests for information should be addressed to:
City of Santa Monica Connell and Associates
Finance Depa~u~nt 11601 Wilshire Blvd, Surte 2440
C M. Dennis, Director of Finance nr Los Angeles, Califamia 90025
1? 17 4th Street, Suite 25Q (213} 477-77d7
Sanra Mor~ca, Cal~'ornia 904(?1
{213) 458-8281
Ofticiai Statement: The Prelirninary OfficialStaDement is in a farm deemed finaI by the Ciry
within meaning of Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant
to the Secunties Exchange Act af I934 except for the omission of certain informanon pernutted to be
omitted therefrom pursuant to Rule ISc2-1~., but is suE~ject to revision, amendment, and completion
m a f na~ Officxal Stacerrsent. Upon the sale of the ~991 5er~es A Bonds, the City will publish an
Official Statement in substant~ally the same form as the Pre~iminary Qfficial Statement subject to
minor addinons, deletions and revisions as nequired to camplete the Prelirninary Officxal Statement.
Promptly after the award date, but not later than seven business days after such date, the City will
provide the successful purchaser with a reasanable number of final4ffici~l Staternents. Such final
Official Stataments may bc obtauied, without cost ta successful purchaser, in an amount not greater
than 500. The sticcessftii purchaser agrees tfl supply to the City all priciag information necessary to
comp2ete the Qfficia~ Statement with~ 24 ho~rs after the award of ~992 Series A Bonds. Addirional
copies of the final Off cial Statement may be obtauaed at addiuonal cost
9
By making a bid for t~e 1991 Series A Bands, the successful bid~er agrees (1) ta disseminate to
all members of the underwnting syndicate copies of the final Official StateFnent, ~r~cluding any
supplements prepared by the City, (2} to promptly file a copy of the final Official Statement,
including any sup}~lements prepared by the C`ity, with a Nationally Recognized Municipal Secunties
Information Repositary, a~d (3) ta take any and all other acnons necessary to comply with
applicable Secunnes and Exchange Commission rules and Munzcipal Secunaes Rulemaki.ng Baard
rules govamuig the offerirtg, sale and deIivery af the Bonds to ultimate purchasers.
Right to Modify vr Amend: The C`ity reserves the right to modify or amend this Notice
In~itin~ Bi~s inclUd~ng, but not IYmited to the right to adj~st and change the prrncipai aznount of the
199I Series A Bonds being offered, howe~er, such notifications or amendments shall be rnade not
later than noon, Pacific Standard nme, on the sccond business day prior to the opemng of bids.
Postponement: The City reser~es the right to posrpone, from time to time, the date
estab~shea for tl~e receipt of bic~s. Any such postpc~nement wxll be announced by Munifacts Ne~vs
Ser~ice not later than 1:(}0 p.m., New York, Eastern Standard time, on the last business day prior to
any announced date for receipt of bids. If any date fixed for the receipt of hids and the sale of the
i991 Series A Bonds Ys postponed, any alternah~e sale date will be announced via Munifacts News
Service at least 48 ho~rs pnor to such alternauve sale date. On any such alternati~e sale date, any
bidder may s~bmit a sealed b2t~ far the purcIaase of the 1991 Series A Bonds in conform2ty in all
respects with the provisxons of the official Nouce Inviring Bids except far the date of sale and except
for the changes annaunced by Munifacts News Service at the tin~e the sale date and time are
announced
Dated• Na~ember , 1991
G~ven by ozFier of the City Council of the Ciry of Santa Monica, Ca~ornia.
Isl CLARICE DYKH4USE
Ciarice Dykhouse, City Clerk
C~ty of Santa Monica, California
10
QFFICIAL BID FQRM
$33,984,000*
CITY OF SANTA MON~ICA
WASTEWATER ENTERpRISE REVENUE BONDS
(HYPERION PROJECT)
1991 SERIES A
City af Santa Monica
1685 Main Strest
Santa Monica, CA 90401
Ladies and Gentlemen:
On behalf of a groap which we have formed, consisting af the firms hereinafter named, pursuant
to the Notice inviting Bids dated November , 1991 we offer to purchase all, but not less the all, of
the $32,775,000* aggregate principal amoant af the Wastewater Enterprise Re~enue Bonds
(Hyperion Project), 1991 Senes A, particularly ~.escribed ~n said notice, [together with a premium of
$ ~[less a discount af $_ ~(strike out inagplicable clause), with said interest to be
payable at the rates more particularly as set forth below.
Sinking
Maturing Principal Iaterest Serial Account
ianuary~ g
Amount '~ $~ ~iaturit~ Instailment (11
. , (Check one)
1993 ... .. ...... $ `%
1994 ...... .... . `~O
_.. .
1995 ............. ~
1996 ..... ...... ~
1947 ..... ...... ~
1998 ..... ...... ~~
1999 ............. 96
2000 ..... .... . ~
2001 ..... ..---- `J6
2402 ...... ...... ~
2E}03 ..... ...... _ `~
20(}4 ..... ...... `~0 -- -
20U5 ............. `ib
2{f(}6 ..... ....... `Xo
~oa~ ............. ~ ~
2aos ..... ...... ~
~aa9 ............. ~
20~0 ..... ...... _~
Zo~~ ...._ ...... ~
Zo~2 ............ ~ ,
2013 ............. `~
2014 ...... .... ~ -~---
2015 ............. , 96
_..
~a~s ...... ...... ~
zo i ~ ..... ...... ~
~o~g ............. ~
2019 ..... ...... `~O , .,..
202Q ............. '~ . , .
2021 ............. `16
2022 ........... `~O
* Preliminary, subject to adjustment as described herein.
(1) Indicate nominal matunty of any term bond{s) by cu+c3~ng the appropriate check mark.
This bid is made subject to aIl of the terms and conditions of the Notice Inviting Bids dated
November , 1991, ail of which terms and conditions are made a part hereof as fully as thangh
set farth in this bid.
This b~d jis subject to] jis not subject to~ (strike out inapplicable clause) the purchase of
municipal bQnd ~nsurance by the Caty. Our caiculation af the true interest cost (usmg the farmula set
fortlz in the Terms af Sale} is shown below_
T'~e purchase price of the 199i Series A Bo~ds and ttze true interest cost are deternu~ed as
follows:
PRINCIPAL AMOUNT OF BONDS $
LESS DISCOUNT QR
PLUS PREMNM
LESS INSURANCE PREMIUM (1)
TOTAL PURCHASE PRICE $
{excludang accrued interest)
TR~JE INTEREST CSQST (2} $
(1) If insured Bonds are specified. The premium is af total debt service on the insured Bonds.
(2) Please calculate to eight ($} decimal plaoes.
The Bvnds maturing the years are to be insured by
(delete if not appl~cab~)
We have enclosed herewith a certified checkJcashier's check (stnke out inapplicable clause) datied
not larer than the date hereof drawn on a ban~c having an o~ce in Cahfornia for $ payable
to rhe order of the City.
We have noted that payment of the purchase price is to be made in irnmediately availabla funds at
the time af deIivery of the 1991 Senes A Bonds.
We hereby request that copies of the Official Statement be furnished to us in
accordance with the Notice Inviting Bids.
We represent that we have full and complete authonty to submit tlus bid on behalf a#' our
pmposing syndicate and that the undersigned will serve as the Iead manager far the group if the
I991 Series A Bonds are awarded pursuant te this bid.
I certify (or declare} under pcnalty of perjury under the laws of the State of California that this
proposal is genurzie, and not a shazn or collusion, nor made in the interest of or on behalf af any
person nflt herein named, and that the bidder has not direcdy or indu~ectly indviced or solicited any
other bidder to pnt in a sham bid ar any other person, firm ar corporation to r~efrain from bidding
and that bi~c~er has not in any manner songht by co~~us~on to secure for himseIf an advantage aver
any other bidder.
Respectfully submitted,
Name
Account Manager
By ,
Addr~ss
City
State Tip
Telephone
Facsamile
LIST ~F SYNDICATE MEMBERS
{Subject to c~ange prior to deiivery of the 19915eries A Bonds)
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~TQ~~~e of Intention to Sell
$33,980,400*
City af Santa Monica
(LOS ANGELES COUNTY)
California
Wastewater Enterpr~se Revenue Bonds
(Hyperion Praject)
199I Series A
SEALED BIDS will be received until 10:00 a.m.P.S.T., Friday,
NOVEMBER 15, I991
at the offices of Qrrick, Hemngton & Sutcliffe, 777 South Figueroa Street, 32nd Floflr,
Los ,Sngeles, California, for the aboye bonds dated November 1, 1991 and maturing either
through senal maturit~es ar sinldng accaunt mstallments January I, 1993-2022, inclusive.
The 1991 Series A B~nds will bear interest frvm the dated date payable on July 1, 1992
anc~ semiannually thereafter on each January 1 and July 1 until maturity or pnor
redemption
The 1991 Senes A Bonds are subject to aptional redemption on January 1, 2002 and
thereafter in the manner provided ~n the Notice In~iting Bids.
The 1991 Senes A Bonds are being issued for the purpose of financing a portion of the
contribution of the City of Santa Monica, Cal~omia, to the costs of the upgrade of the
Hyper~on wastewater treatment plani.
Tha approving legal opimon of Oirick, Heirington & Sutcl~ffe, Los Angeles, Caii.fornia
ar~d the ~ranscript of pinceedings w~ll be fur~ushed to the successful bidder without cost.
The 1991 Series A Sands, when issued, will i~e registered in the name vf CEDE & CO.
as nominee nf The Depository Trust Com~any, New York, New York, who will act as the
securities depository.
Add.irional ~nfo~nation inclucling tize Notice Fnviung Bids and the Preliminary Official
Statement may be obtained finm:
CONNELL Al\D ASSOCIATES
ll60I Wilshire Bouievard, Suite 2440
Los Angeles, California 9fl025
(~13) 477-7707
Dated: October 30, 199~
*Approxunate, subject to adjustment
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PRELI1bIINARY OFFICIAL STA~1~~.MHNT DATEQ ,199I
NEW ISSUE - FULL BQOK ENTRY ONLY Ratings: See'~tatings" herein.
In the op:niox of O~nck, Herrington & SutcIiffe, Bond CounseI, based on extst~ng statutes, regeilat:ons, ruhngs arrd cor+~t
decsslons and assumcng, among other matte~s, compl:ance with certa:n copenunfs, :nterest on the 1992 Series A Bonds ts
exduded f~om gross :ncome far federal mcome tax purpases and exempf fram Sfote of CaIiforn:a persanaT incame taxes In
ihe optn~on of Bond Counsef, snterest on Ehe I99T Sertes A Boads ss not a s~ecsfcc preference :fem for ~aurposes of the fedesai
indtfl~duaI or corparate alte-nnt:ae mm:mum Eaxes, although Bond Counse! observes lhat ~t is srscl~ded :n adjusfed current
earnings when catculating corpo~ate arternat:ve mimmum taxable incame Boad Counsel expresses no opincon regard~ng
other tu.r consequences related to the ownershsp o~ d:spas:t:on of, os ihe accruaI or sece:pt of x~tcrest on, the 1991 Senes A
Bo~ds See 'TAX EXEMf'TION" here~n
~~,9so,oao*
CITY QF SANTA MON~CA
Wasfewater Enterprise Revenue Bands
(Hyperion Projec~)
1991 Series A
Dated: November 1, 1991
Due: January I, as shown below
The Was.ewater Enterpnse Revenue Bonds (Hypenon Pro}ect), I991 Senes A(the "1991 Senes A Bonds'7 will be ~ssued far
the purpose of financing a port~on of the cantnbutian of the City of Santa Mon~ca, Calsfornia (the "Gty'7 to the costs af the
upgrade of the Hypenon wastewater treatment glant. The 1491 Senes A Bonds will be issued pursuant to an [ndenture, dated
as af November 1, 1991, hetween the City and Bank of Amenca Naho~al Trust and Savings Association (the 'Trustee 7 The
199f Series A Sonds will be issued only in book-entry Eorm, taitially reg~stered in the name of Cede & Ca as norc~~nee for The
Depository Trust Company, New York, New York C'DTC7. Purchasers w~il not recei~e cemfscates representing their interests in
the 1991 Ssnes A Bonds Purchases of the 1991 5enes A Bonds will be in pnncipal amounts of $~,Q00 ar integral multiples
thereof. Interest wxll be payable sem~annually on January 1 and July 1, commen~ing JuIy 1, 1992 Pnncipal oE and interest on
the 1991 Senes A Bonds wi11 be paid to DTC by the Trustee See "DESCEZIPTIOEV OF 7HE 1991 SERIES A BONDS" herein The
f941 Seriea A Bonds are ~ubject to opEional and mandatory redemption prior to maturity.
The 1991 Series A Bonda are epecial obligations of the City payable solefy from the Revenues (as defiaet!
herem) and othex amounts held by the Trustee, as provide~ in the Indenture. The General Fund of the City is not
liable, and the credit or taxing power oE the City is not pledged, for the payment of tfee 1991 Series A Bonde or
Eheir intereat. The ownera af the 3991 Series A Bonds shall never have the right to compel the exercise of the
Eaxing pawer of the City ar the forfeiture of any pmperty of the City. The principaI of and interest on the 1991
Series A Bond~ and any premivms upon the redemption of any theieo# ahal~ not be a debt of tl~e City, nor a 1egal
ar equitable pledge, charge, lien or enc~mbrance upon any prnperty of the CiFy or upon any of its income,
receipts or revenues except the Re~enues, and other amounts held by the Trustee, pledged to the payment
thereof as pmvided in the Indenture.
Th~s caver page conta-ns information for quick refereace only. It is not a summary of the finanung Investors must read
thts enttre ~fficial Statement ta obta~n utfarmation essenhal to the malung o£ an ~nformed in~estment deasion
MATUATTY SCHEDULE
Year
1993............
1994...........
I495............
1496............
I997............
1998............
1999............
2aoa............
2Q01............
2U02............
2003............
2D04............
2005............
20U6............
2007...........
Pr~ncipai interest Price or
~~ Rate Yield
Year
2048
2009
2070
20]i
2012
20I3
20I4
2015
2016
2~i7
zasa
2019
2020
2Q21
2022
Principal Interest Price ot
Amount Rate Yield
$ °~ 'Term Bonds due January 1, Q %
(To be des~gnated by the successful b~dder iE one or more principal amounts is rnmbined into one or more Term $onds )
(Plua accrued Intere9t from November 1, 1991)
The Bonds are offered for sa~e when, as and if issued by the Crty, sub~ect to approval of legaltty by Orrick, Herrington &
Sutchffe, Los Angeles, Cahfarn~a, Bond Counsel, and certaitt other cond~hons It is antzcipated that the 1991 Senes A Bonds will
be available for delivery ta DTC in New York, New York on ar about November ,1991
`Preuminary, sub~ect to change
Dated ,1991