SR-CC/PFA-1~ ~ ~~/'[ ~ 1
AU6 0 8 ~
f:atty\muni~strpts~lmc\cops
Council Meeting: 8-8-95 Santa Monica, California
TO: Mayor and City Council
Chairperson and Santa Monica Public Financing Autharity
Meinbers
FROM: City Staff
SUBJECT: Adoption of Resolutions Authorizing the Execution and
Delivery af Various Agreements and Documents Concerning
the Issuance of 1995 Airport Facil~ties Certificates of
Participation (COP'sy for Redemption of 1985 Airport
Facilities COP's
INTRODUCTION
This is to recommend that the City Council and the Santa Monica
Pu~lic Financing Authority adapt the resolutions at Attachment A
which authorize the execution and delivery of the various
~greements and documents at Attachment B concarning the issuance of
19~5 Airport Facil~ties COP's ("1995 COP's"). Issuance of the 1995
CoP~s will enable thE City to redeem all outstanding 1985 A~rport
Facilities C~P's ("1985 COP's") at a substantial annual debt
service savings to the City over the remaining life of the new
COP'S.
BACKGROUND
On October 1, ].9 8 5, the City issued the 198 5 COP' s to construct the
Airport Administration Building and a Specialty/Limited Fixed Base
Operator Hangar {the "Airport Facil~.ties"} ,
AU6 0 8 f9~i
-~- Cc1~~A-!
f:atty~muni\strpts\lmc\caps
Council Meeting: 8-8-95 Santa Monica, California
TO: Mayor and City Council
Chai~person and 5anta Manica Public Financing Authority
Mernbers
FROM: City Staff
SUBJECT: Adoptian of Resolutions Authorizing the Execution and
Delivery of Various Agreements and Documents Concerning
the Issuance of ~995 Airp~rt Facilities Certificates of
Part~cipation (COP's) for Redemption of ~985 Airport
Facilities COP's
INTRODUCTION
Th~s is to recommend that the City Council and the Santa Monica
Public Financing Authority adopt the resolutions at Attachment A
which authorize the execution and delivery of the various
agreements and documents at Attachment B concerning the issuance o~
1995 Airport Facilities COP's {"1995 COP's"). Issuance of the 1995
COP~s will enable the City to redeem a~l outstanding 1985 Airport
Facilities COP's ("1985 COP's") at a substantial annual debt
service savings to the City over the remaining life af the new
COP's.
BACKGROUND
On 4ctober 1, 1985, the City issued the 1985 C4P's to canstruct the
Airport Administration Building and a Specialty/Limited Fixed Base
Operator Hangar (the "Airport Facilities").
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On Ju~y 25, 1995, the Council adapted Resolution No. 8922(CCS~
authorizing staff ta procaed to issue the 1995 COP~s, the prnceeds
of which are to be used to redeem all outstanding 1985 C~P's. The
Council taak this actian because the 1985 COP's were issued at an
interest rate of 9.11~, whereas current interest rates are
considerably lower. Staff reparted that new 1995 COP's can be
issued at an estimated interest rate of from 4.5~ to 5.0~. This
will result in a net present value debt service payment savings of
approximately $.7 million, which is about 15~ of the 19$5 COP~s,
over the remaining life of thE 3985 COP's.
On July 25, 1995, the Council adapted Resolution No. 8923 (CCS) and
the City's Redevelopment Agency adopted Resolution Na. 444(RAS),
approving a joint exercise of p~wers agreement and establishing the
Santa Monica Public Financing Authority (SMPFA). This was a
technical action necessary to camplete the financing structure
needed to issue the 1995 COP's.
The financing structure of the 1995 COP's is a lease and lease-back
arrangement. Under this arrangement, the City wi11 lease thE
Airport Facilities to the SMPFA. The SMPFA then will lease the
Airport Faailities back to the City, and assign all af its rights,
including the right to recei~e lease payments from the City, to
U.S. Trust Company af Califarnia, N.A., as Trustee. The Trustee
will then issue fractional and proportionate interests (i.E.
Certificates af Participation) in the City lease payments which
will i~e sald to an underwriter far subsequent resa~e to the publa.c.
- 2 -
Investors holding the 1995 COP's will receive payments from the
Trustee from periodic lease payments made b~ the City to tha
Trustee. At the end of the lea5e periad, in fiscal year 2007-08,
ownership of the Airport Facilities will be transferred to the City
from the Trustee.
The Trustee, U.S. Trust of Cal~~ornia, N.A., has been selected by
staf~ through competitiv~ bidding as the lowest cost bidder to
provide Trustee services. Approval of the documents at Attachment
A and B will confirm sta£f's select~on.
The underwriter will be selected by staff from a group of
underwriter bidders which have previously bid or are likely to bid
on City securities. The bidder offering the lowest interest rate
on the 1995 COP's will be selected as the underwriter. Approval of
the documents at Attachments A and B authQrize staff ta award the
underwriter bid.
THE SERIES A AND SERIES B 1995 COP'S
The 1995 COP's will be issued in two series: a) a$3,74U,000 tax-
exempt series (Series A) and a$255,00o taxab~e series (Series B).
The Series A COP's are the traditiQnal tax-exempt COP's issued by
public entities. The taxable Series B COP's need to be issued in
order to finance costs of issuance of the 1995 COP's while
complying with Federal Internal Revenue Service (IRS) regulations,
Current IRS regulatians specify that new tax-exempt COP's issued to
_ 3 -
refinance other COP's, such as the 1985 COP's, cannot be issued far
a principal amount exceeding the amaunt of the COP's still
remaining to be paid at the time af the refinancing. This means
that the costs of issuance (that is, fees paid to underwr~ters,
bond counsel, disclosure counsel, the financial ad~isar, the rating
` aqency, and other administrative fees) cannot be financed from the
new tax-exempt 1995 COP~s. Therefore, to pay these fees, the City
would either have to use City funds or finance these costs through
the issuance of taxable COP's. Staff have struetured this COP
refinancing using the latter approach so that future users of the
Airport Facilities will pay these casts as they pay their rent and
use fees, rather than having present users pay all of these costs
now.
BUDGET AND FINANCIAL IMPACT
The following technical budget adjustments are needed to implement
the refinancing of the 1985 COP's through the issuanca of 1995
COP~s:
-- Increase revenues in the Airport Fund by $4,550,000, ~o
receive the 1995 COP's proceeds, the interest accruing on
these funds pendi.ng redemption ot the 1985 COP's, and tha
].985 Debt Service Reserve Fund fram the old trustee.
-- Increase e~enditures in the Airport ~'und by $4,550,000
for payment to the escrow account to redeem the 1985
COP's, to establish the new Debt Service Reserve Fund
- 4 -
with the new trustee, and ta pay ~995 COP's issuance
costs.
Staff will assign appropriate account nl~mh~r5 for thes~ budget
adjustments following Council approval.
RESOLUTI4NS AT ATTACIiMENT A
The resolutions of the City and the SMPFA at Attachment A authoriza
the execution and del~very of the various agreements and documents
at Attachment B concerning the issuance of the 1995 COP's. These
resolutions also set "not to exceed" limits for the issuance of the
1995 COP~s. These maximum limits are expressed in terms of lease
limits between the City and the SMPFA for the Airport Facilities.
Specifically:
-- Maxim~un aggregate principal amount sha].1 nat exceed
$5,OOQ,000.
-- Maximum allowable intarest rate shall not exceed 7.0~.
-- Maximum term shall not exceed twelve (~2) years, which is
the remaining term under the existing 1985 Iease.
AGREEMENTS AND DOCLTMENTS AT ATTACHMENT B
The agreEments and documents at Attachment B will be appraved for
execution and delivery by adoption of the resalutions at Attachment
A. These agreements and documents are:
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1. Facilities Lease Agreement between City, as Lessor, and
the SMPFA, as Lessee, pertaining to the Airport Facilities;
2. Lease Aqreement reiating to Airpart Facilities between
th~ SMPFA, as Sublessor, of the Airport Facilities, and the City,
as Sublessee, of the Airport Facilities;
3. Assignment Agreement between the SMPFA, as Assignor, and
the U. S. Trust Company of California, N.A., as Assignee;
4, Trust Agreement among the City, the SMPFA, and the U.S.
Trust Company of California, N.A., as Trustee;
5. Purchase Contract between the City and the underwriter,
who is to be selected by bid, far purchase of the 1995 COP's;
6. Preliminary Official Statement to be issued by the City
to the marketplace explaining why the 1995 COP~s are being issued,
particulars about the 1995 CQP's, and disclosing variaus
infflrmation about the 1995 COP's and the City whach would be of
interest to potential purchasers of the 1995 COP's. At the time of
sale of the 1995 C4P's, a Final Official Statement wi~l be issued;
and
7. Cantinuing Disclosure Certificate to be issued by the
City in order to comply with Federal Securities and Exchange
Commission regulations, which became effective July 1, 1995,
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requiring issuers of tax-exempt securities to agree annually to
issue and release to the marketplace an update of various
information contained in the City's Fina~ Official Statement. The
purpose of the annual update is to assist future secondary market
purchasers in deciding whether or not to purchase 1995 COP's later
sold by the initial purchasers.
RECOMMENDATION
It is rec~mmended that the City Council and the Santa Monica Public
Financing Authority: a) adapt the resolutzons at Attachment A
authorizing the executian and delivery of the agreements and
documents at Attachment B concerning the issuance of 1995 COP's for
redamption of the 1985 CaP's, and b) approve the technical budget
adjustments set farth above.
Prepared by: Mike Dennis, Director af Finance
Jeff Mathieu, Director of Resource Management
Linda Mills-Cayne, Deputy City Attorney
Attachments
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RESULLTION ~(a. 8a31~C~s~
(CITY COUNCIL SERIESI
RES{7L•LTIO~I OF THE CITY COLi~CIL OF 1-H~ CITY t}F Sa\'Ta
~•IUtiYC~ :s-U"I'HURIZI~(~ THE EXECL;'I'IOti :~\ll llELI~'~R4' BY THE
(:ITY ()F ~ F~CILITIES LEaSE, ~ LE:~SE ~(~RE~~IE\"I', ~ TRUS"T
:~GREE~•1ENT ~\D ~- PL.~RC;H~SE CONTR~C"i' ~~'ITH RESPEC;T "1'U
THE EXECUTIO\ AVD DELI~'ER~' OF CERTI~'ICATES ()F
Pf1RTICIP~TIpN (I995 AIRPORT F:~-CILITIES REFU~DIN(~),
~LTTHORrZING "1'HE EXECUTIOti :~ND DELI~'ERY OF SUCH
C;ER"1'IFIC~TES IN :~\ AGGRE(~~`I'E PRI\C`IP~L ~1~~10titiT UF \()T
TO EXCEED $S,OOO,U00, AUTHQRIZI\G THE DISTRIBUTIOti OF A~
UFFIC:I~L S1~.aTEI~•IENT I\ CU\`~ECTION "1'HERE~'L'ITH ~~D
:S.LTHDRIZI\(i THE EYECLTION OF tiEC~ESS~-RY' DUCL'tiIEN'1'S
:~~TD CERTIFIC~'TES ;~\D REL:~.TED ~CTIO~fS
~~'HERE~S. in order to fcnance certain airport facilities (the Fa~~l~tles"}, th~ Cit~• of
Sar~ta ~'Ionica (the "City") caused to be execut~d and delivered 54,b25,000 aa~reRate principal
a~nount of Certi~cates of Particigat~on (Airpart Facilities} (the ~~Prior Cert~ficates"),
~~'HERE:~S, the Citv ~urrentl}~ subleases the FaLiliue~ ai~~i the real ~ropert~~ on ~~~h~ct~
che}~ are locatec~ (~olle~tively, the ` Propert;~"} purs~cant to a Lesse A^rzei~ient R~lat~nt7 to a~rpoit
Facilitles, dated as of October l, 19~~ (tEi~ "Pr~or Leas~"), y
~~'HEREaS, the Prior Certificates ~~~ere executed and deliverEC3 pursuant to a Trutit
~~~reement Re~at-na to Airport Facilitie.s, c~ated ss af Octak~r ~, 198~, among Bank of ?.nleric.a
\~ational Trust and Savin~,s .~~soc~ation, as [ru5t~e, the Cit~~ and SecUr~t~~ Pacifie Nat~onal Bank.
~.s fessor;
~~'HERE~S, the Pnor Certificates represent proportionatz i~lterests in the lease p.~~me«t.
ta be made by the City undzr the Prior Lease, -
~~'HEKE~S, the Cit~~ Coun~il oF the Cit~f (t~e "City Caunc.il") has, pursuant ta
Re;olutio» ~10 8922, aciopted July 2~, 199~, approved tf~e refundint= of tf~e Pnor Czrtificates ~~~~d
che City h~s exercised ~ts optia~~ to prepay lease payments payable under thz Pnor Leasz, ~~~~ich
pizp~yment ~t~~ll reiease the Pro~ert~~ from the Prior Lease, ~~
~~'HEREAS, upon such rele~se, the City desires to lease the Property to thN Santa
~4onica Publ~c Financtn~ Authority (the `~Authortty") pursuant to a Facilities Lease (the
~"Fs~ilities Lease"), and ~ublease the Property~ baclc fro»n the Author~ty purs~ant to ~ Lease
.~~reement (the "Lease A~reement"),
ti~'HERE~S, the Gity has determinecE that it wauld b~ in the best interests c~f the City ta
pro~~ide the funds necessary~ for the City to exercise ~cs option to przp~}~ lease pay~nents pa~•abl~
undzr the Pr~or Lea,e throu~h the execut~on and delivery, pursua~It to a Trust A~reement (the
Tru~t A,ree~nent") by and among U 5 Trust Company of Ca[~fornia, ti1 A, as tru~t~e (th~
`'Tiustee"}, [he Authorit~~ ~nd the City, of cert-fic:aies of partic,ipation (the "Certificatea"}
evic~en~in~ proportianatz inteie~ts ul the base ren~al payments to be made b~~ the City under thz
LeaSe A~7reement.
4'4'HERE~-S, all tight5 to re~eti~~e suc,h ba~e rental pa}~t~sents ~~~ill b~. assi~~ned ~~'1C~lQl1L
re~ourse b~~ the Authority to the Tr~stee pur5u~nt to an A~s~,nment ~~~reernent.
~
:_j
~~i'HERE~S, in considerauon of such assz~nment ant~ the exe~uuon of thz Tru,t
A4~.zeinent, the Truytee ~;°~11 e~cecute and d~l~ti~~r the Certif~cat~s. za~,h e~~idencin~ an~
repre~enu«~, s proportronate interest zn tt~e ba;e rental pa~~ment;; '
~~`HERE:a.S, t~e G~t~~ CQUncil has c~e[eriz~inzd that iiiterest ~a~~sn~~5 mi~~h~ be a~hte~~zd b~,~
ob[ain~n~ an insurance pol~cy to secur~ th~ timel~' payment af the4principal and ~nt~ieat
repre~entec~ by the Certificatzs,
ji~'HERE~S, the City desire~ to sol~cat propo~als froin the uncierw°riters listed on
Att~~hinent ~ her~to tthe "Uncl~rwritzr~ ") to purc~tase Ehe Certificates pursuant ta a Purcha,~
Contract (the ' pur~hase Contrac~"j.
~~'HEREAS, R~ale l~c.?-12 proinui`ated under the S~curitizs Exchan~e Act of I93~
("Rule 15~2-1?"j requ~res that in arder to be able to purchsse ar sell the CertifECates, thz
L~nd~r«~ri~ers muat have reason~bly dztermined that the City has uncfertaken in a ~~rit[~n
a~reeme~it or c,ontraet for the benefit of the E~olders of the Certific.ate~ to pro~•ECfe diaclos~.z~z ot
c.ertain finanuat ~nforrnation and c~rtain material ev~nts on an on~o~n~ ba~i5,
~~`HERE~S, in arder to cause such requirement to be sacisf~zd, the City e~esires to
e~ecute and c~eliver a Continuing Di~c,losure Certif~cate (the "Co~~tinuin~; Dis~lo~we
C~rutitare"}.
~~~HEREAS, a form af thz preli~ninary offiiial statement (the ~ Preli~ncnary Oftirial
5t.~tement"} to be c~~srributed ~n connectton ~ti<<th the publi~ offer~nF of the Certif~cates ha~ be~n
pi zpared.
«~HERE~S, the City Council ha~ been presented G;•ith the torm of each docu~r~ent
referred ta herein relatin~, to the financing conrer~lplaied ~nereb~~. and the City Cou~~~~l h<>>
e~~min~d a~1d appro~~~d eac;h docutner~t and des~res to authorize and direct th~ exec.ution af suGh
do~uii~ents as~d the consumrnat~ors of sucl~ fi~sanc~n~, and
_ ~i~'HERE~S, all acts, conc[itions and thint~~ required by the Constttution ailc! la~~'s of the
5t~-te af C~lEforn~a to e:ci5t, to have happened and to have been performed precedznt to and ui
~nnect~on ~~'itE~ the consumtnat~on of such f~nancina authorized hereby do exis[, ha~e h~ppe~ec{
~~'~ave been performzd ~~~ re~Tular anc~ due time, forn~ anc~ ~nanner as required by la~~~, anc~ the
Cit}~ i; no~~ duly authorizecl and e:r~powered, pursuant to each and every r~quirement of ~a~{~, to
~-~''~'~~ con;u~i mate suc~ financin~T for the purpose, cn the~ rnanner anci upon the terms here~n pro~ided,
s~~(l~~', '~'HEREF(~RE, BE IT RESOL~'ED RY THE CZTY C()U\CIL OF "CHE
C:I"1'~' ()FS:~-NT~- 11~iU\IC~-~ a5 follo~~'S
Secticm 1.. AI1 of the recitaIs herezn contained are true anc3 correct and the City Counc-I
so ~nds
Sectiun ?. Th~ farm o~ ~he Facilit.ies Lease, a~l file ~~•ith the City Clerk, is f~~reb~~
approv~d, and the ~.Sa}~or of the Crty, or such otf~er m~mber of the Cit~~ C~uncii as the ~Tayor
ma}~ c~e~i~~nate, the Clt~~ ~~I~n~ger of the C~ty anc~ the Director of Finan~~ of the City (the
"Authar~zed Officers"}, are each hereby~ ,suthor~zed and d~rected, for and ~n the n~mz ~nd on
beF~alf of the Cit}~~ to e~ecute and deliver the Facilitres LeaSe in substantially ~aid form, ~~~ith suc,h
~.han~Tes therein as the :~uthor~zed Officer e~ecutin` the same may requ~re or approve. ~uch
approval to bz c.on~lu;~vely ev~c~enced b~r the execut~on anc~ delfvzry theizof
~
Section 3. The forin of the L~a,e .-~~,reement, on file "•cth the Cit~~ Cl~r'•.:, is hzrz~}~
appro~~Ld, and ihe ~u~harizec{ Ofncers arz esch h~rzb}~ auther:zed and dire~tec'~, #or and ~n ~h~
:~ai.le ara o~~ beh.~li of thv Cit4~, to zterute ar,~i d~l~ver th~ Lzsse .a~*reement in s~abstsr~tisll~~ said
Tor~n. «~itf~ such chan~~es therein as thz :~uthanzecf ~rticer ~Y:.cutin~~ ihe ,ame inay rzc~uire o:
a~ppratie, suc~ approva[ to be canclus~velE~ e~~id~nczd b;~ the execut~on and deliver~~ thereot.
pro~~st-~zci, ha~~~~~~er, that the aa~~re~ate amos~n~ af pr~ncspal compor~er~t of ba~e rzr~tal pa.•a~l~
wlder the Lease ~,~reement sha~l not z~c.eed ~S.U~?O,C?00, the term of the L~ase :~4,r~ement 5ha[1
~~ot ekc~zd 1? yzars and th~ rate ap~licable ta the inizrest companznts of oase rentai paysbl~
tmder the Lease ~gree~nent ~hail not e~cceed 7 D~~c per annum
Section 4 Tf~e for~n af Trust :~~rzement, on file «:•~th the City~ Clerk, is hzreby
appro~•ed, and th~ .authorized Officer~ ar~ each hereby~ authorizzd anc~ dtrected, for and ~n the
»~rne snd o~t behalf of the C~ty, to er~c;ute anc~ deliver the Trust agreement In substantiallt~ said
form, ~aith such ~han`es therein as the Authorized Officer ere~uttng the same ~n~l}' req~ire oi
app~o~•~. ~uc,h appro~~al to be ~o~~clu~it~ely e~'iC{~[11;2~ I~~' Crl~ ~'{Z411C1011 and del~~zi~~ theieof nr
~ppro~~al ~nc~ c.on5ent therzto
Sectiun ~ The e~zcution and de~iver~~ of not to e~cceed ~~,OOU,~f}0 an~re~at~ prin~Ep.il
amount of the Certif~~ate5. pa~•~ble i~~ tf~z ~~esi~ anc~ in the amounE~. «~~th pnncEpal c,omponzn~5
an~ intzre~t c.ompon~nts ti~°ith respect therzto as specttied ~n the Trust :~gr~enzent aa t-nail~°
execut~d, sre hereby~ authorized and appro~~ed
SecLiun 6 The farm of Purch~se Contract. on fcle ~v~ith the City Clerk, is hereby
appro~'ed, and [h~ authorizecf Officers arz each h~r~by authorized and c{irectecl, for and in the
name and o~l behalf of the C~t}~, (i) to select an C.~nder~~~r~ter tor the Certificates, ba>ed on
proposal; ;ubmitted by~ the L•'nder~vnters, and (ii) to ex~cute a~~d c~eli~~er the Purcf~ase Contralt,i EE]
,ubstanually saECt for~n, with such chan~,es therein as the Authonzed Officer exe~uun~= the samz
m~iy requtre ar appro~-e, such ap~rova~ to be conclustvel~~ e~~idenced b~~ che execution and
del~Gery thereof, pro~ided, ho~;~e~~er, that the under~~~nier'S d~scounz (not ~nclud~n~~ ~n~~ ori~inal
»sue dl~caunt) for the sale of ~uch Certif~c~te, sF~all not exceed 1 5~% of the a~~~rz~ate princip~~l
~st~our~t of 5u~h Certzfi~ates
Secti~n 7 The tor~n of PreizEnEnar}~ Offic~al 5tatem~nt, on file r,~~~th the C~ty Clzrk, ~vith
,uc.h c.hsn;,e> therei« ~s ~nay be appia~~ed b~~ ar- Authonzed Off~ce~, ~s heieby agpro~~ed, and the
u.z of the Prelimtnsr}' Offic~al Statec~tent in connection «~~th the offerin~ and saE~ of thz
Ceruf~c.ates is hzrebS~ authonzed and appro~~ec~ The Authorized Offfcers ar~ eacf~ hereb~•
authonzed to certifv on behalf of the C~tv that the ~reEiminar~~ Off~cial Statemznt is deer~ied final
~is of itti d~te. ~r•i~h~n tf~e ~nesning af Rule 15c2-12 {except for ~~e om~ssion of c:ectain final
pi~c~nt~. iatin~~ and related infarmation a5 permitted by Rule l5c?-12)
Sect~un $_ The form of Continuing Disclosure Cert~ficate, on file ~;•ith the Cit~~ Cierk, iti
E~ereb~~ approv~d, as~d the Ae~t~anzec~ Officers are ~acl~ her~by authorized and duected, far and -~i
Eh~ name and on behalf of the C~t}', to execute a~~d de~iver th~ Continuing Disclosurz Certtf~cate
ul aubst~t~tzally sa~ci form, with such chanYes t~erein as the ~uthor~zed Officer executin~,~ th~
~a~ne ma}' require or appravz, ~uch approval to 6e conclu~ivel~ ev~den~eci to the ex~cutton anci
deln-ery~ thereof or approvaI and consent thereto
5ection 9 The pr~paration and delivery oT an Officia~ 5tate~nent, ane~ its use b5~ the
Unden~~riter in con~~ec.tion w•ith the afferinrr and sale af the Certificates, is hereby authorized and
appro~~ed The Otf~cial Statement shall be in substant~alIy ti~e form of the Preliminarv Off~cial
Statemznt ~;ith st~ch change5, in5ertions and omissions a> >~~ay bz approved b~~ an Autho~ized
Otfic.er, ~uth appro~~al ta b~ conclusivel}~ evidenced b~~ the execut~on and deli~•zry thereof The
Authar~zeci Off~cers are each herzby authortzed and dtr~ct~d> far and m ti~e naine o~ anc{ oct
b~half of the Cit~~, to execute the final Offic~al Stat~Enent and any ainenc~ment or supplemenc
[hereto a~3d thereupon ~o c.au~° the iinat O##ici~l Stateznent and ~inti~ st.~h sm~rd~zient or
,~ippl~~nent to be ~`~eli~:~~rz.d to the Unden~rit~r
Section ~~ The :~uthorized ~fticer~ arz herzb;~ authoriz~d anc~ diie~:te~. ~ofntl~~ a:lcf
se~~:.ra~i~-. to do any and all thit~~~s ~;~hicf~ thz~• ma~~ d~em ~Zec,estiar~~ or ad~~i>ahle in orcier to
~on,umm~te ~he tisn;scnon~ here~n a~tho:ized s~zd oth~~«~i,e to c~ur,~ out. ~~ive etfe~t to and
~omply ~~•ith th~ tzr~ns and tntent of this R~solution, including. ~; i~out limitanon, ne~=ot~aun;7 the
t~rms ot tt~z in5urance poiic~~ referred to h~rein
Section i 1 Ali act~ons heretofore tak~n b~~ the ofticers, e~nptoyee, and a~ents of thz
C~ty r,i•ith resge~t to the transactions ~et forth above ar~ hereb}' appro~~ed, ~onf~rmed and rat~fizc~
5ectiun 12 The City CIer~ shall certify to the adoption of th~> Resolution ~nc!
tlaen~.~forth ~znd thereafter the same shall be in full force anci etfect
APPROVED AS TO FOR~~1
~'farsha Jone outa~e, C~t}° Attorney
~dopted and approved this ~ith d~y of .~u~u~t ~9~~~
~
~TT~CH~iE~'T ~
L-nder;~'r~ter~
Goldcnas~, Sac.h~ & Co
~I~~rill !_,4•nch & Ca
Smit~ Barn~~ Int.
~ G Ed~~~artis & 5on;, fnc
Pa~nel~4'ebber Incorporateci
Prudential 5ecunue~ lncorporated
B~ Secur~tie5
~.tt~ichrn~nt ~-1
.4dopted a~d approved this Sth at :~uaust, 1995
~~' ~
~
L~layor Pro Tempore
I~ereby certify that the fore~oing Reso~ution 8931 (CCS) was duly adopted at a meeting
of the City Counc~l held on the 8th of AuQust, 1995 b}~ the foilowing vote
Ayes Council members Abdo, Ebner, Genser, Greenber~, Hol~rook, O'Connor
Naes Council members None
~bsta~n Councii members Nane
Absent Councit members Rasenstein
ATTEST
,~ G~~.c,~~~,.
" ' J
City Clerk
ATTACHMENT A
- S -
~ =Y]y`1-^.- ]HI3SV GH bC[
RE5OLUTI[)N NO. 1 (PFr~)
RES(}LUTIdN QF THE BOARD t}F DIRECTORS OF THE SANTA
R~ONICA PUBLIC FINAItiCIhG ALITHORITY AUTHURIZIi\U THE
EXECC;TION AND DELIVERY BY THE AUTH~RITY OF A
FACILITIES LEASE, A LEASE A(~REEMENT, A TRGST AGREEI~IENT
AND AN ~SSIGNMENT AGREE~VIENT WITH R~SPECT T() THE
EXECUTIQN AND DELIVERY (~F CITY OF 5ANTA MDNICA
[:ERTIFICATES OF PARTICIPATIO!~ (1995 AIRPORT FAC:ILITIES
REFU]~iDINf~), AUTHQRIZING THE EXECUTIOIlT AND DELIVERY OF
StiCH CERTIFICATES IN AN AGCREGATE PRINCIPAL AMOUNT (~F
NUT TO EXCEED $5,~0(1,4Q0 AND AUTHQRIZINt~ THE EXECUTIO'~
OF NECESSARY DOCUMEI`'TS A?V'D CERTIFICATES AND REL~iTED
~CTI()NS IN C(INNECTION THEREWITH
~S~S
V4'HEREAS, in order to finance certain airport facili~ies (the "~'acil~t~es"}, the C~ty of
5anta 1~'Ionica (the "City"j caused to be executed and del~vered 9~4,625.000 aggregate principal
amount of Certificates of Particfpadon (Auport Facilrt~es) (the "Pnor Certificates"}.
~'F'HEREAS, the Cit~~ currently subleases the Facilit~es and the real property on which
the}~ are lacatzd (c.ollect~vely, the "Property' } pursuant to a Lease Agreement Relating to Airport
Facilities_ dated as of October 1, lyKS (the "Pnor Lease"),
~~'HEREAS, the Pr1ar Certificates were executed and delivered pursuar~t co a Trnst
Agreement Relatin~ to Airport Factl~t~es. dated as of Qctober 1, 19~5, amon~ Barilc of Amenca
Nat~onal Trust and Savings Associauon, as trustee, the Cit}~ and Securit}~ Pacific Nat~onal Bank.
ds lessor,
~~'HEREAS, thF Pnar Cert~~cates represent praportionate interest~s in the lease payments
to be made by the C~ty under tite Prior Lease,
VVHEREAS, in order to achieve certatn sa~ings, the City~ desires to exercise rts opt~on to
prepa~~ leatie pa}lments payabie under the Prior i.ease (thereby releasing the Property from the
Pr~or LeaSe), anc~ then to lease the ~ropert}~ to tl~e Santa Manica Public. Financing AutF~orit~~ (the
"Authorin~") pursuant to a~'acil~Ues Lease (the "Facilrties Lease"), and sublease t~e Property
ba~k from the Author~ty pursuant to a I.ease A~reement (the "Lease Agr~ement").
~'HEREAS, the City has c~etermined that rt would be in the best interests of t~e City~ to
pro~~~de the funds necessar~~ for the C~t~T ta exerc.ise its option to prepay lease gayments payable
under t~e Prior Lease throu~h the execut~on and del~very, pursuant to a Tr~st Agreement (the
"Trust Agreemer~f') by and amang L~ S. Trust Company of Californza, N.A., as trustee (the
"Trustee"), the Authority and the City, of certif~cates of participation (the "Cert~ficates"1
evidencin~ proportionate interests in the base rental payments to be made b}~ the City under the
Lease Agreeinent;
~~'HEREAS, ail rights to recer~e such base rental payments will be assigned wishout
recour5e 6~~ ihe Authority to the Trustee pursuant to an Assi~nment Agreement (the "Asslgnment
Agreement"),
VL'HEREA~, in considerat~on af such assi~nment and the executaon of the Trust
A~,reement. the Trustee will execute and deliver the Certif~c~test ea~h evidenc~~g and
repre~enting a proport~onate interest in the bace rental payments.
~
WHEREAS, the Board of DLrectars af the Author~ty {the `Baard of Dueciors') has been
presented with the farm of each document referred to herein relat~na to the financin~
co~templatec~ hereby. and the Board af Dlrectors has exairuned and approved each document and
desires to authoraze and d~rect the execut~on of such document5 and t~e consummat~on of such
finan~ing, and
VF'HEREAS, all acts, condit~ons and th~ngs requued by the Canst~tut~on and ~av~'s af the
State of Ca~ifornia to exist, to have happened and to ha~e been performed precedent to and in
connection u~~th the consummation of such finar~cin~ authonzed hereby do exist, have happened
and ha~'e been performed in regular and due titne, form and manner as rec~u~red b}~ law, and the
Authority ~s na«~ duly autharized and empo«ered. pursuant to each and even~ requ~rement of
law~, to c.onsui~mate such financ~ng for tl~e purpose. in the manner an~ upon the terms t~ere~n
pro~~ided;
NOW, THEREF(~RE, BE IT RESOLVED BY THE BOARD [)F DIRECTORS [)F
THE SANTA M()NICA PUBLIC ~'INANCIN[~ AUTHURITY, as follows:
Seetion 1. Ail of the rec~tals hereFn 4or~tained are true and conrect and the Board of
D1rec;tors so finds
Sectio~ 2. The form flf the Facilities Lease, on ~ile wrth the SecrEtary of the Author~ty, is
hereb}~ approved, and the Chairperson of the Authority, or such other member of the Baard of
Duectors as the Chatrperson may designate, the Executive D~rector af the Authority and the
Treasurer of the Authority (the "Authorized Officers"} are each hereby authonzed and d~rected.
for and in the narne and on behalf of the Authority, to execute and delxver the Facilit~es Lease in
suhtitant~ally said form. with such changes there~n as the Authonzed Officer execut~n~ the same
may r~yuire or approve, such approval to 1~e conclustvely evidenced by the execution and
deliverr thereof
Section 3. T'he form of the Lease ~-greement, on f~le with the Secretary of the Authority,
~s hereb~ approved. and the Authonzed Officers are each hereby authorized and duected, for and
in the name and on behalf of the Authorzty~, to execute and deliver the Lease Agreement in
,ubtitanE~all~~ saic~ ~orm, ~~zth such chan¢es therein as the Authonzed ~fficer executmg the same
ma;: rec~uire or approve, such approval ~o be conclusively evldenced by the execut~an and
deliver}~ thereof, provided, however, that the ag~re~ate amount of pnncipal component of base
rentai pa;~~able under the L~ase Agreement si~all not exceed $S.OO~,oaa, the term of the Lease
Agreeme~t shall not exceed 12 years and the rate a~plicable to the ~nterest components of base
rental p~yabl~ under the Lease A~reement shall not ex~eed 7 O~Ic per annum
5ectian 4 The form of Trust Agreement. on fl~ with the Secretary of the Autharity. i~
hereby approved. and tf~e Autharized Officers are each hereby autharized and d~rected, for ar~d in
the name and on behalf of the Authority, to execute and del~ver the Trust Agreement in
substan~ially sa~d form, with such changes therein a5 the Authonzed Officer execut~ng the same
ma~~ rec~u~re or approve, such approva~ to be conclusi~ely evidenced by the execut~vn and
deliver~~ thereof
Sectiun 5 The form of Assignrnent Agreement, an fiie witF~ the 5ecretary of the
Authoi~ty. is i~ereby approved, and the Authonzed Officers are each l~ereby authorxzed and
ci~rected, for and in the name and on behalf of the Authority, to execute and delive~ tE~e
AsSignment A~reement zn substant~all5r saud forrr~, with such changes therein as the Authorzzed
Officer execuung the same may requue or approve, such appro~al to be conclusrvely e~rldenced
by the exec.ut~on and deli.fer}~ thereof_
2
~
~
Section 6. The execut~an and del~very of not to exceed 5~5,000,000 ag~regate pr~ncipal
amount of Ceraficates, payable in the years and in the amounts, with pnnctpal components and
interest components with resgect thereto as specified in the Trust Agreement as finally executed.
are hereby authonzed and approved.
Sectivn 7' The officers of the Auihor~ty are hereby authorazed and directed, ~aintly and
severally, to do any and all things which they may deem necessary ar advisabie in order to
consummate the transacnons herein authorized and otherwise to carr~~ out. grve effect to and
comply with ehe terms and intent af thXS Resolution
Seetion $. Ali actions heretofore taken by the officers and a~ents of the Authonty w~th
re~pect to the transact~ons set forth above are ~tereby approved, confirmed and rat~fied
Section 9 T~he Secretary of the Autharity shall certify to the adopt~on of this Resalut~on
and thenceforth and thereafter the same shall be in full force and ef~ect.
APPRQVED AS TO FORM
~~.~.~~~.~.~~,.
~'farsha Jone outne, Autharit}' Attorney
.~c~opted and approved this Kt~ day of Au~ust ? 9y5
t
/
a
Adopted and approved thfs 8th of August, 1995
:~~- ~
~ ~
Ghaxr Pro Ternpore
~ hereby certify that the foregoing Resolution 1(FFA) was duly adapted at a meetin~ of
the Public Financ~ng Authority held on ihe Sth of August, 1995 b~ the fallowmg vote
Ayes Authority members Abdo, Ebner, Genser, Greenberg, Hoibroak, ~'Gannor
I`'oes Authority members I~one
Abstain Authoritv members None
Absent Authorrty members Rosenstein
ATTEST
,~.~~~~.
,_ _, ~
Act~ng Secretary
~~
ATTACffiKSNT B
- 9 -
39149-D7 ]HHI~ GH L~.t 7/11l95
7lLSl95
TO BE RECORDED AND WHEN RECORDED
RETURN TO:
~ones Hall H~ll & Wlvte
Four Embarcadero Center, 19th floor
San Franc~sco, Cal~orn~a 9~1111
Attentron , Pro~ect Coardinatar
THIS TRANSACTION IS EXE:vIPT FROM CALIF4RNIA DOCUMENTARY TRANSFER
TAX PURSUANT T4 SECTI~:+I 11929 ~F THE CALIFORNIA REVENUE AND
TAXATION CODE THIS DOCUMENT IS EXE~VIPT FR4M RECORDING FEES
PURSUANT TO SECTION 27383 ~F THE CALIFORNIA GOVERNMENT CODE
FACILITIES LEASE
b~ and between
CITY OF SANTA M~NICA,
as lessor
and
SANTA 1~ZONICA
PUBLIC FINANCING AUTHORITY,
aslessee
Dated as oF 1,1995
FACILITIES LEASE
THIS FACILITIES LEASE (thts "Fac~i~t~es Lease"} executed and entered into as of
1, 1995, is by and between the CITY QF SANTA MONICA, a mumc~pal corporation
and charter city duly organazed and existina under and hy virtue c~f the Constitution and laws of
the State of California and its Charter (the "City"}, as lessor, and the SANTA M4IVICA PUBLIC
FINANCING AUTHORITY, a ~otnt exercise of powers entity organized and e~st~ng under and
by vzrtue of the laws of the State of Cal~fornia (the "Authonty"), as lessee.
RECITALS
WHEREAS, fn order to finance certain a~art facili~ies {the "Facil~ties"), the City
caused to be executed and deiivered $4,625,Oa0 aggregate principal amount of Certificates of
Partic~pation (Airport Facilities) (the "Pnor Certificates");
WHEREAS, the City currently subleases the Facilities and the real property on which
they are located, more particularly descnbed in Exhibit A hereta (collect~vely, the "Praperty"),
pursuant to a Lease A~reement Relat~nQ to .4irport Facilities, dated as of October 1, 1985 (the
"Pnor Lease"):
WHEREAS, the Pnor Certificates were executed artd delivered pursuant to a Trust
Agreement Relating to Airport Facilit~es, dated as of Octaber 1, 19SS, among Bank of America
National Trust and Savmgs Assaciatian, as trustee. the City and Secur~ty Pacific Nationai
Bank, as lessor,
WHEREAS, the Prior Cert~ficates represent groporuonate interests ~n the lease
payments to be made by the City under the Pnor Lease.
WHEREAS, in order to achie~~e certain sa~~tngs, the City desires to exerc~se its opt~on
to prepay lease payments payabie under the Prior Lease (thereby releasing the Property from
the Prior Lease}, and then to lease the Property to the Authonty pursuant ta this Fac~lit~es Lease
and sublease the Property back from the Authanty pursuant to a Lease Agreement, dated as of
the date hereof {the "L,ease Agreement");
WHEREAS, the City has determined that it wauld be in the best interests of the Ciry to
~rovide the funds necessary for the City ta exercise its option to prepay lease payments payable
under the Prior Lease through -he s~le and delivery of certif2cates of part~cipation (the
"Certificates"} evidencmg praportionate interests in the base rental payments to be made under
the Lease A~reement;
WHEREAS, all acts, condxtions and thfngs reyuired by law to exfst, to ha~e happened
and to have been performed precedent to and ~n connection with the execution and entenng ~nto
of this Facilities Lease dQ exist. have l~appened and have been performed in regular and due t~me,
form and manner as requ~red by iaw, and the parties hereto are naw duly authonzed to ex~c~tte
and enter into th~s Facilities Lease;
~RTICLE I
DEFI~ITIO~iS
All words and phrases def~ned in .~.rticle I of the Lease Agreement shail have the same
rneanmg in this Fac~l~Ues Lease
ARTICLE II
LEASE OF THE PROPERTY; RENTAL
Section 2.01. Lease of Pronert~~. The City hereby Ieases to the Authonty, and the
Authonty hereby leases from the C~ty, far the benefit of tY-e Owners of the Certrficates, the
Property, sub~ect anly to Permitted Encumbrances, to have and to hold for the term of this
Facflft~es Lease
Scctian 2.02. Rental. The Authority shall pay to the City as and far rental of the
Property hereunder, the sum of not to exc~ed $ {the "Fac~ities Lease Payment"}
The Facilities Lease Payment shall be pa~d from the proceeds of the Certificates; provided,
however, that in the event the available praceeds of the Certif~cates are not sufficient to enable
the Authority to pay such amount ~n fuli, the remaimng amount of the Faciht~es Lease Payment
shail be reduced to an amaunt equal to the amount of such available proceeds
The Ciry shall deposit the Facilities Lease Payment m one or more separate funds to b~
held and admin~stered for the sole purpose of financing the refunding of the Pnor Certificates.
The Authority and the City herel~y find and determ~ne that the amount of the Facilities Lease
Payment does not exceed the fa~r market value of the leasehald ~nterest in the Property wluch is
con~eyed hereunc3er by the City to the Author~ty 1Vo ather amounts of rental shall be due and
payable by the Authonty for the use and occupanc}t of the Property under this Facilities Lease.
ARTICLE III
QUIET ENJ~YA~ENT
The parties intend that the Property ti~~ill be leased back ta the City pursuant to the Lease
Agreement for the term thereof It ~s further intended that, to the extent pr~vided herein and in
the Lease Agreement, ~f an event of default accurs under the L.~ase Agreement, the Author~ty, or
its ass~gnee, will have the nght, for the then reznazning term of this Fac~Iities Lease to• (~} take
possessfon of the Property. (u} if it d~ems it approgrtate, cause an appraisal of the Property and a
study of the then reasonable use thereof to be undertaken; and (ui) relet the Property Sub~ect to
any rights the City may ha~~e ~nder the Lease A~reement (in the absence af an event of default}
to possession and en~oyment of the Progerty. the City hereb}T co~enants and agrees that it will not
take any action to prevent the Author~ty~ from ha~•tng c~uiet and peaceable possession and
en~oyment of the Praperty dunng the term hereof and will, at the request of the Authanty and at
the City's cost, to the extent that it rnay lawfuily do so. ~o~n in any legal act~~~ in which the
Authority asserts its right to such possession and en~a}~ment_
ARTICLE IV
SPECIAL C4~'ENAl`TS AND PROVISIONS
Section 4.01. `Vaste. The Authority agrees that at all times that ~t is in possessian of the
Property, it w11i not cammit, suffer or permit any waste on the Property, and that it will not use
or permit the use of the Propertyr for any ~lle~al ~urpose or act.
5ecfion 4A2. Further Assurances and Correcfire Instruments. The City and the
Authonty agree that they will, from time to t~me, execute, acknowiedge and deli~er, or cause to
be executed, acknowledged and delivered, such suppleme~ts hereto and such further insuuments
as may reasonably be requ~red for correcting any inadequate or incarrect description of the
Property hereby ~eased or ~ntended so ta be or far carrying out the expressed intention of this
Facii~ties Lease, the Trust Agreement and the Lease .~greement
2
Secfion 4.03. Waiver of Persanal Liabi~ity. AIl liabihues under this Facihties Lease on
the part of the Author~ty shall be solely l~abit~t~es af the Authority as a 3aint exercise of pawers
ent~ry, and the City hereby releases each and every director. member, of~cer and ernployee of the
Author~ty from any persa~al of ind~wT~dual liab~l~ty under this Facihties Lease No director,
member, ~fficer or employee of the A~thonty shall at any t~me or under any eircumstances be
indrv~dually or gersonally liable under this Facilities Lease to the City or to any other party
whomsoever for anything done or omitted to be dane by the Authanty hereunder
All liahilrties under this Fac~hties Lease on the part of the City shall be solel~ ~iabiht~es
of the City as a city, and the Authority hereby releases each and every member, of~icer a~d
employee of the City from any personal or ~ndividual l~ability under this Facilit~es Lease No
member, officer or emplayee of the City shall at any time or under any c~rcumstances be
individually or personally liable under th~s Facilities Lease to the Authority ~r Eo any other part~r
whamsae~er far anyth~s~g dane or omitted tfl ~e dane b}r the C1ty hereunder
Section 4.04. Taxes. The City ca~~enants and agrees to pay any and all assessments of
any kind or character and also all taxes, includin~ possessory interest t~es, levied ar assessec~
upan the City's or the Authonty's ~nterests or estates in the Property.
Sectivn 4.05. Ri~ht of Entry. TI~e City reserves thz nght for any of its duly authanzed
representauves to enter upon the Property at any reasonable time to insgect the same.
Section 4.06. Renresentatians of the City The Ciry represents and warrants to the
Authonry and the Trustee as follow s.
(a} the Cxty has the full power and authont}~ to enter into, to execute and to dehver this
Facihtfes L.ease, and to perfarm all of ~ts duties and obligations hereunder, and has duly
authorized the execut~on of this Facllities Lease;
(b) except for Permstted Encumbrances, the Praperty is not sub~ect to any dedicat~on,
easement, right of way, reservation in patent, coti~enant, candYt~on, restriction, lien or
encumbrance whlch w ould prohibit or materzalIy interfere with the use ~f the Property for th~
nurposes contemplated by the City,
(c) aIl taxes_ assessments or impos~tions of any kind with respect to the Properiy, except
current ta~ces, have be~n paid in full, and
(d} the Property is necessary to the C~ty in order for the City to perform its governmentai
funct~o~s
Section 4A7. Representations of the Author~t~~. The Authority represents and warrants
ta the City and the Trustee that the Author~ry tias the full pawer and authonty to enter into, to
execute and to dehver this Facilities Lease, and to perforrn all of its dutaes and obl~gat~ons
hereunder, and has duly authori~ed the execution and deh~~ery of this Facil~t~es Lease.
Section 4.0$. Airnor~ Cavenants. (a) 4peratrons Shall Comply~ with All Laws,
4rdrnances and Regulat~ons The Author~ty shall conduct, ar cause to be conducted, all
operat~ons on the Property in accordance ~v~th all laws and corc~ply, ar cause campliance, w~th ali
laws. state or fec~eral, ord~r~ances, rules and regulat~ons applicable to the bus~ness conducted on
the Property, in effect or hereafter adapted by the City, the County of Los Angeles, the State of
California or the Un~ted States, ~ncludin~ but not limited to compliance with all technical
constructian cades adopted by the C~ty. the C~ty's Airport Code, and ail rules and regulat~ons
adopted for the operat~on of the 5anta I~lomca A~rport
3
(b} Permrts Arad Lacenses The Authonty shail obtain and mamtain, or cause to be
obtained and maintained, dunng the term of this ~acilities Lease, all appropnate hcenses, permrts
and cert~f~cates that may be requu~ed in connection with the operat~on of the Property, uicluding,
but not l~mited to, all Federal AvXatzon Administration and City hcenses, permits and cemficates.
{c) Airport l.ccradrng Area The City reserrres the right to further develop or improve the
landin~ area of the Santa Monica Airport as it sees ftt, regardless af the desires or view of the
Authoriry and w~thout interference or hindrance.
(d) Aarport Marntenance The City reszrves the nght, but shall not be obligaied to the
Authonty, ta mamtain and keep in repair the landing area of the Santa Manica Airport and all
publicly-owned fac~ht~es of the Santa Momca A~rport, together with the right to d~rect and
contro~ all act~v~t~es af the Authoriry in this regard
(e) Subordrncataan af Faciltnes Lease. Th~s Fac~lit~es Lease shall be subordinate to the
prov~sions and requuements of any ex~sting or future a~reement between the City and the Umted
States, relati~~e to [he development, operation or maint~nance af the Santa Monica A~rport
{~ Raght of Flr.ght Easement. There is hereby reser~~ed to the City, its successars and
assigns, for the use and benefit of the public, a right of fltght for the passage of aircraft in the
airspace alaove the surface of the Property~ This public r~ght ~f flight shall include the nght to
cause in said ~rspace any noise inherent in the aperatfon of any aircraft used for navigation or
flight through the satd airspace or landing at, tak~n~ off from, or operation on the Sa~ta Monica
.a.irport
(gj Building Modrf~cataons The Authonty agrees to comply with, or cause eampliance
wfth, the notificat~on and review requirements covered in Part 77 of the Federai Aviation
Re~ul~tions in the event af any planned modification or alteration of any present or future
bu~lding or structure situated on the Property
{h) Heaght Lrntlr The Author~ty, by aceepting th~s Facil~t~es Lease, expressly agrees for
~t~elf, tts suc~essors and assigns that it will not erect nor permit the erectzon of any structure ar
ob~ect, nor permit the grawth of any tree on the Property above the mean sea level elevat~on of
20$ feet In the e~ent the aforesaud cavenants are breached, the City reserves the right to enter
upon the Property and to remo~e che offending structure or oh~ect ar~d cut the offendmg tree
(1} Interference ~vith Arrcraft. The Author~ty. by accepting this Fac~lities Lease, agrees
far itself, its successors and assigns that ~t will not make use of the Property rn any manner which
m~ght interfere with the landing and taking off of a~rcraft from Santa Momca Airpart or
otherw~se constrtute a hazard In the event the aforesaad cor enant is breached, the City reserves
the nght to enter upon the Property and cause the abatement of such fnterference.
(~} No Excl~sive Righr.s It is understood and agreed that nothing herein contained shall
be const~rued to grant or authonze the grantii~g of an exclusive r~~ht withm the meaning af
Sect~on 308a of the Federal A~~iat~on Act of 1958 {49 U S C 1349a}.
(k} Federal Gavernment R~ghts Th~s Fac~lit~es Lease and all the provisions hereQf shall
be subject to whatever nght the Un~ted States Government naw has or m the future may have or
acquire affectin~ the control, operatian, re~ulatian and taking aver of the Santa Monica Airport
or the exclusive or non-exclusive use of the Santa ~~on~ca A~rpart by the Umted States dunng
the t~me of v~~ar or national emergency
4
ARTICLE V
ASSIGNMENT, SUBLEA5ING, I110RTGAGING AND SELLING
Section 5.01. Assi~nment and Subleasin~. To the extent permitted by ~aw, this
Fac~l~t~es Lease may l~e sold or ass~~ned and the Property subleased, as a whole or in pari, by the
Authority, without the necessity af ohtaining the consent of the City, ~f an event of default occurs
under the Lease Agreement The Authority shall, «~ithm thLrty {30} days after such an
assignment, sale or sublease, furnish or cause to be furnished to the City a txue and correct copy
of such assignment. sale ar sublease, as t~te case may he
The Authonty shall ass~gn all of its ngh~s hereunder to the Trustee appainted parsuant to
the Trust Agreement
Section 5.02. Rg~~ri~~iqn$ an City. The C~ty agrees that, except with respect to
Permitted Encumbrances, it will not martgage, sell, encumber, assign, transfer or convey the
Property ar any partion thereof dunng the term of th~s Facilities Lease.
ARTICLE ~'I
IlbiPROVE;~•'IENTS
Title ta all improvements made on the Property dunng the term hereof shall vest ui the
C~ty
ARTICLE VII
TERI~'~; TERMINATION
Section 7.OL Term. The term of this Facil~ties Lease shall commence as of the date of
commencement of the term of the Lease A~reement and shall remain tn ~ull force and effect from
such date to and including 7uly l, 2007 unless such term is extended or sooner terminated as
hereinafter provided
Section 7.02. Extension: Earlv Termination. If on July 1, 2007, the Certificates shall
not be fully pa~d, ar prav~s~on t~erefor made ~n accordance with Article X of the ~'rust
Agreement, or the Trust Agreement sha~l not be dischar~ed by ats terms, or if the rental payments
payable u~der the Lease Agreement shall have been abated at ar-y time, then the term of th~s
Facilit~es Lease shall be automatically extended unul the date upon which all Cert~f'icates shall be
fully paid, or provlsion therefor made in accardance ~~~th Article X of the Trust Agreement, and
the Trust Agreement shall be discharged by ~ts terms, except that the term af this Facilit~es I.ease
shall ~n no event be extended more than ten { 10) y~ears If pnor to July 1, 2007, all Certificates
shall be fully paid, ar provis~ons therefar made in accordance with Article X of the Trust
Agreement, and the Trust Agreement shall be d~scharged by its terms, the term of t~is Facil~ties
Lease shall end simuttaneously therewith
ARTICLE VIII
hIISCELLANEOUS
Section 8.01. Bindin~ Effect. This Facil~ties i..ease shall inure to the benefit of and shall
be b~ndmg upon the G~ty, the Authonty~ and their respectiv~ successars and assigns.
5
Section 8.02. Severabflitv. In the event any pro~~~sio~ af this Facilit~es Lease si~all be
held vi~alid or unenforceable by any court of competent ~unsdzction, such holdmg shall not
invahdate ar render unenforceable any other provision hereof
Section 8.03. Amendmen#s. Chan~es and l~~odifications. This Facilit~es I.~ase may be
amended, changed, mQdified, altered or term~nated only ~n accordance with the provisions of the
Lease Agreement.
Section $.04. T1~ird-Partv Bene~ic~ar~. Thz Authonty a~d City acknowledge that the
Anthonty has assigned its nght. title arid fnterest in and to th~s Facihties Lease to the Trustee,
pursuant to certam provisions of the Assignment Agr~ement of even date herewith. The City
cansents ta such assignment. The Ciry consents to the Trust Agree~nent and acknawledges and
agrees to the rights of the Trustee as set forth there~n As a material inducement to the Trustee,
the Autharity and the City agree that the Trustee sha~i be a third party beneficiary to this
Fac~lities Lease, uicluding, without hrrjrtation, Section 7 02 hereof
Section 8.45. Ex~~upo~- in ~qunterparts. This Facilitie~s Lease may be simultaneously
executed in several cour~terparts, each of wh~ch shall be an original and all of which s~all
constitute but one and the same mstrument
Seetion S.D6. An~licable La«. This Facilzt~es Lease shall be gaverned by and construed
in accordance with the laws of the State of California_
Section 8.07. Cantions. The captions or headings in th~s Facilfties Lease are for
conven~ence only and in no way define. linnit or descnt~e the scope or intent of any pro~isions or
sect~ons of tt~zs Facihties Lease
Section $.0$. Costs of L~hgation. If any Iegal action is necessary to enforce any
provision af this Facihties Lease or for damages by reasan af an alleged breach of any pravision
of this Facilities Lease, the prevailing party shali be entitled to receive from the losmg party ali
casts and expenses and such amo~zr~t as the court may ad~udge to be reasonable attarney's fees
for the costs incurred by the prevailing party in such act~on or proceedmg
6
IN WITNESS WHERE4F, the C~ty and the Authanty have caused th~s Faciht~es Lease
ta be executed by the~r respective officers thereunto duly authonzed, alI as of the day and year
first above wntten
CITY OF SANTA M~NICA
By:
SANTA 11~ONICA PUSLIC FINANCING
AUTHORITY
By:
APPRQVED AS TO FQRM:
Marsha Jones Moutr~e,
C~ty Attarney and Authonty Attorney
7
STATE OF CALIFOItNIA }
} ss
COUNTY OF )
On before me, , Notary Public, personally appeared
, persanally known to me or pra~~ed to me on the basis of satisfactory evidence ta
be the person(s) whose name(s) is/are subscnbed to the within instrument and acknowledged to
me that he/she/they executed the same ~n his/her/their authorized capaciry{les), and that by
his/her/the;r signature(s} on the ~nstrument the person(s), or the entity upQn behalf of which the
person{s) acted, executed the instrument
WITNESS my hand and official sea1.
STATE OF CALIFORNIA )
) ss
C~UNTY OF }
~n before me. , Natary Publie, personally appeared
, personally known to me or pra~~ed to me on the basis of satisfactory e~idence to
be the person(s) whose name(s) ~slare subscnbed to the u~~thin ~nstrument and acknowledged to
me that he/she/they executed the same in his/her/the~r authorized capaciry(ies), and that by
his/herlthe~r s~gnature(s} or~ thz instrun~ent the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument
WITI~'ESS rny hand and official seal
EXHll31T A
DESCRTPTION 4F THE PR4PERTY
All that real property situated in the Caunty of Los Angeles, State of Califorma,
descnbed as ~ollows. and any ~mprovements thereto
Exhibit A- I
~9L p~-:)? fE~iC§' GH bc[ 'i l 1P75
~, ~~:5'j
r:i.~'ir15
LEASE AGREEMENT
b~ and between
CITY QF SANTA MONICA,
as sublessee,
and
SANTA 1l~IONICA
PUBLIC FINANCING AUTHQRITY,
as s~blessar,
Dated ~s of 1, 1995
TABLE [jF C{)~'TENTS
Pa~e
ARTICLE I
DEFIriITTOIv'S
Sect~on 1.01 Definrtians .._ . . . . . .. _.... . . . .o .... ...... .... .. . 2
ARTICLE II
LEASE 4F PROPERTY; TERM
Sect~on 2 Ol Lease of Praperry ... ._.. . .... . .o . . ... .. .. .... ... . . . . 4
Section 2 02 Term; Occupancy .. . ... .. . .. . .e. ..
. .. .. .... . .... . . 4
ARTICLE III
REi~ITAL P.~Y~VIENTS
Sect~on 3 O1. Base Rental Payment~ .... ...... ...... . .... ...... .... . . . . .. .... . ....5
5ect~on 3 OZ Add~Uonal Rental Payments ... . ..... .... ...... .... .. .. . . .. .. .. .... . ....5
Secnon 3 03. Fa~' Rental Value ... . .... ..... ...... . .. .... ...... .... .... _ . .. . ._.. _ ___.l5
5ec,tion 3 04. Payment Pro~isions . . . . .... ...... .... .... ...... .... ... - - .. . . --•• - --•- 6
Section 3 0~. Appropriatlons Covenant .... ..... .. . ............ .... .... . . . . . ... . ...7
Section 3 06. Rental Abatement . .... . .. . . ...... ............ ...... ..... .... ....... ... . .. . . 7
r1RT~CLE IV
MAINTENAi~TCE: ALTERATiONS Al~;D ADDITIONS T~ THE
PI~OPERTY
Se~t~on ~.01. Niaintenance and Unlitaes .. . ,... .. . . . . . .. ..... ~. - ---. . . H
Sect~on ~- 02. Addxt~ons to Property . ... .-•--..... .... .. ,.. . , .....~ . .... .. . >. H
~ec.t~on 4 43. Installat~on of Cit}~'s Ec~ui~pment ... .... ... .... .. . ... ... ~. .-.. .._ .. K
~RTICLE V
INSURANCE
Sectlon 5.01 General Liab~lity and Prop~rt~i Da~nage Insurance; Worl~ers'
Compensat~on Insurance; Bullder's Risk Insurance .... .. .. ., ... . 9
Sect~on 5.02 Title Ins~u'ance . .. ...... ........<.. ...... . .... ...... .... .... e. . ... 9
Sect~on 5.03 Additional Ins~u-anc~ Provision, Form of Palxcxes.... .... .. ... ... 1~
Sect~on S 0~ Self-Insurance . . .. .. . . ..... ...... ... . . ~..... .... .... . . -• --- . ---. . 10
,
ARTICLE VI
DEFAUL'I'S AIvD REMEDIES
5e~t~on 6 Q1. Defaults and Remedies. ... ..._ ... .... . . . . . . ...... ..... .. .. 11
Sec.t~on 6.a2. Waiver .... .... .... . ... ....... ..,. ..... .... .... ..,. . ...... .... .. i3
ART`ICLE VII
EMINEI~'T DOMAIlV'; PREPAYME~'T
Sect~on 7 O 1 e Erninent Dornain. ....... ._.. „ ~ .. . . .... ... .. . .~.. .. .... .. 15
Sect~on 7 a2 Prepayinent . . ..... ...... .. ... . ,., .... .... . .. . .. .... ..... ..._ .. 15
ARTICLE VIII
COVENANTS
Section $.Ul Right of Entry ... .............. .... .... . . . .... ...... ... . . . .. ._.. .. _ 16
Section }~ a2 Liens .. . . .... .
.. .. .. ...... .. _ . .. . 16
. .... ...... .... .. .
Se~tion }~.03 Qu~et En~oyment. ... .... .. . ...... . ..e ...... .... . . ... .... . 16
Section }i 04 Authorit~~ Not L~ab~e . ....... .. ............. .... ... .. ... 16
Section $ OS A.ssignment and Subleasin~ ...... . ...... ... ... . .... _ 17
Section $.afi Title to Property.. . ... ..a, _.. ...... . . ...... .... ... . .. . .. ... .... . 17
Section ~ 07 Tax Covenants. ..,. .. ,. ... .. .. ...... .... ... . . .... 17
Section 8 08 Authority's Purpose .. ,,.. .. . . .. .. .... .. ... .... . .... . 1K
Secuon 8 0~} Representations of the City~. ,. . . . .. .. .... ...... o... .. _... . 1!~
Secuon K 1(} Repres~ntat~on of the ~suthority ...... .. ............. ... . 1$
.~RTICLE IX
NO CQNSE~UEN i IAL DA\~IAGES;
USE ~F 'I'HE PROPERTY
Secuon 9 O1 \o Consequent~al Damages. ,,. .
... ... ...... .... . .. .. 20
Sectio~ 9 02 LTSe of the Propert5~, .... .e.e .. .... . .. ... .. . ... ... .... .... . .... 2~
ARTICLL ~
MISCELL.~I~TEOUS
Seciior, 10 01~ Law Governing . .... .. .... ...... .. ..... .. .. _ .. ...- ----.. .... .. 21
Sectior- 10.02 l~Tot~ces . ..... . .. .... . .... ... . .. .... .... ... , .. .. .... . 21
Section 10.03 Validity and Severabilit~r _.. .... .
............... ... .... .. . 21
. .. ....,
Section 10.04 1~`et-Net-NetLeas~>> ... .... ..... . .. ......... .. .. .. . ...... e e . 21
Sec~~on 1Q-OS Taxes .......... ... .... . ... ..~. .... . .., .e.. .... . . . . _.. .. .._. . ._ 21
iectian 10.06 Section Headings . . .... . .. .... .. . . .... .... ... . . .. . ... . .._. .. 22
Sect~o~ 10.07. Amendm~nts. .. .---- . .,.e ~ e. ...~ . .~.. .... .... . . . .. ... .-- • -- 22
5ectian 10.U~ Assignment . . .... .. .... .. e ._. ,.. .,.,_ .._. .,.. .,. . ..__ .. ._ ... ._......... .. ... 23
5ection 1~_09 Execution .. .. ... . .... ..... . . .... .. .............. ... . ...... .... .. .. . .... ..,..23
EXHIBIT A Descrlption af the Property ..... ...... .... ..... ..... . .... .... . , . .... ...A-1
EXHIBIT B Base Rental Payment 5checiule ..... . .... .... .:.. .... . ... .. . B-1
i~
LEASE A[,K~:I+:M~``l'
THIS LE~SE A{~REEMENT (this "Lease Agreement"} executed and entered znto as of
1, 1~95, is by and between tE~e CITY OF SAIVTA UIONICA, a munxc.ipal corporanon
and charter city duly organized and existang under and by viriue of the Consrituuon and Iaws of
the 5tate of Cal~fornia and its Charter (the "City"}, as sublessee, and the SANTA M~'VICA
PLTBLIC FINANCING AUTHORITY, a ~oint exercise of po~~~ers entity argamzed and existing
under and by ~~~rtue of the laws Qf the State of Cahfornia (the "Authonty"j, as sublessor
REC:ITALS
~'HEREAS, 1n order to finance certain airport facilities (the "Fac~lines~~j. the City
caused to be executed and delivered ~4,625,~00 aggregate pnncipal amaunt of Ceruficates of
Paxticipation (Airpor~ Facilit~es) (the "Pr~or Certi€icatec"},
WHEREAS, the Cit}~ currently subieases the Faci~ities and the real properry on which
they are lorated {collectively, the "Propert}~"; ~ursuant to a Lease Agreement Relating to
Airport Fac.iliries, dated as of October 1, 1985 (the "Prior Lease"),
V4'HEREAS, the Pr1or Cert~ficates were executed and deiivered pursuant to a Trust
Agreeinent Relatin~ to Airport Fac~lities, dated as af Qctober l, 1~$5, among Banlc of Amer~ca
Natlonal Trust and Sa~ings Association, as trustee, the C~ty and Security Pacific Nataonal
Bank, as lessor:
`VHEREAS, the Prior Certificates represent proportaonate ~nter4sts in th~ lease
pa}Tments t~ be maeie by the C~ty under the Pnor Lease,
~'L'HERE~~, in order ta achiev~ certa~n savings, the City des~res ta exercise its opt~on
to prepay lease payments payable unde: the Priar Lease (thereb5~ releasing the Properry from
zhe Pnor Lease}, anci then to lease the Property to the Authority pursuant to a Facilit~es Lease,
dated as of the date hereof, and sublease the Property back from the Aut~-onty~ pursuant hereto;
~VHEREAS, the C~ty ha~ determined that ir ~vauid be in the best interests of the City to
provide the fund5 necessarV for the Cit}~ ta exercise its oprion to grepay Iease payments pa}~able
under the Prior Lease throu~h the sale and deii~~ery of tiertifi~ates of participation (the
"Certtficates"} evidencing proportionate interests in the base rental payments to be made by the
City~ herennder, pursuant to a Trust Agreement, date~ as of the date hereof, by and among U.S
Trust Company of Califorma, N A, as trustee, the Authonry and the Cit~~, and
~[7HEREAS, alI acts, conditaons anc~ things required hy Ia~~ ~o exist, to have happened
and to nave been perfarmed precedent to and ~n conn~ct~on wlth t~e execu~on and entering into
of th~s Leas~ Agreement do exist, have happened anci ha~e been ~erforrned in r~gular and due
t~me, form and ~nanner as required b~~ law, and the partie~ hereto are now du~y authorized to
execute and enter into tlus Lease Agreement;
1UV4', THEREFORE, xn considerat~on af the mutual covenants ~er~~nafter contained,
the part~es hereto agree as follows:
AIaTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requ~res, the terms defined in
this Section ~.01 shall, for al~ purposes of this Lease Agreement, have the meanings herein
spec.ified, «~hich meanzngs shall be equally apglicable ta both the singular and plural forms af
any of the terms herein defined. Capitalrzed terms not otherwise defined h~rein shall have the
meanings assigned to such terms in the Tn~st Agreeinent
141954 Code" means the InEernal Revenue Code of 1~54 as ~n effect on t1~e day before
enactment of the Tax Reform Act of 1y~6 together with applicable proposed, temporary and final
regulations promulgated, and appl3c.able offic~al pvblic guidance pubhshed, under the 195~
Code
"Additional Rental Payments" means all amounts payable by the C~ty as Add~tionai
Rental Payments pursaant to Section 3.02 hereof.
`~Authority" means the Santa Monica ~ublic Financing Autharity, a~oint exercise of
po~~~ers entrty organized and existing under the laws af the State of Californ~a
`Base Rental Deposit Date" means the 15th day next preced~ng each Interest Payment
Date_
`Base Rental Payments" means a11_ amaunts paya6le to the Authority from the Cxty as
Base Rental Payments pursuant to Sect~on 3.~1 hereof
6B~se Rehtal Payment. Schedule" means the sch~dule of Base Rentai P~yments pa~~able
tc ~he Authorit~r fr~m th~ C~t~~ pursuant to 5eenon 3.01 hereof and attached hereto as Exhi6it B_
"City" ineans the C~ty of Santa Monica, a municipal corporation anci ~1_;arter ~it3~ duly~
organized ~nd exlsting uncier and by virtue of the Ccnstitut~on and ]au~s of the 5tate of Caiifornia
and the City's Charter
"Cade" means the Interr~al Revenue Cade of lyH6 as in effect an the ~ate of execut~on
and deliv~ry of the Certificates or (except as otherwis~ referenc4d herein) as ~t ma~ be amended
to apply to obligations issued on the date c~f exec;ution and dehver~~ of the Cert~fi~.ates, to~eher
~~ith applicable proposed, temporary and final regulat~ons pramulgateci, and applrcable officzal
publ~c guidance published, under the Code
"Deli~ery Date" ~neans , 1995_
'iFair Rentaf Value'S means, with respect to th~ P_ropert}~, the annual fair rental ~alue
tfiereof, as ~et forth in Sect~on 3_03 hereof
"Facilities Lease" means the Fac~lit~es L.zase by ar-d between the Cit}~, as le~sor, and tt,e
Authonty, as lessee, dated as of the date hereof, p~rsuant to which the City leases the Property to
the Authority, as the same ~nay be amended or supplemented pursuant to the provis~on5 thereof
and hereof
",Iuint Po~c~ers Agreement" means the ~oint exer~ase of po~~ers agreement by and
between the City and the Re~le~elopment Age~cy of the City of Sant~ Monica, dated ~s of July
2S, 1995, ati rt may~ frotn time to t~me be amended or sup~lemented pursuant to the provisions
thereof.
"Lease Agreement" ~neans this lease agreement and any amendmznt or supplement
hereto
"Net Proceeds" means any znsurance proceeds or condemnat~on a~~ard in exeess of
$50,00~, paid wtth respect ta any of the Property, ~emaining after payment therefrom of all
reasonable expenses incurred in the collection thereof.
`~Permitted Encumbrances" means, ~vith respect to the Property, as af any particular
ume: (z} iiens for general ad ~alarem taxes and assessments, ~f any, nat then delinquent, or
wh~ch the City may, pursuant to provxsXOns of Article V hereof, permit to remain unpaid, {ii) the
Ass~~nment Agreement. (F1i} this Lease Agreement, (1v) the Facilit~es Lease, (v) any right or
claim of any lnechanic, labarer, materialman, supplier or vendar not filed or perfected in the
manner prescr~bed by law as narmally exist w~th respect to properaes slrr-ilar to the Property for
the purposes for v~~~-ich it was acqmred or is held by the Crt}~, (vi} easements, rights of way,
~runeral rights, dnliing nghts and other rights, reservat~ans, covenants, conditions or restr~cuons
which exist of rec.ord as of the Delivery Date which the City certifies in writing w~xll not affecC
the intended use of the Property~ or ~mpair the secur~ty granted ta the Trustee for the benefit of the
owners of the Certificates by the Trus~ Agreement and the Assignment Agreement, and
;vi~) easements, rights of way, mineral rights, drilling rig~its and ather rlahts, reservat~ons,
co:jenants, c,ondltions or restri~rions establ~shed foilo~ving the Delivery Date ~~~hich t~e City
certifies in v~~~rzting do not affect the ~ntended use of t'tie Pa-operty oz impa~r the security granted ca
the Trustee for the 5enef~± of the owne*s of she ~eraficates by the Trust Agreement and the
ASS~gnment Agreement,
~~Pruperty" means the real praperty moze part~cularly descnbed in Exhlbit A hereto, and
any improvements thereto
"Re~tal Period" means the perrod ~rom the Del~very Date thraugh June 30, 1y96 and,
thereafter, tE~e ~~velve-manth periad ~.ommencing on July 1~f each ye~r durin~ the term of ~he
Leas~ Agreement.
6~Series ~ Base Rental Payments" means the portion of Base Rental Payments
descr~bed in the Base Rental Payment Schedule ancier the cal~tion "Series A Base Rental
Payments"
"Series B~ase Rental Payrnenis" rr~eans t~e port~on of Base Rental Payments described
in the Base Rentaf Payment Schedule under the capt~on "Series ~ Base Rental Payments"
"'I`ermination Date" means July 1, 2Q07, unIess ~xtended or sooner terminated as
provided ~n Section 2.02 hereof
``Trust Agreement" means the trus~ agreement by ar~d a.mon~ the Trustee, the Authonty
and the City, dated as af the date hereof, as at may from time to Lime be amended or
supplementeci pLixsuant to the pro~israns ther~of
`~Trustee" means the trustee appointed under the Trust Agreement and referred ta there~n
as the Trustee
A~TICL~ II
LEASE OF PR{)P~R7'Y; TERM
Section 2.01. Lease of Pronertv. {a} The Author~ty hereby ieases to the Cit}r and the
Cit}T hereby leases from the Authonty the Property, on the terms and condrtions hereir~after set
farth, and subject to all Perrtutted Encumhra~ces that existed as of the Dehvery Date
(b) The leasing af the Property by ~he C~ty *o the Autharity purs~ant to the Facllzt~es
Lease shall not effect or result in a merger of the City's leasehold estate pursuant to this Lease
Agreement and rts fee estate as lessor under the Facilit~es L~ase, and the Authority shali continue
to nave a leasehold estate in the Property pursuant to the Facilities Lease througE~out the term
thereof and hereof. This Lease Agreement shall const~tute a sublease with respect to the
Property~. The leasehold interest granted by the C1ty ?o the Authorrty pursuant to ~e Faciht~es
Lease is and shall be ~ndependent of tliis Lease Agreement; this Lease Agreement shall not be an
ass~gnment or surrender of the leasehald interest ~ranted ta the Authority under the Facil~t~es
Le~ se
Section 2.02. Term: [7tcuoanc~. {a) The term of th~s Lease A~re.ement shall
cammence on the Delivery Date, and shal] end on the Termination Date unless such term is
extended or soQner terminated as hereinafte: provided if on the Termination Date the
Certaf~cates shall not be fully paid, or pro~ision therefor made in accordance with Art~cle ?~ of
the Tr~st A~eement, or the Trust Agreem~nt shall not he discharged by its te~rns, or ~f the rental
pa}~able hereun~er shall rema~n dt~e an~ paya~le ~r shal, na~e been ab~ted at any time and for
any reason, then tne term of this i,ease A~reeine~~ s[~all be ex~ended u~t~x the date upon ~~hi;:h
all Certiflcates s~all be fully paid, or pravis~on t~exefo; made ir. 3ccordance ~~~tr, Art~cte ?~ ~f the
Trust Agreement, ihe Trust Agreement shall be d~~c;`~arged by its terms and ali rental payable
hereunder shaIl ~ave been paid =rs full, exc°pt that ~[~e term af this Lease Agreement shall :n ~n
e~~ent be extende:i more than 10 years be~~ond such Terininat~on Date, such extended date being
rhe "l~~ax~mum Lease'I'errr~ " If prior to the 1 ez~nina~on Date, all Cert~fic.ates shali be fully paid,
or provisian therefor ~nade ~n accordance u~ith Art~cle X of the Trust Agreement, and the Trust
Agr~~ment shaL be dischargeci by its terrn5 ar~~ a1I rental payable hereunder shail ha~e been paid
in ful:, the term of ~h1s I.,ease Agreement sha~J. enci sim~ltaneously th~revvit~
(b) The City shal] talce possession of the Propeny on the Deliver~ Date
ARTICLE III
RENTAL PAYMENTS
Sectian 3.01. Base Rental Pa~ments. {a) Ija G~neral Sub~ect to the provis~ons ~ereof
relating to a revis~on of the Base Renta~ Payment ~chedule pursuant to Sect~on 3 O1(b} hereof,
the Cit}~ sha11 pay to the Authority, as Base Rental Payments (sub~ect to the provlsians of Secuon
3.~~ and Artrcle VII of this Lease A~reement} the amount at t~ie ti~nes specified in accardance
with the Base Rental Payment Schedule attached hereto as Exhibit B and made a pari hereof, a
port~on of which Base Rental Payments shall constitute principal, and a port~on of which shall
eonst~tute interest. The Base Rental Payments shall be paid by the City for the nght of beneficial
use and occupancy of t~e Property. The interest ~ompanents of the B~se Rental Payments shall
be paid by the City as and constitute interest paid o~ the pnncipal c~mponents of the Base
Rentai Payments to be pald by the Cit}~ hereunder.
The obligarion of the City to ~nake ~he Base Rental Payments does not const~tute a debt of
the City or of the State af Cahfornia o~ of any pol~tical sub~iiv~sian thereof within the mean~ng of
any constitutional or statutor;~ debt limit or restriction, and does not consntute an obli~at~on for
~~~h1ch the C~ty or the S~ate of California is obl;gatec~ to levy or piedge an}~ form of taxat~on or ~ar
4~~h1cn the City ar the State of Ca~fornia has Ievied or pledged any form of taxanon,
(b) Payments other than Re~ularly Scheduled Payments If the term of this Lease
Agreement shal] have been extended pursuant to Sectlan 2 02 hereof, the Base Rental Payments
and Additional Rental Pay~nents shall cont~nue to and includ~n~ the Base Rental DeUOSit Date
precvd~ng the date of terminatian ~f this Lease f~~reement {as sa extended pursuant to
Sect~on 2.02 hereof) in an amount equal ~o the aggregate Fa~r Rental Value of the Property. and
aiiocated as pravided in the next sentence, Upon such extension, the pr~ncipal and interest
components shall be establashed sc~ ihat ±he prin;:~pai components will in the aggregate be
suff'tcient to pay all extended and unpa~a pz-incipal components and the interest components w~ll
in the aggregate be sufficient to pay all extended and unpdid u~terest components plus ~nter~s~ an
~he ~xtended principal and interest comp~nertts at a rate equal to the highest rat~ payablE ~~Xth
respect ~~ the Certificates.
~~j ~ntr Ifentr~l "VQ~u~ All Base Rental Payments made pursuant to this Sectlon 3.01,
together w1th, any~ ~dd~tional liental Payments p~d pursuant to Sect~on 3.02 hereof, for each
Rental Periad shall not exceed the Fair Rental Value of the P: operty
The aggre~ate annual Base Rental Payment~ and Additional Rentai Paymentc for the
Property shal~ be far the ngh~ to use and ~ccupy the ~roperty during the Rental P~r1od, or port~on
thereof,ln wl~ich such pa~ment is scheduled ro ~e made.
Section 3.Q2. Additiona! Rental Pa~ments. The City shaii also pay, as Additional
Rental Payments hereunder ~n addirion to the foregoing Base Rental Payments, such amounts as
shall be requued far the paytnent of the following~
(~} All taxes, assessment~ ~f any tyn~ ~r natur~ char~ea to the Authority ar the
Cit~~ or affect~ng the Propert~j or the ~espect~ve ~nterests ar estates of the Authority or tne
City therein, or affecting the ~mcun~ ~~.r~'able to ~e i~uthority from rentals rece~~ed
hereunder for the retireinen~ of tne ~;,~ficates (including taxes or ~SSessments assessed
ar le~ied bv any ~o~ernmentai agency or district having nower ~o ~evy ta~es or
assessments}
(i~) All reasonable adminisuati~e casts of the Authority relating to the Property
including, but without limiting the generality of the For~going, salai-ies, wages, all fees
and exper~ses, compensation and indemnlficataon ~f the Trustee payable by the Authont~~
under the Trust Agreement, fees of auditors, accountants, attorne5rs or engineers, and all
other necessary and reasanable adm~nistrative costs of ti~e Au~hority or charges requ~-ed
ta be paid by it in order to mainta~n ~ts existence or to comply with the terms of the
Certificates or of the Trust Agreement or ta defend the Authorrty and its inembers,
of~cers, agents and employees.
(ui} Insurance prezru~ms for al1 ~nsurance reyuired pursuant to Art~cle V af this
Lease Agreement.
(iv) Al3 other payments requuecf to be paid by the City under t~e pr~~isions of
th~s L,ease Agreement.
(v) Any a~nounts with respect to the Lease Agreement or the Cert~ficates requ~red
to be rebated to the federal government in accordan~e w~th sectro^ 14K(~ of the Code
(vi) All other payments requ~red to be paid by t~e City under the provisions of the
Trust Agreement
Amounts const~tut~ng Addit~onal Rental Payments payable hereunder shall be paid by the
City du-ectl}~ to the person or persons ta wham such amounts shall be payable The C~ty sha,ll
pay alI such arr-ounts when due or at such later nme as such amounts may be paid without
nenalty or, m any other case, witiun sxxt~ ~60} da~~s after notice in wri~ing from the Trustee to the
City stat~ng rhe arnoun± af Additional Renta~ Payments then due and payabie and the purpose
thereof
5ection 3.03o Fair Rental Val~~~ 5uch paymen~s cf the forego~ng Base Rental Pa}~ments
and Additio~al Rental Payments far th~ ~roperty during eact~ Rental Period, dur~n~ the term of
this Lease Agreement, shall const~tute tY~e rotal rentai for sald Rental Period. The part~es hereto
~ave agreed and dete:mirred that the Faia 12enta~ ifalue of ~e Property, as of the Delivery Date, is
nc Iess than $750,000 In g-naking such determinatz~n ~f Fair Rental ~lalue, cons~deratiar, has
been given to the costs of ~inancing the 3cqmsition of the Property, the uses anci purposes which
may be served by the Property and the ~enefit~ therefrom whic~ will accrue tc the C~ty and the
general public, Said t~tal rental shall be paid for and in considera~~on of the n~ht to use and
occupy the Property and 'zn consid~rat~on of ,}~e c.ont~r,ued rtg~t tc the quiet use and en~oyment
thereof dunng each Rentai Perrod for whic:~ saici renial is to b~ paid_
Notwithstanding any other prov~sion of ;his Lease Agreement, ~r tne vvent ti~at rental
payments due hereuncier shall be part~all~- ~bated for ~ny period of time, the rental payinents due
for sach period af ~ime shall not exceeci the Fair Rental vaiue of t~at pQrt~or, of t~e Pro~ert~~
available for use and o~cupancy by the City durin~ su~ch p~aiod ~f t~me
5ection 3.04. Pavmenf, Prov-sions. Eacn i~stallment of 3ase ~ental Payments payablE
hereunder shail be pald in iawfu~ money cf the Un,ted States af Amer~ca tG or upon ttie order of
the Authonty at the princi~al office of the 'I`n~stee in , Ca~forn~a, ~r SuC~I OtY~e: place ~r
ent~ty as the Authority shalI designate Each Base Rental Payment shall be deposited with tt~e
Trustee no later than the Base Rental De~osrt Date ~receding the Interest Payment Date on ~Nhic~
suc,h Base Fcentai Payment is due Any Base Renta~ ~a~~lr,ent accruing i~ere~nder which shall not
be naid b}~ the Cit~~ when due and payable uncier tl:e terms of this Lease A~reement shail ~aear
interest frozn the date when the satne is due hereunder until the same shali be paid at a rate equal
ta the nighest rate payable with respect to the Cert~ficates. Notufithstanding any clispute ~etween
the Authority anci the ~ity, the City s~all maice aIl rentai payments when ~u~ without deducaon
~
or offset of any kind and shall not wrthhold any rental payments pending the fYnal resoluuon of
suc.h dispute. In the e~+ent of a c~eterminat~on that the City was not habie far said rental payments
or any portion thereof, said payments or excess of payments, as the case may be, shall be credited
against subsequent rental payments due here~nder or refunded at the tune of such determination
Amounts requ~red ca be deposrted by the C~ty with the Trustee pursuant to thzs 5ect~on 3~4 on
any date shall be reduced to the extent of a~ailable ~inounts on debosit in the Base Rental
Pa~~ment Fund, t}~e Interest Fund and ~he Pnncipal Fund
Section 3A5. Aonronriations Co~~enant. The C~ty covenants to take such act~on as may
be necessary ta lnclude all such rental payments due hereunder as a separate line item ~n its
a~r~ual budgets and to make necessary annual appropnations far ali such rental payments The
City will dela~er to the Authority and the Trustee copies of the portzon of each proposed and final
City budget relat~n~ to the payment of rentals hereunder w~thir~ ten (10} days after the filing or
adoption thereaf 'The covenants on the part of the City herein contained shall be deemed to be
and shail be construed to be duties imposed by la«- and it sha~I be the duty of each and every
public official of the City to take such a~tion and ~o such things as are requ~red by law in the
perfor~nance of the official duty of such off°icial_s to enable the City to carry aut and perform the
co~~enants and agreements tn thls ~ease Agreement agreed to be carried out anci performed by the
Crty.
Section 3.06. Rental Abatement. Except as atherwise spec~ficall}~ pravided in th~s
Sechon 3Af~ and Sect~on 7.01 hereof, durrng any period in which, by reason of material damage
ta, or destruction or candemnaqon of, the Property, or any defect ui t~tle ~o the Propert~~, th~re is
substanual interference with the City's right to use and occupy any port~on of the Praperty, rental
payments due hereunder shall be abated proportionately, and the Crty waives the benefits of Ci~ii
Cade Sect~ons 1932(1), i932(2) and 1933(41 and any and all other rights to terminate the Lease
A~-~ement by vlrtue of any such interferencE and the Lease Agreement shaIl ~onnnue in full
force ~nd effect. The amouni of s~cr abate~nent shali be agreed upon by the City and the
Autnorit~= but, sub~ect ~o Sect~on 3.03 hereof, in r~o event shall th~ rental be iess than the amount
required for the payment of the prkns;ipai and ~nterest components of the Base Rental PaSjments,
and the Addltional Rental Payinents related thereto, a~ the same becoine due ancE paya}~le The
City ancl the ~luthanty shall ~alculate sucl~ abatement and shall pro~ide th~ Trustee ~~ith a
certitic.at~ sett~n~ forth s~ch caiculation and the basis therefor. SLCh abatement shall continue for
the pertad co;tlmenc~ng witn the daie oi xnterxerence result~n~ from such damage, ~estruction,
condemnat~on or ntle defect and, with resp~c~ to damage io or ciestruct~on of the Property, ending
with rhe substantial c.omplet~on of the vvork ~f r~pair o~ repiacement of tl-ie Propert}~, or the
partion thereaf sa damaged or destroyed; and the terrr~ af this Lease A~reement shall be extended
as provided in Sect~on 2.U2 hereof, except that the t,~rm sha11 in no event be extended beyond the
:Vlaximum Lease Term,
Notwithstanding the foregoing, t~ the extent that mor-eys are avaulabie for the ga~~ment of
rental pay~nents in any of the funds and ~erLounts establzshed under the Tru~t Agreement, rental
payments shal~ not be abated as provxded abo~e b~t, rather, sh~ll be payable by the City ~s a
speual obligation payable solely from said funas ar,d accounts
ARTICLE ~V
MAIIVTENANC'E; ALTERATTONS AND ADDITIONS TQ TH~
PRnPERTY
Section 4.01. Maintenance a~d jJtilities. Throughout the term of this Lease
Agreement, as part of the considerat~on for rental of the Property, all i~npro~~ement, repa~r and
maint~nance of the Property shalI be the responsibilrty of the Cit}~, and the City shall pay for or
other~,;~ise arrange for the payment of a11 utility services suppl~ec~ ta the Property, which rnay
include, w~thout lim~tation, ~amtor service, aecurity, power gas, telephone, iight hea~ing,
vent~lauon, air condition~ng, water and all other utilrty services, and shall pay for vr otherwise
arrange for payment of the cost of the repair and replacement of the Property resulung from
ord~nary wear and tear or want af care on the part of the Crty or any assignee for sublessee
thereof In exchan~e for the rentai herein provided, t~e Authority agrees to prov~de ~nly the
Properiy
Section 4.02. Ad~itians to P~-,~ ert~:. Sub~ect to Section R,C12 hereaf, ~he City and any
sublessee shall, at its own expense, have the rzght to ~nake addit~ons, medificat~ons and
improvements ta the Property, To the extent that the rema~ai of ~uch addrtions, modificat~ons or
i~npro~ements wau~d not cause matenal damage to the Property, such additions, modifications
and improvements shall remain the sole property ~f the City ar sucn sublessee, and nelther the
Authonty nor the Trustee shall have any interest therein Such additrons, modifzcatlons and
ampra~ements Shall not in any way damage the Property or cause xt to be used for purposes other
than those authorized under the prov~sion~ ~f state and fe~eral iaw; and *he Property, upon
c,amplet~on of any addiuons, modifications and impra~ements made p~rsuant to this Secuon,
shall be of a value which is at least equal to the value af the Property immed~atel~~ prior to the
ma~ng of such add~~~ons, modifi~ations anci zmprovemen~s.
5ection 4.03, Installation of Cit~'s Eauinment.. The City and any sublessee may at any
tame anci from tlme to ~me, in its sole discret~on and at its own expense, lnstall or perrnit to be
installed items of ec~uipment or other personal proper;~ in ar upon the Praperty_ All sucn item5
shail remair~ the sole property of the Crty~ or such sublessee, ana neither the Authority nor the
Trustee shali have any interest therein~ '~he Cit~~ or such sublessee may remoae or modlf~~ such
equ~pment or othe* personal property at ~ny time, pro~~ded ~hat such party shall re~a~' and
restore any and all damage to the Property resul_t~n~ from the installatior, modifs~:at~on or
remo~ai of an}~ such items Nathing in this ~eas~ Agreement snaIl ~revent the Cit}~ or an~=
sublessee from purchasin~ items to be install~ci pursu~nt to this Sect~on under a c:onditional sale
ar lease pur~hase contract, or subject to a vendor'c lzer~ or security agreement as secunty for the
unpaid portran of the purchase price therecf, prQVZde~l that ~o such l~en or security ~nterest shall
attach to any part of the Prope:ty
ARTICLE V
INSUR.~IiiCE
Section 5.01. (~enerai Lia6ilitv and Prppg~~y pama~e Insurance: Workers'
Comnensatic~n Insurance: Builder's Risk InsurancP. (a) The City shall maintain vr cause to be
maintained, t~u~oughout the term of this Lease Agreement, a standard commercial general habihty
insurance polic.y ar paltcies in protecuon of the City. the Authority and then' respect~ve rnembers,
officers, agents and employees. Sa1d pol~cy or policies shall prov~de for indemni~cation of said
part~es against duect or contingent Ioss or liability for damages far bodiiy and persona.l in~ury,
death or property damage occasioned by reason of the use or ownersh~p of the~ Property Saud
policy or palic~es shall prov~de coverage sn th~ mxnimum lzabilxt~ li~n~ts of $1,0409D00 for
personal in~ury or death of each person anci $3,Qq0,npp for personal in~ury or deaths of two or
more persons in a single accicient or e~ent, and in a m~nimum amount of $SOO,Q~O for damage to
property (sub~ect ta a deducuble clause of not to ~xceed $100,000) ~esc~lting from a single
accident or event Such public liabll~ty and property damage insurance may, however, be m the
form of a s~ngle hmit policy in the amount of $3,004,000 cavering all such nsks Such llability
~nsurance may be mamtained as part of or in con~unctzon with any other liability insurance
covera~e carrled or requued to be carned by the CFty, and may be maintained in whole or in part
~n the form of self-insurance by the City provided such self-insurance coinplies with the
prov~5ions of Sect~on 5 04 hereof. The Net Proceecis of su~h liab~iity insurance shall be applied
toward ext~n¢uishment or sahsfact~on cf the Iiabili~y "rttll xespect to ~~~hich the Net Proceeds of
such fns~ranLe shall ha~~e been paid
(b} The City ;hall maintain or cause to be maintainecl, throughout ±he term of this Lease
Agreement, ~orkers' compens~tion insurance issued by ~ responsible carrier aathor~zed under
the laws of t't~e State or Cai~fornia to insure einpioyers agalns~ hab~~ity for co~nper~satior~ under
the Lalaor Code of the State of Califorma, ar ar_5~ act enacted as an arr.endnnent or supplement
thereto or in l~eu thereof, such vvoricers' compensat~an inswance to ~.cver ~.1.1 per5ons employ:.d
~y :tie Cit~~ zn conneL~an with r~he r roperty and to cover full hab~lity for compensation under any
suc:h act. pravided, however, t~aat the C~ty's obi~gatians unaer this clause (b) may he sat~sfied by
se~-~nsurance, provlded such seif-insurance ::ampl~es w~th the prov:sion5 of 5ecr~an 5.~4 I~ereof
(c) ~ he City shall maintaln or cause to be maxntained casuaity ~nsurance insurin~ the
Property aga~nst f~,re, lighming and all other risks ~overed by an extended c~verage endorsement
(exc.Iuding earthquake and flaod~ ta the full c:~surable value oi ~he Property, sub~ect to a
~540,00~ loss deductible provlsiar~. Ful~ znsurabl~ vaiue shall not be Iess than the Outstanding
prancipal a~nount of the Certiflcates.
(dj The City shall maintain or cause to be maintained rental uiterrupt~on insurance to
cover the Authonty's loss, total or paz~t~al, of Base Rental Payments resulting from the loss, total
or partial, of the use of any part of the Prap~rt}~ ~s a resu~t of any of the hazards required to be
covered pursuanc ta clause (c) above in an amount sur"fic~ent at all t~me~ to pay ar~ amount not
Iess than the praduct of two t~mes the maxiinus~ amount af Base Rental ~ayments scheduied to
be paid durFng any Rental Penoci. The ~ity shall not be permitted t~ self-~nsure its obligation
under th~s c.lause (d)
{e) The insurance requ~red by th~s Section 5 O 1 shall be provided by carriers razed at lea5t
",4"' by~ Standard s4~ Poar's Corparat~on {a "Qualifie~ insurPr"), If an insurer's rating falls below
"A", such ~nsurer Shall be replaced w~itl~ a Qualifie~ Insurer
Section 5.02. ' ~!'he City s~all ~ro~icie, at ~ts own expense, one or more
CLTA k~tle insurance policies for the Property an rhe a~gregate amount of not iess than the
aggregate prlnc~pal amount af the Certificates Said policy or pohc.ies shall insure (i) the fee
interest of the City fn the Froperty, {ii) the Authority'Sleasehald estate under the Fac~lities Lease
in the Praperty, and {iii) the Ctty's leasehold estate hereunder in the Property, sua,~ect only to
Perrrutted Encumbrances All Net Proceeds recei~ed under sa~d policy or polrcles shall be
deposited with the Trustee and applied as pro~~ided in Sect~or~ 5.04 of the Trust Agreement So
long as ar~y af the Certificates rema.in outstainding, ~ach policy of title insurance obtained
pursuant hereto or required hereby shalI pravide t~at all proceeds tE~ereunder shall be payable to
the Trustee for the beneft of the Certificate O~~ners
Section 5.03. Additional Insuranc~ ~ro~~isian: Fnrm of Palicies. The City shall pay ar
cause to be paid when due the premiums for aIl insurance policies requ~red by Section 5 Ol of
this Lease Agreem~nt, and shali promptly furnish or cause to be furnxshed evidence of such
payments to the Trustee. AIi such policie~ shall nrovide that the Trustee shall be g~ven thuty
~30} days notice of the exptrat~on thereof, any interd~d cancellatlon ther~of or reducti~n ~f the
covera~e provided thereby. The Trustee shali be fully protecteci an acceptin~ pa~ment on
account of such insurance or any adlustment, compram~se or settlement of any ioss a~reed to by
the Trustee
The C~ty~ shall cause to be delivered to ~he Trustee on or before August 15 each }~ear,
cominencing August 15, 1~96, a schedule of the insurance policies being maintained 1n
accordance herewith and a Certificate of the City sta~ing that sucl~ policie~ are in full force and
effect and that the C`ity is in full compliance w~ith ~he requiremenis of this Article V The T?-ustee
shall be ent~tled to rely upon said Cert~ficate of the Ciry as to the City's compliance with this
Article V The Trustee shall not be responsible for the sufficiency of coverage or amovnts of
such pciicies
~ection 5.04. Seif-Insurance, Irisurance ~ro~ided throug~~ a Cal~farnia jo~~t pov~~ers
authority of ~hich the ~ity ~s a member ~r ~vr*h u~hich the C~t, contracts for insurance shal~ be
~ieemed to be self-~nsurance for purposes ~ereof_ finy self-~nsurance maintainetl by the C~ty
pursuant to this Art~cle V shall com~iy with ~he fallowing terms:
{lj The seif-insurance prcgraYn shall he approved ir~ wriung by ~he City's
professionally cert~fied risk manager or by 3n independeni insurance consvltant;
(ii) Tl~e self-insurance program shall ~nclude an actuarially saund claims reserve
fund out of which each seif-insure~l cIaim sh~ll ~e paid; the adequacy of each such fund
shall be evaluated at least on a bi-annuai basis by ~he City's professzonaIl}~ certified risk
mana~er or by an indepencient ~nsurance s;onsultant, ~nd ar~y deficiencies ~n any
self-insured cla~ms reserve func: shall be remedipci ~r, ae.cordance wzth the
recommenciat~on af ~he City's prof~s~ior~ally ;,ert~fied nsk manager or sueh inciependeni
~nsurance consultant, as applicable; and
(iii} In the event the self-ansurance pro~ram s~-ali be discont~nued, the actuanal
~oundness of its clairns reser~E fund, a~ ~eier~une~ by the C~ty's professionally certified
ris~ manager or by an independent insuran;:e con5ultant, shall be mauitained.
10
ARTTCLE VI
DEFAULTS AND R]EM~DIES
Sect~on ~.41. Defaults and Remedi~s. {a} {1) If the C~ty shall faal (A) to pay any rentaI
payable hereunder w[~en the sarne becomes due and payable, k~me being expressly dec,Iared ta be
of the essence fn this Lea~e Agreement, or (B) to keep, observe or perform any ather term,
covenant or condit~on contained herein or in t[~e Trust Agreement to be kept ar perforined by the
City, or (~~} upon the happening of an}~ of the e~ents specified in subsection (b) of thxs Sect~an
b O1, the City shaii be deemed to be ~n default hereunder and rt shall be lar~~ful for the Authanty
to exercise an}~ and all remedies ava~lable pursuant to law or granted pursuant to this Lease
Agreement The City shall in na event be in default in the o~aservance ar performance of any
covenant, condltian or agreement in this Lease Agreement an ats t~art ta Ue observed or
performed, other than as referred to in clause (i)(A} or (ii) of the preceding sentence, uniess the
C~t}~ shall have failed, for a penod of thirty (30) days or such additional hme as is reasonab~y
requued, to correct any such default after notice b;~ the Autharity to the Crty praperly specifyin~
wherein the C3ty has faiied to perform an}~~ suc.h covenant, condition or agreement. LTpor~ any
such default, t~e Authority, an addition te all other right~ and remedies i± ~na}f ~ave at law, ~hall
have the option ta cio any of tt~e follo~u~ng:
{ 1} To termznate this Lease Agreement in the manner here~nafter provided on
account of default by the C~ty, notw~thstanding any re-entry or re-letting af the Property
as hereinafter pro~ided for in subUaragrapri (2) hereof, and to re-enter the Property and
remove ali persans in possessior~ thereof ~nd all personal property ~~hatsaever situated
upon the Property and place such personal property ~n starage ir, an~~ warehouse or ather
suitable piace located ~~itl~in ti~e ge~graph~cal houndaz~es of th~ ~~ty, fcr the acco~nt of
and ai tise experse of the City_ In the ev~nt o~ such term~nation, the City agrees to
surrender lmmediately possession of the Prop~rty, without let or hindrance, anc~ te pay the
Autharity all damages recoverable at law that the Autharlty tnay tncur by reason cf
ciefault by the City, znciuding, ~~ithout lir;utatton, any r~asanable co5ts, loss or damage
whatsae~er arising out of, ir. connection ~~ith, or inczdent to any such re-e~-try i~pen the
Property and removal and stara~e of such ~roperty by th~ ~uthority or its ~u1y authorized
agents in accordanc.e with the pro~is2ons herein contained_ Neither na~ace to pay ren~ ar
to deiiver up possessior, of the Properiy given gursuant to law n~r any entry ar re-entry
~y the Authority nor any proceeding in unlawful detainer, ~r otheru-1se, braught by ~he
Auiharity for the puapose of effecting such re-entry ar obt~inin~ posse5sion of the
Property nor the appointment af a reueiver upon in~tiat~ve af the Authority ta protect the
Authoriiy's lnterest under this Leas~ A~ree~mer~t shall of itself operate to terrrunate this
Lease A~reement, and no terrrunat~on of *h~s Lease Agreement on account af default by
the Crty shall be or become effectrve by o~erat~on ~f law or acts of ~he paraes hereto, ar
othen~ise, unless and until the Authanty shall have gi~en writter_ notice tc~ the City of the
eiec.tion on the part of the Authoa~ty tc~ terminate this Lease Agreement The C1ty
covenants anci agrees #hat no surrender of the Property or of the remainder af the term
hereof or any terrrunat~on of th~s Lease Agr~ement shall be valid in any manner ar far an~~
purpose whatsoever unless stated by rhe A~thor~ty by s~.~ch written not~ce,
(2) VVithout term~nak~ng th~s Lease Agreetnen~, (i) to collect each iristallmeni ~f
rent as it becomes due and enforce any other terms or pravisions hereof ta be kep* or
performed by the City, regardle5~ af ~vhether or not the C~ty has abandoned the Property
or ~ii) to exercise any and all rlghts of e:ttry and re-entry upon the Property. In the e~~ent
the r~uthority does no~ eleci to terminate this Lease Agreelnent in the manner prov~deci
for ~n suupara~raph (1) hereof, ti~e City shaii remain iiable and agrees to xeen or perform
all eo~enants and cond~t~ons [~erein contained to be kept or performeci by ihe Crt~~ and, ii
11
the Property is not re-let, to pay the fu~l amount of the rent to the end of the term of tlus
Lease Agreement or, in the event that the Property ~s re-let, to pay any deficiency in rent
that results therefrom; and further agrees to pay said rent and/ar rent defic~ency
punctually at the same time and in the same manner as here~nabotfe pro~ided for the
payrnent of rent hereunder, notw~thstanding ~F~e fact that the Authonty may have received
in pre~~ous y~ears or may recerve thereafter ira subsequent years rental in excess of the
_rental herein specif~ed, and notwithstanding any entry or re-entry by the Authorlty or suit
in unlawful detainer, or otherwise, brough~ by ti~e Authonty for the purpose of effecting
sucf~ re-entry or obtaining possessiar. of the ~roperty Should the Aut~ority elect to
re-enter as herein provided, the Csty hereby ~-revocably appoinrs the Authority as the
agent and attomey-in-fact of the City to re-1_et the Property, or any part thereof, frotn t~me
to t~me, either in the Authonty's name ar otherwlse, upan such terms and conditions and
for su~h use and penad as the Aut~ority may deem advisable and to remove all persans in
~os.cession thereof and all personal property whatsoever srtuated upon the Property and to
place such persanal property in storage in any warehouse ar other suitable place located
wrthin the geograpt~ical boundaries af the C~ty, for the account of and at the expense of
the City, and the City hereby inde~nmfies anc~ agrees to save harmless the Author~ty from
any reasonable casts, loss or damage whatsoever ar~sing out of, in connect~on iv~th, or
incxdent to any such re-entry upon and re-lettrng of the Property and remaval and storage
of such property by the Authonty ar ~ts duly authorized agents in accordance with the
provisions herein contained. Tt;e ~~ty agrees that the terms of this Lease Agreement
cot~statute full and sufficient notice of th~ r~ght af the Authority to re-let the Property in
the event of such re-entr}~ wit~tout ~ffecting a surrender of this Lease Agreement, and
further agrees that no acts of the Author~ty 1n effect~ng such re-letting shall :;onsntute a
surrender ar tertnlnat~on of this Lease A~reement zrrespective of the use or the term for
~~hic.h s~ch re-iemng ~s made or the terms and conditions of such re-letting, or otherwise,
but that, on the c.antrary, in the event of such default by the Crty the nght ta termuiate this
Lease A¢reement shall ~est in the Author~ty to ~e effected in -*_he sole and exclusive
manner provided for 1n sub-paragraph {1; ;~erecf~ The Cit~f further agrees to pay the
Authonty the cost of any aiterations ar addit~ons to the Prc,perty necessary ~o place the
Property 1n condit~on for re-letting immedaately upan nat~ce to the City of the completion
and :nstallation of such addit~ons or alterations,
The ~ity nereby wai~es any and al~ claims far dama~es caused ar which may be caused
by t~e A~thority ~n re-entering and takin~ gossessior~ of the Property as he:ein provzded ~nd all
claims for damages t~at may result from t~e destructior~ of or injury to the Property and all
ciaims for damage~ to or loss of any property belcnging to ~he City, or any other person9 tY-at
may be ~n or upon the Property
(b} If {1) the City's xnterest in this Lease Agree~nent or any part thereof be ~sslgned or
~-ansferred, either ~o~~ntarily or by operat~on of law or otherwise, without the wntten conseni of
the Authonty, as hereinafter provided for, or {2! the ~ity or anv assignee sha11 file any petat~on or
inst~kute any proceeding under any act or ~cts, state or federal, ~ealing with or relat~ng ±o the
subiect or sub~ects of bankruptcy or insoi~enc.y, or under any ~mendmeni of ~uch act o±~ acts,
e~ther as a banlcrupt or as an insolvent, or as a debtor, or in any sinular s:apacity, wherein ar
~~her:,by the City asks ar seeks or prays ta be ~c~~udicated a bankrupt, or zs to be dischargeci from
any ar all of the City's debts or obli~atbons, or offers to the Cit}%'s cred~tors to ~ffect a
compasitio^ or extension of tltne to pa~ t~e ~it~~'s debts or asks, seek~ ar prays for
reorganiaataon o~ to effect a pian af reoreanizatior., or for a read~ustmen~ of th~ City'~ debts, or
for ~ny ot~er sim~lar relief, or if an~~ sucr pe~ation or ~ny sucl-~ proceedings of the saine or surular
k1nc~ ar e.haracter be filed ar be institut~d ~r taken agair~sc th~ City, or ~ a recerver of the business
ar of the property ar assets of the City shall be ~ppointed by any court, ex~ept a receive:
appointed at the instance or request of the ~luthor~?y, or if the ~~ty sha11 rriai€e a generas
~~
assignment for the benefic of the City's credrtors, or if (3} the City shall abandon or vacate the
PropertS~, then the Ci~y shall be deemed t~ be in default ~ereunder.
{cj In add~t~on to the other remedies set forth in this secrion, upon the accurrence of an
event of default as descr~beci in this Secuor fi Ot, the Authority and its assignee shall be entztled
tc proceed to protect and enforce the nghts vested in the Authanty and its assignee by the Lease
Agreement or by law; provided, however, that, notwithstanding anything herein or in the Trust
Agreement to the contrary, there shall be. no righ~ under any crrcumstances to accelerate Base
Rental Payments or Addit~onal Rental Pa}~ments or otherwise declare any Base Rental Payments
or Additional Rental Payments not then in default to be immediately due and payable The
pravisians of the LeaSe Agreement and the dut~es of the City and af its city counc~l, afflcers or
employees shail be enforceable by the Authority or its assignee b~~ mandamus or other
appropr~ate suit, act~on or proceed~ng in any court of campetent ~urisdicrion. Without lim~ting
t~e generality of the foregoing, the Authority and its assignee shall have the nght to bring the
fol~owing aetion5:
(1} Accounttnn. By acnon or suit ~n ec~uity to require the Cit}~ and rts city councii.
officers and employees and its as~~gns ~o accaunt as the truste~ of an express trust.
(2} In7uncnon. By action or surt in ec~uity to en~oin any acts or th~ngs wh~ch may
be unlawfu~ or in violation of the r-ghts af the Author~ty ar its assignee.
(3} Mandamus By ~nandamus or other suit, action ar proceedin~ at la~~ ar in
equity to enforce the Authoraty's o~° rts assignee's rights against the Crty (and its city
councii, ~fficers and employees) ar~d ~o compel the C~ty to perfarm and carrv out its
duties and obligat~ons under the 1a~~ an~ its covenants 3nd agreements wxth the Author~ty
as provided h~re~rj,
Each and all of ~he reinedies glr~er~ t~ the Authoraty I~ereunder or by any law naw or
hereafter enacted are cumu?at~ve and the sir.gle or partial exercise of any right, power or privilege
here~nder shaii not ~tnpa~r the right of the Authont}~ tc tF:~ further exercise ~hereof or the exercise
of an}~ or ~1 other rights, powers or priv~leges. The term 5`re-let" or "re-Ietting" as used in this
5e~t~on 6 O1 s~all ~nclude, but not he litn~ted to, re-letting by means of the operatior. bq the
Authority of the Praperty. If any statute ar rule of iaw validly shall l~rrut the remedies g~ven to
the Authority hereunder, the Authority neverthele5s shall be entitied to whatever rennedies are
allov~~able uncier any statute or rule of law.
In the e~ent the Authority shall prevail in any actton brought to enfarce ~ny of the terms
~nd provisions of this Lease Agreement, th~ City ~grees to pay a r~asonable amount as and for
attorney's fees incurred by the Authonty in attem~t~ng to enfor~e any of the remedies a~a~iable
to the Authoriry hereunder,
(d} Notwithstanding anyth~ng her~in to ihe contrary, the terrrunation of this ~.ease
Agreement by the Authority and ~ts aysignees on ~ccount of a defaul~ by the CitS~ ur~der this
~ecaon 6,~1 shaii not effect or result ir_ ~c t~rr~ina~on ~f the iease of tY~e Propert}- by the City to
the Authorit~~ pursuant to th~ Facilit~es Lease
Section b.02. Wai~Ter, Failure of th~ Autharity to take advantage of any default ~n the
~1c1Ii Of CIl~ CiT~r shall not be, or be construed as, a waiver therecf, nor shali any custom or practice
whic,Y~ may ~row up between the part~es ~n tf~e LoLr~e of ~dmamstering this instrument be
construed to waive or to lessen the right of rhe Auth~ority to insist upon perforinance b}~ tne Cit~
of any term, cavenant or condit~on hereof, ~r ~o :,xercisP any rights g~~~n the Autharity ~n
account of such default A waiver of a narticul~r ciefault shail not ~e deemeci t~ be a w~uve~ ot
lj
the same or any subsequent default. The acceptance of rent hereunder shall not be, or be
construed ta be, a~vai~er of any term, co~enant or condition of this Lease Agreement.
14
AR'1'ICL~ ~'II
EMINENT Di)MAIN; PREPAYMENT
Section 7A1. Eminent. Do~nain. If all of the Praperty (ar portions thereof such that the
remainder is not usable for publ~c purposes by the City) shall be taken under the power of
eminent domain, the term hereof shall cease as of thP day that possession sha11 be so taken If
less than a~l of the Properry shall be taken under the pov~~er of eminent domaln and the remainder
is usable for publ~c purposes by the C~ty at the time of such taking, then ihe Lease Agreement
sha11 contmue in full force and effect a~ to suc~t remainder, and the pames watve the benefits of
any Iaw to the contrary, and 1n such event there shall be a part~al abatement of the rental due
hereunder, as provided in 5ection 3.Ofi hereof. So lon~ as any C~rtificates shall be Outstanding.
any a~~ard macie in emXnent domain praceedings for the takfng of the Pra~ert}~, or any gortion
thereof, shall be paid to the Trustee and applled to the prepayment of Cert~ficates as pra~ided in
Sect~ans 4_Oi(a) and 5.03 of ihe Trust Agreement Any such av~~ard made after all of the
Certificates, and all other amo~nts ciue ~snder the Trust Agreerr-ent and hereunder, have been
fully pa~d, shall be pa~d to the Anthority and tc the C~ty as the~r respect~ve interests ma~r appear
Section 7.a2. Prena~ment. (a} The City ma}l prepay, from any sot~rce of availahle funds,
aIl or any portion of the Base Rental Payments by deposit~ng with the Trustee moneys or
securit~es as pro~ided, and sub~ect to the ter~nti and condit~ans set farth, in ArticIe X of the Trust
Agreement suffic~ent to make such Base Rea~tal Pa~ments when due; provided, that the City
furnishes the Trustee with an opinion ~f ~:ounsei that such deposit will nat cause ~nterest
e~.-idenced ~y and payable with respect ~o ~he Ser~es A Certificates to be includable in =ross
~ncome for federal income tax purpases
(b) If less than alI of the Base Ren~al Payments ~re prepaid pursuant to th~s Sect~on 7_02
then, as of the date of the depos~t pursuant to Section 7.02(a), the prulcipal and ~nterest
components of the BaSe Rental Payments shall be recalculated in order to take such prepayment
inta account T~e Czt~~ a~rees that if, follawing a partial prepa}~ment of Base Rentai Payments,
the Froperty is datnaged or destroyed or taken by errunent damain, ~t is nat entrtled to, and by
such prepaymen± :~~aives the right of, abatemPnt of such prepaid Base tZental Payments and shall
not be enutled ta any reunbursement of such Base Rental Payments
(c) If all of the Base Rental Payment~5 are prepaid pursuant to this Secbon ~ 02 then, as of
the date of the deposit pursuant to Sect~an 7.02{a), the ~erm of thls L~ase Agreement shall be
terminated
(d) Before makin~ any prepaytnent pursuant ~o this arncle, the City shall gi~e v~~ritten
notice to the Authority specifying the date on v~lhicr~ the prepayment will be 1nac~e, which daie
~hall be not less than thirty-five (35) nor more than sixty-f~~e ~bS) days from the date such not~ce~
is gi4~en to the .4uthority
15
ARTICLE VIII
C;( ) VENANTS
Sectian 8.01. ~~ht of Entrv. The Authonty and its assignees shall have the right to
enter upon and to examine and inspect tl~e Property upon reasonable not~ce during reasonable
business hours (and in emergencies at all tunes} far any purpose connected with the Authority's
rights or olaligauons under this Lease Agreement, and for all other la~vful purpo5es_
Section S.a2. Liens. In the event the City shall at ar~y t~me during the term af this Lease
Agreement cause any changes, alterarions, addl[i~ns, tmUrovetnepts, ar o[her work to be done or
performed or matenals to be supplied, in ar upon the Property, the City shall pay, wher~ due, all
sums of ~noney that inay becotne due for any lauor, serv~ces, matenals, supplies or equipment
furnisned to or far the City in, npon a; about the Property and which may be secured b}T a
mechanics', matenalmen's or other lien aga:nst the Propertv or the ~uthority's lnterest thereln,
and w~il cause each svch llen to be Fully d~scharged and released at the Ume the performance of
any obligat~an secured by any such tien matures or becomes due, except that, if the City desires
to contest any such lien, it may do sa as long as such contest is in good faith. If any such llen
shall be reduced to final ~udgment and such ~udgment ar such pracess as may be lssued for the
enforc,ement thereof is not promptly stayeri, or if so stayed and said stay thereafter expxres, the
City shal~ forthw~th pay and discharge said ~udgment.
Sectron R.03. ~~i~E~~Q_y_,~ The ~arties hereto mutually :,ovenant tr-at the City. b~~
Iceeping and performin~ the covenants and agre:,ments herein contazned, shall at all umes dunng
the term of this ~ ease Agreemeni peaceaaiy :and :~uaetly hav~, nolcl, :~se anci ~n~o~~ zhe Propert~~
without suit, trouble or }unc[rance frcr~ t~e ~~3tnarit; _
Sect~on $.d4. The l~utharity and its d~rectors, members, officers,
agents and employees, shali not be :iable te tf~e Ciry or to any other party whamsoe~er for any
dearh, in~ury or damage that ma}~ resul± co any person ~r property ~~~ cr from any cause
whatsoever ~n, on or about the Property~ To the exient pertruttzd by la~~, ihe ~it~~ shall, at rts
expense, indemnify and hold the Authority and the Tr~stee and all directors, inembers, officers
and etnpioyees thereof harmless against and from any and all ciaims ~y or or. behalf oi an,~
person, firm, corporation or governmenta~ author~t3~ arising f;cm the ~cqui~irion. c~nstruction,
occupauon, use, operarion, maintenance, pocsessson. ~onduct or management of or from any
~~~ork cione in or about the Property or f:orr- th~ s~bletting of a:~y part thereof, inciuding any
liability for violat~on of conditions, agreement5, ~ esirict~ons, laws, ordinances, or regulat~ons
affechng the Praperty or the accupancy or ~se thereof, but except~ng the ~egli~ence ar ~~vtllful
~rusconduct of the persons or ent~ty seeking indemmty. The City also covenants and agrees, at ~ts
expense, to pay and inderrinify a~d sav~ the Authority and the Tr~stee and all directors,
members, officers and employees thereof har;r-less against and fram, an~~ and all cla~ms arisang
from (i} any condition of the Property ana the ad~oining sidewalks ~nd passageways, (ii) any
breacn or default on the part of the C;ty ~r tl~e performance of any covenant or agreement to be
perFormed by the Cyt~~ pursuant to th~s Lease ~greLment, (iii) any act or negligence of the Cit~~'s
licensees in connection with their use, occ~~panc:y or operatlon of the Property, or (iv) an}~
acc~dent, in~ury or damage whatsoe~er eai~sed to any person, flrm or corporation ir~ or abaut the
Property~ or upon or under the sidewalks and from ancf against all costs, reasonable caunsel fees,
expenses anci liab~lzties incurred 1r any acr~or~ ~r proceeding brought by reason of any cia~m
referred to ir. this Sect~on ~5.04, but except~ng the negl~gence or w~11_ful mzsconduct of the person
or entrty seelang inciemnity In the eve~t that an~~ act~on or praceedin~ is brought agair~st the
Author~ty ar tne Trustee or any d~rector, ~nember, ~fficer ar emplo}~ee thereof, by reason of any
Ib
such claim, the City, upor~ prior w~tten nance from the Authonty or the Trastee or such director,
melnber, officer or employee thereof, covenants to resist or defend such action or proceeciing.
This Section shall survi~e the terminatzon of thas Lease Agreement for any claim,
pro~eeding or act~on arisin~ from any ever~t or omission occurring during the term of th~s Lease
Agreement
Section 8.05. Assi~riment and Subleasing. Ne~ther this Lease Agreement nor any
interest of the City hereunder shall be sold, mortgaged, pledgeci, assigned, or transfenred by the
City by ti~cluntary act or by operation of law ar ot~erwise, except with the prlar wr~tten consent
af the Authoriry. The Property may be subleased ~n part 6y the City without the consent of the
Autnonty; prQVided, however, that each such sublease shall be entered in~o ~n the normal course
of opera~~g the Property and, provided, further, ~hat this Lease Agreement and the obligat~on of
the City to make all rer~tal payments hereunder shall remain the pnmary obligation af the City
Other than as descnbed in the precedxng se~tence, ~he Property may nat be subleased rn whole or
in part by the City without the prior wntten consent of the Aut~onty (which consent shall not be
unreasonabiy r~~rthheld}, and any such subiease shall be sub~ec~ ta all af ~he following condit~ons•
(i} Thts Lease Agreement and the obligation of the City tc make all rental
payments hereunder shall remain the prim~ry obligat~on of the City;
{i1} The City shall, wit~in thirty (30) days after the deli~ery thereof, furmsh or
cause to be furmshed to the Authonty and the Trustee a true and camplete copy of such
sublease,
{iii) Any such sublease of the Praperry by the City shall explic~tly provide that
such sublease is sub3ect to a11 rights of the Autharity under the Lease Agreement,
including, the right to re-enter and re-iet the Property ar terminate ihe Lease Agreement
upon a ciefault by the Cit} ; and
{~~} The C~ty sha11 furnish the Authorrty and the Trustee w~~ti~ ar. 4pxnion of
Counsel, with respect to any such sublease, staung that such sublease ufili not ~.ause the
interest component of the Seriec A C~rtificates to be zncluded ~n gross incom~e for ieaeral
income tax purposes.
Section ~3.D6. Title to Pranert~, Ugan ~he .ermination oa exgiration a~ th~s i,e~se
~~reement {other than as provide~ in Sect~on h.0? anci 7.~~ of this Lease A~reement), and the
first ~iate ~apon which the Certificates are no lon~er Outs*.anding, all neht5 Eitle 3nd ~nterest ~n and
to the Property Shall vest in the City Upon an~ ~~cta terminatiarz or expiration, the Authortty
shall execute such canveyances, deeds and othe~ documents ~s ma}~ be necessary~ ta effect such
vesting ~f re~~ord.
Section $.07. Tax C:o~enants. (a) Fede~al Guarayat~e P~ohibitao:~ The City shall not
take any action or pe~nit or suffer any ac.ian tc be taken if the result af the same :~~ould be tc
cause any of the Serzes A Certificates or the Se:~es A Base Rental Payments to be"federail}~
guaranteed" r~rithin t~e meaning ~f sechon I03(h) of the 1954 Code.
{b; Rebare Reqi~zr•ement. The City shal~ take any and ~11 actions r~ecessary to ass;.ue
compl~ancP with sec.tion 14~i(fl of the Cade, ae~at~n~ to tne rebate of excess in~estment earmngs,
~f any, to the federal gavernrrient, to the extent that such ~ection ~s appl~c~ble t~ the Ser~eS .~
Cert~fic,ates or the Lease Agreement.
(c) No Af-bitr~a~e_ The Cft~ shall not uake, or perrrut ar suffer ta l~e taken by the Trustee
or otherrn~~~sv, any a~tion with resgect to the proceeds of the Series A CPrt~fica±es ~rhich, if such
?7
act~on had been reasonably expected to ha~e been taken, ar had been deliberately and
intentionally taken, on the Del~very Date would have caused the Senes A Certifica~es or the
Series A Base Rental Payments ta be "arbitrage bonds" within the meaning of section 14~ of the
Code
{d) Maint~naiace of Ta~:-Exempt-on. The City shall take all actions necessar~~ to assure
the exclusian of the interest component of Series A Base Rental Payments and the interest
paya~le with respect to the Series A Certlficates frotn the gross income of the Owners of the
Series A Cert~ficates to the same extent as s~ch znterest is permitted to be excluded fram gross
incame unc~er the Code as in effect on the Delivery Date,
(e) Costs of Issurxnce Limitarioja The City covenants that no portion of the proceeds of
the Serles A Certificates or of *.he Prior Certificates wzll be used for costs of ~ssuance of the
Series A Cert~ficates in excess of an amount equal te 2~lc of tF~e pnncipal amount of the Series A
Certificates, less ariginal issue discount (~f any) ori the Series A Certificates, all withan the
meamn e of sect~on 147{g)(1) of the Code,
(f} Ira~~esmiefat Lzmit Ahave 150 ~e~rcent of Annual Debt Servtce Except as otherwlse
provided herein, at no t~me during any bond year while the Series A Cert~fi~ates are outstanding
st~all the City suffer or pertnit the aggregate amount of gross proceeds of the Senes A Certzficates
(withm the meanzng of sect~an 14~(f} of the Code; invested in nonpurpose in~esttnents with a
y~eld higher than the yield of the Senes A Base Rental Payments to exceed 150~1c af the amount
of the Series A Base Rentai t~ayments fer such bond }Tear all ~c set forth in section 14$(d}{3) of
the Code. In addition, the City shall assure that, beginning with the fourth bond year, sa~d
~ggregate amount +~f gross praweeds ~f the Series A Cert~ficates invested in nonpurpase
investments with a yield t-igher than the ~~eld of th~ Series .4 Base ~ental Payments is promptly
3nci apprapriaiely reduced as the tot~l pnncipal amo~r.t af ;he ~eries A Certificates is reduced
This iimita~on shatl not apply to gross pro~.;ee~s of th~ Ser~es A Certificates lnvesteci pursuant to
a temporary period descnbed in sect~on 148(d)(3){~; of th~ Code
(g) Us~ fo.• Atrpof•t Pt~r•pnses The Cit~~ sna11 assure that, at all times ciur~ng ~h~ terrn of
th~s Lease Agreement, the property fxnanced witi~ ~.he praceeds of the Pnor Cer~ficate~ is used as
an ~irpart: including storage and train~ng facil~tzes and land, buildingc ~r other propert;r
funct~onaily relatecf and su~ord~nate to the ~uport, all i~~ithin tF~e meaning of sectaan 1C13{~)(4)(D)
af the 1 ~54 Code.
Sect~~n 8.Q8. Authority's Pur~~ose. The Avtharity covenants that, pr~or to the
terrrunat~on of this Lease Agreement and the payment af the Cert~ficates an accordance v~~ith the
terms of the Trust Agreement, it w~ll not engage ir any acavities inconsistent witn the purpases
far wh~ch the Author~ty is organized, as set for*h in *_h~ Joint Pawers Agreement.
Sectian 5.09. Reoresentat~ons of the [;itv. The C1t~ represen~s and ~~arrants ?o the
Authorlty that the City nas the fuil power an~ authority tc ~nter ~nto, to execute an~ to deliver
rhis Lease Agreement and the Trust Agreament, and to perforr,-~ all of its dut~es and obligatlons
hexeunder and thereunder, and has dul~ authorized the execution anci deirvery of this I.ease
Agreement a,-~d the Trust Agreement.
Section 8.I0. Rearesentation of the Autharitv. 'I'he Authorit~ represents and warrants
ta the C~ty that the Authonty has the fuL' t~o~~er an~ aathorlt~T to enter into, to execute and to
deiiver this L~ase Agreement, the Assigr~r~ent A~reement and ~~ie 't'rust Agreement, and to
perform all of its ~futies and flbligations hereunder and there~znder, ard has dul~r authorized the
~g
executlan and delivery of this Lease Agreement, the Assignment Agreement and the Trust
Agreement
19
ARTICLE IX
NU CUNSEQUENTIAL DAMAGES;
USE (7F T~IE PROPERTY
Section 9.01. No Conseatientiai Damages. In no event shall the Authority be liabie for
any incidental, induect, special or consequentlal damage ~n connect~o~ with or ansing out of this
Lease ~1~reement or the City's use of the Property.
Section 9.02. Use ~f th~ Propertv. The City will not use, aperate or maintain the
Property improperly, carelessly, in violatzon of any applicable Iaw ar in a manner contrary to that
contemplated by this Lease Agreetnent. In additjon, t~e City agrees to comply xn all respects
(including, without limitation. w~th respect to the use, malntenance and operation of the
Property} with ai1 laws of the ~urisdlc:tzons Fn which its operanans may extend and any
leglslat~ve, executrve, administrative or ~u~icial bady exercising any power or ~urisdict~on over
the Property, provided, however, that the City may c~r~test in good faith the validlty or
apphcation of an}~ such law or rule in any reasonable manner whtch does not, in the opimon of
the Authorrty, adversely affect the estate af the Authonty tn and to any of the Property or rts
interest or nghts under this Lease Agreetnent.
20
ARTIC;LE X
MISCELLANEOUS
SectiQn 10.01. Law (~o~e,~ing. THIS L~ASE AGREEMENT SHALL BE
GOVER:'vED EXCLU3IVELY BY THE ~ROVISIONS HEREOF A~VD BY TH~ LAWS OF
THE STATE OF CALIFOR~'iA AS THE SAME FROM T1ME TO TL~vIE EXIST
Sectiun 10.U2. N~tices. Ali notices, statements, demands, cansents, appro~als.
authorizat~ons, offers, designanons, requests, agreements ar prorruses or other communications to
be grven hereunder sha11 be in wrlt~ng and shall be sufficiently given and served upon the part}~
entitled thereta if dellwered persanally or xf mazled by Umted States registered mail, return
receipt requested, postage prepaid:
If to the Ciry: City of Santa Monica
1685 Niain Street
Santa Monlca, Califarma 90401
Attention: Cxty Manager
With a copy ta City of Santa Monica
16~iS Main Street
Santa Manica, California 90401
Attention~ +~ity Attorney
If to the Authorrty~: 5anta Ivlan~ca Public Financin~ Authonty
c/o Crty af 5anta Monica
1 fi85 Main ~treet
Santa Mcnicd, Caiifornia 9d401
Attention Executave Directar
ar to ~uc~~ ather addresses as the respect~~e partzes ma~ from t~me ta nme designate b~~ not~ce in
wr~t~n,. A ~.opy of any such notice or other dacument herein referred to shall also be delivered
to the Trustee
5ection 10.43. Vafiditv and Sererahili~.y, If for any reason thi5 Lease Agreement shall
be held by a court of competent Jurlsd~ction to be void, voidabie, or unenfarceable by the
Author~ty or b}~ the Crty, or ~f for any reason xi ~s helci b}~ sach a court that an}~ of the ~o~tenants
and ca~ditions of the City hereunder, incluciing she co~~enant ~e pay rentals hereunder, is
unenforceable for the full terrn hereof, then ar-d ~n skc!: even~ th~s ? ~ase Agreement ~s and sha11
be deemed to be a Lease Agreement under which the rentals are to be paid by the City annually
1n consicferation of the ri~ht of the City tc nassess, ~ccupy anc~ use the Property, and alI of the
rental and other terrns, pro~lsians and condit~ons of ~his Lease Agreement, except to t~te extent
that such terms, prov~sions and cond~t~Qr.s are contrary to or inconsistent with such holding, shall
remain ~n full force and effect
Sectiun i0.04. Net-Net-Net Lease. Th~s Lease Agreement shall be deemed and canstrued
to 6e a"net-net-net lease" and the C~t}~ her~by agrees that the rentals provlded for herein shali be
an absolute net return tc t~e Authonty, free and clear of any expenses, charges or ~et-offs
v~~ha~soever anci not~vithstanding ar~y disp~atE between the City and the Authority
Section 10.05. Taxes. The C~ty shall pay ar cause to be paid aIl taxes and assessments of
any t}~pe or nature charged to the Authority or affec:t~ng the Praperty or the respective lnterests or
2i
estates of the City or the Authonty therein; provided that w~th respect to special assessments or
other governmental charges that may lawfully be pa~d in instal~ments over a penod of years, the
City shall be obligated to pay only such installments as are required to be paid during ~he term of
this LeaSe Agreement as and when the same become due.
The City or any sublessee may, at the C1ty's ar such su6lessee's expense and in rts name.
in goocE faith contest any such taxes, assessments, ut~lity and other char~es and, in the event of
any 5uch contest, may permit the taxes, assessments or other charges sa contested ta remaln
unpaXd dunng the period of such contest and any appeal t[~erefrom unless the Authority ar the
Trustee shall not~fy the City or sucE~ sublessee that, in the opinion of ~ndependent counsel, by
nonpayment of any such items, the interest oF the Authorlty in the Property wtll be material~y
endangered or t[~e Property, or any part thereof, wiL be subaect to loss or forfelturea in which
event the City or such sublessee shall promptly pay si~ch taxes, assess~nents or charees or
provade the A~thonty wrth full security a~ainst any loss whici~ ma}~ result fro~n nanpay~ment, in
far~n sat~sfactory to the Authant}~ and the Trustee,
Sectic~n 10A6. $ection Headings. All sect~on headings contalned hereln are for
convenience of reference only and are not intended to define ar lirrut the scope of any pro~ision
of this Lease Agreement.
Section 10A7. Amendments. (a~ This Lease Agreement and the Faciikties Lease may be
arnen~ed in wriUng a5 may be mutually ~gree~ by #ne Authority and the C~ty, with the pn~r
«~ritten consent of the ~wnerc of a majorty ~r, a~g;eg~te pr~nefpal amount of the Cert~fic:ates
±her~ Outstandxng pursuant to the Trust Agreei;~e~t, ~rovideti tha4 n~ such arr~endment shall
(r) extend t[~e pa}~ment date of any Bas~ Rental Payments, reduce fhe interest ~ornponent or
principai componen~ of any Base Rent~l Paymec~ts or change the prepayment terms and
provisions, ~r~thout the prior written consent of t[~e Owner of each Cernficate so affect~d. or
(ai) reduce the perc~ntage of Cert~ficates t~~e consent of the Owners of ~~hich is requu-ed for the
execution of any amendment of this Lease Agreement or the FaciIities Lease.
(b) This Lease Agreement and the Facilities I.~ase and the rights and obli~ations of the
Authorxty and the C~ty hereunder and thereuncier may also be amended or suppl~mented at any
t~me by an amendment hereof or tt~ereof or supplement hereto or thereto ~•hich shal~ be~ome
binding upon exe~ut~on by the Authority and the City, without t~~ written consents of any
O~r~ners, but anly to the extent permitted by law and anly far any one or mcre of the following
purpoti~s-
{~j to ac~ci to the agreements, ~ond~tions, covenants and terms requ~red by~ the
Author~ty or the City to be observed or gerf~rrr,ed herein ~r therein other agreements,
~~nd~taons, covenants and terins thereafter to be observed or performed by the fluthanty or
the City, or to surrender any nght or pawer reserved herein or therein ±o or conferred
herein or therein on the Authonty ar ~he City, and wluch in either case shall not adversely
affect the interests af the Ov~~ners;
{i~} to make such pravisions far th~ purpose af curing any ~mblgt~lty or of
;:orrecring, cunng or supplementing any~ defecr~ve grovision contained herein or there~n or
in regard [o quest~ans aa7sing hereurcier oa thereunder whic,h the Authorrty or the City
may deem desirable or necessary and not incansisteni herew.th or iherewith, and which
shail not matenally ad~ersely affect ~he u~terest5 af the Owners;
{iii) to make such additaons, deletions or modlricatlons as rraay be necessary or
apprapr~ate ta assure the exclusion fror-n gros~ income far fecierai income tax purposes of
the interest components of Base Rental Faymen~s; and
~z
{iv j to make such other changes ~ereir or therein or modifications hereta or
thereto as the Authonty ar the City may deem des~rable or necessary, and which shali nat
mater~ally adversely affect the interests of the Owners.
Section 10.08. Assignment. The City and the Authority hereby acknowledge ~he
ass~gnment of this Lease Agreement and the Base Rental ~ay~nents payabie hereunder ta the
Trustee pursuant to t~e Assignment Agreement
Section 10.fl9. Executian. This Lease Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an origlnal, but all together shall const~tute but
one and t~e same Lease Agreement, It is also agreed that separate counterparts of this Lease
Agreement may separately be executed by t~e Authority and the City, all with the same force and
effect as though the same counterpart had been executed by both the Authority and the City
IlV WITNESS WHERE{)F, the Authority and the CityT have caused this Lease
Agreement to be executed by the~r respectrve officers thereunto duiy authorixed, all as of the day
and year first above w7itten.
SANTA MONICA PUBLIC FINA`CING
AUTHQRTI'Y
By~:
C'ITY (}F SAN'I`A MON~CA
By:
APPROVED A5 TO FORM~
Marsha Jones iVloutrie,
City Attorney~ and Authority Attorney
23
EXHIBTd' A
DESCRIPTI(1N OF THE PRfIPERTY
All that real property situated in the County of Los Angeles, 5tate of California,
descnbed as follows, and any Xrnprovements thereta•
Exh~bit ~ - i
EXHIBIT S
B.~-SE RENTAL PAYMEN'F SCHEDULE
Series A Base Rental Paymen~
Principal Interest Total
Date Comnanent Comnonent Base Rental
Eit~zb~t B - i
Series B Base Rental Payments
Princi pal Interest Total
Date Camua~ent Base Rental
B-2
Combined Base Rental Payments
Principal Interest Total
Date Comnonent . . ~3ase Rental
B-3
29199-D7 JI3H~t~ GH h..k 7111195
7/24l95
TO BE RECORDED AND WHEN RECORDED
RETURN TO:
Jones Hall H~fl & Wtute
Four Embarcadero Center, 19tb Floor
San Fra~c~sco, Cal~fora~a 94111
Attenhon , Pra~ect Coordmator
THIS TRANSACTION IS EXEMPT FRO~~ CALIFORNIA DQCUMENTARY TRANSFER
TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND
TAXATION CODE. THIS DOCUME~=T IS EXEMPT FR4M RECORDING FEES
PURSUANT TO SECTIQN 273$3 OF THE CALIFORNlA GOVERNMENT C~DE.
ASSIGNMENT AGREEMENT
br• and behi~een
SANTA ~ZONICA
PUBLIC FINANCING AUTH4RITY
and
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
Dated as of 1, 1995
A55IGNl~ZENT AGREE1~iENT
THIS ASSIGNNiENT AGREEhiENT, made and entered into as of 1, 1995, by
and between the SANTA MO1~~ICA PLTBLIC FINAI`CII~G AUTHORITY, a ~oint exercise of
powers entity orgamzed and existing under and by ~~rtue of the laws of the State of Cahfornia
(the "Authonty"), and U.S. Trust Cornpany ~f Califomia. N A, a nationai associat~on organized
and e~st~ng under the laws of the United States of Amenca. as Trustee (the "Trustee"},
~VITI~TESSETH:
WHEREAS, pursuar~t to a Facil~t~es Lease dated, as af the date hereof (the "Facllities
Lease"), the City of Santa Monica {the "City") nas leased to the Authority certain real property
owned by the Crty, mare gartFCUlariy descnbz.d tn Exhibit A hereto, and any ~mprovements
tl~ereto (collecuvely, the "Property"):
WHEREAS, pursuant ta a Lease Agreement, dated as of the date hereaf (the "Lease
Agre~ment "), the Aut~arity has subleased the Property back to the Ciry;
WHEREAS, under tne Lease Agreement, the Crty is obligated ta make base rentai
payments ta the Authority for the lease of the Property,
WHEREAS, the Auth~rity desires to assign w~thout recourse certain of its n~hts m the
Fac~l~ties Lease and the Lease A~reement, ~nclud~ng ~ts rights to receive such base rental
payments under the Lease Agreement, to the Trustee for the benefit of the owners of cert~ficates
of participation (tt~e "Certificates"} to be executed and delivered under the Trust Agreement,
dated as of the date hereof (the "Trust A~reement"), by and a~nong the Trustee, the Authonty and
the Ciry;
WHEREAS, in cons~deratior~ of such assign~nent and the execution of the Trust
Agreement, the Trustee has agreed to execute and delrver the Certificates, each evidencmg and
represent~ng a fractional undir~Fded m~erest in such base rental payments to be made by the City
under the Lease Agreement; and
WHEREAS, aIl ac~s, cond~t~ans and th~ngs required by law ta exist, to ha~e happened
and to have been perfarmed precedent to and m connect~on with the execution and entenng into
of thas Ass~gnment Agreement do exist. ha~~e happened and have been perfarmed in regular and
~ue time, form and znan~er as required by law, and the parties hereto are novsr duly authorized to
exee~te and enter ~nto this Assi~nment Agreernznt;
NOW, THEREFORE, in considerat~an of the prem~ses and of the mutual agreements
and ca~enants contained hereu~ and for other valuable considerat~on, the parties hereto do hereby
agree as follows:
Section 1. Assi~nmen~ The P.uthonry. for good and valuable constderatiQn, the receipt
of which is hereby ackn~wledged, does hereby sell, assi~n and transfer to the Trustee,
irrevacably and absolutely, without recaurse, fQr the benefit of t~e owners of the Certif'icates ~1
of its n~ht, trtle and interest in and to the Fac~ht~es Lease arid the Lease Agreement including,
without limitatxon, its nght to rece~ve the base rental pa}~ments to be paid by the City under and
pursuant to the Lease Agreerrjent, pra~~ideci that the Authority shall retain the nghts to
indemmficat~on and to paymen[ or reimbursement of its reasonable costs ar~d expenses under the
Lease Agreement.
2
Section 2. Accentance. The Trustee hereby accepts the foregom~ assignment, subject ta
the terms and pra<<xsions of the Trust Aoreement, and all such base rentai payments shall be
apphed and the rights so ass~gned shall he exercised by the Trustee as pro~ided in the Lease
Agreement and the Trust Agreement.
Section 3. Conditions. Excepting only the ass~gnment and transfer of nghts to the
Trustee pursua~t to Section 1, this Assignment Agreement shall unpose no obl~gations upon tl~e
Trustee beyond those expressly pro~ided ~n the Lease Agreement and the Trust Agre~ment
Section 4. Further Assurances. The Authority shall make, execute and dehver any and
all such further resolutions, instruments and assurances as may be reasonably necessary or proper
to carry out the lntention or to facxlitate the performance of this Assignment Agreement, and for
the better assuru--g and canfirming to the Trustee, for the benefit of the owners of the Cert~ficates,
the nghts intended to be conveyed pursuant hereto.
Sectian ~. Gpv~rnin~ Law. THIS ASSIGNA~IENT AGREEMENT SHALL BE
GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF
THE STATE OF CALIFORNIA AS THE SA1~1E FR~V] TIME TO TIME EXIST.
Seetion 6. Ex~c~~pn. Th~s Assignment Agreement rr~ay be executed ~n any number of
counterparts, each af wh~ch shall be deemed to be an onginal. but alI together shall constitute but
one and the same Assxgnment Agreement
IN WITNESS WHEREOF, the parti~s hereto have executed this Agreement by their
of~cers thereunto duly authortzed as of the day and year first wntten above.
SANTA NiON~CA
PUBLIC FINANCING AUTHORITY
By:
U.S. TRUST COMPANY OF
CALIF4RNL4, N.A., as Trustee
By
APPR~VED AS TO FORM:
Marsha Jones Moutrie,
Authonty Attorney
4
STATE OF CALIFORIVIA )
~ S5
COUNTY OF )
~n before me, , Notary Publ~c, personally appeared
, persanally known to me or proved to me on the basis of satisfactory evidence to
be the person{s) whase name(s) ~s/are subscnbed to the w;thin instrument and acknowledged to
me that he/she/they exeeuted the same in hisJher/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which tY~e
person{s) acted, executed the instrument
1~ITNESS my hand a~d official seal.
STATE QF CALIFORIVIA
COUNTY OF
55
Qn before me, , Notary Publ~c, personally appeared
, personaIIy knQwn ta me or pra~~ed to me on the basis of satisfactory evidence to
be the gersan(s) whose name(s) ~s/are subscrihed to the within instrument and acknowledged to
me that he/she/they executed the same in his/herltheir authanzed capacity(ies), and that by
his/herltheir signature{s} on the instrument the person(s), ar the entity upon behalf of which the
person{s) acted. executed the instrument.
~~ITNESS my hand and offzcia~ seal.
EXHIBIT A
DESCRIPTION 4F THE PROPERTY
All that real property situated ~n the County of Los Ange~es, State of Califarma,
descnbed as follows, and any impravements thereto:
Exhibzt A-1
~9;S~i-~~' II~-I~t' r,H bcr 07;`L l'9~
C'~=4r~?
TRUST AGREEMENT
by and among
U.S. TRUST Cn~VIPANY OF CALIFORNIA, ti.A.,
as Trustee
and
5ANTA MONICA
PUBLIC FINANCING ALTTHORITY
and
CITY C3F SANTA MC)NICA
Dat.ed as of 1, 1995
RELATIN[~ T(1
~
C~'1'Y ~F SANT.~ I~~ONICA
CERTIFICr~TES {)F PARTICIPATI{)N
(1995 AIRP()RT FA(:ILTTIES REFUNDING)
SERIES A .~\D B
TABL~ OF CONTE~TS
ART'ICLE I
DEFII~'ITI~I~TS. EQUAL SECURITY
Pa~~
Secuon 1 O1 Defin~tions. . ... _ . _.. ...._ .. .. .. . . . .... .. . .. . . .. . .... .. .. 3
Section 1 02 Equal Se~urity .... . , ... .. .. .... ..... .. .. ..... . .... .... .... 12
ARTICLE II
TERMS AND CO~~ITIONS rJF CERTIFICATES
Section 2 Ol . Preparat~on of Certificates .., ... .. .... ...... .... .... .. . .. ...
Section 2 02. Denorrunation, Medium and Dat~n~ of Cer[rficates.._. .._ ... .. ,
Section 2 03. Payment Dates of Certifacates; Interest Computat~on. ._.. ..
Section 2 04 Form of Certaftcates .... .. ....... .... . e. ..._ ...... .... ....
Section 2 D5. Execut~on of Cerafic.ates and Replacement Certificates.... ,. ..
Sectian 2 06 Transfer and Payment af Certificates, Exchange of Cert~ficates. .
5ecuon 2.07. Cert~fieate Registration Books, . .. . . .,. .e .. ....... ... .... . .... ..
Section 2 OS, Temporary Cert~cates . . .... ...... ..... ..... ...... .... .. . ...
Secuon 2 09. Cert~ficates Mut~lated, Lost, Destro}~ed or Stolen. .... ..,. .. .
5ecuon 2 10. Cooperat~on by the Crty. ,... .. .. .. .... ...... .... ... ... ..
S~ctian 2 11. Book-Entry System .,. . .o .. ...... .. .... ...... .... .... .._ ,.
ARTICLE III
PROCEEDS flF CERTIFICATES
Sectian 3 O 1, Del~~ery of Cerk~ficates . ... .... ............. ..... ...... . . .... .. . .... .
~ection .i a2. Deposit and Trar-sfer of Proceedc ~f ~~rt~ficates . ...... .... .. . . .
Section 3 03_ Cost of Issuance Account,..o .... ...... .. .... ...... .... .... .... .... ..
ARTICLE IV
PREPAYMENT OF CERTIFICr~TES
.. .. I3
.. .. ~ 3
. .. ~ 3
.. .. I4
.. ~4
. .. ~ 5
.. .... I S
.. __ IS
•- -- 15
.. .. . I6
.. ....1 b
-- 19
.. 1 y
. 19
Secnon 4 O1. Terms of Frepayment . ... .... .... .•-•-- .... ..._. ...... .... .... . . --. _. _ 20
Secnan 4 02. Select~on of Certificates far Prepa}~ment .... ...... .... .... .. ., . ... 20
Sectian 4 ~3, No~ce of Prepayment.... .,_ ... ... .... ...... ... ... _ .. .. ... .. 20
Section 4 04_ Partial Prepayment of Certificates . ... ... .... ...... ..... .~. .. ... 22
Section ~ ~~. Effec.t of Prepayment . . .... .... ...... .... .... ... .. .... . . . . . . ,... .... 22
ARTIC~ E V
REti"'TAL PA~\~iENTS
Section ~ O1. Pledge, Base Rental Payment Fun~ . . . .. .... .. ... ... . __.. __._ 23
~e~tion 5 D2. Deposit of Base Rental Payment5 ... .... .... ...... .. . . _... .... 23
5ection 5 p3, Appl~cation of Net Proceeds . .... . .. . .. . . ... ... ... .. . . . ... .. 23
Section S 04. Tat1e Insurance. .... .... . . .... .. . . .. .... ...... ... .... ... . .. . 25
Se~tion 5 O5. Certificate Reserve Fund , o._o .. _. .. .... ..... ..... .... . .._. .,.~ 25
~
ARTICLE VI
COVENANTS
Section 6 O 1 Cornpliance wrth Trust Agreement .... .... ..... . .. . .. . . . .... . _.__ 27
Section b 02 Complzance with the Fac~lines Lease and the Lease ~greement ..... ......27
Section 6 03 ~bservance of Laws and Regulat~ons .......... .... . .... . .. .. . . .... ..27
5ec,~ion 6 04 Other Liens . .. .. .... . .. . .... .... ~e. . . .... . .... ... ... . .. 27
Section 6 OS Prosecunon and Defense of SUits .. ... ..... .... ..... .... . ... ....27
Section 6 Ob Acconnhng Re.~.ords and Statements ...... ..... .... ....... .... .. .... .... .. 28
Se~tion h 07. Recordaaon and Filing ......... .. .... ... . . .... . .... ..... ... . .... ...... . ......28
Section b 08 Cont~nuin;~ D1sc.losure. ....
.. ...... . ..... .. ... ............ ... . .. . 28
Seetion 6 09. Further Assurances .... . .... .... ............ . .... .... ...... ......... ., . . ......28
ARTICLE VII
DEFAULT AND LIUIITATIOVS OF LIABILITY
Section 7 Ol. Act~on on Default.. . .. . ...... .. .... ... .. .. .... . ..« .... .. . .. 2y
Sectior~ 7 02. Qther Remedies of the Trustee . .. . ....... ........... . . .... . .... .... .. _.. .. 29
Section 7 Q3. Non-Wai~er..... ..... .. . .... ..... . ..... .... .. .. . . . . .... .... . .... 29
Section 7 ~4 Remedies Not Exclusi~e ........... ... ... .......... .. . ..... . .... . .... .... 29
Section 7 a5. No Liabil~ty b}r the Authority to the Owners .. .. .. .... ..... .... .. ... 30
5ection 7 06. No Liabihty by the City to the Owners .. ..._ .. . .. ..... .... . ... 30
Sect~on 7 07_ No Liability of the Trustee co ~he ~vwners . . . ... .... ... .... . .... .... . . . 30
Sect~on 7 08_ Applicat~on of Amounts After Default ... .... .... ... ..... .... 30
Section',.09. Trustee :Vlay Enforce Cia~ms Without Possession of Certxficates ._ _.. .._ . 30
Sect~on 7 ia, L~~rutation on Suits . . ,e . . . .. . ... .... . . .... . .... .... .. .... 31
ARTICLE ~IIII
THE TRL'STEE
Section ~i.01. Employinent of the Trustee_.._._. < _ ... . .. . .. ... ... ..... . .... .. . 32
5ecnon H.02 Duties, Remor~al anci Res~gnat~on of tF~e Trustee .. .... ... ... ... ..... . 32
Secrion 8 03 Cornpensation and Indemnification of the Trustee .. ... ...... .... . 33
Sectian ~i Q4. Protect~on of the Trustee ... ........ ...... .......... . . ... . . ..... . .... .. . 33
AR'TICLE ;X
~MENDMENT ~F OR SL=PPLEMEI~TT TO;
'i'RUST AG~EEMEiVT
Sect~an 9.~1 Amendment ar Supplement e ... ... .. .. ... .. .e . . : .~._ . ,_~. _... .. ... 35
S~cnon 9.02. Disqual~faed Certificates .... .. . . ... ... . . . .... . .... ..__ ,~ .... 35
Section 9.03. Endorsement or Replacement of Cer~f~cates After A~nendment or
Supplement .... .... ...... ..... .... ....„ , ~_ ,... , .. .... .. ._.. . .... o~.. . . 3f~
Secnor~ y.04~ Amendrnent by Mutual Cons~nt .. ... _. . ... . 3l5
r,
.~RTICLE X
DEFEASANCE
Sect~on 1Q.Q1 Discharge af Certificates and Trust Agreement .... .... .. .. ..
Section 10.42 Unclairned Moneys . .... ... ........ . ... . . .. ..... .a..... .... .. . . .
ART`ICLE XI
MISCELLANEOUS
Sec.tion 11.01 Benefits of Trust Agreement ~,i~nited to Parties .... ....
Sect~on 11.Q2 Successor Deemed Inc.Iuded ~n all References to Predecessor
Section 11.03 Execution of Documents by Owners . . ... ..... .. . ... .... . .
Section 11.44 Waiver of Personal Liabihty .. . . . . . . ..., . .
Sec~ion 11.05 Acquisition of Cert~ficates t~y City ... . .. ..... .... .........
Sect~on 11.06 Content of Certificates ... . ... . . ... .. .. . . .... ... .._.. ....
Section 11.07 Funds .................. .. . . . ... .. . .. . .. .. .... . .
Section 11.08 In~estments . ... .. . . . .. .. . .. . .. .... ............. ... .... . .
Section 11.09 Artic~e and Section Head~ngs, Gender and References ...... ..
Section 11 10 Partsal Invalidity .......... . ..... .. .. . .... .... ..... .. .. ..... .. .
Sect~on 11.11 California La~~ . .. . .. ..... . .. .. ... .. . .. . .. .... .... . .
Sect~on 11 12 Not~ces ... .... .... ..... .. .... .... ... .... .. .. .. . . ... .... ...._ . .
Section 11.13 Notice to Rat~ng Agenc.~es .... . . . ..... .... ...... .... . .
~ection I 1 ~ 14 Effect~v~ Date .... .., .. . ..... . . .. . . . .... . .
~ection I 1.1 S Execution in Counterparts . . , .. . . . ... . .
EXHIBIT A - ~`orm af Cemficate . . . . e. . ~ ........... ..... .. ,. .... . .
--.... 37
.... . 3 S
3~
3y
.. ... 39
.. .--- .. . . .. 3y
-- .... 39
.. .... . 39
... .... .... ...... ~0
.. .... .. . .. 40
.. ... .. .. 41
.. .... . .. 41
.. .... 42
.. .... . . 42
.. .... . . .. 42
_. ... . . .. 42
.. _.._ .._ .. ~2
.. .. ... ... A-1
~u
TRUST A{~REEVIENT
THIS TR[1ST AGREEMENT, made and entered into as of 1, 1~95, b}T and
among LT S. TRUST COMPANY OF CALIFORNIA, ~ A, a nat~onal banking associauon
organized and eYisting under and b}T virtue of the laws of the Lnited States af America, as
Trustee (the "Trustee"j, the 5AN'I'A MONICA PUSLIC FINANCING AUTHORITY, a ~oint
exerei5e of powers entity orgamzed and exisring under and by~ ti•~utue of the la~~~s of the 5tate of
California (the "Authont~~''), and the CITY OF SANTA MOIVICA, a municipal corparauon and
charter cit}~ duiy organized and existing under anci b~~ virtue of the Constitution and laws of the
State of Califorma and xts Charter (the "City~").
WITNESSETH:
~VHEREAS, in order to finan~e c.ertain airport facilit~es (the "Facilities"), the C1t}~
~aused to be executed and delivered 9~4.62~,~OQ aggregate principal amount of Ceruficates af
Part~cipation (Airport Fac~lities) (the "Prior Certific,ates").
WHERE~S, the City currently subleases the Fac:ilines and the real property on ~~hich
they are lo~ate~ {collect~vely, the "Property") pursuant to a Lease Agre~ment Relat~ng to
Auport Facihues, dated as of October 1, 1~R5 (the "Prior Lease").
WHEREAS, the Prior Certlficates were Pxecuted and del~vered pursuant ta a Trust
Agreement Relating to r~rpart Facilities, dated as of Octol~er i, 19~i5. among Bank of America
Vat~onal '?'rust and Savings Association, as trustee, the City and 5ecunty Pa~ific I~Tational
Bank, a5lessor.
WHERE~IS, the Prior Certificates represent proporuor~ate interests in the lease
uayments ta be made by the City under the Pnox ~..ease:
WHEREAS, in order to ach~ave certain sav~ngs, the C`~t~~ desire5 to exer~ise ~ts opt~on
to prepay lease payments payable under the Frior L~ase (thereby reieasing the Property from
the Pnar Lease;, and then to ~~ase the Property to th~ Authority pursuan± to a FaciIi~es Lease,
daied a~ ot the date hereaf, and subiease the Property ba~k from the Authorit}~ pursuant to a
Lease A¢reement, dated as af the ciate hereof {the "Lease Agreement'~};
«'HEREAS, the Crty has determxned that i~ would be in the best interests of the City to
pro~lide the funds nec.essary far th~ Cit}% to eYercise :ts opt~on to prPpay lease paym.ents payaL~le
under the Prior Lease througn the sale ~nd deii~fery of cert~fica~es of particzpation (the
"CPrt~ficates"} e~•idenc~ng proport~onate interests in the base rental payments to be made under
the Lease r~~reement,
WHEREAS, ali nghts to recei~e such base rental pa}~ments have been assigned without
reco~rse by the Authonty to the Tructee pursuant ta an Assignment Agreement, dated as of the
ciate hereof4
~'4'HERE~iS. ~n cor~si~eration of such assi~nment and the exec;uuon of thls Trust
Agreement, the Trustee has agreed to exe~.ute and deliver the Certificates, each e~~idencing an~
repre~ent~n~ a proportionate intere5t ~n such ~asc: rental pay~nenis;
VF'HEREAS, all acts, conciit~ons an~ things requ~red b}~ law ta exist, to ha~~e happened
and to have been performed precedent ta an~+ in connect~on with the exec.unon anci enterin~ into
of this Trust A~reement do exist, have hdupened and have been performecf in regular and due
t~me, for~n and tnanner as required by law, and the parties hereto are no~~v duly author~zed to
execute and enter ~nto this Trust Agreement,
~1[)~L', THEREFnRE, ~n cans~derat~on of the pre~ruses and of the mutual agreements
and covenants contained herefn and far other vaiuable c.onsiderat~on, the pames do hereby agree
a5 follo~.~,-s
ARTIC;LE I
DEFINrI'I{)NS; E(~UAL SECURITY
Section 1A1. Definitions Uniess the contexr_ other~vise requires, the terms defined in thls
Sect~on shall for all purposes hereof and of an~~ amendment hereof or supplement hereta and of
the Cert~ficates and of any ceruficate, opinion, request or other document mentioned ~erein or
therein have the rneanings defined herem, the falloti~ing definit~ons ta be equally a~pl~cable to
both the singular and plural farms of any of the terms c~efined herein
"Additional Rental Payrnents" means all amounts payable by the City as Add~t~anal
Renta.l Payments pursuant to 5ection 3 02. of the Lease Agreement.
"~ssignment Agreement" rnear~s the assigninent agreement, by and between the
Author~ty and the Trustee, dated as of the date hereof.
"A~thorit~~" ineans the Santa Mon~ca Public Financing Autharlt~~, a ~oint exercise of
powers enaty organized and exisnng under the laws of the State of Cahfornia.
";~iuthorized Authority Representati~~e" means the Chaxrman, the Executi~~e D~rec,tor or
the Treasurer of the Authorit~.~, or any other person authorized b}~ the Board of Dlrectors of the
Autharlt~~ to act on behalf of the Authonty under or w~th respect to thrs Trust Agreement.
"r~uthurized Denc~minations" means $5,00(l or an}~ integral inulhple thereof
"Authorized (:it~ Representatit~e" means th~e Mayox ~f the City, the C~ty Vlana~er of
the Crty, the D~rector of F~nance of the ~uy, or an3~ other person authorized by the City Council
of the Crt}% to act on behalf of the ~ity und~r or with re5pect to this Trust A~reement
~~Base Rental PaFrnent Fund'' ;neans the fund bv that narne established 1n ac.cordance
~~~itt~ ~ect~on j 0 ~ hereof ~
SBase Rental Payanent Schedule" means the schedule af Base Rental Paylnents payable
tc the 4uthority from ~he City pur~uant to ~ectzon 3:~ i of the Lease ,Agreemer~t and attached to
thE Lease Agreement as Exhibit B
"Base Rental Parrnenfs" means ~11 ~mo~nts payable to the Aisthority by the City as
Base Rental Payments pu~-suant to Sec~ior .~ {~a 1~f thE ~ease Agreement
"Benefici~l ()wners" means it~ose :nciividuals, partnerships, corporat~ons ar other
entit~e5 for whom the Pamcipants ha~e cause~ t~-e Depository to hold Book-Entry Ceruficates
6iBook-Entry Certificates" means t~ie ~erti€~cates ~egistered ~n the name af the nominee
of DT~: or any ~uccessor securities cie~a~itcry for the ~eruficates, as thE re~istered awner
thereof pursuant to the texms and pro~isions ~i Sec+~~n 2 I 1.
"Business Day" means a day other than (i} Sat~rday or Sunday, (u~ a day or ~~hich
banking inst~tu~ons ~ tf~e city or cities ~n whict? the pr~ncipal corporate trust office of the Trustee
is located are auti~or~zed ar requlreci ~~: la~~~ Yc~ be closed, or (iii) a da}~ on wi~ich the New York
Stocic Exchange is closed.
"Cec~e & C'o:' ~neans Cede & Ca , ~he nom~nee af DTC, anc~ an}r successor nommee af
1>TC ~~~th respect to the Certificates~
"C'erti~cate of the Authorit,y" means an instruinent in wrrting signed by an Authorized
Authority Representative If and to the extent required by the prov151ons of Sect~on 11 06 hereof,
each C~rt~ficate of the Authority shall ~nclude the statements provided for in Section 11 06
hereof
"Certificate of the E:itY" means an ansu-ument in v~~ritzng signed by an Authorized City
Representative_ If and to the extent requ~red by the provisions of Sect~on 11 06, each Cernficate
of the C1ty shall include the statements pro~ided for in Section 11 06
"Certificate Reserve Fund" means the fund by that name estabiished in accordance ~~~ith
Sect~on 5.05 hereof
"Certi~cate Reserve Fund Requirement" rneans an amount equal to the least of (i} the
maximum amaunt of ~eries A Base Rental Pa}rments c.amuig due in any one }ear, (ii) "109c of
the proceeds of the issue" wlth respect ta the Senes A Cert~ficates, within the meaning of
Section 14~i of the Code, and (ii1) 125~Ic of the a~erage amount of Serles A Base Rental
Payinents coming due ~n each year~
"Certificates" means the certificates of participat~an executed and deli~ered by the
Trustee pursuant hereto
"C:ity" means tF~e City of ~anta Monica, a m~nicipal carporation and charter cit}~ duly
or¢anized and exist~n~ under and by virtue oi the Const~tution and la«~s of the State of Cal~fornia
and the City's Charter.
"Code" means the Internal Revenue Code of 19Mfi as in effect on the date af execution
and delivery of the Cert~ficates ar {except as otherwis~ referenc.ed herein} as it may be amended
t~ apply to abligat~ons issued on the date of exe:,ution and deli~ery of the Cerrificates, together
«~itl~ applicable praposed, temp~rary and fi~al aegulationc promuigat~d, and apphcable official
publi~ eu~dance published, under the Code_
"Continuing Disclosure Cee-tif~caT.e" m~ans .h~ Continuing Dis~.losure Certificate
~xecuted by the Cit~T and dated the Date af ~ei~very; as orig~nall~~ ~xecuted and as it may be
amended from tune to rime in accordanc,e w~~th the te~ns thereof
"Cost of Issuanee Ace~unt" means the account by that name :.stabiished in accordance
i~~rth Sec.tion 3.04 hereof,
"Costs af Issua~ce" ~neans a11 the c~sts o~ issu~n~ the Cert~ficates, includ~n~, but not
llmiteci *o, alI nrinting and document prenaratlon expenses in co~nec~~an with this Trust
~greement, the Lease Agreernent, the Fac~iities Lease, the Assignment A~reement, thE
Cert~f~cates ~nd th~ preilmmary of~cial_ statement an~ final official statement pertalmng to the
Certlficates; rating agency fees; CUSIP Serv~ce Btu-eau charges; market study fees; legal fees
ard expenses of caunsei with respec~ La the eYecut~on of tl~e Cer~aficates; t~e amtial fees and
expenses of the Trustee; and other fees and expenses lncurrsd ~n connectaon ~;~ith khe execu~ion
af tl~e ~ertificates, to the extent such feec ar~d ex~enses are approved by the C~ty
"C:redit Facilit~" means any line of cred~t, ~etter of credit, msurance pohcy, suret3r bond
ar ather credrt source deposited «~ith the Trustee pu.rsuant te Sect~on 5.05 hereof.
"Deli~ery Date" means , Iy95
4
"Depositor~" means the sec.urities depository acting as depos~tory pursuant to
Section 2.11 hereof.
"DTC" means The Depository Trust Company, New York, New York and 1ts successors
"Facilities Lease" means the faczlazies lease b}~ and between the City, a5 lessor, and the
Authorrty, as lessee, dated as of the date hereof, pursuant to whic,h the City lease5 the Propert~~ to
the Authority, as the same may be amended or suppletnented p~arsuant to the pro~isions thereof
and of the Lease Agreement
"Fair Nlarket Value" means the price at which a willing buyer ~~~ould purchase the
investment from a willing seller in a bona fide, arm's le~gth transact~on (determined as of the
date the contract to purchase or sell the mvestinent becomes binding} if the in~estment is iraded
on an established sec~rjtles market (~~1t?~in the meaning af sect~on 1273 of the Code) and,
other~~rse, the ter~n "Fair Market Value" ~neans the acqu~s~t~on pnce ~n a bona fide arm's length
transa~t~on (as referenced abo~e) if (i} the inve5trnent is a cem~cate af denosit that is acqu~red in
accordance wrth appl~cable regulations ~nder ~he Code, or {~i} the investment ~s an agreement
with specifically negotiated withdrawal or rein~estment provisions and a specifically negotiated
interest rate (for example, a guaranteec~ investment contract, a farward supply contract or other
~nvestment agreement} that is acquzred ~n ac:,ordance ~~~th applicable regulations under the Code,
(iii) the investtnent is a United States Treasury 5ecunt}~--5tate and Local Government Series that
is acquired in accordance with appllcable regulat~ons of the United States Bureau of Public Debt
~~Interest Fund" means the fund by that narne establjshed in accardance with Sectlon
~.{}2 hereof.
~~Interest Paoment Date" means January 1~nd Jul}~ 1 of eac.h year, commencing on July
l, ly9E~.
"Lease ~lgreement" means the lease agreer;ient by and between the City, as sublessee,
and the Author~t~~, as sublessor, dateci ~s of the date hereof, as amended or sugplemented
pursuant to the prov~sions thereof.
"Letter of Representati~ns" me~~~ the letter af the Trustee and the C~ty delir.rered to
and accepted by the Depository on or pr~or to the deiivery of the Certificates as Book-Entry~
~ertif~cates settine forth the basis on ~~f~ich the Depository ser~es as deposrtory far such
Book-Enu'y ~ertificates, a5 or~ginally ~xecuted or as it ma}~be supplemented or re~ased or
rep~ac.ed by a letter to a subst~tute Deposrtory.
66~a~dF's" means Moody'S In~estQrs Service, a corparation organized and existing
under the laws of the State of Dela~3fare, ~ts successors and assigns, except that if such
~orporation sha11 no longer perform the funct~on of a secur~t~es rattn~ agency for ~n~r reason, the
term "Moody`s" shall be deemed to refer to ~r~y other natiar~aily recognized ~ecuriues rating
a~enc~~ selected by the City
"lominee" means the no~runee cf t~e Denository, ~~hich may be the Depositor~~, as
cletermzned from time to t~me pt~rsuant to Sec:tion 2 i I he:eof
`~{)pinion of Counsel" means a~;~ritten =~pin~on ~f :.ounsel of re~ogniL.ed national
standing in the fleld of Iar~f relatm~ to munzci~al borzds, appaXnted and paid by the Authority or
the City and sat~sfactory to and appraved b~r the TrusiPe
"Outstanding," w~en used as of any particular time with reference to Certificates, means
(sub~ect to the pro~isions of 5ection 9.02) aIl Certaficates except
(1} Certificates prevaously canceled by the Trustee or dehvered to the Trustee for
cancellation;
(2} Certificates pald or deemed to have been paid ~vithin the meaning of Section
10.01, and
(3} Cert~~cates 1n lieu of ar in subst~tut~an for ~~hich other Certificates shall have
been executed and delivered by the Trustee pursuant to Sex.t~an 2 09
"()wner" means any persan who shall be the registered o~vner of any Outsta~ding
Certificate as in~icated in the registrat~an books of the Trastee
`~Participants" means those braker-dealers, banks and a~her financial lnstitut~ons from
t~me to time. for which the Depository halds Book-Entry Cert~ficates as secunties depository
"Participating Underwrit.er" has the meanin~ ascribed thereta 1n the Continuing
Dlsclosure Cert~ficate.
"Permitted Investments" means any of the following to the extenE then perrrutted by the
~eneral laws of the State of Califorma appllcable to investments by crties, but only to the extent
that the same are acqu~red at Fau Market Value-
(1} (a} D~rect obligat~ons (other than an obligatian sub~ect to variation in pnncipal
repa}~tnent) of the United States of America {"United 5tates Treasury Obh~ations"}, (b}
obligations fully and unconditionally guaranteed as to ~mel}r payment of principal and
tnterest by t~e United States of Amer~ca, (c) obligations fully and uncondit~onally
guaranteeci as to ti~nely payment of pr~ncipal and interest by any agency or
lnstrurr~ental~ty af the United State~ of Amer~c.a when such oblzgatians are backed by the
full faith and credlt nf the Un~tec~ States of America, or (d) evidences of o«~nership of
~raport~onare ~nterests in future ~nt~;rest and pr~ncipal pa~Tments on obli~at~ons described
abo~re held b~~ a bank or trust campany as custodian, under which the o«~ner of the
investment is the real party ~n interest and has the right ta praceed directly anci
individually agaxnst the obligor and the underlying governrr~ent obliQat~ons are not
available to any person claiming through the custodian or to whom the custodian may be
obligated (collectively "United States Obli~ations"). These include, bvt are not
necessanly lv~uted ta;
-U.S. Treasury obligatians
All d~rect or fully ~uaranteed obligations
-Farmers Home Admrnistrauon
Cerrificates of benef c_al_ ovvnerst~ip
-General Servxces Administration
Parncipat~on c~rtificate~
-U S. N~antame Adnur.istration
Guaranteed Trtle XI financing
-Small Business Adrrunistratao~
Guaranteed parnc}panon certif~cates
Guaranteed pool ~.ertificates
-Government Nat~onal A~ortgage Asso~~at~on (GNMA)
G1VNiA-guarantee~ rr,ortgage-backed securittes
GNMA-guaranteeci part~cipation c,ertificates
6
-U S Department of Houstn~ & Urban De~elopment
Lacal authority bonds
-Washington Metropolitan Area Transit Authonty
Guaranteed transit bonds
(2} Federal Housing AdrYUnistration debentures
(3) The Iisted obligations of governcnent-sponsored agencies ~i•hich are not
backed by the full faith and credit of the United States of Arr~erica•
-Federal Home Laan Morcgage Corparation (FHLMC)
Part~cipation cert~ficates (excluded are stnpped martgage securities ~~~hich
are purc~ased at pnces exceedirtg their pnncipal amounts)
Senior debt obligat~ons
-Farm Credit Banks (formerly Federal Land Banks, Federai Intermed~ate
Cred~t Banks and Banks for
Cooperat~~es}
Consolidated systemwide bonds and notes
-Federal Home Loan Banics {FHL Banks)
Consolydated debt abligat~on~
-Federal National Mortgage Association (FI~'MA)
Senior debt obligat~ons
Mortgage-ba~ked securiues {excluded are stripped mortgages securities
which are purct~ase~+ a~t prices exceedin~ the~r principal amounts)
-5tudent Loan Marketing Association {SL11~A)
Seruor debt obligaF~ons (excluded are sec:urrties that do not have a fixed
par value and/or whase terms do not prarruse a fixed dollar amount at
znaturlt~ ar call date,l
-Financing Corporat~on {~'IC~}
Debt obllgat~ans
-Resolut~on Funding Corporat~on (REF~ORP}
Debt obligat~ons
{4) llnsecured cernficates of depasit, time depos~ts, and banlcers' acceptances
(havin~ tnaturit~es of nat more than lK4 c~ays) of any bank the ~hort-term obligat~ons of
~~hich are rated "A-1" flr bettex b}~ S&P_
(5} Deposits the a~gregate 3lllOllil~ of which are fulIy fnsured by the Federal
iJeposit Insurance Corpora~ion (FDIC), in ~anks which ~ave caprtal and surplus of at
least $5 million_
(6} Commercial paper (having orig~nal maturities of r~ot more than 27Q days)
rated "A-~+" by 5&P and 5`Pnme-1" by Moody'~.
{7) Money market funds rated "AAm" or "AAm-G" e}~ S&F, ar better
{K) Repurchase agreezr~ents:
A With any damest~c ba,-~k the l~ng term debt of which 3s rated "AA" or
better by S&P (so long as ?~C 0~.71riICli 15 rendered that the repurchase agreement is
a"repurchase agreement" as defined in the FinancraI Inst~tutions Reform.
Reco~ ery and Enforcement Act of 1989 {"FIRREA"1 a~d t~at such bank is
~ub~ect to FIRREA), or an}~ f~reign bank rated at least "AA" by 5&P and "Aaa"
by 117oody's or "AAA" by S& P and at least "Aa" by Moody's; pro~ided the term
of such repo ~s for one ~~ea.r or less.
B. W~th {1} any broker-dea~er with "retail custamers" v~rhich has, or the
parent company af wh~ch has. long-term debt rated at least "AA" by S&P and
"Aa" by Maody's, ~hic.h braker-dealer falls under the ~urisdiction af the
Securities Investors Protect~on Cor~, (SIPC), or (2} any~ other entrty appro~ed by
Financial Security, provided ihat
a. T[~e market value of the collateral is ma~ntained (i) for United
States Treasury Obligatlans, at the levels shown below under ~`Collateral
Levels far United States Treasury 061igat~ons" and (ii} far other collatera~,
at levels acceptable ta Financial Security;
b. Failure to maintain the requisite collateral percentage w~ll
rec~uue the City or the Trustee to Iiquidate the collateral
c The Trustee, the City or a thlyd paxty acting salely as agent
therefor (the "Holder of the Collateral"; has possession of the collateral or
the collateral has been transferred to the Holder of the Collatezal in
accordance with applicable state and federal laws (other than by means of
entries on the transferor's beaks};
d The repurchase agreement states, and an opin~on af counsel is
rendered to the effect, that the Trustee has a perfected f~rst prionty securrty
interest rn the callateral, any substituted collateral and all praceeds thereaf
(in the case"of hearer secunties, this means the Holder af the Collateral is
in possession};
e. The transf~ror represents that the callateral is free and clear of
any t~~rd-party liens or cl_aims,
f. Ar, opinion ic rendered that the repurchase agreement ~~ a
"repurchase agreement" as defined in the Unrted States Bankruptcy Code;
g There ~s a~ ~ri~l be a wntten aeree~nent govermng every
repurchase transactlon;
h. Each of the ~ity and the Trustee represents that it has ~-o
knowled~e af any fraud tnvolved in the repurchase transaction, and
i The City and tl--e Trustee receive an opin~on af counsel (whlch
opinion shall be addressed to the Ciry) that such repurchase agreement is
legal, val~d and binding and enforceable agaunst the provider in accordance
with its terms.
{9) State Obligatzons
(a) D~rect general ~bligatio75 ~f ~ny state oA the [Jnited States or any
subdivision or agenc~~ thereo~ to whicn es pledged the full faith and credit of a
state the unsecured ~eneral ~~Ii~at~an debt of ~~hich is rated "A3" by Maody~s
and "A" by S&P, or better, ~r any a5ligation fully and unc.onditional_ly guaranteed
by any state, subdivisian o: a~ency ~~~hose unsecured general obligaUon debt is so
:ated
{b) Direct, general short-term obligatxons of any state agency or
subdiv~sion described in (a) above and rated "A-1+" by S&P and "Prime-1" by
MpOd~' S.
{c) Special Re~enue Bonds (as defined in the Un~ted States Bankruptcy
Code) af any state, state aQency or subdivision described in (a) above and rated
"AA" or better by S&P and "Aa" or better by Moody's
(10) Imrestmer~t agreements «•ith (1) a domestic bank the long-term debt of ~;-h1ch
is rated at least "AA" b}~ S~P and "Aa" by~ Moody's {so lan€ as an op~nion is rendered
that the bank is sub}ect to FIRREA}, or {2) a fareign bank the long-term debt of ~;~luch is
rated "AAA" by S&P and at least "Aa" by Maod~~'s, or at least "AA'' by S&P and "Aaa"
by~ Moody°s; prov~ded, that, by ±he terms of the in~estment agzeement
{a) interest payments are to be made ta the Trustee at t~mes and in amounts
as necessary to pay debt service (or, if the investment agreement is far the
construction fund, construction draws} on the Cert~~cates,
{b) the anvested funds are availabie for wrthdraw~al without penalty or
prerruum, at any time upon not more t~an ser•en days prior notice {which notice
may be amended ar withdrawn at any ~me pr~or to the specified withdrawal datej;
pro~ided that the Trust Agreement specifically requires the Trustee or the C1ry ta
give notice in accardance with the terms of the investment agreement so as to
recerve funds thereunder wit[~ no penalty or prem~um pazd;
(c) the inv~stment a~reement shall state that it is t1-ie unconditional and
~eneral obllgatlon of, and ~s not subordinated to any other obligation of, the
prorider thereof,
(d) a fixed guaranteed rate af interest 1s to be paid on ~nvested funds and
all future depasits, if an}~, rec~u.red ta ~e made ta restore the amount of such funds
to tE~e Ievel spec~fied under the Trust Agreement;
(e) the term af the investment a~reement does not ex~eed seven years;
(~ the Trustee and the City receive zhe op~nion of dome5tic ~;ounsel
{which opin~on shall be addressed to ±he City) thai such investmen~ agreement ~s
legal, val~d and binding and enfarceable against the pravider in accordance w~th
i~s terms and oi fareign c~unsel (xf apnlicable~;
(g) the mvestmen~ agreement ~hall provide that if durin€ it~ term (~; the
pro~~tder's rat~ng 6y either 1VTQOCiy's or S~F is witharawn or suspe~ded or faila
below 6GAA" ar ".4a", respectively, or, with respect to a foreigr bank, beiow the
~at~ngs af such provider at the ciel~very date af the invest~nent agreernent, the
pro~ider must, at the direcnon of the City or the Trustee w~thin 10 days of receipt
af suc~- direction, ~ither ~a) coilateralize the investmen~ ~greement by deli~ ering
or transferring ~r, accordanc.e w~th ap~~icabie state and federal laws (other than by
means of entries on tf~e pr~~ ider's books) to the Trustee, the City or a Holder of
the Collateral, United SFates T:easury 4bligations wrach are free and clear of any
third-party liens or c,laams at the C~llaterai Levels set forth be~ow, or (b) repay the
principal of and accrt~ed but snpaici znterest on tihe investment {the choice af (a} ar
(b) above shall be that of thti C~ty or Trustee, as appropr~ate), and ~ii) the
pro4~ider's rat~ng by either 'vloody's or S&P is withdrawn or s~spended or falls
bela~v "A", or, w~th respect to a foreign bank, below "AA" or "Aa" by S&P or
Moocty's, as appropriate, the pro~~ider must, at the direcuon of the City or the
Trustee, withln 1~ days of receipt of such direcuon, repay the pr~ncipal of and
accrued but unpaid interest on the investment, 1n either case with no penalty or
premium to the Crty ar Trustee.
(h} the invest~ne~t a~reement shall state, and an apinaon of counsel shall
be rendered to the effect, that the Trustee has a perfected first pnonty secunty
~nterest in the colla[eraI, any substztuted callateral and all proceeds thereof (~n the
case of bearer securities, th~s means the Trustee is m possession), and
(i) the investment agreement must provide that if durln~ its term {x) the
pravider shall default in its payment obl~gatians, the provider's abligauon under
the investment agreement shall, at the ciu'ection of the City or the Trustee, ~e
accelerated and amounts im~ested and accrued but unpaid interest therean shall be
repaid to the City or Trustee, as appropr~ate, and (y) the provider shal~ become
insalvent, not pay its debts as they become due, be declared ar pet~t~on ta be
declared bankrupt, etc. ("event of insolvency"}, the provider's abligat~ons sha11
automaticall}T be accelerated and amaunts invested and accrued but unpaid interest
thereon shall be repaid to the Cityf or Trustee, as appropriate.
(1 i) Pre-refunded municipal obliganons rated "AAA" b}~ S&P and "Aaa'' by
Vloociy"s meeting the follo~ving requirements;
{a) the mun~cipal obl~ganons are (z} not sub~ect to redempt~on prlor to
maturiry or {ii) the truste~ far the municipal obiigations has been given
ure~~~.able instructlons cancerrung their cail and redemption and the issuer of the
municipal obligat~ons has covenanted not to s~edeerr- such murucipal oblagarions
other than as set forth in s~ch ~nstruct~ons,
(b) the municipal ~ibligatrons are ~ecured b~r cash or United States
Treasary Obllgaaans tivh~ch ~n~y be ap~l~ed only~ ta payment of ±he pr~ncipal of,
interest and prerruum ar: suc~ municipal obhgations.
{~) the principal of and intere~t on the Unrtec~ 5tate5 Treasury Obligations
~pius ~ny ~,:ash an the escrow) has beer~ i°erifie~ by the report of independent
certified pubiic accountants *o be safficieng to pay in fu11 all pnncipal of, interest,
and premium, if any, c[u~ anc~ to hAcome due on the mumcipal obligations
("Verif`icat~on");
{d} the cash or Unite~ State~ Treasury O~l~gations ser~•ing as security~ for
the m~nicipai obl~gat~ons are held by an escxow ~gent ar trustee in trust for
owners of the municipal obl~g~uons: a,-~c~
(e; na substiiuhan of u Un~ted State~ Treasuryt Obllgation shail be
permittec~ except w~th anot~aex LT~?jted States Treasvey Obligatian anr_1 upon
deli~~ery of a ne~~ Verif~cat~on, anci
(f} the cash or the Lir,rt~d 5tates Treasury Obligat~ons are not ~vailable to
satisfy any other ciaims, it~clading those by ar a~a~nst the ~ustee or escrow aQent.
1C~
Collateral Levels For Umted States Treasury ~bligations
Remaimng Matunty
1 year S years 10 years 15 years 30 years Frec~uency of
ar lesc or less or less ar less pr 1~S$ Valuarion
Daily lfl2 1~?5 lOfi 10~ 114
Weekly 1~3 11_ 1 112 ~ 14 120
Monthly 105 117 120 125 133
Quarterly 107 12fl 130 i 33 14p
Further Requ~rements: (i} On each valuation c~ate the City, the Trustee, or the custodlan
~~ho shall ~onfirm to the Ciry and the Trustee, shall value the market ~~alue (exclusive of accxued
interest} of the collateral, which market ~alue w111 be an amount equal to tl~e requisite collateral
percentage times the pr~ncipal amount af the investment (including unpaid accrued interest
therean) that ~s being secured, (i~} ln the event the collateral le~el ~s below its collateral
percenta~e on a valuatian date, such percentage shall be restared within the following restoration
pe.riods one bus~ness day for daily valuations, tr.uo business days for ~~eekly and monthly~
~•aluations, and one month far quarterly valuat~ons {the use af different restarat~on periods affect
the requssite collateral percentage), {iii) the Cit}~ or the Trustee shall terminate the repurchase
agreeinent ar the tnvestinent agreement, as the case may be, upon a fa~lure to maintain the
rer~uxsite collateral perc:entage after the restorat~an per~od and, if nat paid by the counterparty ~n
federal funds agaunst transfer of the callateral, l~qu~ciate the collateral.
"Prepayment Func3" means the fund by~ that name established in accordance «•ith
Section 5_[:2 hereaF
~~Principal Fur~d" means the fun~ establl5hed 1n accordance ~vith Sect?on S~2 hereof.
"Principal Pavment Date" means a date on which the pnncapal component e~ldenced
and repreiented by the Certlficates becomes due arid payable, as provided tn 5ect~on 2.03{a).
``Purci~ase Contraet" means that c,erta~n Pwrchase Contract, dated , 1995, by
and beri~~een ti~e Purchaser and the. ~ity relating .o the Cert~ficates
~~Purchaser" means , as unrierwrlter and purchaser of
the Cert~ficates pursnant to the Purchase Conuac.t.
"Record Date" means the fifteenth day af the inonth next preceding an Interest Payrnent
Date, «~hether ar not such day is a Busines~ Day.
"Rental Payments" means collect~vel}~ the Base Rental Pa}~ments and the Adcfit~onal
Rental Payments.
~~Rental Period" means the period from the Delivery Date thraugh June 3G, 195~6 and,
thereafter, the twelve-month period cominencing on July 1~f each year during ~he term of the
Lease A~reement
"S&P" ~neans Standard & Poor's Aatyngs Groap, a di~•~sion of McGraw-H~ll, Inc , a
carporauor~ organ~zed ar-d exist~ng unde?- th~ law5 of the State of New York, zts suc.cessars and
a5s~gns except that if such carporation shall nfl lonper perform *.he functcons of a securl~es rating
agency for any reason, the tertri "S&P'' shall be deemed to refer tc ~n~: other nationaily
recounized secunt~es rat~ng agency selecte~ 5y t~~e C~ty.
11
"Series A Base Rental PaFrments" means the pornan of Base Rental Payments
des~ribed in the Base Rental Paymeni Schedule under the capt~on "Senes A Base Rental
Pa}~ments"_
"Series A Certi~cates" means the Cert~ficates executed and delivered pursuant hereto
and designated hereunder as 5enes A Cert~flcates,
"Series B Base Rental Payments" means the portion of Base Rental Payments descr~bed
in the Base Rental Payment ScheduIe under the c.aption "Series B Base Rental Payments''
"Se~-ies B Certiticates" means the Cert~ficates executed and dellvered pursuant hereto
and designated hereunder as 5enes S Cemficates.
"Trust Agreement" means thi5 trust agreement by and among the Trustee, the Authonty
and the City, as originally executed and as rt may from tiine to time~ be amended ar supplemented
in accordance herew~ith.
`~Trustee" means U S. Trust Company of California, N A, a national banking assocrat~on
duly organized and existing under and by ~irti:e of the Ia«~s of the Umted States of America and
having a pnncipal c,orporate trust office in , Cal~fornia or any other bank or trust
company ~~hich anay at any ame be substituted in its place as provided in Section ~ 02
~`VVritten Request of the [:it~T" means an instrument in ~~riting signed by an Authorized
City Representat~ve
"V4'ritten Request uf the Authority" means an instrument ~n ~7iting signed by an
Authanze~ E+-utharity Representatx~e
~ectiun 1.02. Eaual Security. In c,onszderat~on of the ac~eptance of the Certaficates b}~
the O~~~ners, this Trvst Agreement snall ~e deemed to be and shall ~.onsf~tute a contract be~u~een
the Trustee and the Owners to secure the full and final payment of the interESt and przncipal
representecl by the Certif~cates which may be executed and delivered hereunder, sub~ect to each
oi the agreements, ~onditi~ns, cavenan*s und terrr-s ~ontained herein: and a~l agreements,
condiuons, cover~ants and terms containec~ herein rec~u~red to be obser..~ed or uerforme~ by or on
behalf of the Trustee shall be far the equal and preportionate benefit, pr~tection and sec~ty of
all Owners wlthout distinctian, preference or pr~o:ity as to ~ecarity or ~thervvise of any
Certaf~cates over any other Certaficates b;: reason af the number or date thereof or the time of
execution or dei~very thereof ~r for any cause ~~~hatsoever, except as expressly prov~ded herein or
therein
1~
ARTICLE II
TERI~ZS AND CONDI'I'IONS OF CERTIFICAT~S
Section 2.01. Prenaration of Certificates. The Trustee is hereby authorxzed and
d~rected to prepare and, upon the Wr~tten Request of the City, sha11 execute and deliver the Series
A Certificates ~n the aggregate principal amaunt of $ representing the
aggregate principal components of the ~erie.~ A Base Rentai Payments and each evidencing and
represent~ng a fractional unciivided interest ~n the Series A Base Rental Payments The Trustee is
hereby authorized and directed to grepare and, upon the Written Request of the Cit}~. shall
execute and deliver the Series B Certifica~es in the aggregate principal amount of
$ represent~ng the aggregate princ~pal camponents of the Series B BaSe Rental
Pay~ments and each evidenc~ng and represent~n~ a fractional undivided interest ~n the Senes B
Base Rental Payments. The Cert~ficates shall be nurnbered, r.~~ith or vG~ithout prefixes, 3s du'ected
by the Trustee
Section Z.02. Denomination, jVI~~~~rn and Datin~ of Certificates. The Serles A
Certzficate~ shall be des~gnated "City of Santa Momca Cemficates of Participat~an (1~95 Aupart
Facilit~es Refund~ngj, Series A" and the Series B Certificates shall be designated "City of Santa
Mon~~a Certific.ates of Partic~~pation (1995 Airport Faciiit~es RefundinII~, Serxes B" The.
Cernficates shall be prepared in the fQrm of fully re~istered Cert~fic.ates, without coupons, in
r~uthorized Denor~unataons and shall be nayable in lawful ~noney of the United States of
America
The CerC~ficates shall be dated as of August 15, 1y9~. Each Certifitate shall represent
interest from the Interest Pay~ner~t Date next precedang its date of execut~or, to «-~ich lnterest has
bee~ pa~ti ~n full, unless such date of execuuon shall be ~n Interest Pas~~nent Date, in w~hich case
such Ceruficate shall r~present interest from the date of execution thereof, ar unless such date of
execution shall be after a Record Date and prior to the following Interest Payment Date. in which
case such Ceruficate shall represent i~rterest from such Interest Pa}~ment Date, or unless such date
of e~ecutlon shall be on or prior to June 1 s, 19y6, in which case such Certificate shall represent
~nterest from August 15, 1y95 Notv~~ithstar.d~ng, tl;e faregoin~, if, as sl~own by the records of the
Trustee, interest ~hall ~e in default, each Certificate shall represent interest from the last Interest
Payment Date to which u-terest ~as been paid in full ~r dLly provided for.
Section 2A3. Pa~=ment Dates q#' (;~r~~ficates: Interest Com~utat.~on.
ru} IVlethnd arrd Place of PayrrieFat The principal e~°idenced and repre5ented b~ the Se?7e~
A Certrficates shall became due and payable. sub~e~.t to pnor prepayrnent, on Juiy 1 of the ~~ears,
~r. the ~mounts, dnd sha~l accrue interest at the iates per annum se~ forth below.
1j
Principa[ Payment Uate Principal Interest.
E.iulv 11 . _ Rate
1997
19~~i
19y9
zaoo
zaol
zaaz
zao3
zao4
2Q05
2Q46
2ao~
The pnncipal e~idenced a~d represented by the Series B Certificates si~all become due
and payable, sub~ect to pnor prepayment, ~n Ju15~ 1 of the ~~ears, in the amounts, and shall accrue
interest at the rates per annum set forth below.
Principa[ Payment. Date Principal Interest
l.Tulv 11 C~~naonent Rate
19y6
Payments af interest r~~th respect ~o the Certificates shall be made ta the Owners thereaf
{as determined at the close of business on the Recorcf Date next preceding the related Interest
Payme.nt Date) by check or draft of the Trustee m~iled to the address of each such O«~ner as it
appears on the registrat~on books maintained by the Trustee pursuant to Secti~n 2 U7 hereof. or to
s~ach other address as may be fumished in w-r~tutg to the Trustee by each such Owr~er. Payment af
prznc~pal and prepayment premium, if any, represenzed by the Certificates, at final maturity~ ar an
prepa}rment in v~~hale or in part prior thereto shall be made only upon presentat~on and surrender
of the Certaficates at tf~e prmcigal corporate tru~t office of the Trustee.
(b) Cr,n2putatr.on of Isaterest. The interest representecf b~~ the Cert1€~cates shall be pa}table
on each Interest ~'ayrnent Date tQ and includi7g their respective Principal Payment Dates or
prepayment prior thereto, and shall represent the sum of the porttons of the Base Rental
Pa~~ments designated as interest components corrung due on the Inte~est Payment Dates in each
}~ear The pr~nc~pal represented by the Cert~f~~c:ates shall be payable or~ their respect~~e Principal
Payinent Dates in each year and shall represent the sum of the porrions of the Base Rental
Payments designated as princ.ipa~ components corrun~ due on the Principal PaS~ment Dates in
eac.h }~ear
Interest represented by th~ Cerh~'icates 5ha11 b~ co~nputed. on the basis of a 360-day year
consisting of twelve 30-day months
Section 2,04. Fc~rm nf C:ertificates. '1'he ~Certificatec and the assign~nent to appe~r
thereon shall be in substannally the forzns, respect~veiy, of Exhibit A hereto, with ^ecessar~~ or
appropnate insertians, orrussions and variat~ons as perrrutted or requ~red hereby,
Sectivn 2.05. Executian o#' Certificates and Re~lacement Certi~cat.es. The
~ert~ficates shall be executeci by the Trusiee by the inanual signature of an aut~-orized signatory
of the Trustee_ The Trustee shail deliv~x replacement Certificates ~n the znanner and as
conte~~plated by this Arncle II. Such repiacemenr ~ertificates shall be executed as herein
prov~deci and shall be in Authorized Denominatior~s.
14
Section 2A6. Transfer and Pavment of Certi~cates: Exchange of Certi~cates. A~l
Certificates are transferable by the Owner thereof, ~n person or by his or her attorney duly
authorized in writing, at the prlncipal corporate trust office of the Trustee on the boaks requ~red
to ~e kept by the Trustee pursuant to the provisions of Section 2 07, upon surrender of such
Certificates for canceliation accompanied by deli~ery of a duly erecuted written insmament of
transfer in a form approved by the Trustee. The Trustee may treat the Owner of any Certificate
as the absolute cwner of such Certlficate far all purposes, whether or not such Certificate shall be
overctue, and the Trustee shall not be affected by an~r knowiedge or notice to the contrary, and
pa}Jment of the interest and pnncipal represented b}T such Certificate shall be made only to such
Qwner, which paym;nts shal~ be ~alid and effectual to satisfy and discharge t~-e liability
represented b~- such Certificate to the extent of the sutr~ or sum~ so ~azd.
Whene~er any Cert~ficate ar Certificates shall ~e surrendered for transfer, the Trustee
shall exect~te and dellver a new CerUficate or Cert~ficates representing the same principal amaunt
and ha~ing the same stated Princ~pal Payment Date. T~-ie Trustee shall requ~re the payment by
any ~wner request~ng such transfer of any taY or other governmental charge requ~red to be pasd
with respect to such transfer
Certificates inay be exchanged at the pr~ncipal corporate rxust office af the Trustee for a
l~lce a~gre~ate principal amount of Certificates having the same state~ P~-incipal Payment Date in
suc.h Authorized Denaminat~ons as the Owner t~ereof may req~est. `The Trustee shall require the
payment by the Owner requesting such exchange ~f any tax or other governmental chaxge
reyuu-ed to be paicl with respect ta such exchange
The Trustee shall nat ~e rec~u~red tc transfer or ~xchange an}~ Cert~ficate during the penod
commencing on the date five days before the date of selection of Cert~€~cates for prepayment and
ending on the date of mailin~ notice of suc.h payment, nor shall the Trustee be requued to
transfer or exchange any Cer~ficate or portion thereof selected for prepayment from and after the
date of mailing the norice of prepayment thereof.
Section 2.47. C:~rtificate Re~esiration Books. The Trustee ~vill keep at its pnncipal
~oroorate ~-u;t office sufficient baaks for the re~~strat~on and transfer af the Cert~ficates, which
books shall be ava~lable for ~nspection an~ copy~n~ bY the Authority, the Trustee and the Crt}% at
reasanabie hours ~nci under reasonab~e COC1C~1ti0I15, and upon presentation for such purpose the
Trustee shall, ~ncier such reasonabie re~Uia~ions as it ma;~ prescribe, re~ister or transfer the
Certlilcates on suc~ books as hereinabove provided Tr-e Trustee will, upon writter. request,
~nahe ~apies of the fore~~ing ava~labie to any O~vner or suci~ O~iner's agent duly~ auth~r~zed in
v~~rrang
Section 2.a8. Temuorar~ Certificaies. f he Certaficates may be ~nit~ali~.~ deiivered in
texnporary form exchangeable far definitive Cert~flcates when ready for del~very, which
teinporary Certificates shall be printed, lithographed ar typewritter~, shall be of ~uch
denormnations as may be deterrruned by rhe Trustee, shall be ~:~ tully registered form and shall
conta~n such reference to any of the pravis~anti hereof as may be appropriate. Every temparar~
Certificate shail be executed and c~ei~verec~ by th~ Trustee upan the. same conditions and terms
and in sub~tantially the same manner ~~ definit~ve Ceetificates. If the Trustee executes and
del~vers temporary Cert~ficates, it will prepare an~ execute definit~ve Cert~ficates u~ithaut delay,
anci ther~upon the temporary Cert~ficate~ may ~~ surrendered at tE~e pT~nc;pal corporate trust
office oi *he Trustee in exchange for such defir~idve Certificates, and untxl so ex::hangPd such
temporar}T Cert~ficates shall !~e enfi~t~e~ to t~e 5ame benefi~s hereunder as definit~ve Certificates
exe~ uted and deiivered hereunder
Section 2.09. C;erti~cates Mutilated, Lvst. Destroved or Stolen. If any Cert~ficate
shall become mutilated, the Trustee, at khe ~xpense of the 4wner thereaf, shai~ execute and
15
del~ver a new Cert~ficate of lilce pnncipal amount, payment date and number in exchange and
subst~tution far the Certtficate so mutilated, but anly upon surrender to the Trustee of the
Certlficate so mutilated. Every mutilated Cer€rficate so surrendered to the Trustee shali be
canceled by it. If any Ceri~ficate shall be lost, destroyed or stolen, evidence of such loss,
desuuction or theft may be submitted to the Trustee, and if such evidence is sat~sfactory to the
Trustee and indemnlty sat~sfactory to the Trustee shall be given, the Trustee, at the expense of
the Owner thereof, shall execute and cieliver a new Certificate of l~ke principal amount and
paylnent date, numbered as the Trustee shall determine, in lieu of and ~n subst~tut~on for the
Cernf~cate so last, destro}~ed or stolen. The Trustee may require payment of a sum not exceedin~
the actual cost of preparing each new Certificate exee.uted and delivered 'by it under this Section
and af che expenses which may be rncurred by it under this Sect~an. Any Cert~ficate exec~ted
and delivered under the pro~isians of ihis Sect~an tr lxeu of an}~ Ceruficate alleged to be lost,
destroyed or stolen shall be equally and proportionately entitled to the bene~its hereof wi~h alI
other Cert~ficates secured hereby, and the Trustee shall not be required te treat b4th the ar~gina~
Certific,ate and any replacement Cert~ficate as being Outstanding far the purpose of determimng
the amount of Certificates which may be executed and cielivered hereunder ar for the purpase of
determimng any percentage of Certlficates Outstand~ng hereunder, but both the original and
replacement Certxficate shall be treated a~ one and the 5ame Natw~ithstandinQ an}~ other
pTaviSion of t~lis SeCtiOn, in Iseu of execut~n~ and dehverang a new Certlficate for a Certificate
wh~ch has been 1ost, destroyed or stolen and ~~~hich has matured. the Trustee may malce payment
of st~~:h Certific.ate to the Owner thereof if so inst~ucted by the Czty
Section 2.10. C"uoueration bv ihe (~it~~, : he ~ity shall cooperate wrth the Trustee to
cause ±he necessary arrangements to be made and to be thereafter continued ~~hereby the
~ert~fzvates shall be made available for exchange, _registration and transfer at the principal
corporate tz'ust office of the Trustee
~ection 2,11. Book-Entrv Systeme (a) Pnor to the execution and delivery~ af the
Cert~ficates, the City and the Authority tnay pro~ide that such Cert~ficates shall be initially
executed an~ deiivered as Book-Entry Certificates, and in such event, the Certificates for each
sch~duled Pnncipal Payment Date shall b~ xn the farm of a separate sin~le fully registered
Cert~ficate {which may be t~~pewritten} Upon inihal execution and delivery, the awnersh~p of
eac[~ such Certificate shall be registered in the ::ert~ficate register m the name of the Nom~nee, as
nominee of the Depositor}r. Payment of principal ar anterest e~idenced by any Book-Entry
Certifacates registered in the name of the Nomine~ shall be made on the appl~cable Interest
Payment Date by w~re transfer of New York clearin~ house or equzvalent next day funds or by
~;l~re ~-ansfer af same clay funds to the account of the lv`ominee. Such pay~nents shall be made to
~he Na;ninee at the address which is, an th~ regular Record Date or special record ciate, as the
~ase may he, ~hown for t~e Nominee u~- tt~Ae bond register of the Trustee.
{i~) t,7iJith re;pect to Book-Entry Cert~ficates. the City~, the Authonty and t~he Trustee shail
have no respons~bility ar obliga~ion to any Part~ci~anti or to any person an behalf of which sucn a
Partx,ipant hoids an interest ~n sUCh Book-Entry ~Lr~ficates Wlthout lirtut~r~g the ~mmediateiy
preceding sentence, the Caty, the AnthorZt}~ anc~ the 'Truste~ shalI ~a~°e no responsibility ar
obligation with respect to {i) the ac,curacy ~af the records of t~e Depos~tory, the Nominee, ar any
Partrc,ipant v~-1th respect to any ownershj~ inter~st in ~ook-Entry Certificates, (ii) the delivery to
an~~ Paracipant or any other person, ather than an O~~ner as shown 1n the ~ertificate register, af
any nonce w~th respect to Boo[c-Entry ~ert~ficates. ~ncluding dny notice of brepayment, (iii) the
select~on by ~he Depository and its Participan~~ c~f the beneti~i~l ~nterests in Book-Entry
Certaficates to be prepaid ir the e~ent the ~ity prepays Cer4ificates ~n ~ar+_, ;iv) the pa~~ment to
any ParUcipant or an}f other persan, other thar, an O~~ner as shown in t~e cert~fieate ;egister, of
an5~ amount with respect tG principal, premiu1ri, if any, or interest ev~deneed ~y Book-En~y
Cemficates or {v) any consent gi~en or other actaan talcen by the Depasitory as Owner
16
(c) The C1ty, the Authority and the Trustee may treat and consider the person in whose
name each Book-Entry Certificate is re~istereci ~n the cert~ficate re~~ster as the absolute Owner of
st~ch Book-Entry Cert~ficate for the purpose of payment of pr~nc~pal, prepayment prerruum, if
any, and interest e~idenced by such Cemficate, for the purpose of selecting any Certificates, or
port~ons thereof to be prepaid, for the purpose of giving not~ces of prepayment and other rr~atters
with respect to such Cert~ficate, for the purpose af registering transfers wrth respect to such
Cert~ficate, for the purpose of obtaining any consent or other act~on ta be taken by Owners and
for all other purposes whatsaever and the C~ty, the Authority and the Trustee shall not be
affected by any notzce to the contrary
(d) In the e~ent of a prepayment necess~tat~ng a reductian in aggregate principal amount
of Ceruficates Outstanding, or a prepayment cf part of the Certificates 4utstand~ng, the
Depository. u~ its discret~.on, (a) may request the Trus±ee to execute and deUver a new Cert~ficate
or (b} if DTC is the sole owner of rhe ~ertificates, shall make an appropriate natation on the
Certificate indicating the date and amounts of such red~ct~on in princ~pal except in the case af
final payment, in whlch case the Certi~~ate must be presented ta the Trustee prior to payment
(e) The Trustee shall pay all prmci}~a1, pre~ruum, if any, and interest evidenced b}~ the
Certificates only to or "upon the order of' (as that term is used ~n the Uniform Commercial Code
as adopted in the State of Ca~~forn~a} the respective Owner, as shown in the certificate re~ister, or
his or her respec.t~ve attarney duly autharized in wrrting, anr~ all such payrnents shall be val~d and
effecave to fvlly satisfy and discharge the abhgations w~th respect to pa}~~nent of principal,
prepayrnent premium, if any, and uiterest evidenced by the Certificates to the exter~t of the sum
or sums so paid No person other than an 0~~,~ner, as snown zn the certificate register, shail
receive a Ceruficate ev~dencing principal. prepa~ment premlum, if any, 3nd interest evidenced
and represer-tecl b~~ the Certificates. Upon deli~lery by the Depositary to the ~wner, the Trustee
~nd the City of written notice to the effect that the Depository has determined to subsntute a new
naminee in place af the Norrunee, and sub~ect to the provisions hexein with respect to recard
dates, the ward Nom~nee in this Trust Agreement shall refer to such nominee of the Deposrtory.
(;} Tn order to qualify the Booic-Entry Certificates for rhe Depository's book-eniry
system, the Truscee shail execute ar,d dehver to the Depositary a Le*tex of Representat~ons The
exec.ut~on and del~very oi a Letter of r'Zepresenta.t~ons shall not in any ~~a}~ ~mpose upon the
Author~ty, the Ctty or the Trustee any obli~ation whatsoever with respect to persons havin~
interests ~n such Book-Entr~t Certificates other than the O«~ners, as shown on the certificate
reg:ster af the Tr~~stee Such Letter of Representations may pravlde the ume, form, cantent, and
manner of u-ansm~sslan, of nat~ces to the Depos~tory In addit~on to the execuuon and delivery
~f a Letter of Representataons by the Trustee, the City, the Authonty and the Trustee shall take
such other at,t~ons, not inconsistent with this Trust Agreement, as are reasonably necessar~ to
qualif~r Book-Enu-y Certificates for the Depositor}~'s book-en~ry program
(g) In the event the City determ~nes that it 1s an the best interest of the Beneficial ~wners
that they be a~le to obtain certificated Certif~cates and that such Certificates should therefore be
madE available and notifies the Depos~tory and the Trustee of such determinat~on, the Depasitory
will norify the Participants of the a~ailability through ~he Depos~tory of ~errificated Certlficates
In such e~~ent, the Trustee shall zransfer and exchange ceruficated Certificates as requested by the
Degositor}~ and any other Owr-ers in ~ppropriate ~inounts In the event {i) the Depository
deternunes not ta continue to act ~s Secur~ties DepositorSl for Book-Entr}~ Cert~fic.ates, or (xi} the
Depos~tory shall no longer so act and gi~+es not~ce to the Trustee of such decermtnation. then t~e
Cit}~ will dtscontinue the Baok-Entry system with the Depasitaryr. If the City deterrr~nes to
rep~ace the Depository with another qualified Secuxit~es Depository, the CitS- sf~all prepare or
direct the preparatzon of a new single, separate, fully registered ~ertificate for eaeh scheduled
pa}~~nent date of s~ach Baok-Entry Cert~ficates, registered in the name of suc.h successor or
subst~tute qualified Securit~es Depository or ~ts nominee If the City fafls to zdentlfyr another
i7
qualified Securities Depository to replace the Deposrtory, ther~ the Cert~ficates shall no longer be
restncted to being registered in such cert~fic.ate register 1n the name of t~e Norrunee, but shall be
registered in ~~~hate~er name or names the O~vners transferri.ng or exchat~~~ng such Certificates
shall designate, 1n accordance with the provisions of ~ections 2,Ofi and 2 04 ~ereof. Whenever
the Deposatary requests the City to da sc, the City will cooperate w~ith the Depos~tory u- takin~
appropnate achon after reasonable not~ce (a) to make avarlable one or mare separate Cert~ficates
evidenctng the Book-Entry Certificates to any Partic~pant having Book-Entry Certif~cates
credited to ~ts account u~ith the Depository, anc~ (b) to arrange far another Securines Depository
to maintain custody of bonds e~idencmg the Book-Entry Cert~~cates.
(h) ltiTotti~~ithstandin~ any other provis~on of this Trust Agreement to the contrary and if
DTC is the sole Owner of the Certaficates, so lon~ as any Book-Entry Cert~~cate is registered in
the name of the Nom~nee, all paymentt v~~,th ~-espect ta principal, prepayment prerruum, 1f any,
and interest evidenced by such Certificate and all no~c;.s w~th respect to such Certi~cate shall be
made and given, respectlvely, as pro~ided in the Letter of Representations or as otherwise
instructed b~~ the Depositary.
(i) In connection with any notice or other commun~cat~on to be provided ta Owners
pursuant to the Trust Agreement by the City, the Author~ty or the Trustee, ~;~lth respeci ta any
consent or nther act~on to be takert b}i Owners, t4~e Crty, the A~tharity or the Trustee, as the case
may be, shail establish a record date for such cons~nt or other action and gzve the Depository
notice of suc~h recard date not less than 15 calendar days tn ad~ance of such record date to the
extent possible Not~ce to the Depositor~ shall i~e given only when DTC is the sole Owner of the
Certificates.
1R
ARTICLE III
PRQCEEDS [)F CERTIFICATES
Sectian 3.01. Deliverv af Certificates. The T~-ustee ~s here6y authorized to execute the
Cert~ficates and deiiver the Certificates to the Purc~aser pursuant tQ the Purchase Contract upon
receipt of a Wntten Request of the C~t~~ and upon rec~ipt of the proceeds of sale thereof
Section 3.02. Denosit and Transfer of Praceeds ~f Certificates. The proceeds
received from the sale of the Certificates shall be deposited or transferred by the Trustee as
follo~ s, as d~ected by a Wr~tten Request of the City_
(1) The Trustee shall depos~t in th~ Interest Fund established pursuant to
Section 5.02 hereof the amount of ~ , representiag accrued interest
~eceived w~th respect to the Certtficates
(2} The Trustee shall deposit in t~e Cost of Issuance Ac~ount established
pursuant to Sect~on 3 04 hereof the amount of ~
{3) The Trustee s~all deposit in the Ce.rt~ficate Reserve Fund estabhshed pursuant
to Section S.OS hereof the amount of $ , an amount equal to the
Certificate Reserve Fund Requn'ement.
(4) The Trustee shall transfer the remainder of such proceeds, ~ ,
to Bank of Amenca Nat~onal Trust anci Sa~~ngs Assaclation, as trustee for the Priar
Certificates, in order to defease the Pnor Cert~ficates,
Section 3.03. C~ost of Issuante Arcount. The Trustee shall estabhsh and ma~ntaui a
separate special accaunt ~o ~e held by t.Y,e Tn:stee k.~own as the Costs of Issuance Account The
Trustee shall disb~rse moneys from the Cost af Issuance Account on suc,h dates and ~n such
amounts as are necessary to pay Costs of Issuance, in each case upan the Written Request of the
City, stanng the persan to whom payrnent ~5 ta be made, the amaunt ta be pa1d, the purpose for
~~rh~ch the obiigat~an was incurred and that such payment ~s a proper charge aga~nst the Cosi of
issuance Accaunt. On 1Vlarch S, 1~96 the Trustee s1~al~ transfer any amounts then reinain~n~ in
the Cost of Issuance Account to the Base Rentai Payment Funda
1()
ARTICL~ IV
PREP~iYMENT C)F C:ERTIFICATES
Sertion 4.~1. Terms of Pre a~v ,ment. The Certificates are subject to prepayment on
any date prior to therr respecrive Pnncipal Payment Dates, in ~~hole or 1n part. in Author~zed
Denom~nat~ons, from and to the extent of any Net Praceeds w~th respect to all or a portian of the
Property, depasited by the Trustee in the Prepayment Fund and not used to repair or replace said
propercy pursuant to Sectxon 5 G3 hereof, at a prepay~nent prlce equal to the pr~ncipal component
evidenced and represented thereby, plus accrued interest e~idenced and represented t~ereby to
the date fixed for prepayment, without prerruum.
~ i,.1.. 11 T., i2.. 0...+...,;.i
,....a, i. ...: c..1~
Section 4.02. Selection of CertificatQS for Prena<<~ent. Whenever less than all the
~utstand~ng Certificates are to be prepazd on any one date, the Trustee shall select the
Certificates to be prepaid proport~onateiy among Cextlficates «~ith different stated Principal
Payment Dates. and bv lot among Certi~cates with the same stated Principal Payment Date in
any manner that the Trustee deems fair and appropriate, which decision shall be final and binding
upon the C1ty, ihe Autiionty and the O«ner~, and tre Trustee shall promptly not~fy the Authonty
and the Crty in wr~ting flf the numbers of the Cer~ificates so selected for prepayrnent on such
date_ F`or purposes of such select~on, any Cert~f~cate ma~~ be prepaid in part in Authonzed
Denorrunat~ons.
Section 4.03. Not.ice of Prena~ment. When prepayment is authorized pursuant to
Sect~on 4 O1, the Trustee shall g~~e not~ce, at the expense of the Caty, of the prepay~ment of the
Certificates. The notice of prepayment shall spec~fy {a) *.he Cert~ficates or designated portions
ihereof (in the c,ase of prepayment of th~ Cert~ficates zn par~ ~ut not in whole) which are to be
prepa~~, (b) the date of prepayment, (c) the ~lace or plac;es where the ~repayment vvill be made.
~nclud~ng the name and address af an}r paying ~gent, (d} the prepaytnent pnce. {ej the CUSIP
numbers assigned to the Cert~ficates ta be prep~id, (f} the numbers of the Certificate5 to be.
prepa~d in ~~~hole ar in part and, 1n the case ~f any Cernficates to be prepaid in part anly. the
princ;ipal c.~mponent of such Certificate~ to be prepaid, and {gj the interest rate and stated
Princ~pal Payment Date of eac.h Cer~xficate to be prepa~d 1n whale or in part. Such not~ce of
prepayment shall further state that on th~ specified date there sha11 become due and payable upon
~ach Cert~ficate or porrion thereof being prepa~~ the prepayment pr~ce anci that from and after
Such date tnterest represented thereby chall cease to accrue and he ~ayable.
The Trustee shall take the follawing acaons :~~th respect to such r~ot~ce of prepayment.
At least th~rty (30) but not tnare than ;ixty~ (60} days priar to the prepayment date not~ce
of prepayment shall be given to the respec~~e (3wners of Cert~cates des~gnated for prepa~~ment
by f~rst-class tnail, postage prepaid, at their addresses appearing on the re~istration boaks of the
Trustee as of the close of bus~ness on the day ~efore such not~ce of prepayment ~s gi~en
20
At least thirty (30) da~~s before each prepayment date, not~ce of prepayment shall also be
gi~~en by (i) first-class mail, postage prepaid, (ii} canfirmed facs~mile transnussion or
(i~) o~~ernight delivery service. to each of the foilawing securities depositones:
(1 j The Depository Trust Company
711 Stewart Avenue
Garden Cit}~, New York 11530
FacSimiie transrrussion• (Slfi) 227-403~
(Si6)227-419~
{2) A~iidwest Secunt~es Trust Company
Capital Structured-Call Notificat~on
4~0 South La Salle Street
Chicago, Illinois h0605
Facsimiie transm~ssion: (312) 6f3-2343
(3j Philadelph~a Depository Trust Company
Rearganizat~on Division
1900 Market Street
Philadelph~a, Pennsyl~~ama 19103
Facs~mile transm~ssion: (215) 49fi-S~SS
At least th~rty {30} days before each prepayment date, not~ce of prepayment shall also be
gi~~en by {i} first-class mail, postage prepa~d, or (u) overnight delivery service, to a~l of the
followmg services•
(1 j Financiai infarmatzon, Inc 's
Financial Dail~+ Called Bond Service.
30 Montgomery Street, IOth F1aor
Jersey City, New Jersey 07342
Attention: Edrtor
(2) Kenny Informahon 5ervic~'s Call_ed
Bond Service
55 Band Street, 2fith Floor
New'lork, New York 10044
(3j Moody`s Mun~cipal and Go~~~rmnent
5254 ?7 Center Dn~e, Suite 150
Chariottc, ;~orth Caroiu~a 25217
Attent~on° Municzpal Ne«s Repc,rtc
(~) Standard & Poor's Called Bond Recar~
25 Broadway, 3rd Floor
New York, New York 1OQ04
The actual aeceipt b}~ the Jwner or any~ af the securittes depositones or servi~es specified
abo~~e of ariy not~ce of such prepa~~menr c~~l not ~e a condrtaon precedent io prepayment, and
ne~ther fa~lure to receive such notice nor any def~s:t therein shall affect the validlt~~ of th~
proceedings for the prepayment of such Ce_rt~ficates ~. tne cessat~on of interest on the dat~ f~ed
for prepayment,
21
A certtficate b~r the Trustee that not~ce of prepayment has been given to Owners or any of
the securjt~es depositones or services specified above as herein pro~~ided shall be conclusrve as
against ail part~es, and na Owner whose Certificate is called far prepayment may obaec:t thereto
or ob~ect to the cessauan of interest on the fixed prepayment date by any clavn or showing that
said O«lner failed to actually receiv~ such nonce of cali and prepayment
The Trustee s~all give not~ce of prepa}~ment of an}~ Cert~ficates to be prepaid upan recexpt
of a Wntten Reyuest of the Cit~r (whlch reque5t shall be g1~°en to the Trustee at least fort~~-five
(45) da}~s prior to the date fixed for prepayment)
Section 4.04. Partial Preuavment of Certificates. Upan surrender of any Certificate
prepaid in part only, the Trustee shall execute and deliver to the Owner thereof a new Cert~ficate
or Certificates represent~ng the unprepaid principal co~nponent of the Certlficate ~urrendered
Section 4.05. Effect af Prep~yment. If not~ce af prepayment has been duiy g~ven as
aforesaid and moneys for the payment of the prepayment price of the Certificates to be prepa~d
are held b}~ the Trustee, then on the prepayment date designated 1n such nou~e the Certificates so
called for prepayment shall become payabie at the prepayment price specified in such not~ce: and
from and after the date so designated interest represented by the Certaficates so called for
prepayment sha11 cease to ac,crLe, such Certificates shall cease to be ent~tled to any benefit or
security hereunder and the Owners of such Certlficates shall ha~re no r~~hts in respect thereof
except to receive payment of the prepayment pnce re~resented thereby The Trustee shall, upan
~urrender for payment of any of the Certificatps to be prepald. pay such Certificates at the
prepa}~ment pnce thereof
All Certificates prepaid pursuant to the prov~sions of thxs Arncle shall be tanceled by the
Trustee and ;hal~ nat be redeli~ered
2L
ARTICLE V
RENTAL PAYNdE\TS
Sectic~n SA1. Pled~e; Base Rental Pavment Fund. In order to secure the City's
obligat~ons hereunder and under the Lease A~reement, the .4uthant~~ and the City ~ereby
irrevocably pledge to the Trustee for the benefit of the Owners all of the~r nght, ntle and interest,
~f any, in ar~d to a~l amounts on cieposit from t~me to t~ir~e ~n the funds and accaunts established
hereunder, v~~hich amounts shall be used for the pa}~ment of the interest components and principal
components of the Base Rental Payments Th~s pledge shall constitute a f~rst lien on the fur~ds
and accounts established hereunder in accordance with the tertns hereo£ It zs the intent of the
partles hereto that the Aut~or~ty not have any right, t~tie or interest ui or to the amounts on
depos~t fram time ta time in the funds anc~ accaunts estab~ished hereuncler If, contra.ry to the
antent of the parties hereto, the Authonty ~s found to ha~e any right, t~tle ar interest in or to an5~
such amounts, then the Authorit~r hereby ure~ocably pledges ta the Trustee for the benefit af the
O~~~ners alI of suc,h nght, t~tle and interest
All Base Rental Payments shall be paid directly by the City to the Trustee, and if rec,eived
by the Authority at any tvne shall be deposited by the Authonty «~1th the Trustee within one {1)
Business Da3~ after the re~;eipt tl~ereof_ A~] Base Rental Pay~nents paid by the City~ shall be
deposxted by the Trustee m the Base Rental Payment Fund, which the Trustez shall establ~sh and
ma~ntain as a special fund hereunder, and all atnounts on deposit therein shall be held in trust by
the Trustee, v~~h~ch fund the Trustee hereby agrees ta establish and maintain unt~l all required
Base Rental Pa~rment5 are paid tn futI pursuant to the Lease Agreement and unt~l the fu-st date
upon which the Cert~ficates are no langer Outstanding, for the benefit of the O~~ners from rinne
ta time
Sectian 5.02. Denosit of Base Rental Parments. The Trustee shall deposat the amounts
an deposit in the Base Rental Payment F`und at the t~mes and in the manner heremafter provided
in the followin~ respectlve funds, each of ~~~hich the Trustee hereby agrees to establish and
maintatn ~nti~ all req~ired Base RentaZ Pa~rments are gatd in fu~l pursuant to t~e Lease
Agreement and untal the i~rst date upon v~~hlch th~ Certificates are no longer Outstanding, and the
moneys ~n each of such funds shall be drsbursed only for the purposes and uses hereir~after
author ~.zed.
{aj Iriterest F'urid The Trustee, on each Interest Payment Date, shall depasit ~r- the
Intere~t Fund that amount of rnaneys representing the poruor~ of the Base Rental Payments
des~~nared as the ~nterest component cort~n~ due an s~ch Interest Payment Date. Vlone}~s in the
Interest Fund Shall be used by the Trustee far the purpose of payin~ the interest represented by
the Certific.ates when due and payable_
(b~ Pr•~raca~r~! Fat.nd. The Trustee, ar each Prmcipal P~yment Date ShaII deposit in the
Principa3 ~und that amount of moneys represenung *.he portion of the Base Rental Payments
desi~nated as the pnncipal camponent coming d~ae on such Fnnc~pal Payment I]ate Maneys in
the Przncipal Fund shall be used b}~ the 'Trustee *or the purpose of payin~ the principal
rPpresented by the Cem€'tcates w~hen due and payabie at matunty
{c) Pj•epa~~rnerzt F~nd The Trustee shail deposit ir~ the Prepayment Fund any amourits
reyuired ta be deposite~ ttterein p~rs~ant so ~ectron 5~(?3 or Secnor~ 5.04 hereof. Vlone~~s tn the
Prepay~nent Fund shall be used by the Truste4 far the purpose of pa~ling the interest and princ~pal
represented by the Cernficates to be preptad
Sect.ivn 5.03. ~n~lication of Net Prc~ceeds. If the Property or a~y portion thereof shall
be damaged or de5troyed, 3ub~e~t to the iurther requirements of this Sect~on. t~e City shall, as
23
expedit~ously as possibl~, contxnuously and diligently grosecute or cause to be prosecuted the
repau or replacement thereof, unless the City elects not to repair or repIace the Propert~~ ar the
affected port~on the.reaf ui ac:cordance with the provisions hereof.
Net Proceeds (other t~ian Net Proceeds of rental interruption insurance}, including the
proceeds of any self-insurance. received on account af any damage or destruc~aon of the Praperty
or a portion thereaf shall as soon as possible be deposrted with the Trustee and be held b~ the
Trustee m a spec.ial account and made av~llable for and, to the extent necessary~, shall, be applied
to the cast af repa~r or replacement of the Propert~~ or the affected poruon thereof upon receipt of
a Written Request of the City~ together with invoic.es therefor. Pending such application, such
pro~eec~s may be invested by the Trustee a~ directed by the Cit~~ in Permitted Investments that
mature not later than such times moneys are expe~ted to be needed t4 pay such costs of repair or
replacement.
Notwithstand~ng the f~regoing, the City shall, within s~t}~ (60) days of the occurrence of
the event of damage or destruction, no~fy the Trustee in ~vn~ing of whether the C~tSr intends to
replac.e or repair the Praperty or the portaons of the Properry vvhich were damaged ar destroyed.
and ~f the City daes intend to replace or repair the Property or portians thereof, the City shall
deposit «lrth the Tr~stee the ~ull amo~nt af any insurance deductzble to be credited to the special
accoun~
If the dama~e, destruction or loss was s~ch that there resulted a substantial interference
with the City's right to the use or occupancy of the Property and an abatement of Rental
Payments results from such damage or destruction pursuant to Section 3A6 of the Lease
A~reement, then the City shall be rec~u~red elther ta (i) appiy sufficient funds from the insurance
proceeds and other iegally available funds to the replacement oz' repair of the Propert}~ or the
portaons there~f which have been damaged ta tt',e condit~on which existed prior to such damage
or destruct~on or {ll) apply sufficient iuncis from the insurance proceeds and other legally
a~a~lable funds ±o the prepayment, as set rorth in Sec,tion 4 01{a} hereof, in full af all the
Outstanding Cey-tificates or all of those Gu~standing Ceraficates wh~ch wauld ha~e been payable
frQm t~at ~aortion of the Base Rental Payments whic~ are abated as a result of the damage or
deslru~tion F~nds to be applied to the prepayment of CerUficates in accordance ~~ith (ii} above
shall be deposited in the Prepayrnent Fund_ An}F proceeds c~f any insurance, including the
proceeds of any self-insu~ance remalning after the portion of the Praperry ~~~hich was damaged or
destroyed is restore~ to and made a~~a~lable to the Cit~~ in substantiall~~ the same condition and
annual fa~r rental value as that which existed prior to ti~e dama~e or destruction as required by (aj
abeve or tf~e prepa}~ment af Cext~ficates as requu-ed by (ii) above, in each case as evidenced by a
Certlficate of thP City to su~h effect, ~hal! ~e deposated ~nta the ~ert~ficat~ Reserve Fund to the
extent that the a1r-aunt thereir, is less thar: ~he ~ert~fic.at~ Reserve Fund Requ~rement. If the C~t~~
~s not requ~red to replace or repair the Pronerty, ~r t~e affected porhon thereof, a~ set forth ui (i)
above or to use such amounts to prepay ~Cert~fic,ates as set forth in {ll) abeve, then such proceeds
shall be deposited into the Certificate Reserve Func1 to the extent that the amount therein is les~
than the Certific~te Reser~e Fund Requirement Any amounts ~ot required to be so depos~ted
into the Certific.ate Reserve Fund shall, if there is #~irst ciela~eied to the Trustee a Cer~ificate of ~he
City to the ~ffect that the fair rental value ~f the Property after suc~ damage or desuuct~on, and
after any repairs or replacements made as a reSUlt of su:,~~ ~arnage or destruction, is at least ec~ual
ta 100~% af t~e ma:cimum amount of ~3ase Rentai Payments becor-ung due ur~der the Lease
Agreement ~n the ihen current year or any subsec~uent y~ear and the fair replacement value of the
Praperty~ after such damage or clestrucnan is at least equal to the sum af the then unpazd przncipa~
components of Base Rental Payinents as set ~orth in Fxhzbit B to the Lease Agreement, be paid
to tihe `~ity to be used for any lawful purpose.
24
The pxoceeds of any award in emznent domain shali be deposited by the Trustee in the
Prepayment Fund and applied to the prepayment of Out~tanding Cert~ficates pursuant to Section
4.Q 1(a) hereaf.
Sectiun 5.44. Title I~~rar~ce. Proceeds of any policy of tltle insurance rece~ved by the
Trustee 1n respect of the Property shall be applied and disbursed by the Trustee as follo«s
(i} If the City determmes thaE the ntle defect gi~ing rise ta such proceeds has nat
substantially interfered with its use and occupancy of the Property and will not result in
an abatement of Rental Payments payable by the City under the Lease Agreement, suc,h
praceeds shall be re~r-itred to the City and used for any lawful purpose thereof; or
(11} If the C~ty c~eter~nines that the Utle defect giving r~se to such proc:eed5 has
substannally~ interfered w~th ~ts use and occupancy of the Propert5~ and will resuit in an
a6atement of Renta! Payment~ paya~le by the City under the Lease Agreement, then the
Trustee shai} immediately deposf~ such proceeds in the Prepayment Fund and such
proceeds shall be applied to the prepayment of Certificates in the manner prov~ded in
Section 4 01(a} hereof.
Section S.QS. Certi~cate Reserve Fund. (a} There shall be deposited in the Cert~ficate
Reserti~e Fund the a~nount required to be depostteci therein pursuant to Sect~an 3.02 hereaf 'The
C1ty may subst~tute a Credit Fac~lrty for ali or part of the moneys or, deposrt in the Cert~facate
Reserve Fund by deposit~ng such Cred~t F~cilrty with the Trustee so long as. at the t~me of such
substltution, t~e amount on deposit in th~ ~ertifi~~ate Reserve Fund, together v~~ith tf~e amount
a~ai~abie under such Credit Faci~ity, shalI be at lea5t equal to the Cert~ficate Reserve Fund
Rec~uilement, provfded, Y~owe~er, that, pr~ar ta suc,h subst~t~t~on, each ~at~ng agenc:y then rat~ng
the ~ertrf~cates shall ha~e canfirmed in wr~tzng that such subsUturion wauld not cause such
rat~n~ agenc}~ ~o Iower or withc~raw zts rat~ng then in effect u~~th resgect to the Certlficates
Vioneys for ~vhich a Credit Facl~ity has be~n substytuted as provlded herein shall be transferred,
at the elect~on of the City, ta the Prepayment Fund or, upon receipt of an 4pinion of Counsel that
such transfer will not adversely affect the exclusion of interest wrth respec~ to the Certtficates
from gross ~ncame for federal income tax p~rposes, to ~ special account to be held by the Trustee
and applied to the payment of cap~tal costs of the City
(b) Amounts available in the Ceraficate Reserve Fund sk~all be used and withdraun by
the Trustee 5olely far ±he p~rposes set forth i~ this Secuor. 5 05_ Amounts on deposit 1n the
~ertif~cate Rese:-~~e Func1 which were :~~t der~ved from pa}=ments under any Crec~it Facility~
credi~ed to the Cert~ficate Reserve Fund to ~a~sfy a pomon of the Certificate Reserve ~'und
Requ~retnent shall be used and withclrawn i~y the Trustee pnor to using and ~~ithdrawing any
ainounts der~ve~? from payments under such Credit Fa~ iliry. In order to ac:complish such use and
tl~ithdr~wai af su~h amounts not deri~ed fr~r~ payments uncier an~ such Credit Facilzt5~, the
Trustee shall, as and to tF~e extent necessary, liquidate any investments purchased «~~th such
amounts
If, on ~ny [nterest Payment Date, the amaunt ~n deposit in the Interest Fund is
ansufficient to pay the interest due with respect tc rhe CerUficates on suc~ IntereS~ Payment Date,
the Trustee shall transfer from the Cert~f~i~ate Reserve Fund and depas~+ in t~e Interest Fund an
arr-ount sufficient to ~nake ~,~p such deficiency_ If the amount on cfeposit in the Cer~f~cate
Re~serve Fund is not sufficient *o make :uch transfer, the Trustee shall inake a claim i~nder an}~
available Credit ~~e.i~~ty, in accardanc~ wlth ti~e pra~~sions thereof, rn order to obtain ~n ~mount
~uffic~ent to allow the Trustee to rr~ake suc~ uansfer as araci wher~ reUUired_
If, on any Principal Pa~~ment Date the arn~unt on deposrt xr. the Prxncxpal Func~ ~s
insuff~cient ta nay the prrncip~l ~ue with resp~ct ta the Cert~ficates on such Pr~nc~pal Payment
25
Date, the Trustee shall transfer fram the Certificate Reser~e Fund and deposit in the Pnncipal
Fund an amount sufficient to make up su~h deficiency. If the amount on depasit in the
Cert~ficate Reserve Fund is not sufficient to make such transfer, the Trustee shall make a claiin
undex any avaa~able Credit Facilicy, in accordanc~ wlth the provisions thereof. in order to obtain
an ainount suffic~ient ta allaw the Trustee to make such transfer as ar~d when requ~red
Vloneys, if any, on deposit in the Certificate Reserve Fund shall be wrthdrawn and
applied by the Trustee for the final payment wit.h respect to the Certi~cates.
(c) If the sum of the amount on depasit in the Cert~ficate Reserve Fund, plus the amount
a~ailable under all available Credit Facilities, is less than the Cert~ficate Reser~e Fund
Requ~rement, t~-e f~rst af Base Rental Paym~nts thereafter received from the Crty under the Lease
Agreement and not needed to pay the interest ~r pnnc~pal cornponents pa~~able to t2~e ~~~ners on
the next Interest Payment Date ar PrincipaI ?aytnen~ Date shall be used to increase the amount
on deposit in the Cert~ficate Reserrfe Fund te an amount whlch, when added ~o the a~naunt
a~ailahle under all available Credit ~aclizt~es, shall equal the Certificate Reserve Fund
Requ~rement_
26
ARTIC~.E di
C() VEN~NTS
Sectivn 6.OL [:urnntiance with Trust A~reement. The Trustee will not execute or
dehver an~~ Certificates in any manner other than in accordance w~th the nravisions hereof, a.nd
the Authont}° and the C~ty will not suffer or permit an5~ default by them to occur hereunder, but
v~~ill faithfully comply with, keep, abserve ~nd perfarm al1 the agreements. condit~ons, covenants
and terms hereof requ~reci to be complied «~ ith, kept, observed and performed b}~ them
Section 6A2. Comnliance R-ith the Facilities Lease and the Lease A~reement The
Authonty and the City will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms contatned in the FaciliUes Lease and the Lease Agreement
requxred ta be compiied ~~~ith, kept, observed anci performed by them and> to~ether «~ith ihe
Trustee, will enforce the Facillues Lease and the Lease Agreement against the other party thereto
in accordance with its terms~
Section 6.03. Obserrance of Laws and Re~ulatians. The Author~t}~, ti~e Crty and the
Trustee will faithful~y comply with, keep, observe and perform all valid and la«ful abiiga~ons or
regulations now ar hereafter lmposed on thetn by contract. or prescribed by any Iaw of the
Unjted States of Amenca or of the State of California, or by any ofricer, board or cotn~russion
ha~ ing ~urisdiction or con~ol, as a condrtion of che continued en~oyment of each anc~ every
franchlse, right ar privilege now owned or hereafter acquired b}~ them, including theu- right to
exist and carry on their respecu~e businesses, to the end that such franch~ses, rights and
pri~~aieges shall be ~naintalnec~ and preserved and shall n~t become abandoned, forfeited or in any
mann~r impaired.
Section 6.a4. ()ther Liens The Cjty ~ill keep the Property and all parts thereof free
from ~udgments and materialmen's an~ mechanics' Iiens and free from all claims, demands,
encumbrances and other liens of whatever nature or character, and free fram any claim or
l~ab~l~ty~ +~:h~ch mater~ally ~mpa~rs khe C74;~ jr! condue:t~ng its business or utilizing the Property.
and the Trustee at :ts option (after first ~iving the ~it}i ter days' writt~n notice to comply
±herewlth and fa~Iure of the City to so campiy ~~i~hin such ten-day period) may defend against
an}r and all act~on~ Qr proceedings ir~ which the validity hereof is or rrug~it be quest~oned, or may
pa}~ or camprom~se any ~laxm or demand asserted in any such acuons or pro~eedings, pravided,
ho~n-ever, that, ~n defending aga~nst any suc.~-i acnons or proceed~n~c or 1n paym~ ~r
compronnising any such claims or demancis, the Tr~stee shail nat in any event be deemed to have
waived ar released the ~~ty from liaEail:ty for ar ~n a4count of any~ of rts a~~eernents and
c.o~enants contalned herein, ar from its l~abiiity~ hereunder ta defend the validity hereo:F and to
perform such agreements and cor~~enants. The Trustee shali have no IiabLrtS~ «•~th respect te any
deterrrunation made in Qood faitrt to proceed or c~eci~ne to defencf, pay or eoinpronuse any~ su~h
claur_ ar demand
So Iong as any Certificates are Outstanding, none af the Trustee, the Authority or the City
shall create ~r suffer to l~e created any piedge oi or ~~en on the Base Rental Payments or any of
the funds or account5 created i~ereunder other than the pledge and lien hereof~
The Authority and the Trt~stee s~ail noi enc~mber the Property other than in accordance
~~~ith th~ Fac~lit~es Leas~, the L~ase A~reement, tnE Trus~ Agreement and rhe Assignment
Agreement
Sectiun 6.0~. Pr~-secution and IIfefense of Suits_ The Citj~ will promn~ly, upon request
of the Trustee, ta[ce suc.~ action from ~me te t~me as inay be reasonably necessar}~ or proper to
remedy or c.ure any cloud upon or defect ~n t~e ~*le te the Property ar an~~ part thereof, ~~.~hether
27
now existing or hereafter developing, will prosecute all act~ons, suits ar ather proceedings as ma}~
be appropriate for such purpose and will indemmfy and sa~e the Trustee harmless from all cost,
damage, expense or loss, includmg attQrneys' fees, w[~ich ~t may incur b}~ reason of any~ such
claud, defect, act~on, su~t or other proceeding.
The Crt}~ will defend agalnst every action, suit or other proceeding at any t~me brought
agalnst th~ Trustee upon any claim arising out of the receipt, deposit or disbursement of any of
the Base Rental Payments ar involvmg the ri~hts of the Trustee hereunder, provided, however,
that the Tz-ustee may appear in and defend an~~ suct~~ act~or., suit or other proceeding. The C1ty
will, to the extent permitted by law, mdem~ufy and hold harmless the Trustee against any and all
liability claimed or asserted by any person arising out of any~ such receipt, deposit or
disbursement, and will, to the extent permitted by law, ~ndemmfy and hold harmless the Trustee
a~ainst reasonable attorneys' fees or other expenses wh~ch it may incur in connection with any
ht~gatlan or otherwise in connection ~~~ith the fore~oing to urhich it may become a part~ in order
to enforce its nghts hereunder or under the Certlficates, provided that no indemmfication r~~~ll be
made to the Trustee for losses ansing out of #he willful mtsconduct or ne~ligen~e of the Trustee.
5ection b.06. Accountin~ Records and Statements. The Trustee will keep praper
accounting records in which complete and correct entries shall be mad~ af all transactions
relat~ng te ~he receipt, deposit and disburse~nent of the Base Rental Payments, and such
accounting rec.ords shali be ava~lable for anspect~on by the Autharity ar the C~ty at reasonable
hours and under reasonabie cor~ditions The Trustee w~ll, upon wntten request, make copies of
the foregoing ava~lable to any O~~~ner or such Owner's agent dUly authorized in ~~~riting.
Sectiun 6.07. Recordation and Filin~. The City w~ll file, record, register, renew, refile
and rerecord a11 such documents, lncluding financ~ing statements (or cantinuat~on statements in
~onnection zherewith}, as ma~.~ be required by ~aw ~r c~rder to maantain the Lease Agreement, the
Facilities Lease, the Assignment Agreemezt and this Trust Agree~nent at all times as a security
interest in the Base Rental Qayments, all in suc,h rr~anner, at such t~mes and iri such places as may
be requ~red and to the extent perrrutted Cy law ~n arde~ ta fully perfect, preserve and nrotect the
securrty of ti~e O~~ners and tF~e rights and secunty interests cf the Trustee, and the Cityr will do
~;lhatever else may ~e necessary ar be reasonably required zn Qrder ta perfect and contmue the
Iien af the Lease Agreement, the Assignment Agn-eement and this Trust Agreement
~ection 6.08. Continuin~ Disclosure. The C~ty ~~~11 ~ompl; v~~ith and carry out all of
the prov~sions of the Cantlnuing Discios~u'e Cert~ficate_ Notwithstanding any other prav~sion af
thi~ I'rust A~reement, fa~lure of the City te complj~ ~~th the Continu~ng D~sclasure CertYficate
shall not be considered an Event af Defauit; however, the Trustee may {and, at the request of any
Participatin~ Underu~~rlter or the holde~ c~f at least 259c aggre~ate principal amount af
Outstandin~ Cert~ficates, shall} or any hoicier or ~eneficial ov~~ner of the Certifacates may, talce
sach act~on~ as may ~ae necessary and ~ppropriate to compej nerfortnance, including seeking
mandate ar specific perfonnance by court ordPr.
~Sectiun b.U9o Further Assuranc~~_ Whenever an~ sa o~ter. as requested to cic so by the
'~'rustee, the Author~iy ar~d the Cit~l will promnt~~l exec;nte anci cieli~er or cause to be executed and
delivered all such other and further assurances, doc~~nen*s or instruments and promptiy ~o ar
cause to be dane ali such other and further things as ~nay be necessary or reasonably req~ired in
order to further and more full}~ vest 1n the Trusiee and the O~vners ail advantages, benefits,
interests, powers, pnvileges and ri~hts conferred or intended to be conferred upon them hereb~~
or by the Assi~nment Agreement, ~he Faciliries Lease or the Lease Agreement.
~R
ARTIC'LE VII
DEFAULT AND LIMTI'ATIQNS OF LIABILITY
Sectiun 7A1. ~i~n _ o~, Default If an event of c3efauit {within the meaning of
Article VI of the Lease Agreement) shall happen, then such event of default shall const~tute a
default hereunder. The Trustee ma~r give notace, as assxgnee of the Autharity, of an event of
default under ti~e Lease Agreement to the City, and shall do so if directed to do so by the O~~ners
of not less than a ma~ortty of the aggregate princlpal represented by Certificate5 then
~utstanding. In each and every ;:ase dur~n~ the continuance of an event of default, the Trustee
(ij ma~l, and (ia) at the d~rect~on of the ~wners of not less than a ma~ority of the aggregate
pnncipal represented by Cert~ficates then Outstanding, shall, upon not~ce in u7rting to the City
and the Authorxty, exercise ar~~~ of the remedxes grar~ted to the Authorit~~ under the Lease
Agreement and in addinon take ~~hate~e.r act~on at law or in ec~uity may appear necessaryr ar
des~rable ta enforce its r~ghts as assignee pursuant to the Assignment Agreement or ta protect
and enforce any of the rights vested m the Trustee or the Ow~ners by thls Trust Agreement or b}~
the Certi~catess either at law or in ec~u~ty or in bankruptcy or otherwise, vs,~hether for the specific
enforcement of aa}~ cavenant or agreement or for the enforcement of any other legal or equitable
ri~ht, includin~ ~ny one or more of the remedie~ set forth in Secuon 7 02(a}, (b) or {c).
Section 7.02. (lther Remedies of the Trustee. Sub~ect ta Sect~on 7.01 hereof, the
Trustee shall have the right
(a} by ~nandamus ar other action or proceeding or suit at law or 1n equlty to
enforc.e rts rights against the Autharjty or the City or any member, director, officer or
e~nplayee thereof, and to compel the Authorit;~ or the City or any such member, du-ector,
officer or employee to perform or carry ~ux its or ~is ar her dut~es under law and the
agreements and covenants required te be performed by it or him or her contained herein,
(b) by suit in equity to en~oin any acts or th~ngs which are unla~~ful or violate the
ri~hts of the Trustee; ar
{c) by smt ~n equlty~ upan the happening of any default hereunr~er to requtre the
Authority and t~-e City to ac.count as the trustee of an express trust
Seetion 7.fl3e Non-Wai~~er A waiver of an~~ ~efault or breach af duty or con~ract by the.
Trustee shall not affect any subsequent default or breach of duty ar contract or impa~r any rights
or remed~es on any such subsequent default or breach of duty or contract. No delay or onnissxon
by the Trustee to exercise an}~ ri~ht or :emedy~ accruing uUOr, any default or breach of dut5~ or
contract shall impair an~~ such rrght or remed}~ or shall be construed to Y~e a r,~°aiver of any sucn
default or breach of duty or cantract or an acqurescence therein, and every ri~ht or remed}~
conferred upan the Trustee by law or 6y th~s Ai~cle inay be enforced and exercised from t~me to
time anci as often the Trustee shall deem expedient
If any ~ct~on, proceeding or suit tc enforc;~ any rlght or to e:~ercise any~ remedy is
abandone~ or detenruned adversely to the 'i'rust~e ar any O~~ner or Owners, ihen svb~ect to any
ad~erse determination, the Trustee, such Q~~~ner or D~ners, the Authority and the C1ty shall be
restored to thelr for~ner posit~ons, nghts and remedies as ~f such action, proceeding or suit had
not been brought or taken.
Se~tion 7.04. . ` Sub~ect to Section 7 O1 hereof~ no remec~y
herein c.onferred upon or reserved to the Trus~ee is intended to be exclusi~e of any other rernedy.
and ea~h Such remed~~ shall be cumulat~~~e anc3 shali be m addinor to e~~er}~ other re~nedy gi~en
hereunder or now or hereafter existing in law or in equity or by statute or oth~rwise and ina}~ be
29
exercised without exhausting and without re~ard to any other remedy conferred by any law The
assertion or etnployment of any r~ght or remedy hereunder, or otherwise, shall not prevent the
con~urrent as~ertion ar employment of any other apprapnate right or remedy.
Section 7.0~. No Liabilitv bv the Author~tv to t.he (}vvners EYCept as expressly
provided herein, the Authority shali not have any obligation or lxability to the Owners ~~ith
respect ta the payment v4~hen due of tE~e Base Rental Pa}~nents by the C~ty, or w~th respect ta the
performance by the City of the other agreements and ~ovenants requ~red to be performed by rt
contasned in the Lease Agreement or herexn, or wzth respect to the performance b}~ the Trustee Qf
an~~ right or abligation required to be ~erformed by ~t contained herein.
~ectiori 7.06. No Liahilitv b~~ the Cit~ to the {)wners Except for the payment when
due of the Base Rental Payments and the perfarmanc,e Gf the other agreeroents and covenants
required ta be performed by it contained ~n the Lease Agreement or herein, the City shall nat
ha~e any obligation or liabailty to the Ow•ners w~th respect to the Trust Agreement ar the
preparation, execuaon, del~very or transfer of the Cernficates or the disbursement of the Base
Rental Payments by the Trustee to the Owners, or ~~~th respect to the perfor~nance by the Trustee
of any nght or obligat~on requ~red to be perforrned by it contained herein
Section 7.07. Nu I,iabilitv of the Trustee fo the f}wners Except as expressly pravided
herein, the Trustee shall not ha~e any o~ligat~on or liability to the Owners with respect to the
pa}•ment when due of the Base Rental Pa~~ments by the City, or with respect to the performance
by the Authorzty ar the City of the ather agr~~ments and covenants required to be performed by
them. respectively contained in the Lease Agreemer~t or herein
Section 7.n8. A~nlieatian t~f r~-rnounts Af'ter Default.. All payment5 received by the
Trustee v~~ith respect to the rental of the Property after a default by the City pursuant to Anc~le VI
of the Lease A~reement (kncluding, withaut lamitation, any praceec[s received in cannection with
the sale, assignment or sublease of the Aut~ority's right, title and interest ~n the Facilit~es Lease},
and all damages or other payments receiv~d by the Trustee for the enforcemer~t of any nghts and
po«~ers of` the Trustee unc~er ArEicle ~I of the L~ase Agreement, shall be deposrted into the Base
Rental Payment Fund and as soon as pract~cable thereafter apphed•
(r) to the payment of all amount~ due the Trustee under sect~on 8.03 her~of;
(ia j to the payment of all ~mounts then dLe ~~ith respect to Certificates for
interest, in respect of wh~ch, or for the benefrt of "rhich, money has been collected (other
t~an Cert~ticatec ~vluch have mat~e~i or otherw~ise become payablP pr~or to such event of
default and money far the paymen~ of which is held by the Trusteej, ratably v4~~thout
pxeference or pr~oriry of any kind, according to the amounts due and payable on ~uch
~Cert~ficates, and
(iu) to the payment of a~l amounis then due with respect #o Certiflcates far
prlncipal, in respect of whict~, ~r for th~ benefit of whach, money has been coliected
(other than Certificates which have matured or otherwise become payable pnor to su~h
event of default and ~noney for t~e payment of whach ~s held by the Trustee), ratably
without preference or prioraty af an~~ kind, according co the amaunts due and payable on
such Certificates
Sec#ion 7.09. Trustee Mar- Enforce C'lairns ~Vithout Possession of Certi~cateso All
~:~hts of act~or. ancl claums under thls Trus~ A~reement ar the Cert~ficates may be prosecuted and
enfarceci by the Trustee ~~ithout the possess;on of ar~y~ of *h~ C~rtificates or the production
thereof in any proceeding relating thereto, and any such proceed~ng inst~tuted by the Trustee
shali be brought in its oa~n name as trustee of an express trust, and any recovery of ~udgment
30
s~all, after provision for the payment of the reasonable co~npensation, expenses, disbursements
and ac~vances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners of
the Cert~ficates in respect of which such ~~dgment has been reco~ered
Section 7.~D. Limi~ation on 5uits IVo Owner of any Certxficate shall ha~e any nght to
inst~tute any proc.eed~n~, ~udicial or oti~erwise, with respect to this Trust Agreement, or for the
appointment af a recerver or Trustee, or for any other remedy hereunder, unless (i) such Owner
shall have prev~ously given wntten notic.e to the Trustee of a continu~ng event of default. (1ij the
Owners of not less than 259c of the aggregate principal represer~ted by Cert~ficates then
Outstanding shall have made written rec~uest to the Trustee to inst~tute proceedings 1n respect of
such event of default in its own name as Trustee ~ereunder, (ii1) such Owner or O«~ners have
afforded to the Trustee indemnity reasonabl}~ sat~sfactary to the Trustee against the costs.
expenses and liab~lit~es to be ancurred in complaance with such reques~, (iv) the Trustee for s~xty
{f~Q} days after rts rec.eipt of such notxce, rec~uest and offer of indemnity has failed to insk~tuce any~
such proceeding5, (v) no direct~on in~pnsist~nt w~xth such v~~ritte~ request has been given to the
Trustee during such sixt}~ (60) day period by the Owners of a ma~ority of the aggregate principal
represented by Certificates then Outstandin~, rt being unders~tood and intended that na one or
rr-are Owners of Certificates shall have any rlght in any ~nanner whatever by v~rtue of, ar by
availing of, any provision of this Trust Agreement ta affect, disturb or pre~udice the rights of any
other Or.~~ner of Cert~ficates, or to obtain or seek to abtain priarity or preference over any other
O~vner or to enfarce any nght under this Trust Agreement, except m the manner herein provideci
and far the eyual and ratable benefit af all the Owners of Cert~ficates.
3i
ARTICL~ VIII
THE TRUSTEE
Se~tion S.O1. Emalo~ment of the Trustee The Authority and the City hereby appoint
and engage y the Trustee to receive, deposrt and dlsburse the Rental Payments, to prepare,
eYecute, deliver and transfer the CertLficates and ta perform the ott~er funct~ons contained herein_
all in the manner provided herein and sub~ect to ti~e conditions and terms hereaf By executing
and del~vering the Trust Agreement, tE~e Trustee accepts the appointment and engagement
hereinabo~~e referred to and accepts the r~ghts and obligations of the Trustee provided herein,
sub~ect to the conditions a~d terms hereof. The TruStee undertakes to perform such dutles and
only suc~ dutles as are speci~cally set forth in this Trust Agreement, and no implied covenants
or obligat~ons shall be read into thls Trust Agreement against the Trustee. In case an event of
default has occurred and is continuine, the Trustee shall exercise such of the nghts and po«~ers
vested in ~t by this Trust A~reement, and use the same degree of caxe and sklii ~n the~r exercise,
as a prudent person wauld exercise or ase under the Lircumstances an the conduct of such
person's own affairs. The Trustee herei~y covenants and agrees that it will not encumbeT the
Property
Section 8.02. Duties. Removal and Resi~~ation of the Trust.ee The Authonty and the
City may, by an ~nstrument in wr~ring remove the Trustee init~ally a partp hereto and any
suc.cessor thereto unless an event of default shall have accurred and then be cont~nuing, and shall
_remave the Trustee rmually a party heret~ and any successor thereta 1f at any time (i) requested
to do so by an instrument or concurrent instruments in writing signed by the Owners of a
ma~o.~t~ of the a~gregate pnncipal represenied by the Certificates at the unne Outstanding (ar
theia attorneys duiy autt~arized 1n ~rit~ng}, or (XX; th~ Trustee shall cease to be eligihle in
accordance ~n=~th t!~-e fellowing paragraph, anci shall appaxnt a successor Tr~stee The Trustee and
any successor Trustee sha.ll be a bank or trust company and ha~ing a combined capita:l {exclusi~e
of bormwed capltal} and surplus of at least fifry rnilifan dollars ($50,{~OO,U00} and sub,ect to
supervision or examination by federal or state authar~nes If such bank or trust company
pubiishes a report of conciit~on at least annuall}~, pursuant to law or to the requirements of any
superrrising or examin~ng authonty above referred to, then for the purposes of this Sect~an the
c.onin.ned capital an~ surplus of such bank ~r trust e.ompany shall be deerr-ed to be its combined
capitai and surplus as set forth in its most recent report of cond~t~on so published,
The Trustee may at anyr t~me res~gn by g~vin~ written nauce of such resignat~on to the
Authorit}~ and the Crty and by mailing notice, first class, postage prepaid, of such resignat~on to
the O~~ners at theu addresses appeanng an the baoks requued to be kept by the Trustee_ Upon
receiving such natlce of resignation, the Authority and the C~ty ;hall promptly appoint a
su~cessor Trustee by an instrument en wr~tar~g; provzded, h~we~er, that in the event the CitS~ and
~he Authonty t1o not ap~aint a successor 'I'rusiee ~~it~~n thirty {30) days following recezpt of such
noti~e of resignation, the resigning Trei~stee inay, at the expense of the City, pet~t~on zhe
appropriate coart ~a~ing ~urisdiction to apaoint a suc;:es~or Trustee Any resignatzon or removal
of a~'rustee and appaintrnent of a successor Trustee shall becorrse effect~ve anly upon acceptan~e
of appointment by the successor Trustee.
An}~ carporation, associ~tion or agency in±o wh~ch the Trustee may be converted or
ir~ergPd, or with which ~t may be consolidated, ar to whxch it may sell or trans~er rts cor~orate
trust business and assets as a whole or substar~r~ally as a~hole, ar any corporation or associar~on
resuit~ng from any suc[~ conversion, sale, merger, consahdation Qr transfer ta ~vhic~ it is a party,
pravic"ted that such entity ~neets the eombined capital and surplus requirements of this
Sect~on K 02, ipso facta, s~all be and becotne success~r trustee under this Trust Agreement and
vested wrth aIl the trusts, powers, discret~ons, jmmumties, pn~ileges and all other matters as was
its predecessar, «+ithout the execution or filing of any instrument or any further act, deed or
32
conveyance on the part of any of the part~es hereto, anything herein to the contrar~~
notw~thstanding.
Sectian 8.03. {'omaensation and Indemnification of the Trustee The City shall fram
t~me to t~me, sub~ect to any wntten agreement then in effect wrth the Trustee, pa} the Trustee
reasonable compensauon for ali ~ts services rendered hereunder and reimburse the Trustee for all
its reasonable advances and expenditures hereunder,lncludin~ bttt not hrr~ted to ad~ances to and
reasonable fees and reasonable expenses of ac~ountants, agents, appraasers, consultants or other
experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys
retained by the Trustee, employed byr it ~n the exerclse and performance of its nghts and
obligat~ons hereunder; provided, ho~vever, that the Trustee shall not have any~ lien for such
compensa~an or reimburseinent against any moneys heId by it in any of the funds estabhshed
hereunder or under the Lease A~reement (eYCept that such compensat~on ar reimbursement may
~e made from the Cost of Iss~ance Accaunt to ti~e extent pro~ided in Section 3 43 hereaf or as
provided ~n Secuon 7.4~ hereaf~ The Trustee may take whate~er legal ac,tians are la~~~full~~
available to it directly against the Authonty or the Cit~~_
The City shall indemnify the Trustee for, and hold it harmless aga~nst, any loss, habihty
or expense incurred without negligence ar bad faith on the Trustee's part, aris~ng out of or in
connectior~ ~~~ith the acceptance or adrrumstrataon af this trust, including the costs and expenses
of defending itself aga~nst any claim ar liabll~ty 1n connectio~ with the exerc~se or performance
of any of its powers or duaes hereunder.
Except as otherwise expressly provic3ecE here~r~, no pro~~sion of this Trust Agreernent
sf~all rec~uire the Trustee ta expend or rlsk its ow•n funds or otherw~se incur any financ,~al liabi~ity
~n the performance of any of yts dunes hereunder or ~n the exercise of any af rts rights or por~~ers
he: eur~der
Sectian 8A4. Protection of the Trustee. The Tnistee shall be protected and sha111ncur
na Iiabii3ty in acting oa proceeding in good faith upor- anv affidavrt, bond, certificate, cansent,
not~ce, request, requlsrtion, resolut~on, statexnent, telegram, voucher. waiver or other paper or
ciocument which it shall in good farth bel~eve to be genuine and to ha~~e been adopted, executeci
or cielive.red by the proper party ar pursuant to any of the provisions hereof, anci the 'Trustee shall
be under no duty to make any investigation or ~nqu~r~~ as to an~r statements ~antav~ed ~r matters
referred ta in any such instrument, b~t a~r~ay accept and ;el}r ugon the same as conclus~ve
es~idence of the truth and accurac}~ af such s~atements The Trustee shall not be bound to
recognize any person as an Owner of any Cernficate ar to take any action at t~e rec~uest of any
su~~ person unless sue:h Cert~ficate shail be deposited wzth the Trustee or satisfac,tory evidence of
the ownership of such Certif'icate shall be furnished to the Trustee. The Trustee shall be under no
obl~gat~on to exerc~se an~T af the right~ or powers vested in ~t by thls Trust Agreement at the
rec~uest or direcuon of any of the Owners of thE ~ertificates pursuant to this Trust Agreement,
unless such Owners shall ~ave offered to the Trustee ~e~urit~~ ar ~nde~nnity reasonably
sat~sfactory xo the Trustee, against the reasonable costs, expenses and laabillti~s ~~hich rrught be
~ncurred by Ft ui compliance with such *eques~ or r.lirection. The Trustee may consult wlth
:;oun5el. who may be counsel to the Authori~y ar the City, with regard to legal quest~ons, and the
w-ntten opinion of such counse~ shall be fulI and cemplete authorazation and protect~on in respect
to an~~ actian taken or 5uffered l~y tt~e Truste~ hereunder ~n good faith in accordance there«,~1th
The Trusiee shall nat be responsible for t~e Sufficienc~~ of the Cer~ficates. the Lease
A~ree~nent. ar of the a~signment made to zr by the Assignment Agreement, or for ;tatements
~nade in the preliminar}f or final official statement relating tc the Certificates, or Qf the t~tle to the
Property
3~
The Trustee shall not be required to take not~ce or be deemed to have notice of any
default or event a~ default hereunder, except failure of any of the payments to be made to the
Trustee requued to be made hereunder, unless the Trustee shall be specifically not~fied in writ~ng
of such default, or event of default by the City, the Authority or an ~cvner
Whenever in the adrrunistrat~on of its nghts and abligations hereunder the Trustee shall
deein it necessary or desirable that a matter be proved or establrshed prior ta taking or sufferuig
any act~on hereunder, such matter {unless other e~idence in respect ~hereof be here~n specific,ally
prescribed~ may be deemed to be conclusivel_y proved and estabhshed by a Cert~flcate af the City
or a Certificate of the Authont~~, and such certificate ~hall be full ~yarrant ta ~he Trustee for an~~
action take^ or suffered under the pro~is~ons hereaf upon the faith thereof, ~ut in its discretion
the Trustee may, in lieu thereof, acce~t okher ev~dence of such matter or may require such
addit~onal evidence as it deems reasonable
The Trustee ~na~~ buy, sell, awn, hoid and deal in any of the Ceruficates and may ~oin in
any action whach any Owner may be ent~tled to talce with like effect as if the Trustee w-ere not a
party hereto The Trustee, either as pr~nc~pal ar ager~t, tna}~ also engage ~n or be interested in any~
financial or other transact~on with the Authority or the Cit}T, and may act as agent, deposrtory ar
trustee for any c,amiruttee or body af Owners or of awners af obligations of the Authont}T or the
Citp as freely as if it were not the Trustee hereunder.
The Trustee may, to the extent reasonably necessary, execute any of the trusts or pav~,~ers
hereof and perform an}~ rights ar~d abljgations required of ~t hereunder by or through agents,
attorne}'s or receivers, and shal~ be ent~tled to adv~ce of counsel concermng a11 matters of trust
and it~ riehts ~nd abligafi~ons hereunder, and the 'I'rustee shall not be answerable for the
negli~ence or miscanciuct af any such a~ent, attorney or recelver selected by it ~~ith reasonable
care, pro~ided, hawe~er, that in the event of any negl~gence or misconduct of any such attorney,
agent or receiver, the Trustee shall diligently pursue all remedies af the Trustee agalnst suc.h
agent, attorney or receiver_ The Trustee shall not be lrable for any errar of audgment made by ~t
in good faith uniess ~t shall be pro~ed that the Trustee w~~as negligent in ascertaimng the pertinen~
facts.
The Trustee shali not b~ ans~~erable for the exercise of any trusts ar powers hereunder or
for anything whaisoever ir~ cannection ~~zth the funds establ~shed hereunder, excepr only for ~ts
o«°n willfui m~sconduct, negligence or breach of an ol~ligation hereunder
The Trustee ir-ay, on behalf of thF Owners,lntervene in any judic:a: p~oceeding to which
the Author~t}~ ar ti-~e City is a party and wh~ch, in ±he op~mo~ af ihe T~ustee and ~ts counsel,
affec.ts the Cert~ficates or the security :herefor, and shall do sa if requested in wr~ting b}~ the
OWners of at least fi~e percent {S~lo} af the ~ggre~ate principal represented by Certificates then
Outstand~n~, prov~ded the Trustee shall have no duty to take such acnon unles~ i+ has been
~ndemnified to its reasonable sat~sfaction against all risK or liabihty~ ansing from such act~on
34
ARTICLE IX
AMEND:VIEN'i' ( )F C)R ~UPPLEME~YT T(l
TRUST A(3REE~IENT
Section 4.01. Amendment or Sunnlement This Trust Agreement ar~d the rights and
obligattons of the Authonty, the City, the O~vners and the Trustee hereunder may 6e amended or
supplemented at any time by an amendment hereof or supplement hereto wh~ch shall become
i~inding when the pnor written consents of the Owners ~f a ma~arrty of the a~gregate pnncipal
represented by the Certif;cates then Outstanding, excit~sl~e of Certificates disquahfied as
provided in Secrion 9.fl2. a;'e filed wzth the Trustee No such amendment or supplement shall
(I j extend the fixed Pnncipal Payment Date of an}~ Cert~fzcate or reduce the rate of interest
represented thereby or extend the ti~ne of payment flf such interest or reduce the amount of
prxncipal represented thereby or ~hange the prepayment ter~ns and provisions ar the pro~isions
regarding delrvery of notlce of prepayrnent ~~lthout the prior w~rltt~n consent of the Owner of
each Certlficate so affected, or {2} reduce the percentage of ~v~•ners whase consent is requued
for the execution of any amendment hereof or supplement hereto wit[~out the prior w~ritten
c.ansent of the Owners of all Cernficates then Outstanding, or (3) modify any of the rights or
obligations of the Trustee without the pnor written consent of the Trustee9 or (4} amend this
Sect~on 9 Q 1 without the pr~Qr wr~tten consent of the Qwners of all Cert~ficates then Outstanding
The Tru~t Agreernent and the nghts and obligat~ons of the Authorit5~, the City, the
O~~ners and the Trustee hereunder may also be asnended or supplemented at any time by an
amendmcnt hereof or supplement hereta which shal~ become bindang upon ~xe~ution, ~v~thau~
the written consents o~ any Ow~ners, but ~r~l~~ to the extent permit~ed by law and only for any one
or more of the follo~~mg purposes:
[1, to add ta the agreement5, condiuons, covenants and tern~s required by the
Autl~ority or the C~ty ta be observed ar performed herein other agreements, condit~ons,
covenants and terms thereafter to be abserved or p~rformed by the Author~ty or the Citj~,
or to surrencier any right ar pa~fer reserved herein ta ar cQnfe~-red here~n on the Authonty
ar the Cit~~, and wh~ch in e~ther case shall not ~dversely affect the rights or ~nterests of the
Jwners;
(I~} to make such provision~ for the purpose of curmg any ambi~urt~r ar of
correcting, curing or Supplement~ng ~n}l defecti~e provision contained herein ar ~n re~ard
to que5uons arisang hereunder wh~c,h the l~uthority or the City may deem cieslrable or
nece5sar~~ and not ~nconsistent herer~°~th, and which shall not adverselSr affect the rights or
interest5 of the Owners,
(lii} to make such add~tgons, ~eletionc or modiflcauons as may be necessary ar
appropnate to assiare the excluszor~ Trogn ~ross income for federal income tax pvrposes of
the interest co~nponents of Base Rental Pay~nents; or
(lv) to make such other s:hanges her~in or modificatxons hereto as the Author~ty
or the City may deem ciesuable ar nece5sary, and which shali not marerially ad~ersely
affect the lnterest of the Ownerse
Section 9.U2e Disaualified Certi~cates. Certificates c~wned or helc[ by or for the
account of the Crty (but exclud~ng Cert~frcates held ,n any pension or retirement fund of the Cit}~•)
shall not be deemed rJutstanding for tf~e gurpo5~ as any consent or ather act~an or any cal~ulat~on
of Outstanding Cer~ficates provided in this Article, and shall not be ent~t~ed to consent to or take
any other action provided in th3s Article9 ~nd the Tn~stee may adapt appropnate regulations to
require each Owner, before such O~~ner's consent U~ov~ded for herein shall be deemed effe~tive,
35
to reveal if the Certificates as to which such consent is ~1ven are disquaiified as pravided in this
Sect~on
Section 9.43. Endorsement ~r Renlacement of t'erti~cates After Amendrnent ar
5~unlement After the effective date of an~~ action tai~en as herelnabave pra~ided in thls Arricle
IX. the Trustee xna}T determine that the Certificates may bear a notation by endorsement in form
approved by the Trustee as to such action, anci Xn that case upon demand of the Owner af an}~
Outstanding Cert~ficate and presentatian of such Certificate for such purpase at the pr~ncipal
c,orporate trust office of the Trustee a suitable notation as to such act~on shall be ~nade on such
Certafic.ate If the Trustee shall recei~e an Opinion of Counsel advising that new Cert~ficates
modified to conform ta such action are necessary, rnodified Certificates shall be prepared, and in
that ~ase upon demand of the Owner of any Outstanding Cert~ficates suc,h new Certificates shall
be exe.hanged at the prineipal carporate truss office of the Trustee without cost to each Owner for
Certlfic.ates then Outstanding upon surrender af such ~utstanding Certificates
Section 9.04. Amendment bv Mutual C'ansent The provisions of this Arncle shall not
pre~ent any ~~~-ner from accept~ng any amenc~ment as ta the particulax Certaficates owned by
such Qwrner, provided that d~e nota~or. tfiereof is made on such Cer~~icates.
36
ARTICLE X
DEFEASr~NC:E
Section 10.01. Dischar~e of Certi~cates and Trust ~~reement (a} If the Trustee shall
pap or cause ta be paid or there shati otherwise be pa~d (i) to the Owners of all Outst.anding
Certiflcates the intere~t and principal represented thereby at the times and in the manner
stipulated herein and therein, and (ii} all other amounts due hereunder and under the Lease
Agreement. then such Owners shall cease ~o be entit~ed to the pledge of and lien on the Base
Rental Payments as prov~deci herean, and ali a~xeernents and covenants of the Authonty, the City,
and the Trustee to such Qwners hereunder shall ihereupon cease, tei'minate and become ~ oid and
shall be discharged and sat~s~ied
(b) Any Outstanding Cert~ficate shall be de~med to have been pald u~7thln the meaning
and w•rth the effect expressed in this Sect~on 10.~ 1 when the -;~hole amount of the principal,
prerruutn, if an~~, and interest represented by such Certifi~ate shall ha~e been paid or when (1) in
case said Certificate or portion thereof has been selected for prepayment ~n accordance with
5ection 4.02 hereof prior to ~ts stated Princrpai Payinent Date, the C~ty shall have given to the
Trustee u-re~vacable instructions to gi~e, m accordance with the pra~isions of Sec~on 4.03 hereof,
notic.e of prepayment of such Certtficate, ar port~on thereof, (ii) there shall be on depos~t w~th the
Trustee, moneys, or (A) Pexmitted In~estments described in clause {1)(a) of the definition
thereof, {B) e~idences of ovvnership of propornonate interests in ft~ture interest and principal
pa}~ments on Per~utted Investments described tn clause (1}{aj of the defimnon thereof held b~~ a
bank or trust company as e.ustodran, under wh~c~ the a«fner of the investment is the real party in
lnterest and has the right to proceed directly and indrvidually against the obligor and the
underl}=ing Government Obligations are nat avaiiable io any person claimin~ throu~h the
c.u;tod~an ar to v~~hom the custod~an may~ be obligat~ci, or {C) Per~rutted In~-estments descrlbed in
clauSe (I1) of th~ ciefinition thereaf, or any cambinat~ans thereof ("Defeasance Se~urities"},
~;~luch Defeasance See,urit~es shall not contain pro~jsions permitung the redemption thereof other
than at the ~ptron of the holder, the princ~pal of and the u-terest on ~~vhich when due, and wathout
any reinvestment thereof, will pravide ~~oneys which shall be sufficient to pay ~~hen due the
pr~ncipal, premium, if any, and interest represer~ted by such Cernficate and due and to become
due on said Cert~ficate or portion thereof on or pr~or to the prepa}~ment date or its stated Pnnc~pal
Payment Date, as the case may be, and (i~:} in the event the sta.ted Pnncrpal Payment Date of said
Certifica~e will not occur, and such Certificate is not to be prepaid, within the next succeedin~
sixt}' (h0} days, the City sY~all have given th~ Trustee rrrevocable instrucnons to give r~otice, as
saon as pra~~icabie m the same manner as a notiee of prepayrnent g~en pursuant to Seet~nn 4.fl3
hereof, to the Owner of said Cercificate, or portion thereof, 5tatin~ that t~e deposat of ~n~ne}'S ~I'
Defeasance Sec:unties required by clau~~ (ii) of this para~raph ha~ been made with the Trustee
and that said Certific.ate, ar portion thereof, i5 deeaned ro ha~e been paid ~n ~c~orcianc,e ~;~rth tYus
Sect~on an~ stating such Principal P~yment Date or prepayment date upon v~~hich moneys are to
be a~ral=able for the. payrnent of the pr~ncinal, premiurn, if any, and interest representeci b5~ Sa1d
Certificate, or port~on thereof.
Neither the moneys nar the Defeasance SeciLrit~es deposited ~nth the Trustee pursuant to
this Secuon nor principal or interest payments o^ any such Defeasance Sec,unties shall be
~;~ithdra~vn or used for any purpose other than. an~+ shall be held in trust for, the pa}~ment af the
principal, premium, if any, and xnterest represente~ ~y said Certlficate. o: port~ons thereof. If
pay~nent of le~s than all of the Certificates zs to be pra~ided f~r in the manner and ~~~ith the effect
expressed in this Sectzon, the Trustee shall ~elec.t such ~ertificates, or port~ans thereaf, in the
manner specified in Section 4.~2 hereof ior se~ect~on for prepayment ~f less than a~l of ~E~e
Certificates in the princlpal amounts desrgnated to the Trustee by rhe Cit~~.
37
(c) The Trustee may seek and is entitled to rely upon (1} an Oplruon of Counsel
reasonat~ly satisfactary ta the Trustee to tF~e effect that the condinons precedent to a defeasance
gursuant to this Section i0 O1 ha~e been satisfied, and (ii} suc~ other op~mons, c.ertifications and
computations, as the Trustee may rea~anably request, or accountants or other financ~al
consultants conr-erning the matters described in paragraph (b) of this Sectron 10.01.
(d j After the payment of ail the interest, prepayment prem~~m, if any, and princ,ipal
represented b~~ alI Outstanding Certificates and all other amounts due hereunder and under the
Lease Agreement as pravided in this Section, the Trustee shall execute and dellver to the
Authont~~ and the City aIl suc.h instruments as may be necessary or des~ra~le to evidence the
discharge and sat~sfaction of the Trust Agreement, the Trustee shall pay over or dehver to the
C~ty all moneys or securities held by it pursuant hereto which are not required for the gayment of
the interest, prepayment prerruum, if any, an~ prir.c.ipal represented by such Certif~cates and al[
other amounts due hereunder and under the LeaSe A~reement.
(e) Priar to any defeasance becoming effective under thLS Art~cle X, the City shall cause
to be dehvered (i} an executed cop}~ ~f a report, addressed to the Trustee and the City~, in farm
and ~n substance acceptable to the Trustee and the C1ty, of a nationally recogmzed certifaed
pubhe; ac,countant, ar firrr~ of such accountants, verifying that the Defeasance Securit~es and e,ash,
if any, satisfy the reyu~rements of clause (ii) nf Sect~on 10.d1{b), above (a "~er~fication"), {ii) a
cop}~ of the escrow deposit agreement entered into in cannect~on with such defeasance, which
escror.v deposit agrepment shall prow~de that na subst~tunon af Defeasance Securit~es shall be
pertnrtted except with other Defeasance Securit~es and upon delivery of a new Verificat~on and
no reinvestment of Defeasan~e Securities sha11 be permitted ex~ept as contemplated by the
~rigirai Verificat~on or upon delivery of a new Verification, and (ui} a c,opy of an ~panion of
~aunse~, dated the date of such defeasance and addressed ta the Trustee and the City, in form
and in substanc~ a~ c.eptable to the Trustee and the ~ity, to the effect that sue[~ Certificates have
been pa~d avithin the meaning anc~ w~iih tre eifec,t expressed ir, ~~ie Trust A~reement, ail
agreerments and co~enants of the Author~ty~, the City a~d the Trustee tc the Owners of such
Certificates under tf~e Trust Agreement have ~eased, termFnated and b~come ~fo1d and ha4•e been
discharged and sat~sfied.
Sectivn 10.02, Unclaimed l~Ior~e_r's. Any moneys hei~ by the Trustee 1n trusc fer the
payment and discharge of the ~nterest or princi~a~ represented by ~.ny of the Certificates which
remaira unclaime~ for twc (2} years aftea ~he date ~:hen th~ payments represented by such
Certific,ates have become pa~~able, if such moneys ~~~~re held by the Trustee at such date, ar for
~~~~a (2) years after the date ~f deposit of ;u~h ;noneys if deposited with the Trustee after the date
«hen the interest and pr~ncipal representea b;.- such ~ert~ficates have become payable, shalI at
ti~e Wntten Request af the City be repazd bt~ the 'I'rustee to the Ciry a~ its absolute property free
from trust, and the Trustee shall thereupon i~e :eleased ~nd di,charged with respect thereto and
the O«ners shall look anly to the City far the payment of the interest and nr~ncipal represented
by such Cert~ficates_
38
ARTICLE ~CI
MISCELL~+iNEOUS
Section 11.01. Benefits of Trust tl~reement Limited to Parties ~~othing contained
herein, expressed or implied, is intended to give ta any person other than the Authonty, the Cit}t,
the Trustee and the Owners any c:laim, remedy or ~ ig~t under or pursuant hereto, and any
agreemer~t, cond~t~on, covenant or term requued herein to be observed or performed b5~ or on
behalf of the Authanty or the City shall be for the sole and exclusive benefit af the Trustee and
the Owners
5ection 11.U2. Successor Deemed Included in all References to Predecessor.
Whenever the Authority, the City or the Trustee, or any officer thereof, is named ~r referred to
herein, such reference shall be deemed to include the successor ta the por~~ers, dunes and
functions that are presently vested in the Autharity, the City or th~ Trustee ar such officer, and
all agreements, canditions, co~enan~s and Lerms requ~'ed hereby to be observed or perfortned by~
or an behalf of the Authanty, the Crty or the Trustee or any afficer thereof shall b~nd and ~nure ta
the benefit of the respective successors thereof whether so expressed or not
Section ll.d3. Execution of Documents b~ (7r~ners Any declarat~on, request or other
instrument wI~ich is permktted or requ~red herein ta l~e exec~ted by Owners may be in ane or
more instruments af similar tenor and ma~~ be executed by Owners an person ar by their attorneys
appointed in wnt~ng The fact and date of the execut~on by any Owner or such Owner's attorney
of an}~ declaration, request or other instrument or of any wrrting appoinang such attorney may be
proved by fh~ certlficate of any notary puhlic or other ~fficer aut~iorized to take
ac1~o~~~ledgments of deeds to be recordeci in the state or territory in which ~uch notary put~lic or
cther officer purports to act that t~e person signing such deciaration, request ar other zns~-ument
or ~~?-~t~ng ackno~~iedged to such notary public ar other officer th~ exeeutron thereof, or by an
affida~rt of a w~tness af such exec:ut~on duly ~v~~orn te befare such notar}~ ~ublic ar other officer,
or by such other proof as the Trustee anay ace,~pt which it may deern sufficient~
The ~wn~rsh~p ~f any Cert~ficates and the a~nount, payment date, number and date of
owning the same may be proved by ~he books req~~red to be kept by the Trustee pursuant to the
provzs~ons of Sect~on 2.07
An~r declaration, request or other instrument in writ~ng o~ the Owne_r of ar.~~ Cernficate
sha11 btnd all future Owners of such Certafi~ate with respect to anything done or suffered to ~e
done by tne Author~ty~ ar the Cit}~ or the Trust~e in goad faith and in accardance there~~~th.
Section I1.04. 6Vai~er of Pe~sonal L~abilit~, Notwithstand~ng anytl-~in~ contained
here~r to ~he contrary, no ~nember, affic:er ~r employee of the City shall be individu~lly or
~ersonally Iiable for the paytnent of any mar~eys, zncluding withoux lirrutataon, the interest or
principal represented by the Certificates, but nothing ~.entained nerein shall relzeve any member,
~fficer o_r employee ~f the City from the perfarmar~c~ of any off~ciai dut~F provrded by any
applicable provisions of 1aw or by th~ Leas~ AgrePment or hereUy.
Section 11.0~. Acauisitian e~f [~erti~cates ~e Ci~v. Ali Certiiicates acq~iired by the
City, whether i~y purchase or gif~ or atherw~se, shal~ b~ surrenciered te the Trustee for
cancellanan
Section 11.06. ('ontent of C"ertificate~~ Lvery Cert~fzc~te of th~ C~t}- and everjF
Cert~ficate of the Authonty wrth respect to wo~npliar:ce wlth any agreement, candit~on, c.ovenant
or te:rm contained herein shall ~nclude ~a} a stat~men~ that the person Xn.al€~ng or gz~ing such
c:,rtificate has read sucr~ agreement, condii~on, ;:o~enant ar term and the defininons herein
35
relaring thereto; {b} a brzef statement as to the nature and scope of the examination or
investigation upon which the statements contained zn such certificate are based; (c) a statement
that, in the opinion of the signer, such person has made or caused to be made such exarrunation
or ~n~~estigat~on as is necessary to er~a~le such person to express an informed apimon as to
~~hether or not such agreement, condttion, ~ovenant or term has been complied r~ith; and
(d) a statement as to whether, in the opinion of the signer, such a~reement, condit~on, co~enant or
term has been compl~ed with.
Any Certificate of the City and an~r Ceruficate af the Autharity may be based, insofar as
it relates to Iega1 matters, upan an Opinian of Counsel unless the person making or glving such
certlficate knows that the Opinian of Counsel with respect to the matters upon which such
person's certificate may be based, as afaresa.id, is erroneo~s, or in the exercise of reasonable care
sho~ld have known that the same was errone~~s. An~~ Opinian of Counsel ma~T be based, ~nsofar
as it relates to factual matters, upon informatao~ ~~hich is in che possession of the City or the
Authonty upon a representation by an offi~er or off~cer5 of the City or the Authority, as the case
ma}~ be, unless the counsel executing such ~pin~on of Co~nse~ knows that the representatlan
with re5pec,t to the matters upan which such counsel's opinion may be based, as aforesa~d. is
erroneous, or in the exercise of reasonable ~are sI~ould ha~e known that the same was erroneous.
Section 11.07. F~nds Any fund requ~red to be established and maanta~ned herein by the
Trustee may be established and maintained ~n the accounnng records of tE~e Trustee either as an
account or a fUnd, and inay, for the purposes of such accountu~g records, any audits thereof and
any reports or statements with respect thereto, be ~reated either as an account or a fund, but all
such records wzth respect to alI such funds shall at aiI umes be mauitained in accordanc.e with
sound ac.~ounUng pra~tice and w~tri due regard for the protectlon of the security of the
CertlfYCates and the. r~ghts of the Owners.
T~e T:ustee ~aj~ ~omrtungie any of the rrioney~ held by ~t hereunder for investment
purp~ses oal5~; provided, hovwever, that the Trustee sha11_ accaunt separately far the moneys in
eac.h funci or ac.caunt established pursuant ta r,his 'I'rusz Agreement.
5ectian 11.0$. Inr•estments. (aj GenerQ~ Any moneys held by the Trustee in the funtls
and ac,eounts establlshed hereunder shail b~ ~nvested by the Txi~stee upon ti~e ~Uritten Reuuest of
t~he C~ty only~ in Permttted In~estments, an~ in the absence of such duection sha11 be invested }~y
#he Trustee only in Permitted ln~estments described 1n clause of the c~efinition thereof The
Tiustee may act as principal or agent in the acqu~sit~on ar disposition of ar~y such investment
The Trustee shall not b~ Iiable or respons;ble for ar.~ loss suffered in connect~on ~~~th any such
inrestment made by rt under the terms of and in accordance with this Section The Trustee shall
sell ~r present for redemptlon an~ obligations 5o purchased whenever it sha~I be necess~ry in
arder to p; ovide moneys to meet any payment of the funds sa invested, ~n~ the Trustee shall ;~ot
be 1_iable or responsible for any losses result~ng ls~om an}~ such investment solci or presented for
redempt~an
(b) Matisr~ty of fnvestm~nts Investments pur~.hased w~th funds on cieposit in the Base
Rental Payment Fund anci Prepayment ~unc~ shall mature not later thar. ihe pay~ment ~ate or
prepayment date, as approprlate, immed~ately ~ucceedin~ the znvestment Notwithstanding
anything to the contrar~~ contalned herezn, investmer.ts purchased «~ti~ fands ~n deposit in the
Cert~ficate Reserve Fund shall have an aver~ge ag~regate weig~ted term to snatur:ty ot not
~reater than five years~
(c) Valucrtrorz. In~estments {ex~ept .r~~estment agreements} ~n any fund or account
establzshed hereunder shall be valued, exclusive of accruec[ interests {lj not iess often t~an
annualIy nor more oiten tiian monthly, and (~:; upon an~ draw upen the Certificate l~eserve Fund.
Except as otheru~ise prov~deci an the following sentence, all investments of amonnts deposited in
~0
any fund or account created b}~ or pursuant to this Trust Agreement, or otherw~se cantaining
gross proceeds of the Certificates or the Lease Agreelnent (within the mean~ng of secuon 148 of
the Code) shali be acquu-ed, disposed of, and valued (as of the date that valuat~on is required b}~
thzs Trust Agreement or the Code) at Fair Market Value Investmer.ts in funds ar accaunts (or
portions thereafj that aa-e sub~ect to a}rield restriction under apphcable pro~isions af the Code
shall be ti~alued at thelr present value (within the meamng of sect~an 148 of the Code}
(c~) Earrarn~s Any interest or prafits on inve.strnents held in any of the funds or accounts
establishec~ hereunder (ott~er than the Certzficate Reserve Fund) shall be retained ~n the fund or
accaunt in which such in~estment is held. Any! interest ar profits on investments held in the
Certificate Reserve Func~ shall be uansferred to ihe Base Rental Payment Fund; pravaded,
ho~~~ever, that any such transfer shall be made anly ~f and to the extent that, after such transfer.
the amount on deposxt in the Certificate Reserve F;~nd, together with amounts avaalable to be
drav~~n on all Credit Facilities, if any, ava~labie therern, is at least equal to the Certificate Reserve
Fund Requu-ement
(e} Lrqutdattora. If at any ti~ne after in~estment therein an investment ceases to meet the
criter~a set forth in the definition of Perm~tted ~nve~cments and such obligat~on. aggregated with
other non-confor~ning investments, exc.eeds ten percent (i0~'Ic) of invested funds, such invesCment
shall be sald or liquidated by the Trustee. The Trustee shall terrrunate any repurchase a~reement
upon a failure of ~he counterparty thereto to maintain the requisite collateral percentage after the
reStoraUon period ane~, if not paid by the counterpart}~ in federal funds against transfer of the
repur~hase securities, Iiquidate the colIateral
(f} Ijavestment A~reernents• In the event ar~y funds or accounts are invested ~n an
investmerat ~greement described in ciause {10} of the defin~~an of Permltted Investinents. the
'Trustee shall give not~ce to trie pro~ider af such tnyestment agreetnent in accordance with the
±erms of such investment agreement ta receive funds thereunder wlth no penalty or prernium.
5ection 11.09. Article and 5ection Headin~s. (~ender and References. The singular
form of any v:orci used herein, including ttie ±erm~ defined in Section 1 G1, shall include the
piural, ar~d v~ce versa, unless the context otherwis~ requires. The use hereir, of a pronoun of any
gender ~hall znclude correlat~ve words of the other genders. The head~ngs or ±~tles of the several
flrti~Ies and Sect~on5 hereof and ti~e tab:e of ~or~tent~ 3ppended herero shall be solely for
convenience of reference and shall nat aff~ct the meanin~, constructlon or effect hereof. All
references herein to "Articles," `Sectians" and ~ther subdivisions or clauses are t~ the
::orresponding Article5, Sections, subci~~~sions ~r clauses hereof. and the r~~ords '`hereby,"
"herein," "hereof," "hereto," "herewith," "hereunder" and other words of similar unport refer to
this 'Trust Agreement as a whole and not to an}~ ;.articular Articie, Sect~on, subc~~visian or clause
thereof
5ection 11.10. Partia! Invalidit~ If any one ar more of the agreements, conditions,
;:ovenants or terms required herein to be observed ~r performed b~r or on the part of the
Author~ty, the City or the Trustee shail be convary ta law, then such agreernent or a~reements,
such ~ondit~on or conditaons, such c~venant or covenants or such term or terms shall be null and
;°oid to the extent contrary to la~v and shall be deemed separable from the reznaxning agreements,
~:onditions, co~enants and terms hereof and shall in na way affect the validity hereof or of the
Cert~ficates, and the Owners shall retain all the be~ef~t, pAotect~on and securFty afforded to them
under any applicable provisions of ?aw The Authonty, the City and the Trustee hereby~ declare
that the}~ would have executed this Trust Agreeinent, and each and ever}~ other Article, Sect~an,
parag:aph, ~ubdlvis~on, sentence, c,lause anc ~~rasE hereof and woulci have authonzed the
execution and delivery of the Cert~ficates pursuant hereto irrespecri~e of the fact that any one or
more Artic.les. Sect~ons. paragraphs, subdivisions, sentences, clauses or phrases hereof or the
41
application zhereof ta any person or circumstance may 6e held to be unconstitutional,
unenforceable or invahd
Sectifln ll.l l. California La~ This Trust Agreement shal.l be consuued and governed
in ac,cordance ~~ith the laws af the State of Cal~fornia
Sectiun 11.12. Notices. All wntten not~ces to be gir•en hereunder shall be given by mail
to the gart}~ enntled thereta at its address set forth below, or at such other address as such parry
may pro~ide to ihe other parues in w7it~n~ from ~ine to tame, namely
If ta the City. CitS~ of Santa Manica
1 bK5 Mam Sa-eet
Santa Monlca, Califorma 9~401
Attention: Crty Manager
W~th a copy ta: City of Santa Mor~aca
16k5 Ma2n Street
Santa Mon~ca, Cai~fornia 90401
Attention• City Attorney
If to the Authority: Santa Monic,a Public: Financing Authonty
c/o City of Santa Monica
1 fiSS Main Street
Santa Monica, Cal~farnia 90401
Attention Executive Directar
If ca the Trustee:
Each such notice, stateinent, de~nand, cansent, agproval, authorizat~on, offer, designat~an,
request or other communicatian hereunde: shall n~ deemed cielivere~ ta the party to whom it zs
addressed {a) if personally served ar ~elivered, upan delivery, (b) if given b}~ electromc
c.ommvnication. ~~hether by telex, tele~ram or telecopier, upon the sender's receYpt of an
appropr7ate ans~~•erback or other wr~tten acknowled~~nent, ~c} if e~ven b5~ reglstered or cerfi~f~ed
mail, return r~c:eipt requested, deposited w~ith the Unlted States mail postage prepaxd,
seventy-two (72) hours after such nat~c.e is deposited with the Lrrated States mail, {d) ~f given ~y
overn~ght c.ouner, with couner charges prepaici, tw-enty-four {24j haurs after delivery to said
avernight courier, ar (d) if given by any ~the~ means, upon delivery at the address specif~ed in
this Sect~on 11.12.
Section 11.13. Notice to Ratin~ A~encies. The Trustee shall provid~ Mood}~'s, ~f the
Certi~cates ar~ then rated by Moody's, arid S&P, if the Cert~~cates are then rateci b~~ S&P, «~~th
prompt written notice of; (i) the appaLntment o~ any successor Trus~ee, {ii) an}~ material
a~ne:~clments tc the Trust Agreemen~, the Lease Agreement, or the Facil~ties Lease and {lll} t.he
prepayment in ~~~hole of the Ceraficates.
Section 11.14. Effecti~~e Date This Trust Agreement shall become effectlve upan rts
exec:~at~on and deiz~~ery.
Sectean ~ 1.15. Execution in Counternarts_ 'I'his Trust Agreement ma}~ be execUted in
several counterparts, each of which shall be deemed an onganals and all of whxch sha11 const~tute
but one and the same ~nstrument.
42
IN WITNESS WHEREOF, the part~es hereto have executed and attested this Trust
Agreement by the~r afficers thereunto dul}~ authorized as of the day anci year first ~vritten above_
U,S. TRUST CUVIPANY OF
CALIFOAMA,1~.Ao
By
SANTA M()1VIC;A PUBLIC FIN~IN(:I;~'(3
AUTH[)RITY
By
C;ITY QF SA\TA MONICA
8~~:
AFPROVED AS TO FORM
Marsha ?ones Moutrae,
City Attorney~ and Authar~ty Attorney
43
~xx~srr ~.
FORM {)F CERTIFICATE
1~ o R-
CERTIFICATE OF PARTICIPATI~N
{1945 AuportFacilities Refunding}, Senes
Evidencing and Representing A Fractianal Undiv~ded
Interest of the Owner Hereof
an Base Rental Payments to be Made
by th~
CITY OF SANTA 1VI4NICA
ro the
SANTA iV[ONICA PUBLIC FINA's~'CING ALJTH~RITY
PAY?1r~ENT DATE
]uly i,
INTEREST R~-.TL
DATED DATE
August 15, 1995
*xx~~x*
CUSIP IVO.
REG[STERED ~WNER:
PRiNCIPAL AMOUN'.T'
D~LI~ARS
THIS I~ TO ~~RTIFY that the Registered ~Qwner of th~s Cert~ficate of Participanon (the
"Cerufic.ate"}, as ident~fied above, is the owner ot a iract~onal undivided Xnteres~ in the right to
receive ~ertain base rental payments ("Base Rental ~ay~r,ents") under and pursuant to ihat certain
Lease Agreeanent, dateci as of August 1, 1995, ;the =`Lease Agreement"), b}~ and'~et~veen the Crty
af Santa Momca (the "City"), a municipa]_ ~orporat~on and charter ;:ity cluly organized and
existing under and by ~~irtue of the Cons#itution and laws of the 5tate of Cahfornia and its
Charter, as lessee, and the Santa Monica Publ~c Flnancing Authority {the "Authorit}~"), a ~omt
exercise of powers entity orgamzed and existin~ und~r and by ~irt~e of the la~~~s of the State of
California, as lessor, all of which rights .~ recei~e such Base Rental Payments have been
assigned ~~~ithout recourse by the Authonty to U.5 Tr~st Company of Calxfarnia, i~1.A. a national
bank~ng associat~~n duly organized an~ existmg nnder ~nd b}r virtue of the la~vs af the LTruted
States and having a principal corporate erus~ ~,ffice in , California (the
"Corporate Trust Office"), as trustee (the "Truste~") u~der the Trust Agreement, dated as of
Aug~st 1, 1995, (the "Trust Agreemer~t"}, by and among the Trustee. the Czty and the Authonry.
Th~s ~ertificate is ~ne of the cluly author~zed City af Santa ,Vlonica Cert~ficates of
Partic~pation {1995 Airport Facilit~es Refunding), Ser~es __ (the "~er~es Certificates")
ag~re~ating ~+ principai ~m~~ant, exeeuted pursuant to the ter~ns of the Tr~st
Agreement. Th~ Senes ~ Certificates evidence and represent fractional undiv~ded ~nteresis ir~
~erta~n Base Rental Payments payable under ~he Lease Agreement An additional serles of
ti~rtificates of partic;pation, the C~ty of Santa ~~n1ca Cert~ficates af Participation (195~~ Au-port
Facil~ties Refunding), Series (the "Series Cert~ficates"j, aggregat~ng S
prir~czpaI amount, also eviden~e and represeni fr~cuanal undivided interests II] C~rtalli Base
Rental Payments payable under the Lease AgrPemeni. T~e Series A Cerr~ficates and ihe SerLes B
Certificazes are collecri~ely referred to as t~-e "Cert~ficates" The Certif'icates are being executed
**~Page 1 oi 6***
and deli~ered to finance the costs of refunding the City's outstanding Certificates of Participat~on
(Airport Facilit~es}, c~ated October 1, 19x5
The Regtstered Owner of t~is Cemficate is ent~tled to receive, sub~ect to the terms of the
Trust Agreement an~ any rlght of prepayment hereinafter provided for, on the Pa}~ment Date set
forth abo~e, upon surrender of this Cert~ficate at the Corporate Trust Office af the Trustee, the
Principal Amount specified above, representing the Registered Owner's fractional undivided
share af the Base Rental Payments designated as princ~pal components coming due on the
Payment Date, ar~d to recei~e on January 1 and 7uly 1 of each year, commencln~ on July l, 1996
(the "Interest Payment Dates"}, interest on said Pnncipal Amount at the Interest Rate specified
abo~~e, computed on the basis of a 360-day year conSlsting of t~~elve 30-day mor~ths, unui
payment in full of sa~d Pnncipal Amount, represent~ng the Registered Owner's proportionate
share of the Base Rental Payments designated as interest companents cotning due on each of said
ciaies
Th~s Certificate shall represent interest from ~he Interest Payment Date next preceding 1ts
date af execution to which interest has been paid in full, unless such date of executian shall be an
Interest Pa}~ment Date, in which case this Certificate shail represent interest from the date of
exeeut~on hereof, or unless such date of execut~on shall be after the fifteenth day of th~ manth
next pre~eding an interest Payment Date, whether or not suc~ day ~s a business day {each such
date, a"Record Date"} and prior to the followxng Interest Payment Date, in which case thas
Certificate shall represent interest from suc:h Interest Payment Date, or unless such date of
exec,ution shali be on or pnor to June IS, 19y65 in which case this CertifXCate shall represent
interest from the Dated Date spectf~ed abo~~e. Notwithstanding the foregaing, if, as shown b}~ the
re~ortis of tne TrusteE, interest shall be in default, this Cert~ficate shall represent interest fro~n the
Iast Interest Faytneni Date ta which interest has been pa~d in fuil or duly provided for
Paymer~ts of anterest with respect to the Certificates sha11 be made to the reg~stered
owners thereof (as deterrrunr~d at t~te close af business on the Record Date next preced~ng the
related Interest Payrnent Date) by checic or draf`t of the Trustee mailed to the address of each such
registered o~~~ner as ~t appears on the reg~strat~on booEcs mainta~ned by the Trustee or ta such
other address ~s ma}~ be f~r~ushed in wriung ta the Trustee by eacn such registered owner
Pay~nent af -~~. r~nc~pa~ and prepayrnent prerruum, ~f any, represented by t~e Cert~fica~es, at final
matunty or on prepayment in whole ar in parT pnor thereto, shall be rnade only upon presentation
and surrender of th~ Ceraficates at the prin:,ip~l corporate trust office of the Trustee_ Ali such
a~nounts axe pa}~ab~e ~n lawf~il money of the ~~n~ted StateS o~ Ameiica.
Reference is I~ereby ma~ie to t~e Trastt Agreement and ta any and all amend~nents thereof
anci supplements thereto for ~ descnpt~on of the a~-eements, conditions, corenants and terms
>ecnring the Cert~ficates, for the nature, exient a~c~ manner of ~nforcement of such a~reements,
c~nditions, covenants and texms, for the rights, dut~es and unmuruk~es of the Trustee. for the
ri~hts and remecl~es of the reg~stered owners of the Certificates with respect thereto and for the
other agreett~ents, condit~ons, covenants and terms upar~ which the Cert~ficates are executed and
delrvered thereunder, to all of whXCh p~ovisions tl~e ~egisterecl Owner by acceptanc:e hereof,
assents anc~ agrees
The Certificates are authorizeci ~a be exeLUted and delxvereci in the form of fully
reglstered certificates in denominations of $S,O~C or ~ny inte~ral ~nult~ple thereof ("Authonzed
Deno~ninat~ons"}.
This Certificate may be transferreci or exc:~anged by ~he Registered Owner hereof, in
persan or by such Owner's attorney duIy autharazed ~n ~~rit~ng, at the Corporate Trust Office of
th~ Trustee, 6ux onl}~ ir~ the manner, sub~eci io the lirrutat~ons and upon payment of the Lharges
provided ~n the Trust Agreement
***Page 2 af G***
The Trustee shall not be required to transfer or exchan~e any Certificate during the penod
commencing an the date five (5} days oefore any date on whici~ the Cemficates are selected for
prepayment and ending on the date of mailing of notice of such prepayment, nar ~hall the Trustee
be required ta transfer or exchange any Cert~ficate or portion thereaf selected for prepayment
from anci after the date of maihng the notice of prepayment thereof.
The Trustee may treat the Registered Owner hereof as the absolute owner hereof far all
purposes, whether or not this Certificate sha11 be averdue, and the Trustee shali riot be affected
by any knowlec~ge or notice to the contrary; and payment of the interest and principal represented
by th~s Certific.ate shall be made only to such Reg3stered Owner, which payments shall be ~a1~d
and e€fectual to satlsfy and discharge the Iiability represented by ~his Certificate to the eYtent of
the sum or sums so paud
The Cernfcates are su6~ect to prepayment prior to maturity wrthout prerruum, on any
date, in whole or in part (and if in part, such th~t th~ aggregate principal component evidenced by
such Certificate5 and payable after such prepayment ~hall ha~e been proportionatel~T reduced as
nearly as practicable), frorn the net proceeds of any insuranee or condemnat~an award wlth
respect to the property leased under the L.ease Agreement, or port~ons thereof, deposited by the
Trustee xn the Prepayment Fund estabhshed ~nder the Trust Agreement and nQt used tQ repau or
replae.e such property, or portions thereof, at a prepayment price equal to the pr~ncipal
component e~idenced thereby {or port~on of such principal component to be prepard} plus the
unpaic~ u~terest co~nponents evidenced thereb}~ accruir?g through the date of prepayment
As provicied ~n the Trust Agreemen±, at Iea~i ~hirty (3C} but r~ot more t~an sixty {b0} days
priar ta a pxepa}~ment date, notice of prepa~~tnent shall be given to the reg~stered awners of
Cert.~n;;ates designated far pre~ayment hy :egistered ~r ~erk~f=~ed mail, pastage prepaicl, at theu
addresses appearing an the registrat~on books of the Trustee as of the clase of business ~n the
c~ay before such notice of prepayment is gi~en The actual receigt by the Registered Owner of
an~ Certificate of any notice of such prepayment shall n~t be a eondinon precedent to
prepayment, and neither fa~3~re to recerve such notice nor any defect therein shall affect the
valic~ity of the proceedings for the ~repaym~nt of such Certificates or the cessanor~ of interest o^
~he date i~xed for prepaymen~.
~f this Certificate ?s ca.lled for prepaymer~t and payment ~s d~aly provided for as spec~fied
~n *he Trust Agreemer~t, the interest represented hereb}~ sha~i cease to accrue fram anci after the
date f~xed for prepayment and this Certifzcate shall cease ta be enti~tec~ to any benefit or secunty
ander the Trust ~greement and the Reglstered Dwner hereof shali have no rignis ~n respect
hereof except to receive payment of t~e prepayment price :~ith : espect hereto.
The Certlficates ev~dence anci repres~r.t a fr~ctional undivided interest in Bas~ Rental
Pa~~ments and en~oy the benefrts of a security .nteres± in the mone}~s ~eld zn ~he funcis and
ac~:,ounts established pursuant to the Trust Agreement, sub~ect to the prorisions of the Trust
Agreement perirutting the disbursement thereaf for ~r to the purposes and on the conditions and
terms set forth therein
'I'c the extent and in th~ rr-anne: ~er~n~tte~ by the terms af" the Trust Agreement, the
provisians of the Trust .Agreement may be atnendeci o: Supplemented by t~e part~es t~eret~, bu~
no suc~ amendment or supplement shall (1) extencf ine fixeri Payment Date of any Certif'icate or
reduce ~he rate of ir~terest represented t~erei~y or extend the t~me of pa; ment of such interest or
r~duce t[~e amaunt of pnncipai represented ~f~er~b;% vvitF~out the pno~ written consent of the
registered owner of each Certifica.te so ~ffecteci, ~r ~2) reduce the percentage of Registered
Owners whose consent is requu'ed for the execut~or~ of any a~nendinent of or suppiement tc the
Trust Agree3nent with~ut the grior writter consent of the Registered Ok:nerc of all Certificates
~**Page 3 af 6***
then outstandzng, or (3) modify any of the nghts or obligations of the Trustee wlthout the praor
w~ritten consent of the Trastee, ar (4) amend the amendment provisions of the Trust Agreement
~~~thout the pr~or w~tten consent af the registered owners of alI Certificates then outstanding
The Trustee has no obligat~on or 1rab~Iity to the Registered Owners of the Certificates for
the paylnent af the lnterest or pnncipal represented by the Cert~facates, but rather the Trustee's
sole obligations are to admin~ster, for the benefit of the Authorzty and the City and the Registered
O~~ners, the various funds and accounts established under the Trust Agreement
THE ALiTHORITY A:VD THE CITY HAVE CERTIFIED that ali acts, conditions and
things requued by the statutes of the State of Califarnia and the Trust Agreement to exist, to have
happened and to ha~e been performed precedent to and in connectaon with the execut~on and
deli~ery of this Certificate do exist, have happenec~ and have been performed ~n regular and due
time_ farm and manner as reqtured by Iaw, and that the Trustee ;s dul}~ authorized ta execute and
de1_iver this Certzficate, and that the amount of this Cernficate, together wzth all other Cert~ficates
executed and dellvered under the Trust A~reement, is not in excess of the amount af Certlficates
authorized to be executed and delivered thereunder.
IN WITNESS WHEREOF, this Certtficate has been executed by the manuai signature of
an authanzed si~natory of the Trustee as of ihe date set forth below_
Date: U S. TRUST COMPANY OF CALIFORI~'IA,
N A., as Trustee
B ~~
~
~UTHORiZED SIGNATORY
***Page 4 ot C***
ASSIGNMEN'T
For value received, the undersigned do{es) hereby seii, assign and transfer unto
the ~~~thin-ment~oned Certificate and hereby urevocably consritute{s) and
appolnt{51
attorney~ to transfer the sa~ne on the books o€ the Trustee with fuil power of substitut~an
~n the premises
Dated ,
Note. The signature(s) on this Assagnment must correspond with the name(s) as «~ritten
on the fae.e of the w~th~n reg~stered Certificate ir~ every part~cular, wjthout alteration or
er~largement ar any change whatsoever.
Tax I.D. #
Signature Guaranteed
***page 5 of b***
29t99 07 ]f~~'GH.ba
PURCHAS~ CONTRA~T
CTTY OF SAl~'TA MOIVICA
CER'TIFICATES OF PARTICIPATIOI~I
(1995 AIRPORTFAGILITIES REFUNDING}
SER1E5 A AND B
PLTRCHASE COI~TTRACT
City of Santa Mamca
1685 Ma~n Street
Santa, Momca, Cal~fornia 90401
Ladies and Gentlemen:
~r~r~s
7/1g195
August _, 1995
The undersigned (the "Underwriter"}, offers to enter into this purchase cantract {the
"Purchase Contract") w~th the City af Santa :~~omca {the "Clty"}, whsch will be binding upon the
~ity and t~-e Underwnter upon the acceptance hereof by the City This offer is made sub~ect to its
acceptance by the C~~y by execution af this Purehase Contract and its delrv~ry to the Underwnt.~r
on or before S•00 p m, California t~me, on the date hereof All terms used herem ~nd nat
otherw~se defined shall have the meanings ~iven ta such terms tn the Trust Agreement (as hereafter
deffned)_
1 Purchase and Sale. Upon the terms and conditions and upon the basis of tl~e
represer~tauans, warranties and a~r~ements here~nafter set forth, the U~derwr~ter hereby agrees to
~urchase, ar~d the C~ty hereby agree to cause to be dehvered to the Underwr~ter. all (but not less
than aIl} of the $ aggregate prlnc~pal amount of the City of Santa Monica
Certificates of Participation {1995 Auport Facihties Refuridin~), Senes A and B(the "Certificates")
at a purchase price of $ (the principal amount of the Certificates, less
$ af Underwnter's discoant} plus accrued interest from the date of the Certificates
to the date of Closmg (as hereafter defzned)
2. Author~z~na Instruments and Lati~~ Th~ City wiil lease certain ~urport facilities, and the
real property on which they are lacated (the "Property''), to the Santa lrrianica Publ~c Financing
Authority (the "Authonry"} pursuant to a Fac:ilities Leasz, dated as of August 1, 1995 {the
"Facil~ties Lease"}, bet~veen the City and [he ~uthont}l The Authonty will then sublease the
Property back to the Cxty pursuant to a Lease Agreernent, dated as of August 1, 1995 (the "Lease
Agreement"}, between the Authonty and the City_ The Certificates will evidence and re~resent
fract~onal unditi~ided mterests of the owner~ thereof in Ba~e Rental Payments to be made by the
City to the Authority pursuant to the Lease A~r~ement The Certificates w~11 be executed and
dehvered pursuant to a Trust Agreement, datzd as of Au~ust i, 1995 (the `"Trust Agreernent"},
among U.S. Trust Company of Caizforn~a. N A, as trustee {the "Trustee"), the Authonty and the
City. The Authonty will asssgn substantiaily all of its nghCs un~er the Fac~lit~es Lease and the
Lease AgreEment, including its nght to receive Base Rental Payments, tfl the Trustee pursuartt to an
Assignment Agreement, dat~d as of August l. 1995 (the "Assignment Agreement''), between the
Authonty and the Trustee Tne Certzficat~s shall be as descnbed u; the Trust Agreement and the
Official Statement {as hereafter defined) Unless the cantext otherwise requires, capitalized
undefined terms used herein that are defined in the Trust Agreement or the Lease Agreement shall
ha~e the rr~eanings ascnbed to them there~n
The proceeds of the Certificates «=i11 be used {i) to refund the City of Santa Monica
Certificates of Participation (Airport Facilities} {the "Pr~or Cert~ficates"), of which $
aggregate gnncipal amount is currently outstanding. (u} [to fund a reserve fund for the Certif'icates,
and (i~i)] tQ pay the costs of executian and dzlivery of the Cert~ficates The Fnor Certif'icates were
executed and delivzred pursuant to a Trust A~reement Relating to Airport Facihties, dated as of
October 1, 1985 (the "Pnar Trust Agreement"), by and among Bank af Amenca NaUOnal Tn~st
and Sa~ings Associat~on, as trustee (the "Pnar Trustee"), the City and Secunty Pacific National
Bank, as lessor
3 Public Offerm~ The Unden~vnter a~rees to make a bona fide public offenng af all the
Certificates uutially at the pubhc offenng pnces {or yields) set forth an Appendix A attached hereta
and incorporated herein by referer~ce. Subsec~uent to the imt~al pubiic offering, ti~e Underwnter
reserves the right to change the put~i~c offering prices {or ytelds) as it deems necessary in
cannection with the market~ng of the Cert~f~cates, provided that the Underwr~ter shall not change
the interest rates set forth on Appendix A Thz Cert~ficates may be offered and sold to certain
dealers at prices lower than such imaal puhlic affenng pnces
4 Deli~rerv of Of~cia~ Statement ~n the Date HereQf Pursuant to the authorizat~on af the
Cfty. the Under~vriter has distributed cUpies of the Przl~minary Official Statement dated August
_, 1995, relat~ng to the Cert~ticates (the "Prel~m~nary Official Statement"). By ~ts acceptance of
this propasal, the Cfty hereby ratif~es the use hy the Underwriter of the Preliminary Official
Statement; and the City a~rees to approve a final Offic~al Statement relat~ng to the Certificates (the
"Of~cial Statement") which w~ll cons~st of the Prel~minary Official Statement with such changes as
may be made thereto, with the approvai of thz City and the Underwnter, and to provide copies
thereof to the Underv4•riter as set forth fn 5ect~on 6{n} hereof The Underwriter hereby agrees ta
deposit the Official Statement with a nationally recognized municipal secunties information
depository. The City hereby autharizes the Undervvnter to use and d~stnbute. in cQnnect~an with
tne offer and sale of the Cert~ficates, the Preliminary Official Staterrient, the Off'icial Statement, the
Trust A~reement, the Lease Agreement, the Fac~ht~es Lease, the Assignment Agreement and other
documents or contracts w which the City or the Authority is a party, fncluding this Purchase
Contract and all information conta~ned herein, and all other documents, certificates and staternents
fumished by the City to the Unden~nter fn connect~an ti~v~th the transactions conternplated by this
Purchase Contract
5. The Closing. At S 00 a rn , Cahforn~a time, on August 31, 1995 or at such other time or
on such earlier or later busFness day as shall have been mutuaIly agreed upan by the City and the
Underwriter, the City w~ll ca~se to be dali~~ere~ (i} the Certificates, through the facilities of t~e
Depository Trust Compan}~, to the Undeni~r~ter in :Veti~~ York, New York, and (ii) the closing
documents hereinafter mentioned at the offices of Jones Hall Hill & White, A Professional Law
Corporatzan ("Special Counsel"), San Francisco. Califorr~ia or another place to be mutually agreed
upan by the City and the Underwnter The Underwr~ter will accegt suc~ dei~very and pay the
purchase pnce of the Certificates as set farth in Sect~an 1 hereof {less the $100,000 gaod fa~th
depos~t previously delivered ta the C~ty) ~n ~mmed~ately available funds. This payment and
delivery, together with the delt~rery of the aforementioned docaments, is herein called the
"Closmg " The Cert~ficates w~ll be del~vered in such denom~nat~ons and depos~teci in the account or
accot~nts speciffed b~ the Underwriter pursuant to ~vritten notice noC later Chan fi~e business days
prior to Closmg The Certificates wFll be made available ta the Underwnter for inspection and
packaging nat less than 48 hours prior to Ehz Clos~n~
6. Renresentations. V4'arrantles and The City represents, warrants and
covenants to the Underwr~ter ttiat:
-?-
(a) Due Organizat~an Existence and Authorrtv. The City 1s a charter city duly
organized and existin~ under the Constitution and laws of the State of California (the
"State") and its Charter, wxth fu1I r~ght. power and authority to execute, deliver and
perform its obligations under thfs Purchase Contract, the Trust Agre~ment, the Lease
Agreement and the Facil~ties Lease (collectirely, the "City Documents'~) and ta carry aut
and consummate the transactions cnntemplated by the City Documents and the Official
Statement
(b} Due Authonzat~on and Approval By all necessary offic~al act~on of the City, the
City has duly authorized and appro~red the execunon and delivery of, and the performance
by the Ciry of the abligauons contained or descnbed in, the Preliminary Official Statement,
the Officiai Statement and the City D~cuments and as of the date hereof, such
authoriaations and approvals are in full force and effect and have not been amended,
modified or rese~nded 'The City has com~lied, and «~ili at the Clos~ng be i~ compliance in
all respects, with the terms o# the City Documents
(c} Of~cjal Statement Accur~te ~n~ Compiete The Preliminary Of~cial Statement
was as of ~ts date. and the aff~c~al Statement ~s, and at all ti~nes subsequent to the date of
~he 4fficia~ Statement up to and includ~ng the Clasin~ will be, true and corcect in all
matenal respects, and the Prehminary Dfficiai Statement and the Of~cial Statement cantain
and up to and including the Closing wi~l contain no misstatement of any matenal fact and
do not, and up to and includtng the C~os1n~ will nat, amit any statement necessary to make
the statements contained therein, m the li~ht of the c~rcumst~nces in which such statements
were made, not misleading
(d) Underr,unter's Consent to Amendrnents and Sunnlements to Official Statement_
The City will advise the Underwr~ter prompt~y of any propflsal to amend or sappiement the
Offic~al Statement and will not effect or consent to any such amendment or snpplement
without the consent of the Undervvriter, «~luch consent wil~ not be unreasonably withheld.
The City will advise the Undenvriter promptly of the inst~tnt~on of any proceedings known
to it by any governmental a~ene}~ prohxb~ting or otherwise affecting the use of the Official
Statement in cannection with the offer~n~, sale or distnbut~on of the Certificates.
(e} Cih~ A~reement to Amznd or Sup~lement Offici~l S~~t~men~ If after the date of
this Purchase Contract and until 2~ da~~s after the end of the "underwr~t~ng per~od" (as
defined in Rule 15c2-12), an}~ e~~ent accurs as a result of which the Official Statement as
[hen amended or supplemented ti~~o~ld ~nclude an untrue statement af a mater~al fac~ or amit
to state any material fact necessary~ ~n order ta make the statement~ contained theretn, ~n the
~~ght of the circumstances undex ~ti~hich they «,:ere made, nat misleading, and, in the
reasonable opinion of tt~e Underwnter, an amended ar supplemented Official Statement
shauld be del~vered in connect~o~ w~th the offers or sales of the Certificates to reflect such
event, the City promptly w~ll prepare at its expense an arnendmenE or supplement which
will correct such statement or omissian and the City shall pro~nptly furnish to the
Underrknter a reasonable number ot copies of such amendment or supplement. Unless the
Underwnter otherwise ad~~~ses the Ciry in writing that the end of tYte underwnt~ng penod
shall be anot~er specified date, the end of the underwriting period shall be the day of
Closing
(f} No Matenal ChanQe in Finances_ At the time of the Closing, there shall nat have
been any macer~al ad~erse chan=es in the financ~al condit~Qn of che City since June 30,
1994
-3-
(g} No Breach ar Default As of the time af acceptance hereaf arfd as of the time of
the Closing, the City is not and wiIl not be in breach of or ui default under any appllcable
constitutianal proviston. la~~ or admznistrat~~~e rule or regulation of the State or the United
States, ar, ui any manner ~~h~ch would advzrsely affect the transact~ons contemplated
hereby and by the City Documents, any applicable ~udgment or decree or any trust
agreement, laan agreement, bond, note, resolution, ordknance, agreement or other
instrument to which the Czty Fs a party or is otherwise sub~ect, and no event has occurred
and is contmuing ~~h~ch, ~r~~th the passage of t~me or the giving of not~Ce, or bath, would
constatute, in any manner ~~hich would adversely affect the transact~ons cantemplated
hereby and by the City Documents, a defauit or event of defauit under any such instxument;
ar~d, as of such t~mes, the authorizat~on, execution and del~very of the City Documents and
compl~ance with the pra4~rsions of eaeh of such agre~ments ar instruments do not and will
not confl~ct w~th or constitute ~ breach of ar default under any applicable constitut~onai
provisFOn, lau~ or admimstrative rule or regulation of the State or the Umted States, or any
applicable ~udgment, decree, license, permit, trust agreement, loan agreement, bond, note,
resolution, ordmance, agreement or other instrument to whieh the City (or any of its
officers in their respect~ve capacities as such} ~s sub~ect, or by which it ar any of its
properties ~s baund, nor will any such au~honzation, executton, aelivery or compliance
result ~n the creat.ian or imposition of any lien, charge or other security rnterest or
encumbrance of any nature w hatsoever upon any of its assets ar propert~es or under ~he
terms of any such la~~, regulation or instrument, except as may be prov~ded by the City
Documents
{f~) No L~t~eat~on. As of the t~me of acceptance hereof and as of the date of the
Closing, no achon, suit, groceeding_ inguiry or investi~ation, at law or in equity, before or
by any court, ~ovemment agency~, pul~lic board or body, pending or, to the best knawledge
of the City after due inr~est~gaaon, threatened (i} fn any way questioning the corporate
existence of the Cit}~ or the t~tles of th~ officers of the City to their respecti~e offices; (ii)
affecnng, contesting or seeking to prohibit, restra~n or en~oin the execut~on and dehvery of
the Certif'icates, or in any way contest~n~ or affectrng the validtty of the City Documents or
the consummat~an of the transact~ons contemplated thereby, or contestin~ the exclusion of
interest evidenced and represented by the Ser~es A Certificates frotn gross income for
federal incorne tax purposes ar contesang the po~vers of the Czty to enter into the City
Documents; {ui) which may result in any mater~al adverse imgact on the fuiancial condit~on
of the City; or {i~} cantest~ng the completeness ar accuracy of the Preliminary Official
Staternent or the Official Statement or any suppiement or ame~dment thereta or asserting
that the Preliminary OFficial Statement or the Of~csal Statement contained any u~true
stateme~t of a matenal fact or omit~ed to state an}~ matenal fact requ~red ta be stated therein
or necessary to make the statements thei-ein, m the hght af thz circumstances under which
they were made, not mislead~n~, and there ~s na basis for any action, suit, proceeding,
inquiry or investigat~on of the nature descnbed in elauses {~) through (~r) of th~s sente~ce
{i) Permitted Encumbrances As af the t~me af acceptance hereof and as of the date
~f the Closing, the Praperty shall be free of all l~ens against any gortion thereof other than
Permitted Encurr~brances
{~) Further Cooneration; Blue Sk~~. The City will furnish such informat~on, execute
such tnstruments and take such ather action in cooperation with the Underwriter as the
Underwnter may reasonably request in order (~) to yua~fy the Certificates for offer and sale
under the Blue Sky or othe.r secur~t~es la~ys and regulations of such states and other
~unsdict~ons of the Un~ted States as the Undenvr~ter may designate and {u} to determine tt~e
eligibility o€ the Certificates for ~n~~estment under the la~vs of such states and other
~unsdictions. prov~ded, howe~-er_ that the City shaLl nat be required to execute a general ar
-4-
special consent to service of process or qualify to do business in connection with any such
quaUficat~an or determinat~on m any ~ur~sdicttan
(k} Consents and Annro~-als. All authonzat~ons, approvals, l~censes, permits,
consents and orders af or f~linas with any gavernmental author~ty, legislat~ve bady, board,
agency ar commission having ~ur~sd~ct~on in the matters wlueh are required for the due
authonzation of. which would constitute a canditian precedent to or the absence of which
would adversely affect the due performance by the City of its obl~gat~ons in connect~on
with, the CFty Docnments have been dnly obtained or made, except as may be required
under the Blue Sky or securit~es laws of any state in connectian w~th the offenng and sale
of the Certificates.
(1) Validrtv of C~tv Documents 'I"kze City Documents, when executed and deuvered
by the Crty, wiIl be legally vaiid and bfndin~ obligatio~s enforceable in accordance with
their respecuve terms, except as enforcement may be limited by bankruptcy, msoi~ency,
reorganization morator~um or similar laws or equitable principles relafi~ng to or hmit~ng
creditars' rights generaiI~r
(m) No Other Obl~aations. Bet~~~en the date af thts Purchase Contract and the date
of Clos~ng, the C~ty w~ll not, ti~ithout ~he prior written consent of the Underwriter, offer or
issue any bands, notes ar other obligat~ons for barrowed money payable frflm the General
Fund of the City
(n) Cert~ficates. Any certif~cate signed by any offic~al of the C~ty and delivered to
the Underwriter shall be deemed to be a representat~on and warranty by the C~ty to the
Undenvnter as to the statements made therefn
(a) Comnliance With Rule 15c2-12 The Preliminary Official Statement heretofore
deuaered to the Underwrfter ~s deemed ~nal by the City as of its date and as of the date
hereof, except for the om~ss~on of such information as is perrt~itted to be ornitted in
accordance with paragraph {b)(1} of Rule ISc2-12_ The City hereby covenants a~d agrees
that, within seven business days from the date hereof and within suffic~ent time to
accompany any confirmat~on requesting payment frorn any customers of the Underwriter,
the C~ty shall cause a ftnal printed for~n of the Official Statement to be delivered to the
Underwr~ter in suffic~ent quantit}J to cornpIy wikh paragraph (b){4} of Rule 15c2-12 and
Rules of the Mumcipal Secunties Rulemaking Board
7 ClasinQ Conditi~n$ The Under~,~r~ter has entered into this Purchase Contract in rel~ance
upon the representattor~s, warranties and ca~renants herein and the performance by the City of its
obligat~ons hereunder, ba~h as of the date hereof and as of the date of the Clasing. The
Underwnter's obhgat3ons under th~s Purchase Contract are and shall be sub~ect to the following
addrtianal condit~ons:
{a) Brin~-Dawn Reoresentat~an. The~ representat~ons, warrant~es and covenants of
the City conta~ned herein shaIl be zrue. complete and correct at ttse date hereof and at the
tune of the Closing, as ~f made an the date of the Clos~ng
(b) Executed A4reements and Perfc,rmance Thereun~l~r At the time of the Closmg
{i} the City Documents and the Ass~Qnment Agreement sh~ll be in full farce and effect, and
shall not ha<<e laeen amended. modified or supplernented except with the wntten consent of
the Undervt~nter and (ii) there shali be in full force and effect such resolutions (the
"Resolut~ons") as, in the opinion of Special Counsel, shall be necessary in connect~on with
the transact~ons conternplated by the Off~c~al Statement, the Cxty Dacuments and the
Assignment Agreement, (i~~) the City shall perform or have perfarmed its obligations
_~
requu~ed as specifiecl ~n th~s Purchase Contract or the City Dacuments to be performed at or
gnor ta Closmg, {~v) the Authonty shall perfor~n or have performed its obhgations requued
as spec~fzed in the Trust Agre~ment, the Lease A~reement or the Facil~ties Lease
(collect~vely, the "Authorzty Documents"} to be performed at ar prcor to Closing, and {v}
the Officlal Statement shall not ha~e been supplemented or amended, excegt pursuanE to
Paragraph b(e) or as otherwXSe may have been agreed to in wnt~ng by the Underwrrter
(c) No Default At the time of the Closing, na default shall have occurred or be
existing under the Resolutions, the Authorzty Documents, the City Documents or the Priar
Trust Agreement, and the City shall not be in default in the payment of any of its bonded
~ndebtedness or a~y of ~ts other obhgations, wh~ch default would adversely impact the
abil~ty of the City to make Base Rental Payments
{d) Terminatian Events The Underwr~ter shall have the right to terminate this
Purchase Contract, without ]~ab~I~ty therefor, by wntten nat~fication ta the Authonty and the
City ~f at any time at or pnor to the Closin~.
(f) any event shall occur ~vh~ch ca~ses any statement cantained in the
Official Statement t~ be mater~alIy rnisleading or results in a failare Qf the Official
Statement to state a rnater~a~ fact ne~cessary ta make the stat~me~ts in the Official
Statement. ~n tt~e light af the c~rcumstances under which they were made, not
m~sleadmg; or
(11} the marketability of the Certificates or the market pnce r.hereof, in the
opln~on of the Underwr~ter, has bezn materially adversely affected by an
amendment to the Const~tution of the United States or by any leg~slation m or by the
Congress of the Umted States or by the Stat~, ar the amendment of legislation
pending as of the date of t~is Purchase Contract in the Congress of the Umted
States, or the recommendation tp Congress or endorsement far passage (by press
release, other form ot not~ce or athervvise) of legislation by the President of the
Lrmted 5tates, the Treasury Depa~-tment af the Umted States, the Internal Reven~e
Sen•ice or the Chau-man or ranking minor~ry member of the Committe;e on Fuyance
of the United States Senate ~r the Cammittee on Ways and Means of the United
States Hause of Representatives, or the propasal for consideration of legislat~on by
either such Comrn~ttee or by~ any member thereaf, or the presentment of leg~slat~an
for cansideration as an option by either such Comm~ttee. or by the staff of the ]oint
Committee on Taxation of the Congress of the Umted States, or t~e favorable
re~porting for passage of Ie~~slatton to either House of the Congress of the Unrted
States by a Committee of such House to u~h~ch such legislat~on has been referred
for considera~on, or any decis~c~n af any federal or State court or any ruling or
re~ulatio~ (final, temporary or proposed} or of~c~al stateme~t on behalf ~f the
Unit~d States Treasury Department, the Internal Revenue Service ar ather federal or
State author~ty materially ad~~erszly affect~ng the federal or State ta~c status of the
City ar the Authanty, or the int~rest on bands or notes or obligat~ons of the genera~
character of the Senes A Certificates; c~r
(i~i) any leg~slat~on, ordinance, rule ar regulation shall be introduced ~n, or
be enacted ~y any governme~ntal body, department or a~ency af the Staze, ar a
decision by any court of ~ampetent ~urasdict~an withm the State or any eourt ~f the
United States shail be rendered which, in the reasonable opinion of the
Unden~vr~ter, matenally adversely affects the market pnce of the Certzficates: ar
(iv) legislation shali be enacted by the Conaress of the United States, or a
decision by a court of the United 5tates shall be re~dered, or a stQp order, ruhng,
-~r
regulation ar officia~ statement by, or on behalf of. the Secunties and Exchange
Commission or any other govemmental a~ency having ~urisdiction of the sub~ec[
matter shall be issued or made ta the effect that the executton, delivery, offeru~g or
sale of secunties of the ~eneral character of the Certificates, or the execut~on,
del~~ery, affenng or sale of the Certificates, inclvding all underlyu~g obligat~ons, as
contemplaked hereby or by the Official Statemer~t, is in violation or wauld be m
v~olat~on of, or that securit~es of the general character of the Cert~ficates, or the
Certificates> are not exempt fram registration under, any provision of the federal
secunt~es laws, ineluding the Securities Act of 1933, as amended and as then in
effect, ar that the Trust Agrzement needs to be qual~fied under the Trust Indenture
Act of 1939, as amended and as then in effect; or
(~) add~t~onal matenal restr~ct~ons not in force as of the date hereof shall
have been imposed upan trading ~n secunties gen~rally by any go~ernmental
autharity or by any natianal secur~t~es exchange which restnctions rnatenally
adversely affect the Unden~nter's ab~hty ta trade the Certlficates; or
(~i) a general bank~ng moratonum shall have heen established by federal or
State authont~es; or
(vn) the Un~ted States has become engaged in host~hties which have resulted
m a declaranon of war or a nat~onal emergency or there has occurred any other
outbreak af hast~lit~es or a national or internat~onal calamrty or cnsis, f~nancial or
otherwise, the effect of such outbreak, calamity or cnsis on the financial markets of
the Unrted States, being such as. Ln the reasonable opimon of the Underwriter,
would aifect matenatly and adversely the ab~lity of the Underwnter to market or
deh~~er the Cert~ficates; or
{viii} any rating of the sec~r~ties af the City shall ha~e been downgraded,
suspended or withdrawn by a nationa~ ratmg service, which, ~r- the Underwnter's
rea,sonable oplnion, materialIy adversely affects the marketabihry or market pnce of
the Cemficates, or
(ix) the commencement of any action, s~it or proceeding described in
Paragraphs 6(h) hereof ti~vhich, ~n the ~udgment of the Underwnter, matenally
adversely affects the market pr~ce of the Certrficates> ar
(x} there s~all ~e in force a general suspensian of trading on the New York
Stoek Exchange
(e} ~lq~ing Documen~s At or pnor to the Closing, the Underwnter shall recefve
{unless the context otherr~~~se mdicates} ttie fallow~n~ documents:
(1} Final Oninipn An appro~~u~g opimon of Special Counsel dated the date
of the Closmg and sut~star~tially in t~ie farrn included as Append~ C to tt~e Officiai
Statement, together w~th a letter from such counsel, dated the date of the Closing
and addressed to the Underwnter. to the effect that the foregoing opinion addressed
to the City may he relsed upan by the Underwriter to the same extent as if such
apmion were addressed to it
(2) 5ur~nlemental Opiniqn A suppierrjental opinFOn of Special Counsel
addressed ta the Underwnter, ~n form and substance acceptable to the Underwriter,
and dated the date of t~e Clasmg subs~ant~ally to the followulg effect:
_~_
{i} The statements cont~uned m the Offu~al Statement an tYie cover page and
under the capt~ons "II~'TRODUCTI4N," "THE CERTIFICATES," "PLAN QF
REFUNDING,'' "SECURITY AND 50URCE OF PAYMENT FOR THE
CERTIFICATES," "RISK FACTORS" and "TAX MATTERS," and in Appendix
A thereto. u~sofar as sueh statements expressly stu~nmarize~ certain provisions of the
Certificates, the Trust Agreement, the Lease Agreement and the Fac~lities Lease.
anc~ Special Counsel's opiruon eoncerning certa~n federal tax rnatters relat~ng to the
C~rt~ficates, are accurate ~n all matenal respects; and
~11} The Certificates are j}ot sub~~ct to the reg~stratian requirements of the
Secur~ues Act of 1933, as amended, and the Trust Agreement is exempt from
qualificat~on pursuant to the Trust Indenture Act of 1939, as amended
(3} Cit~~ Attorne~~ O~inion. An oplnlon of the City Attorney, dated the date of the
Closing and addressed ta tne Under~rr~ter, in form and substance acceptable to t~,e
Underwnter substank~ally to the falla«~ing effect:
(i} The C~ty ls a charter city duly organfzed and validly existing under ~he
Canst~tuk~on and the laws of the Scate and ~ts Charter;
(u} The City has full tegal power and lawful author~ty to enter into the Ciry
Documents;
(iu} The City' Documents ~ave been duly authorized, executed and dehvered
b~~ the C~ty and const~tute the ~al~d and b~nding agreements of the C~ty enforceable
against the City in accordance v~~ith their respecti4e terms, except as enforcement
may be l~mited b}T bankruptcy, insol~ency, reorgan~zat~on moratarium or sunilar
laws 4r equitable pnnc~ples relaun~ to or luniang creditors' rights ~enerally;
{iv) The resoluhons ("City Resolut~ans"} of tt~e City approvi~g and
authonzing the execution and de~li~rery of the City Documents, and apgroving the
Offic~al Statement, have been duly adopted at meetu~gs of the governing bady of the
City, ~~vhich were cailed and held pursuant ta law and with all publ~c notice required
by iaw and at which a quarum ~vas present and act~ng throughout and the Ciry
Resolt~tsat~s are ~n full farce and effect and ha~e nat t~eet~ madified, amended or
rescu~ded.
(v) The execut~on and del~~~er}~ of the City Documents and compi~ance with
the provis~ans thereof, under the circumstances contemplated thereby, do no~ and
w~il not iri any matersal respect con~ict with, Qr constitute tin the part of the Ci~y a
breach af or default under, any a~r~ement or other ~nstrument to which the Ciry is a
party or by which it is baund or any ex~st~ng law, regulation, court order or consent
decree to whFCh the City is s~baect:
{vi) No addit~anal authar~zation, appro~~al, cansent, wa~ver or atiy ott~er
action by any person, board or body, pubIic or private, nat pre~ia~sly obtatnPd ~s
reqmred as of the date of the Clasing far the City to enter into the City Documents,
or to perform its abhgations thereunder,
(vii} Except as othenvise d~sclased in the Official Statement, there is no
l~t~gat~on, proceedin~, act~on, su~t, ~r in4~estigat~on at law or fn equity before or by
any court, governmental a~ency or hody, ~end~ng or, to the best knowledge of
such counsel after due in~jesugat~an, threatened against the City, challenging the
ereauon, ar~an~zat~on or existence of the City, or the vai~diry of the City Documents
-~
or seeking to restrain or en~om t~ie Base Rental Payments or in any way cantesting
or affec~ng the va].idity of the City Dacuments or any of the transact~ons referred to
thereu~ or contemplated thereby or contest~ng the authonty of the Ciry to enter into
or perform ~ts obligations under any af the City Documents, ar under which a
determination adverse to the City wauld have a matenal ad~erse effect upon the
fmanc~al condition or the re~enues of the City, or which, in any manner, quest~ons
or affects the right or abilit3r of the City to enter into the City Documents or affects
m any manner the r~ght or ab~lity af the City to make Base Rental Payments: and
(v~ii) That nothing has come to the attention of such counsel which would
tead it ta beheve that the Off~c~al Statement (excluding therefrom the fuiancial and
statist~cal data and farecasts included there~n, as to which no opinion need be
expressed) contauis any untrue statement of a rnater~al fact or omfts to state a
material fact necessary to ~nake the staterne~nts therein, in the light of the
cu'curnstances under ~~-h~ch they tivere made, not ra~sleadFng
(4} Authontv Counsel ~nin~on An opFnian of Counsel to the Authonty, dated the
date of the Closing and addressed to the Under«mter, in form and substance acceptable to
the Underwnter, substantially ta the fo~lowin~ effect:
(1} The Author~ty 1s a ~aint exercise of powers a~t}~onty, duly created and
lawfully exist~ng under the laws of the Scate;
(11} The AUthonty nas fuU legal power and lawfui authonry to enter into the
Authonty Documents;
{Iii) T'he Authority Doc~zments have been daly authorized, executed and
delivered by the Author~ty and constitute the vai~d and bmding agreements af the
Authonty enforceabie against the Authartty in accordance with their respective
terms, except as enforcement rt~ay be limited by bankruptcy, insolvency,
reorganizat~on moratonum or sim~lar la~~~s or equitabte pnnciples relating ta ar
hmit~ng creditors' nghts ge~nzrally,
{iv) The resolunon ("Auttlonry Resolution") of the Authanry aggrovmg and
authonzing the execution and deli~~ery of the Authonty Documents has been duly
adopted at a meet~ng af the ~overn~ng body af the Authonty, wh~ch was ealled and
held pursuant to law and ~~~~th all puhlic notice requtred by law and at which a
9uorum was present and act~n~ throughout and the Authonty Resolut~on is in full
force and effect and has not been modi~ed, amended or resc~nded;
{v} The execution and delivery of the Author~ty Documen~s and compliance
with the prp~isions thereof, under the circurnstances contemplated thereby, d~ npt
and will not in any materzal respzct confl~ct w~th, or constitute on the part of the
Authority a breach of or default under, any agreement or other instrument to wluci~
the Authonty is a part~ or by v~hich it Ss bound ar any existing law, regulation,
court order or consent decree ta ti~~luch the Authonty is sub~ect:
(r~i} No add~tionai authonzation, approvai, cansent, waiver or any other
aetion by a~y person, board or body, public ar pnvate, not previously ohtained is
required far the Authorrty to enter into the Authanry Dacuments or to perfarm its
obi~gat~ons thereunder: and
(v~i) There ~s na lztigat~on, action, suit, praceeding or in~esugation at law or
in equity before or by any court_ go~~ernmental agency or laody, pending or, to the
_~
best knowledge af such counsel after due ~nvestigation, threatened against the
Authonty, challengmg the creation, orgaruaat~on or existence of the Authonty, or
the validity of the Authonty Document~ or seekFng to restrain or en~o~n any of the
transactions referred to therein or cantemplated thereby or contest~n~ the author~ty
of the Au[tZOnty to enter into or perform its obhgat~ons under any of the Authonty
Documents
(5) Trustee Counsel Ornnion The opin~on of counsel to the Trustee, dat~d the date
of the Closing, addressed to the Underwnter, to the effect that:
(i) The Trustee is a nat~onal bankm~ associat~on, duiy orgaruzed and vahdly
exist~ng under the laws of the Un~ted States, having full corporate power to enter
inta, accept and administer the tnist created u~der the Trust Agreement;
{ii) The Trust Agreement and tt~e Assignrnent Agreement have been duly
authar~zed, executed and deln-ered by th~ Trustee and each of the Trust Agreement
and the AssFgnmznt A~reement const~tutes che Ie~ai, valid and bindmg ob~igat~on of
the Trustee enforceable in accordance tiv~th its terms. excegt as enforcement thereof
may be lim~ted by bankruptcy, insol~=ency or ott-er laws affecttn~ the enfarcement
af creditors' z~g~its generally and by the application af equitahle pnnclples, if
equitable remed~es are sou~ht;
(iii) No consent, appro~~al, author~zation ~r oth~r action by any
governmental ar regulatory authorit}~ ha~ing ~urisdiction over the Trustee that has
not been o~tained ~s or w~ll be required for the execut~on and delrvery of t~e Trust
Agreement or the Assignment Agreement or the pez-formance by the Trustee of its
dut~es and obhgat~ons under the Trust Agreement or the Assignment Agreement;
(~v} The Cert~f~cates have been executed by a duly authonzed officer of the
Trustee;
(v} The execut~on and del~v~ry by the Trustee of th~ Trust Agreement and
the ~iss~gnment Agreement and compliance with the terms thereof will not conflict
with, or result ir~ a~rFO~ation ar breach of, or constitute a defautt under, any loan
agreement, indenture, band. note, resolut~on ar any other agreement or instn~ment
to which the Trustee ~s a pany or by wh~ch rt is bound, or any law or any rule,
regulatfon, order or decre~ of any court or governmental agency or bady having
~unsdiction o~ter the Trustee or any of its acti~lit~es or properties (except that no
representat~on. ~~varranty or aareement need be made by such counsel with respect
ta any federal or State secunt~es or blue sky laws or regulat~ans}, and
(vi} There zs no action, suit, proceed~n~ or invest~~at~on, at law ar m equrty,
before or by any court or goti-ernmental agency, public board or body pending or,
to the best knowledge of such caunsel, threatened against ihe Trustee which ~n the
reasonable }udgment of such caunsel would affect Li~e ex~stence af the Trustee or in
any way contest~ng or affect~ng the ~•ahdit~~ or enforceab~~ity of the Trust Agre~rn~nt
or the Ass~gnment Agreement or contestin~ the powers of the Trustee or its
authanty to enter ~nto and perform its obl~gat~on thereunder
(6) Citv Certificate. A cemf~cate of ihe City, dated the date af the Clos~ng, signed
on behalf af the City by the CFty Niana~er. Finance Directflr or other duly author~zed officer
of the City to ~he effect that:
-~a
(i) The representations. warranties and covenants of the City cflnta~ned
here~n are trne and carrect ~n all matenal respects on and as of the date af the
Clos~ng as ~f madz on the date of the Clos~ng and the City has comphed w~th all af
the terms and conditrons af this Purchase Cantract reqnired to be complied with by
the City at or pnor to the date of the Clos~n~, a~d
(u) No event affect~ng the C~ty has occurred since the date of the Offic;al
Statement which has not b~en drsclosed therem or m any suppiement ar amendment
thereto wh~ch event shauld be disclosed fn the ~ftic~al Statement in order to make
the statements thereFr~, ~n the l~ght of ihe c~rcumstances under wYuch they were
made, not mislead~.ng
(7} Aptnqritv ~ertif~cate A certificate of the Authority, dated the date of the
Closing, s~gned on behalf af the Author~t}r by the Chauperson or other duly authanzed
officer of the Authanty to the effe~t that~
(i} The Authonty is a ~aint exercise of powers authonry, duly created and
lawfully ex~st~ng undzr th~ lav~~s of the State, with full right, power and author~ty to
execute, deuver and perform its obligations under the Authority Documents and to
carry out and consummate th~ transactions cantemplated by the Authonty
Documents and the Offic~al Statement;
(ii) By all necessary off~cial act~on, the Authority has duly autharized and
approved the execution and delivery of, and the performance by the Authonty of the
obligations contained ar descnbed in, the Prelimmary 4fficial Statement, the
~fficial Statement and the Author~ty Documents and as of the Closmg Date, such
authonzat~ons and ap~ravals are ~n full farce and effect and have not been amended,
modrfied ar rescinded The Authonry is in compl~ance in aIl respects with the terms
of the Authortty Documents;
(111} The Author~ty ~s not ~r~ breach of or ~n default under any apphcable
constitutional provision, law or adm~n~stratzve rule or regulation of the State or the
United States, or, in any manner wh~ch would adversely affect the transact~ons
contemplated by the Author~ty Documents, any applicable ~udgment or de~ree or
any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement
or other ~nstrument to wh~ch the Authority is a party or is atherwise subJect, and na
event has occurred and is cont~nuan~ ~vh~ch. ~~~~th the passage of time or the giving
of notice, or both. would constitute, in any manner whFCh would ad~ersely affect
the transactions contemplated by the Author~ty Documents, a default or event of
defau~t under any such instrume~t: and the authonzat~an, execut~on and delivery of
the Authonty Documents and compliance with the provXSions of each of such
agreements or instruments do not and w~ll not conflicC with or canstitute a breach of
or default under any appl~cable constitutional pro~ision, law or adre~in~strat~ve rule
or re~gulation of the State or the Un~ted States or any apphcabie ~udgment, decree,
hcense, perm~t, trust agreement, loan agreement, bond, nate, resolut~on, ordinance,
agreement or other instrument to wnich the AuthorFty (or any af it~ officers in the~r
respective capacities as such} is sub~ect, ar by ~vh~ch it or ariy of its properties is
bound. nor will any such authflrization, execut~on, dehvery or compl~ance result in
the creation or i~nposition of any l~en, charge or other secunty mterest or
encumbrance of any nature ~~~hatsoej~er upan any of its assets or properties or under
the tern~s of any such law, regulation or instrument, except as may be provided by
the Authority Doeuments,
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{iv) There ~ no actian, suit, proceeding, inquiry Qr investigation, at law or
in equity, before or by any c~urt, ~a~ernment agency, public board or body,
pend;ng or, to the best knowledge of the AuthorFty after due investigation,
threatened (a} in any wa}~ quest~omng the existence of tY-e Authonty ar the titles of
the off~cers of the Author~ty to thekr respective offices, (b) affecting, contest~ng or
seek~ng to prohibit, restrain or en~oin the execution and del~very of the Certificates,
or in any way contesting or affecting the validity of the Authority Documents or the
consummation of the transact~ons contemplated thereby, or contesfiang the pow~rs
of the Authonry to znter into the Authar~ty Documents, or (c) which may resuit m
any material ad~rerse irnpact on the financial condik~on of the Authonty, and ihere is
no basis for any actlon, 5lliC, proceeding, inquiry ar mvestigation of the nature
descnbed in clauses (a) through (c) of thFS sentence;
(v) The Authar~ty Documents are ~ralid and binding obligations of the
Authority e~forceabie in accnrdance with their resgective terms, except as
enfareemer~t ma}~ b~ l~mite~ by bankruptcy, ~nsolver~cy, reorganizat~an, moratonum
or similar laws or ~quitable pr~nciples relatir~g to or limiting creditors' rights
generally:
(vi) All authorizations, approvals, licenses, permits, consents and orders of
or f~l~ngs with any go~ernmental autYfonty, legisiative body, baard, agency or
cammtssion havm~ ~urisdict~on ~n the matters wh~c~ are requzred for the due
authonzation of, wh~ch would constitute a condition precedent to or the absence o~
which would adversel}r affect the due performance by tne Authonty of its
obiigations in connection with. the Authonty Documents have been duly obtatned
or made, except as ma}~ be required under the Blue Sky or secunties laws of any
state ~n connect~on with the offe.nn~ and sale of the Cer[if~cates; and
{vii} No event affect~ng the Authority has occurred stnee the date of the
Offic~al Statement which has not been disclosed there~n ar m any supplement or
amendmer~t thereto which event should be disclosed in the ~ff~cial Statement in
order to make the statements thereln, m the l~ght of the circumstances under which
they were made. not misleading
(8} Trustee's Cert~ficate A certificate of ttie Trustee, dated the date of Closmg,
addressed to the C~ty and the Undenvnter, in form and substance acceptable tc the
Underwnter, to the follow~ing effect
(1} The Trustee is a nat~onal bankin~ associat~an, duly arganized and vahdly
ex~sting under the la~~~s of the United States, having full corporate power to enter
~to, accept and admimster the trust created under the Trust Agreement;
(ii} The Trust Agreement and the Assignment Agreement have been duly
authorized, exe~cuted and del~vered by the Tnistee and each af the Trust Agreement
and the Assignment Agreement canst~tutes the Iegai, valid a~d binduig obhgat~on of
the Trustee enforceable ~n accordance v~~~kh ~ts terms, except as enforcement thereof
may be lirr~tted by bankruptcy, xnsol~~ene}~ or other laws affect~ng the enforcement
of creditors' nghts benerall~~ and by the application of equitable pnnciples, if
eqmtable remedies are sought.
(ili} No consent. approval, authorization or other action by any
governmental or regulatory author~ty ha~~ing ~urisdiction over the Tr~stee that has
nat been obtained ~s or ~v~ll be required for the execnt~on and delivery of the Trast
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Agreement or the Assignment Agreement or the performance by the Trustee of its
dut~es and abhgat~ans under the Trust Agreement or the Assxgnment Agreement
(iv) The Cert~f~cates have been executed by a duly aathonzed of~cer of the
Truste~,
{v} The execut~fln and dellvery by the Trustee of the Trust Agreement and
the Assignment A~reement and campliance with the terms khereof will nat confl~ct
with. or result in a v~olation or breach of. or cons~tute a defa~lt under, any loan
agreement, indenture, band, note, resolut~on or any other agreement ar ~nstrument
ta which the Trustee fs a party ~r by whzch it is bound, ar any law or any rule,
regulation, order or decree of any court or governmental agency or body ha~ing
Junsdiction aver the Trustee or an}j of its acti~rt~es or properties (except that no
representation, warrant}~ or a~reemeni need be made by such counsel with respect
to any federal or State securit~es or blue sky laws or re~ulations); and
{~i} The~re is no act~on. suit. praceeduzg or invest~gataon, at law ar i~ equrty,
bef~re or by any court or governmental agency, public board or body penduig, or
to the best knowledge of the T~-ustee, aga~nst the Trustee which ~n the reasonable
}udgm~nt of the Truste~e «~ould affect the existence af t4~e Trustee ar ~n any way
contesting or affect~ng the ~-alidity or enforceability af the Trust Agreement or the
Assignment Agreement ar contest~ng the powers af the Trustee or its authority to
enter into and perform ~ts ohi~~ataon thereunder
(9} D~sclosure Caunsel Ootn~on An opinion, dated the date of th~ Closing
addressed to the Underwriter, of Jones Hall Hill & White, A Professional Law
Corporation, Disclc~sure Caunsel, to the ef~ect that, based on s~eh counsePs parncipat~on
u~ conferences with representata~~es of the A~thonty, the C~ty, the City Attorney, Rauscher
Pierce Refsnes, inc., as Financial Adv~sor, and others, dunng wh~ch canferences the
contents af the Official Statement and related matEers were discussed, and in rehance
thereon and on the records, documents, certificates and opininns descr~bed therein, such
eounsel advises the Underwnter that, dur~ng che course of ~ts engagement as D~sclosure
Counsel on this matter, no fnfarmation came to the attent~on of such counsel's attarneys
renderi.~g legal serv~ces ~n cannection ~vith such representations which caused such counsel
t~ beheve that the Qfficial Statement as af ~ts date (except far any financial Qr stat~st~cal data
or forecasts, numbers, charts, eStimates, pro~ections, assumptions or expressions of
opznion, Appendices B and C, or an}~ information about baok-entry and the Depositary
Trust Company includzd therein, as to which such counsel need express no opntion or
view} conta~ned anv untrue statement of a material fact ar ~mitted ta state any matenal fact
necessary to make che statements there~n. ~n the hght of ttae circumstances under wluch they
were ~nade, not misleading.
(10) Transcnnts Two transcnpts of all proceed~ngs relating to the authonzation,
execution and delivery of the City Documents, t~e Autt~orfty D~cuments and the
Certtficate.s.
(11) Offici~l Statement The Off~ctal Statement and each supplement ar amendment,
if any, thereto, exec~ted on behalf af the City by a duly~ author~zed officer of the City.
(12) Documents An on~inal exz~cuted copy of each of the Authonty Documents
and each of the Ciry Documents
Clerk
(13) ~ity Resolut~an Cert~fied copies af the City Resolution, certified by the Crty
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(14) Authon~y R~solt~t~on Cert~fied copies of the Authonty Resolution, cert~fied by
the Clerk or Assistant Clzrk of the Authanty.
(15) Trust~e Certified copFes of the general resolution of the Trustee
authonzing the execution and delxvery af certa~r~ dacuments by certain of~cers and
employees of the Trustee, which resolution authorizes the execution and deiivery of tt-e
Trust Agreement
{16) 8038 Evidence that the federal tax infarmation form 8038-G has been
pregared for fihng
(17) Nonarbitra~e Certi~cate A ta.x and nonarbitrage certi~cate in form satisfactory
to Spac~at Counsel
{18} CDAC 5tatements .~- cop~~ of the Notices of Sale req~Fred to ~e dehvered to
the Califorrua Debt Advisory Cammission pursuant to Section 53583 af the Cal~forn~a
Government Code
(19} Ratin~s E~~idence fram Standard & Poor's Rat~ngs Group and Moody's
Investarc Ser~ice that the Cert~ficates have been rated "_" and "_", respect~vely, by
such rating services
(ZQ) Title Insurance E~iden~e of arrangements for the issnance of a binder for a
CTLA t~tle insurance policy insur~ng the Trustee's ~nterest an the Property in form and
substance acceptable to Special Counsel
(21} Verificatx~n Letter. A letter addressed to the City, dated the date af the Closing,
from Ernst & Young, Cert~fied Pu~l~c Accountants, ~=enfying the accuracy of (~} the
mathemat~cal camputations concerr-in~ the adequac}~ of the matun~g principal amounts af
and interest earned on the gavernment c~bligatians, together with other eserowed moneys,
to be deposited ~~vith the Pnor Trtzstee to pay w~hen due pursuant to the stated maturity or
call for prepayment the pnnc~pal af and ~nterest and premium, ~f any, evidenced by the
Prior Certificates and (u} the mathemat~cal carnputat~ons af the yield on the Certificates and
the yield on the government o~iigat~ons purchased with a portion of the proceeds of the sale
of the Cert~ficates and used in part by~ Special Counsel in concluduig that interest ~n the
Certificates is excludable frons gross ~ncome for federal ~.ncome tax purposes under
presently exist~ng la~, regulations, dec~sions and official interpretatians, ~ncluding the
"arbitrage" regulations promuigated and praposed u~der Section 148{a} of th~ Internal
Revenue C~de of 1986, as amended, or any successor thereto
(22} Additional Documents Such additional czrtificates, instruments and other
documents as the Underwnter or ~heu- caunsel may reasonably deem necessary.
If the City shall be unal~le to sat~sfy the cond~tions contained in this Pa~chase
Contract, or if ihe obligations of the Underwriter shal~ be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the
Underwnter nor the Caty shall be uncier further obl~~atian hereunder, e~cept a5 further set
forth m Sect~on 8 hereof
8 Ex~renses The Underwriter shall be under no o~iligat~on to pay and the City shall pay or
cause to be paid the expenses ~ncldent to the performance of the obligat~ons of the C~ty hereunder
includmg but not l1r-uted to (a) the costs of the pre~aration and pnntmg, or other reproduct~on (for
d~stnbuEian on or prior to the date hereot~ of the Autharit}~ Dacuments at~d the City Dacuments a.*~d
- I4-
the cost of preparing, pr~nting, execut~ng and dei~vering the Cerhficates; (b) the fees and
d~sbursements of the Trustee. the F~nancial Ad~~isor. any accounta~ts or ather experts or
consultants retained by the Cit}~. (c) the fees and disbursements of Special Counsel and D~sclosure
Counsel; (d} the cost af preparat~on and pnntmg of the Prel~mi~ary Offic~al Statement and any
supplements and amendments thereto and the cost of pregarauon anci pnnung of the Official
Statement, includmg a reasonable ^umber of copie~s thereaf for distnbutton by the Underwnter;
and (e} the costs of any ratmg agency presentat~~ns.
The Underwnter shall pay, and the City shall be under no obligation ta pay, all expenses
~ncurred by it in conneet~on with the public offer~ng and distnbutian of the Certificates, apphcable
CDAC fees and any ad~er~is~ng expenses
9 Notice Any notice or other communication to be given to the City under this Purchase
Contract may be given by deli~~ering the same in wnting to s~ch ent~ty at 1717 4th Street, Suite
250, Santa Mon~ca, Calfforrua 90401, Attent~on: Finance Directar.
Any natice or other commun~cation to be g~v~n to the Undervvnter under this Purchase
Contract may be given by~ deliverin~ [he same in writ~ng to ,
Attention:
10 Entire A~reement. This Purchase Contract, ti~~hen accepted by the City, shall constitute
the ent~re agreement between the Cit}~ and the L'nden~nter and ~s made solely for the benefit of the
City and the Underwriter (~ncluding the successors or ass~gns of any Underwnter}. No other
person shall acqu~ze or have any nght hereunder by virtue hereof, except as provided herem All of
the City's representat~ons, warranties and agreements in this Purchase contract shall remain
operative and in full force and effect, re4ardless of any investigat~on made by or on behalf of the
Underwnter, unt.~l the earlier of (a) deli~~ery of and payment for the Certificates hereunder, and (b}
any termination of this Purchase Contract
11 Counternarts Tlus Purchase Contract may be executed by the parties hereto in separate
counterparts, each of which when so eYecuted and del~vered shall be an original, but all such
counterparts shall together constitute but ane and the same mstrument_
12. 5e~erabilitv. In case ar~y one or more af the provisions contained herein shall for any
reason be held ta be invalid. illegal or unen.forceable in any respect, such inval~dity, illegahty or
unenforceability shall not atfect any other prov~s~an hereof
13 State Law Gov~rns The valid~ty, xnterpretation and perfarmance of this Purchase
Contract s~all be governed by the laws of the State
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14 NQ Assi~nment The nghts and obli~ations created by tlus Purchase Contract shall not
be sub~eet to assignment by the Und~r~vnter or the City without the pnor wntten consent af the
other party hereto.
By
Accepted as of the date first stated above
CITY OF SANTA MOIVICA
By
~PROVED as To Foun~:
Marsha Janes A~out~e, City Attorne}~
[U~TDERWRITER]
Authorized Signatory
- i 6-
APPEl~'DIX A
Pnncipal
Payment Date Pnncipal
(Julv 1) Amaunt
Interest
Rate Y~e1d/Price
-17-