HomeMy WebLinkAboutCC AG PKT 2008-12-08 #WAGENDA STAFF REPORT
DATE: December 8, 2008
TO: Honorable Mayor and City Council
THRU: David Carmany, City Manager
FROM: Robbeyn Bird, CPA -Director of Administrative Services/Treasurer
SUBJECT: SEAL BEACH PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2009
SUMMARY OF REQUEST:
Authorize the issuance by the Seal Beach Public Financing Authority of Lease
Revenue Bonds, approve the form of and authorize the execution and delivery by
the City Manager of an Indenture, Lease, Sublease, Assignment Agreement and
Bond Purchase Agreement with Bank of America, and make a Finding of Public
Benefit.
BACKGROUND:
On November 10, 2008, the City Council authorized issuance of a Notice Inviting
Bids for the reconstruction of Fire Station No. 48. The final submittal date for
these bids is January 6, 2009.
At the August 11, 2008 City Council meeting, the City Council reviewed a
proposal from Bank of America for financing the reconstruction of Fire Station
No. 48 through Lease Revenue Bonds and directed the City Manager to pursue
the same. The bond amount will be scaled to project cost based on the January
6th bid plus soft costs of architecture and engineering and cost of issuance of the
bonds.
-The City Hall complex and the police department buildings will be used for
collateral while the fire station is being constructed. Once the fire station is
complete, it is expected that the fire station will be replaced as collateral for the
bonds and the City Hall complex and the police department will be released as
collateral.
The City Council is now requested to authorize the issuance of Lease Revenue
Bonds, approve the forms of and authorize the execution and delivery of the
Agenda Item W
Page 2
Indenture, Lease, Sublease, Assignment Agreement and the Bond Purchase
Agreement with Bank of America.
In addition, the City Council is asked to make a finding that the financing of the
Fire Station No. 48, a public capital projects through the issuance by the Seal
Beach Public Financing Authority of the Series 2009 Bonds will result in
significant public benefits to the constituents of the City, including demonstrable
savings in effective interest rates and bond issuance costs and more efficient
delivery of City Services to residential and commercial development.
FINANCIAL IMPACT:
The budget will need to be amended for the interest and principal payment due in
the current year. This will be done with the mid-year budget review.
RECOMMENDATION:
Authorize the issuance of Lease Revenue Bonds, approve the form of and
authorize the execution and delivery by the City Manager of an Indenture, Lease,
Sublease, Assignment Agreement and Bond Purchase Agreement with Bank of
America, and make a Finding of Public Benefit.
SUBMITTED BY:
12raa~-~,~.. ~.y~ci
Robbeyn ird, CPA
Director of Administrative Services/Treasurer
Attachments:
NOTED AND APPROVED:
~~~
David Carmany, City Manager
A. Resolution No. 5824 (City of Seal Beach)
B. Resolution No. FA 08-01 (Seal Beach Public Financing Authority)
C. Indenture
D. Lease
E. Sub-lease
F. Assignment Agreement
G. Bond Purchases Agreement
H. Lease Revenue Bonds, Series 2009 -Financing Schedule
Attachment A
Resolution Number 5824
'~
RESOLUTION NUMBER 5824
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL
BEACH MAKING A FINDING OF PUBLIC BENEFIT AND
APPROVING AS TO FORM AND AUTHORIZING THE
EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN
CONNECTION WITH THE ISSUANCE AND SALE OF SEAL
BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE
BONDS, SERIES 2009, AND AUTHORIZING CERTAIN OTHER
MATTERS RELATING THERETO
WHEREAS, the City of Seal Beach (the °City") and the Redevelopment
Agency of the City of Seal Beach (the "Agency") have heretofore executed and
delivered a joint exercise of powers agreement, dated May 8, 2000 (the "Joint
Powers Agreement'), by and between the City and the Agency, which Joint
Powers Agreement created and established the Seal Beach Public Financing
Authority (the "Authority"); and
WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of
the Govemment Code of the State of California and the Joint Powers
Agreement, the Authority is authorized to issue bonds for financing costs of
certain public capital improvements; and
WHEREAS, the Authority desires to issue a new series of bonds (the
"Series 2009 Bonds") to finance the costs with respect to certain public capital
projects, including the construction of a fire station; and
WHEREAS, in connection with the issuance of the Series 2009 Bonds,
the Authority and the City desire to enter into the Lease and the Sublease (each
as hereinafter defined), with respect to certain assets of the City including City
Hall, as more particularly identified therein; and
WHEREAS, the Series 2009 Bonds will be secured by certain base rental
payments payable by the City under the Sublease; and
WHEREAS, there has been presented to the City a Bond Purchase
Agreement (as hereinafter defined), by and among the Authority, the City and
Bank of America, N.A. ("Bank of America") pursuant to which Bank of America
will purchase the Series 2009 Bonds from the Authority; and
WHEREAS, pursuant to Section 6586.5 of the California Government
Code after notice duly published in accordance with law, this City Council held a
public hearing on this date with respect to the issuance of the proposed Bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL
BEACH DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and
correct.
Section 2. Finding of Public Benefit. The City Council hereby finds that
the financing of public capital projects described above through the issuance by
the Authority of the Series 2009 Bonds will result in significant public benefits to
the constituents of the City, including demonstrable savings in effective interest
rate and bond issuance costs and more efficient delivery of City services to
residential and commercial development. The City Council hereby approves the
issuance of the Series 2009 Bonds by the Authority.
Section 3. Lease. The Lease Agreement (the "Lease"), proposed to be
entered into by and between the City, as lessor, and the Authority, as lessee, in
the form presented to the City Council and on file with the City Clerk is hereby
57296-11230096801.1
Resolution Number 5824
approved. The Mayor, the City Manager or the Director of Administrative
Services (each, an "Authorized Officer"), acting singly, is hereby authorized and
directed, for and in the name and on behalf of the City, to execute and deliver the
Lease in substantially said form, with such changes therein as such Authorized
Officer executing the same may approve (such approval to be conclusively
evidenced by the execution and delivery thereof).
Section 4. Sublease. The Sublease Agreement (the "Sublease"),
proposed to be entered into by and between the Authority, as the sublessor, and
the City, as sublessee, in the form presented to the City Council and on file with
the City Clerk is hereby approved. Each Authorized Ofricer is hereby authorized
and directed, for and in the name and on behalf of the City, to execute and
deliver the Sublease in substantially said form, with such changes therein as
such Authorized Officer executing the same may approve (such approval to be
conclusively evidenced by the execution and delivery thereof).
Section 5. Bond Purchase Aareement. The Bond Purchase Agreement
(the "Bond Purchase Agreement"), proposed to be entered into by and among
the Authority, the City and Bank of America, as purchaser of the Series 2009
Bonds, in the form presented to the City Council and on file with the City Clerk is
hereby approved. Subject to the parameters set forth in the resolution of the
Authority approving the issuance of the Series 2009 Bonds, each Authorized
Officer is hereby authorized and directed, for and in the name and on behalf of
the City, to execute and deliver the Bond Purchase Agreement in substantially
said form, with such changes therein as such Authorized Officer executing the
same may approve (such approval to be conclusively evidenced by the
execution and delivery thereof).
Section 6. Bond Counsel. The appointment of Richards, Watson &
Gershon, A Professional Corporation, to act as bond counsel for the issuance of
the Series 2009 Bonds is hereby approved.
Section 7. Qualified Tax-Exempt Obligations. The Series 2009 Bonds
are hereby designated by the City as "Qualified Tax-Exempt Obligations" for
purposes of Section 265(b)(3) of the Intemal Revenues Code of 1986, as
amended. In that connection, the City represents and covenants that it, together
with all its subordinate entities or entities that issue obligations on its behalf, or
on behalf of which it issues obligations, during the current calendar year, (i} has
not issued and will not issue tax-exempt obligations designated as Qualified Tax-
Exempt Obligations in an aggregate amount, including the Series 2009 Bonds,
exceeding $10,000,000, and (ii) has not issued, does not reasonably anticipate
issuing, and will not issue, tax-exempt obligations in an aggregate amount
exceeding $10,000,000 (including the Series 2009 Bonds, but excluding (a)
private activity bonds that are not qualified 501(c)(3) Bonds and (b) current
refunding issues to the extent that the amount of the current refunding issue
does not exceed the outstanding amount of the prior issue), unless the City first
obtains a written opinion of the bond counsel approving the Series 2009 Bonds
that such designation or issuance, as applicable, will not adversely affect the
status of the Series 2009 Bonds as Qualified Tax-Exempt Obligations. The City
represents and covenants that, during any time or in any manner as might affect
the status of the Series 2009 Bonds as Qualified Tax-Exempt Obligations, no
entity has been or will be formed or availed of in order to avoid the purposes of
subparagraph (C) or (D) of Section 265(b)(3) of the Intemal Revenues Code of
1986, as amended. The City further represents that the Series 2009 Bonds are
not being issued as part of a direct or indirect composite issue that combines
issues or lots of tax-exempt obligations of different issuers.
Section 8. Other Acts. The Authorized Officers and all other officers of
the City are hereby authorized and directed, jointly and severally, to do any and
all things and to execute and deliver any and all instruments which they may
deem necessary or proper in order to effectuate the purposes of this Resolution
and the documents approved hereby and to assist the Authority with respect to
S 7296- 1123\ 1096801.1
Resolution Number 5824
the issuance and sale of the Series 2009 Bonds (including the obtaining of title
insurance or other insurance pursuant to the Sublease), and any such actions
previously taken by such officers are hereby ratified and confirmed.
Section 9. Effective Date. This resolution shall take effect from and after
its passage and adoption by the City.
PASSED, APPROVED AND ADOPTED by the City Council of Seal Beach, at a
meeting hereof held on the 8th day of December , 2008 by the following vote:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
ATTEST:
Mayor
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of Seal Beach, California, do hereby certity that the
foregoing resolution is the original copy of Resolution Number 5824 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council of
the City of Seal Beach, at a regular meeting thereof held on the 8th day
of December , 2008
City Clerk
S729G-1123\1096801 1
Attachment B
Resolution Number FA 08-01
RESOLUTION NUMBER FA 08-01
A RESOLUTION OF THE SEAL BEACH PUBLIC
FINANCING AUTHORITY AUTHORIZING THE SALE,
ISSUANCE AND DELIVERY OF LEASE REVENUE BONDS
AND APPROVING AS TO FORM AND AUTHORIZING THE
EXECUTION AND DELIVERY OF DOCUAAENTS RELATING
THERETO AND AUTHORIZING CERTAIN OTHER
MATTERS RELATING THERETO
WHEREAS, the City of Seal Beach (the "City") and the Redevelopment
Agency of the City of Seal Beach (the "Agency") have heretofore executed and
delivered a joint exercise of powers agreement, dated May 8, 2000 (the "Joint
Powers Agreement"), by and between the City and the Agency, which Joint
Powers Agreement created and established the Seal Beach Public Financing
Authority (the "Authority"); and
WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of
the Government Code of the State of Califomia and the Joint Powers
Agreement, the Authority is authorized to issue bonds for financing costs of
certain public capital improvements; and
WHEREAS, the Authority desires to issue a new series of bonds (the
"Series 2009 Bonds") to finance the costs with respect to certain public capital
projects, including the construction of a fire station; and
WHEREAS, in connection with the issuance of the Series 2009 Bonds,
the Authority and the City desire to enter into the Lease and the Sublease (each
as hereinafter defined), with respect to certain assets of the City including City
Hall, as more particularly identified therein; and
WHEREAS, the Series 2009 Bonds will be secured by certain base rental
payments (the "Base Rental Payments") payable by the City under the Sublease;
and
WHEREAS, for the benefit of the holders of the Series 2009 Bonds, the
Authority will enter into the Assignment Agreement (as hereinafter defined)
pursuant to which the Authority will assign its right to receive the Base Rental
Payments and certain other rights of the Authority under the Sublease to the
trustee for the Series 2009 Bonds; and
WHEREAS, there has been presented to the Authority a Bond Purchase
Agreement (as hereinafter defined), by and among the Authority, the City and
Bank of America, N.A. ("Bank of America") pursuant to which Bank of America
will purchase the Series 2009 Bonds from the Authority; and
WHEREAS, the City Council of the City has made a finding, after a duly
noticed public hearing pursuant to Section 6586.5 of the California Government
Code, that the issuance of the Series 2009 Bonds will result in significant public
benefit;
NOW, THEREFORE, THE GOVERNING BOARD OF THE SEAL BEACH
PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE
AND ORDER AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and
correct.
Section 2. Acknowledgment of Citv Council Findino. The Authority
hereby acknowledges and concurs with the City Council's finding of significant
public benefit in connection with the issuance and sale of the Series 2009 Bonds
S729G-1123/1096802
Resolution Number FA 08-01
Section 3. Issuance of Series 2009 Bonds: Indenture. Subject to the
parameters set forth below, the issuance of the Series 2009 Bonds is hereby
approved and authorized. The Indenture (the "Indenture°), proposed to be
entered into by and between the Authority and Wells Fargo Bank, National
Association, as trustee for the Series 2009 Bonds (the `Trustee"), in the form
presented to the Authority and on file with the Secretary of the Authority, is
hereby approved. The Chair or the Executive Director (each, an "Authorized
Office') is hereby authorized and directed, for and in the name and on behalf of
the Authority, to execute and deliver the Indenture in substantially said form, with
such changes therein as such Authorized Officer executing the same may
require or approve (such approval to be conclusively evidenced by the execution
and delivery thereof).
Section 4. Lease. The Lease Agreement (the "Lease"), proposed to be
entered into by and between the City, as lessor, and the Authority, as lessee, in
the form presented to the Authority and on file with the Secretary of the Authority,
is hereby approved. Each Authorized Officer is hereby authorized and directed,
for and in the name and on behalf of the Authority, to execute and deliver the
Lease in substantially said form, with such changes therein as such Authorized
Officer executing the same may require or approve (such approval to be
conclusively evidenced by the execution and delivery thereof).
Section 5. Sublease. The Sublease Agreement (the "Sublease"),
proposed to be entered into by and between the Authority, as sublessor, and the
City, as sublessee, in the form presented to the Authority and on file with the
Secretary of the Authority, is hereby approved. Each Authorized Officer is
hereby authorized and directed, for and in the name and on behalf of the
Authority, to execute and deliver the Sublease in substantially said form, with
such changes therein as such Authorized Officer executing the same may
require or approve (such approval to be conclusively evidenced by the execution
and delivery thereof).
Section 6. Assignment Agreement. The Assignment Agreement (the
"Assignment Agreement'), proposed to be entered into by and between the
Authority and the Trustee, in the form presented to the Authority and on file with
the Secretary of the Authority, is hereby approved. Each Authorized Officer, is
hereby authorized and directed, for and in the name and on behalf of the
Authority, to execute and deliver the Assignment Agreement in substantially said
form, with such changes therein as such Authorized Officer executing the same
may require or approve (such approval to be conclusively evidenced by the
execution and delivery thereof).
Section 7. Bond Purchase Agreement The Bond Purchase Agreement'
(the "Bond Purchase Agreement"), proposed to be entered into by and among
the Authority, the City and Bank of America, as purchaser of the Series 2009
Bonds, in the form presented to the Authority and on file with the Secretary of the
Authority, is hereby approved. Subject to the parameters set forth below, each
Authorized Officer, is hereby authorized and directed, for and in the name and on
behalf of the Authority, to execute and deliver the Bond Purchase Agreement in
substantially said form, with such changes therein as such Authorized Officer
executing the same may require or approve (such approval to be conclusively
evidenced by the execution and delivery thereof).
Section 8. Parameters for Issuance and Sale. Each Authorized Officer,
as the officer executing the aforementioned documents, is hereby authorized and
directed to act on behalf of the Authority to establish and determine (i) the
aggregate principal amount of the Series 2009 Bonds, which shall not exceed
$9,000,000; (ii) the purchase price of the Series 2009 Bonds and the interest
rates thereon, provided that the interest rates of the Series 2009 Bonds shall not
exceed 5.75 percent per annum.
109G802
Resolution Number FA 08-01
Section 9. Bond Counsel. The appointment of Richards, Watson &
Gershon, A Professional Corporation, to act as bond counsel for the issuance of
the Series 2009 Bonds is hereby approved.
Section 10. Qualified Tax-Exempt Oblioations. The Series 2009 Bonds
are hereby designated by the Authority as "Qualified Tax-Exempt Obligations" for
purposes of Section 265(b)(3) of the Intemal Revenues Code of 1986, as
amended. In that connection, the Authority represents and covenants that it,
together with all its subordinate entities or entities that issue obligations on its
behalf, or on behalf of which it issues obligations, during the current calendar
year, (i) has not issued and will not issue tax-exempt obligations designated as
Qualified Tax-Exempt Obligations in an aggregate amount, including the Series
2009 Bonds, exceeding $10,000,000, and (ii) has not issued, does not
reasonably anticipate issuing, and will not issue, tax-exempt obligations in an
aggregate amount exceeding $10,000,000 (including the Series 2009 Bonds, but
excluding (a) private activity bonds that are not qualified 501(c)(3) Bonds and
(b) current refunding issues to the extent that the amount of the current refunding
issue does not exceed the outstanding amount of the prior issue), unless the
Authority first obtains a written opinion of the bond counsel approving the Series
2009 Bonds that such designation or issuance, as applicable, will not adversely
affect the status of the Series 2009 Bonds as Qualified Tax-Exempt Obligations.
The Authority represents and covenants that, during any time or in any manner
as might affect the status of the Series 2009 Bonds as Qualified Tax-Exempt
Obligations, no entity has been or will be formed or availed of in order to avoid
the purposes of subparagraph (C) or (D) of Section 265(b)(3) of the Internal
Revenues Code of 1986, as amended. The Authority further represents that the
Series 2009 Bonds are not being issued as part of a direct or indirect composite
issue that combines issues or lots of tax-exempt obligations of different issuers.
Section 11. Other Acts. The Authorized Officers and all other officers of
the Authority are hereby authorized and directed, jointly and severally, to do any
and all things and to execute and deliver any and all instruments which they may
deem necessary or proper in order to effectuate the purposes of this Resolution,
the documents approved hereby, and the issuance, sale and delivery of the
Series 2009 Bonds (including the obtaining of title insurance or other insurance
pursuant to the Sublease) and any such actions previously taken by such officers
are hereby ratified and confirmed.
Section 12. Effective Date. This resolution shall take effect from and
after its passage and adoption by the Authority.
PASSED, APPROVED AND ADOPTED by the Seal Beach Public Financing
Authority of the City of Seal Beach this 8th day of December , 2008 by the
following vote:
AYES: Authority Members
NOES: Authority Members
ABSENT: Authority Members
ABSTAIN: Authority Members
ATTEST:
Secretary/City Clerk
Chairman
109G802
Resolution Number FA 08-01
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of the City of Seal Beach, California, do hereby certify
that the foregoing Resolution is the original copy of Resolution Number FA OS-01
on file in the office of the City Clerk, passed, approved, and adopted by the Seal
Beach Public Financing Authority of the City of Seal Beach at a meeting held
thereof on the 8th day of December , 2008.
Secretary/City Clerk
1096802
Attachment C
Indenture Document
INDENTURE
by and between the
SEAL BEACH PUBLIC FINANCING AUTHORITY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee
Dated as of January 1, 2009
Relating to
Seal Beach Public Financing Authority
Lease Revenue Bonds
Series 2009
S7296-1123/1096805.1
TABLE OF CONTENTS
Page
ARTICLE I - DEFIlVITIONS; EQUAL SECURITY ..................................................................... 2
1.1. Definitions ........................................................................................................................2
1.2. Rules of Construction ...................................................................................................... 9
1.3. Equal Security .................................................................................................................. 9
ARTICLE II -THE BONDS; SERIES 2009 BONDS PROVISIONS ......................................... 10
2.1. Authorization; Designation ..................................................................
.......................... 10
2.2. Terms of Series 2009 Bonds .......................................................................................... 10
2.3. Redemption of Bonds .................................................................................................... 12
2.4. Form of Series 2009 Bonds ............................................................................................ 13
2.5. Execution of Bonds ........................................................................................................ 14
2.6. Transfer of Bonds .......................................................................................................... 14
2.7. Exchange of Bonds ........................................................................................................ 15
2.8. Temporary Bonds ........................................................................................................... 15
2.9. Registration Books ......................................................................................................... 15
2.10. Bonds Mutilated, Lost, Destroyed or Stolen .................................................................. 15
ARTICLE III -DEPOSIT AND APPLICATION OF PROCEEDS ............................................ 16
3.1. Issuance of Series 2009 Bonds ...................................................................................... 16
3.2. Application of Proceeds of Sale of Series 2009 Bonds ................................................. 16
3.3. Costs of Issuance Fund .................................................................................................. 16
3.4. Improvement Fund ......................................................................................................... 16
3.5. Validity of Bonds ........................................................................................................... 17
ARTICLE IV -REVENUES; FLOW OF FUNDS ....................................................................... 17
4.1. Pledge of Revenues; Assignment of Rights ................................................................... 17
4.2. Lease Revenue Fund ...................................................................................................... 18
4.3. Redemption Fund ........................................................................................................... 19
4.4. Investments .................................................................................................................... 20
4.5. Valuation and Disposition of Investments ..................................................................... 20
ARTICLE V -COVENANTS OF THE AUTHORITY ............................................................... 20
5.1. Punctual Payment ........................................................................................................... 20
5.2. Extension of Payment of Bonds ..................................................................................... 21
5.3. Against Encumbrances ................................................................................................... 21
5.4. Power to Issue Bonds and Make Pledge and Assignment ............................................. 21
5.5. Accounting Records and Financial Statements .............................................................. 21
5.6. Additional Obligations ...................................................................................................21
5.7. Sublease ......................................................................................................................... 22
5.8. Tax Covenants ............................................................................................................... 22
5.9. Further Assurances ......................................................................................................... 23
ARTICLE VI -THE TRUSTEE ................................................................................................... 23
6.1. Appointment of Trustee ................................................................................................. 23
57296-1123/1096805.1 _i_
6.2. Acceptance of Trusts ...................................................................................................... 23
6.3. Fees, Charges and Expenses of Trustee ......................................................................... 26
6.4. Notice to Bond Owners of Default ................................................................................ 26
6.5. Intervention by Trustee .................................................................................................. 27
6.6. Removal of Trustee ........................................................................................................ 27
6.7. Resignation by Trustee .................................................................................................. 27
6.8. Appointment of Successor Trustee ................................................................................ 27
6.9. Merger or Consolidation ................................................................................................ 27
6.10. Concerning any Successor Trustee ................................................................................ 28
6.11. Appointment of Co-Trustee ........................................................................................... 28
6.12. Indemnification; Limited Liability of Trustee ............................................................... 28
6.13. Trustee's Acceptance of Instructions by Electronic Transmission ................................ 29
ARTICLE VII -MODIFICATION AND AMENDMENT OF THE INDENTURE ................... 29
7.1. Amendment Hereof ........................................................................................................ 29
7.2. Effect of Supplemental Indenture .................................................................................. 30
7.3. Endorsement or Replacement of Bonds after Amendment ............................................ 30
ARTICLE VIII -EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS .........:..... 31
8.1. Events of Default ........................................................................................................... 31
8.2. Remedies; No Acceleration ........................................................................................... 31
8.3. Application of Revenues and Other Funds After Default .............................................. 32
8.4. Power of Trustee to Control Proceedings ...................................................................... 32
8.5. Appointment of Receivers ............................................................................................. 33
8.6. Non-Waiver .................................................................................................................... 33
8.7. Rights of Bond Owners .................................................................................................. 33
8.8. Termination of Proceedings ........................................................................................... 34
ARTICLE IX -MISCELLANEOUS ............................................................................................ 34
9.1. Limited Liability of Authority ....................................................................................... 34
9.2. Benefits of Indenture Limited to Parties ........................................................................ 35
9.3. Discharge of Indenture ................................................................................................... 35
9.4. Trustee's Additional Acknowledgment of Certain Provisions of the Sublease ............. 35
9.5. Successor Deemed Included in All References to Predecessor ..................................... 36
9.6. Content of Certificates and Opinions ............................................................................. 36
9.7. Execution of Documents by Bond Owners .................................................................... 36
9.8. Disqualified Bonds ......................................................................................................... 36
9.9. Waiver of Personal Liability .......................................................................................... 37
9.10. Partial Invalidity ............................................................................................................. 37
9.11. Destruction of Canceled Bonds ..................................................................................... 37
9.12. Funds and Accounts ....................................................................................................... 37
9.13. Payment on Business Days ............................................................................................ 37
9.14. Notices ........................................................................................................................... 37
9.15. Unclaimed Moneys ........................................................................................................ 38
9.16. , Governing Law .............................................................................................................. 39
9.17. Execution in Counterparts .............................................................................................. 39
57296-1123/1096805.1 -ii-
Exhibit A -Form of Series 2009 Bond
Exhibit B -Form of Requisition (Costs of Issuance Fund)
Exhibit C -Form of Requisition (Project Fund)
Exhibit D -Form of Investor Letter
S7296-1123/1096805.1 -iii-
INDENTURE
This Indenture is made and entered into as of January 1, 2009, by and between the Seal
Beach Public Financing Authority, a joint powers authority organized and existing under the
laws of the State of California (the "Authority") and Wells Fargo Bank, National Association, a
national banking association duly organized and existing under the laws of the United States of
America, being qualified to accept and administer the trusts hereby created (the "Trustee").
RECITALS:
A. The Authority is a joint powers authority duly organized and existing under and
pursuant to a joint exercise of powers agreement, dated as of May 8, 2000 (the "JPA
Agreement"), by and between the City of Seal Beach (the "City") and the Seal Beach
Redevelopment Agency, and under the provisions of Articles 1 through 4 (commencing with
Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California
(the "Act"), and is authorized pursuant to Article 4 of the Act to borrow money for the purpose
of financing and refinancing public capital improvements.
B. The Authority has determined to issue its Lease Revenue Bonds, Series 2009 (the
"Series 2009 Bonds"), the proceeds of which shall be used to finance certain public capital
improvements of the City.
C. As a part of the aforementioned financing, the Authority and the City have
entered into a Sublease, dated as of January 1, 2009 (the "Sublease"), pursuant to which the City
will lease certain real properties (the "Leased Properties") from the Authority.
D. Under and pursuant to the Sublease, the City is obligated to make rental payments
to the Authority for the lease of the Leased Properties.
E. The Authority has assigned, without recourse, all its rights to receive "Base
Rental" payments (the "Base Rental Payments") to be paid by the City under and pursuant to the
Sublease and certain other rights to the Trustee pursuant to an Assignment Agreement, dated as
of January 1, 2009, by and between the Authority and the Trustee.
F. Subject to and in accordance with the terms of this Indenture, the Base Rental
Payments to be received by the Trustee shall be held in a special fund pledged to the payment of
the debt service of the Series 2009 Bonds.
G. The Series 2009 Bonds shall be issued pursuant to and secured by this Indenture
in the manner provided herein.
H. In order to provide for the authentication and delivery of the Series 2009 Bonds,
to establish and declare the terms and conditions upon which the Series 2009 Bonds are to be
issued and to secure the payment of the principal thereof and interest thereon, the Authority has
authorized the execution and delivery of this Indenture.
I. The Authority has determined that all acts and proceedings required by law
necessary to constitute this Indenture a valid and binding agreement for the uses and purposes
S7296-1123/1096805.1 -1-
herein set forth in accordance with its terms, have been done and taken, and the execution and
delivery of the Indenture have been in all respects duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure
the payment of the principal of and the interest and premium (if any) on all Bonds at any time
issued and Outstanding under this Indenture, according to their tenor, and to secure the
performance and observance of all the covenants and conditions therein and herein set forth, and
to declare the terms and conditions upon and subject to which the Series 2009 Bonds are to be
issued and received, and in consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance of the Series 2009 Bonds by the Owners thereof,
and for other valuable considerations, the receipt whereof is hereby acknowledged, the Authority
does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from
time to time of the Series 2009 Bonds, as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.1. Definitions. Unless the context otherwise requires, the terms defined
in this Section shall for all purposes of this Indenture and of any Supplemental Indenture and of
the Series 2009 Bonds and of any certificate, opinion, request or other document herein
mentioned have the meanings herein specified.
"Act" means Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division
7, Title 1 of the Government Code of the State, as in existence on the Closing Date or as
thereafter amended from time to time.
"Additional Rental Pa ents" means the additional rental payable by the City under and
pursuant to Section 3(b) of the Sublease.
"Annual Aggregate Rental Payments" means, with respect to any Bond Year, the sum
obtained by totaling the following:
(a) The total amount of Base Rental Payments required to be paid in such Bond Year, and
(b) The total amount of Additional Rental Payments required to be paid in such Bond
Year.
"Assignment Agreement" means the Assignment Agreement, dated as of January 1,
2009, by and between the Authority and the Trustee (as further described in Section 4.1), as the
same may be amended, supplemented or otherwise modified from time to time.
"Authority" means the Seal Beach Public Financing Authority, a joint powers agency
duly organized and existing under the JPA Agreement and the laws of the State.
"Authority Board" means the governing body of the Authority.
``Average Annual Aggregate Rental Payments" means the average Annual Aggregate
Rental Payments over all Bond Years.
S7296-1123/1096805.1 _2_
"Base Rental" or "Base Rental Pa ments" means the base rental payable by the City
under and pursuant to Section 3(a) of the Sublease.
"Bond Counsel" means any attorney or firm of attorneys appointed by or acceptable to
the Authority of nationally recognized expertise in the issuance of obligations the interest on
which is excludable from gross income for federal income tax purposes under the Code.
"Bond Law" means the Marks-Roos Local Bond Pooling Act of 1985, constituting
Article 4 of the Act, as in existence on the Closing Date or as thereafter amended from time to
time.
"Bond Year" means each twelve-month period extending from in one calendar
year to of the succeeding calendar year, both dates inclusive, except that the first Bond
Year shall extend from the Closing Date to , 2009.
"Business Day" means a day other than (i) a Saturday or Sunday, (ii) a day on which
commercial banks in the city in which the Trustee maintains its Trust Office are authorized or
required by law or executive order to close or (iii) a day on which the New York Stock Exchange
is closed.
"Certificate of the Authority" means a certificate in writing signed by the Chair or the
Executive Director of the Authority, or by any other officer of the Authority duly authorized for
that purpose by a resolution adopted by the Authority Board and filed with the Trustee.
"Certificate of the Citv" means a certificate in writing signed by the Mayor, the City
Manager or the Director of Administrative Services, or by any other officer of the City duly
authorized for that purpose.
"City" means the City of Seal Beach, California.
"Closing Date" means the initial date of delivery for the Series 2009 Bonds, which shall
be December _, 2009.
"Code" means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.
"Costs of Issuance," means all expenses incurred in connection with the authorization,
issuance, sale and delivery of the Series 2009 Bonds, including but not limited to all
compensation, fees and expenses (including but not limited to fees and expenses for legal
counsel) of the Authority, the Original Purchaser and the Trustee, the origination fee of the
Original Purchaser, compensation to any financial consultants or underwriters, legal fees and
expenses, filing and recording costs, costs of obtaining title insurance with respect to the Leased
Property, costs relating to conveyance of the Leased Property, rating agency fees, costs of
preparation and reproduction of documents, costs of printing, bond insurance premiums and fees
and costs for any guaranty, surety bond, letter of credit or other credit facility.
"Costs of Issuance Fund" means the fund by that name established and held by the
Trustee pursuant to Section 3.3.
S7296-1123/1096805.1 -3-
"Default Rate" means five percent (5.0%) above the interest rate then borne by the Series
2009 Bonds.
"Event of Default" means any of the events described in Section 8.1.
"Federal Securities" means any direct, noncallable obligations of the United States of
America (including obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America), or other noncallable obligations for
which the faith and credit of the United States of America are pledged for the payment of
principal and interest.
"Fiscal Year" means any twelve-month period extending from July 1 in one calendar year
to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month
period selected and designated by the Authority as its official fiscal year period.
"Indenture" means this Indenture, as originally executed or as it may from time to time be
amended or supplemented in accordance herewith.
"Independent Certified Public Accountant" means any certified public accountant or firm
of certified public accountants appointed and paid by the Authority, and who, or each of whom:
(i) is in fact independent and not under domination of the Authority or the City; (ii) does not
have any substantial interest, direct or indirect, in the Authority or the City; and (iii) is not
connected with the Authority or the City as an officer or employee of the Authority or the City
but who may be regularly retained to make annual or other audits of the books of or reports to
the Authority or the City.
"Interest Account" means the account by that name established and held by the Trustee
pursuant to Section 4.2(a).
"Investor Letter" means, as applicable, the letter to be delivered by the Original
Purchaser to the Authority on the Closing Date, or the letter to be delivered by any person or
entity subsequently acquiring a Series 2009 Bond, substantially in the form attached hereto as
Exhibit D, pursuant to Section 2.6.
"JPA Agreement" means the joint exercise of powers agreement, dated as of May 8,
2000, by and between the City and the Redevelopment Agency of the City of Seal Beach,
together with any amendments thereof and supplements thereto.
"Lease" means that certain Lease Agreement, dated as of January 1, 2009, by and
between the City, as lessor, and the Authority, as lessee, with respect to the Leased Property, as
the same may be amended, supplemented or otherwise modified from time to time.
"Lease Revenue Fund" means the fund by that name established and held by the Trustee
pursuant to Section 4.2.
"Leased Property" has the meaning ascribed to such term in the Sublease.
S7296-1123/1096805.1 _4_
"Maximum Annual Aggregate Rental Payments" means, with respect to the Series 2009
Bonds, the largest Annual Aggregate Rental Payments during the period from the date of
calculation through the final maturity date of any Outstanding Series 2009 Bonds.
"Mood" means Moody's Investors Service, Inc., and its successors and assigns.
"Original Purchaser" means Bank of America, N.A.
"Outstanding," when used as of any particular time with reference to Series 2009 Bonds,
means (subject to the provisions of Section 9.8) all Series 2009 Bonds theretofore executed,
issued and delivered by the Authority under this Indenture except:
(a) Series 2009 Bonds theretofore canceled by the Trustee or surrendered to the
Trustee for cancellation;
(b) Series 2009 Bonds paid or deemed to have been paid within the meaning of
Section 9.3; and
(c) Series 2009 Bonds in lieu of which or in substitution for which other Series 2009
Bonds shall have been executed, issued and delivered pursuant to this Indenture
or any Supplemental Indenture.
"Owner" or "Bond Owner," when used with respect to any Series 2009 Bond, means the
person in whose name the ownership of such Series 2009 Bond shall be registered on the
Registration Books.
"Payment Date" means [March 1, June 1, September 1 and December 1] of each year,
commencing , 2009.
"Permitted Investments" mean any of the following obligations if and to the extent that
they are permissible investments of funds of the Authority, as applicable:
1. Cash (insured at all times by the Federal Deposit Insurance Corporation),
2. Obligations of, or obligations guaranteed as to principal and interest by, the
United States of America or any agency or instrumentality thereof, when such
obligations are backed by the full faith and credit of the United States of America
including:
• U.S. Treasury obligations
• All direct or fully guaranteed obligations
• Farmers Home Administration
• General Services Administration
• Guaranteed Title XI financing
• Government National Mortgage Association (GNMA)
• State and Local Government Series
3. Obligations of any of the following federal agencies which obligations represent
the full faith and credit of the United States of America, including:
57296-1123/1096805.1 -5-
• Export-Import B ank
• Rural Economic Community Development Administration
• U.S. Maritime Administration
• Small Business Administration
• U.S. Department of Housing & Urban Development (PHAs)
• Federal Housing Administration
• Federal Financing Bank
4. Direct obligations of any of the following federal agencies which obligations aze
not fully guaranteed by the full faith and credit of the United States of America:
• Senior debt obligations issued by the Federal National Mortgage
Association (FNMA) or Federal Home Loan Mortgage
Corporation (FHLMC)
• Obligations of the Resolution Funding Corporation (REFCORP)
• Senior debt obligations of the Federal Home Loan Bank System
• Senior debt obligations of other Government Sponsored Agencies
5. U.S. dollaz denominated deposit accounts, federal funds and bankers' acceptances
with domestic commercial banks (including the Trustee and its affiliates) which
have a rating on their short term certificates of deposit on the date of purchase of
"P-1" by Moody's and "A-1" or "A-1+" by S&P and maturing not more than 360
calendar days after the date of purchase; provided ratings on holding companies
shall not be considered as the ratings of the bank;
6. Commercial paper which is rated at the time of purchase in the single highest
classification, "P-1" by Moody's and "A-1+" by S&P and which matures not
more than 270 calendaz days after the date of purchase;
7. Investments in a money mazket fund rated "AAAm" or "AAAm-G" or better by
S&P, including funds for which the Trustee or an affiliate provides investment
management or other services;
8. Pre-refunded Municipal Obligations defined as follows: any bonds or other
obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not callable
at the option of the obligor prior to maturity or as to which irrevocable
instructions have been given by the obligor to call on the date specified in the
notice; and (A) which are rated, based on an irrevocable escrow account or fund
(the "escrow"), in the highest rating category of Moody's or S&P or any
successors thereto; or (B) (i) which aze fully secured as to principal and interest
and redemption premium, if any, by an escrow consisting only of cash or
obligations described in clause (2) of the definition of Permitted Investments
above, which escrow may be applied only to the payment of such principal of and
interest and redemption premium, if any, on such bonds or other obligations on
the maturity date or dates thereof or the specified redemption date or dates
pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is
sufficient, as verified by a nationally recognized independent certified public
accountant, to pay principal of and interest and redemption premium, if any, on
S7296-1123/1096805.1 _6_
the bonds or other obligations described in this paragraph on the maturity date or
dates specified in the irrevocable instructions referred to above, as appropriate;
9. Any bonds or other obligations of any agency, instrumentality or local
governmental unit of any state of the United States of America which are rated
"Aaa/AAA" or general obligations of any such states with a rating of "A2" or
higher by both Moody's and S&P.
10. Investment agreements (supported by appropriate opinions of counsel);
11. Any state administered pool investment fund in which the Authority or the City is
statutorily permitted or required to invest will be deemed a permitted investment,
including, but not limited to the Local Agency Investment Fund in the treasury of
the State.
"Principal Account" means the account by that name established and held by the Trustee
pursuant to Section 4.2(b).
"Project" means the following City project (which constitutes a "public capital
improvement" as defined in the Act): the construction of a fire station.
"Project Costs" means, with respect to the Project, the costs, expenses and liabilities paid
or incurred or to be paid or incurred by the City or the Authority, all calculated in accordance
with generally accepted accounting principles, in connection with acquisition(s), financing,
planning, engineering, design, construction and installation(s) relating to the Project or any
portion thereof, and the obtaining of all governmental approvals, certificates, permits and
licenses with respect thereto, including but not limited to (a) the costs of acquisition, renovation
or construction of real or personal property or any interest therein, (b) any good faith or other
similar payment or deposits, (c) the costs of any demolitions or relocation necessary in
connection therewith, (d) costs of physical construction and costs incidental to such construction,
renovation or acquisition, (e) all costs relating to injury and damage claims, (f) the costs of any
indemnity or surety bonds and premiums on insurance, including obligations to a stock, mutual
or reciprocal insurance company or exchange, (g) preliminary investigation and development
costs, (h) engineering fees, contractors' fees, legal fees and expenses, and any other fees and
expenses of professional consultants and (i) the costs of labor, materials, equipment and utility
services and supplies, (j) administrative and general overhead expenses and costs of keeping
accounts and making reports required by the Indenture or the Sublease prior to or in connection
with the completion of such Project, (k) all federal, state and local taxes and payments in lieu of
taxes legally required to be paid in connection with the Project prior to or in connection with the
completion of the Project. It is intended that this definition of Project Costs be broadly construed
to encompass all costs, expenses and liabilities of the City and the Authority which are
chargeable to the capital accounts of the Project in accordance with generally accepted
accounting principles.
"Project Fund" means the fund by that name established and held by the Trustee pursuant
to Section 3.4.
"Qualified Reserve Account Credit Instrument" means an irrevocable standby or direct-
pay letter of credit or surety bond issued by a commercial bank or insurance company and
S7296-1123/1096805.1 -'7-
deposited with the Trustee pursuant to Section 4.2(c)(2), provided that all of the following
requirements are met: (i) at issuance of such letter of credit or surety bond, the long-term credit
rating of such bank is within the highest rating category of Moody's and S&P, or the claims
paying ability of such insurance company is rated within the highest rating category of A.M.
Best & Company and S&P, or if the Series 2009 Bonds are then insured, the long-term credit
rating of such bank, or the claims paying ability of such insurance company shall be at least as
high as the insured rating of the Series 2009 Bonds; (ii) such letter of credit or surety bond has a
term which ends no earlier than the last Payment Date of the portion of the Series 2009 Bonds
covered by such letter of credit or surety bond; (iii) such letter of credit or surety bond has a
stated amount at least equal to the portion of the Reserve Requirement with respect to which
funds are proposed to be released pursuant to Section 4.2(c)(2); and (iv) the Trustee is authorized
pursuant to the terms of such letter of credit or surety bond to draw thereunder amounts
necessary to carry out the purposes specified in Section 4.2(c)(1), including the replenishment of
the Interest Account or the Principal Account.
"Record Date" means, with respect to any Payment Date, the fifteenth calendar day of the
month immediately preceding such Payment Date, whether or not such day is a Business Day.
"Redemption Fund" means the fund by that name established and held by the Trustee
pursuant to Section 4.3.
"Registration Books" means the records maintained by the Trustee pursuant to Section
2.9 for the registration and transfer of ownership of the Series 2009 Bonds.
"Rental Pa ents" means collectively the Base Rental Payments and the Additional
Rental Payments.
"Reauest of the Authority" means a request in writing signed by the Chair or the
Executive Director of the Authority, or by any other officer of the Authority duly authorized for
that purpose by a resolution adopted by the Authority Board and filed with the Trustee.
"Request of the Citv" means a request in writing signed by the Mayor, the City Manager,
or the Director of Administrative Services, or by any other officer of the City duly authorized for
that purpose.
"Reserve Account" means the account by that name established and held by the Trustee
pursuant to Section 4.2(c).
"Reserve Requirement" means, as of any calculation date, an amount equal to the least of
(i) Maximum Aggregate Annual Rental Payments, (ii) 125 percent of Average Annual Aggregate
Rental Payments, or (iii) 10 percent of the proceeds of derived from the sale of the Series 2009
Bonds to the Original Purchaser.
"Revenues" means (a) all Base Rental Payments payable by the City pursuant to the
Sublease (including prepayments}; (b) any proceeds of Series 2009 Bonds originally deposited
with the Trustee and held by the Trustee in the Lease Revenue Fund and the accounts thereof;
(c) investment income with respect to any moneys held by the Trustee in the Lease Revenue
Fund and the accounts thereof (other than amounts payable to the United States of America
57296-1123/1096805.1 _g_
pursuant to the Tax Certificate); and (d) any insurance proceeds or condemnation awards
received by or payable to the Trustee with respect to the Leased Property, including rental
interruption insurance.
"S&P" means Standard & Poor's, and its successors and assigns.
"Series 2009 Bonds" means the Seal Beach Public Financing Authority, Lease Revenue
Bonds, Series 2009, issued pursuant to this Indenture.
"State" means the State of California.
"Sublease" means that certain Sublease Agreement, dated as of January 1, 2009, by and
between the Authority as sublessor and the City as sublessee, with respect to the Leased
Property, as the same may be amended, supplemented or otherwise modified from time to time.
"Supplemental Indenture" means any agreement supplemental to or amendatory of this
Indenture entered into in accordance with the provisions of Article VII.
"Tax Certificate" means the Certificate Regarding Compliance with Certain Tax Matters
(or similar instrument) dated the date of the original delivery of the Series 2009 Bonds relating to
the requirements of certain provisions of the Code, as such certificate may from time to time be
modified or supplemented in accordance with the terms thereof.
"Trust Office" means the principal corporate trust office of the Trustee in Los Angeles,
California or such other offices as may be specified to the Authority by the Trustee in writing.
With respect to presentation of Series 2009 Bonds for payment or for registration of transfer and
exchange such term shall mean the office or agency of the Trustee at which, at any particular
time, its corporate trust business shall be conducted.
"Trustee" means Wells Fargo Bank, National Association, and its successors and assigns,
and any other corporation or association that may at any time be substituted in its place as
provided in Article VI.
SECTION 1.2. Rules of Construction. All references in this Indenture to "Articles,"
"Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of
this Indenture; and the words "herein," "hereof," "hereunder," and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.
SECTION 1.3. Equal Security. In consideration of the acceptance of the Series 2009
Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract
between the Authority and the Owners from time to time of the Series 2009 Bonds; and the
covenants and agreements herein set forth to be performed on behalf of the Authority shall be for
the equal and proportionate benefit, security and protection of all Owners of the Series 2009
Bonds without preference, priority or distinction as to security or otherwise of any of the Series
2009 Bonds over any of the others by reason of the number or date thereof or the time of sale,
execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly
provided therein or herein.
57296-1123/1096805.1 -9-
ARTICLE II
THE BONDS; SERIES 2009 BONDS PROVISIONS
J SECTION 2.1. Authorization; Designation. The Authority has reviewed all
proceedings heretofore taken relative to the authorization of the Series 2009 Bonds and has
found, as a result of such review, and hereby finds and determines that all things, conditions, and
acts required by law to exist, to happen and to be performed precedent to and in the issuance of
the Series 2009 Bonds do exist, have happened and have been performed in due time, form and
manner as required by law, and the Authority is now authorized under the JPA Agreement and
the Bond Law and each and every requirement of law, to issue the Series 2009 Bonds in the
manner and form provided in this Indenture. Accordingly, the Authority hereby authorizes the
issuance of the Series 2009 Bonds pursuant to the Bond Law and this Indenture for the purposes
described in the recitals hereof.
The Series 2009 Bonds are authorized to be issued by the Authority under and subject to
the Bond Law and the terms of this Indenture and shall be designated the Seal Beach Public
Financing Authority Lease Revenue Bonds, Series 2009, and shall be issued in the original
aggregate principal amount of $
SECTION 2.2. Terms of Series 2009 Bonds. The Series 2009 Bonds shall be dated
the Closing Date. The principal with respect to the Series 2009 Bonds shall be payable on the
quarterly Payment Dates in the years and the amounts set forth in Table 1 below. The Series
2009 Bonds shall bear interest at the rate of percent per annum (calculated on the basis of
a 360-day year of twelve 30-day months) on the Outstanding principal, payable on each quarterly
Payment Date. Based on such rate of percent per annum, the amount of interest scheduled
to be payable on each Payment Date is set forth in Table 1.
Each Series 2009 Bond shall bear interest from the Payment Date next preceding the date
of authentication thereof, unless (i) it is authenticated during the period from the day after the
Record Date for a Payment Date to and including such Payment Date, in which event it shall
bear interest from such Payment Date, or (ii) it is authenticated on or prior to the Record Date for
the first Payment Date, in which event it shall bear interest from its dated date; provided,
however, that if, at the time of authentication of any Series 2009 Bond, interest with respect to
such Series 2009 Bond is in default, such Series 2009 Bond shall bear interest at the Default Rate
from the Payment Date to which interest has been paid or made available for payment with
respect to such Series 2009 Bond.
S7296-1123/1096805.1 -10-
TABLE 1
Payment Date Principal Interest Total
Total
The Series 2009 Bonds shall be delivered in fully registered form. The Series 2009
Bonds shall be issued initially as a single bond certificate and registered in the name of the
Original Purchaser. If subsequent to the Closing Date, the Series 2009 Bonds are transferred to
one or more new Owners, the Authority shall prepare or caused to be prepared, and execute and
deliver new Series 2009 Bond certificates to the Owners, substantially in the form set forth in
Exhibit A, with such changes (e.g., the aggregate principal amount represented by each such
Series 2009 Bond, and the principal and interest payable on each Payment Date thereunder) as
appropriate. The Trustee shall authenticate such new Series 2009 Bond certificates upon the
Authority's written instructions.
Except for the final principal installment with respect to a Series 2009 Bond (either
scheduled or at the earlier redemption thereof), (i) principal installments and interest with respect
to any Series 2009 Bond shall be payable in lawful money of the United States of America on
each Payment Date to the Owner thereof as of the close of business on the Record Date, and
(ii) such principal of and interest on the Series 2009 Bonds shall be paid by check or draft of the
Trustee, mailed by first class mail no later than the Payment Date to the Owner at his address as
it appears, on such Record Date, on the Registration Books maintained by the Trustee; rop vided,
however. that at the written request of the Owner of at least $1,000,000 in aggregate principal
amount of Outstanding Series 2009 Bonds filed with the Trustee prior to any Record Date, such
principal and interest on such Series 2009 Bonds shall be paid to such Owner on each succeeding
Payment Date (unless such request has been revoked in writing) by wire transfer of immediately
available funds to an account in the United States designated in such written request. Payments
of defaulted interest with respect to the Series 2009 Bonds shall be paid by check or draft to the
registered Owners of the Series 2009 Bonds as of a special record date to be fixed by the Trustee,
57296-1123/1096805.1 -11-
notice of which special record date shall be given to the registered Owners of the Series 2009
Bonds not less than ten days prior thereto. The final principal of and premium, if any, on the
Series 2009 Bonds, are payable by check when due upon surrender thereof at the Trust Office in
lawful money of the United States of America.
SECTION 2.3. Redemption of Bonds.
(a) Extraordinary Redemption. The Series 2009 Bonds are subject to redemption
prior to their respective maturity dates, upon notice as hereinafter provided, as a whole or in part
on any Payment Date on a pro rata basis (as much as practicable) among the principal amount
due on each Payment Date, from amounts on deposit in the Redemption Fund pursuant to
Section 9 of the Sublease (from Net Proceeds received by the City from insurance payments or
condemnation awards with respect to the Leased Property or any portion thereof under the
circumstances and upon the conditions and terms prescribed in the Sublease, and from additional
money, if any, transferred by the City at its discretion for such purpose).
Redemption pursuant to this subsection (a) shall be made at the following
redemption prices expressed as a percentage of the principal amount to be redeemed, together
with accrued interest to the date of redemption:
Redemption
Redemption Dates Prices
(b) Redemption Resulting from Prepayments of Base Rental. The Series 2009
Bonds shall be subject to redemption prior to their final maturity date, as a whole only, from
prepayments of Base Rental made at the option of the City under Section 11(b) of the Sublease
on any Payment Date with respect to which such prepayment has been made. The Series 2009
Bonds called for redemption pursuant to this Section 2.3(b) shall be redeemed at the following
redemption prices expressed as a percentage of the principal amount to be redeemed, together
with accrued interest to the date of redemption:
Redemption Dates
Redemption
Prices
(c) Notice of Redemption. The Trustee, on behalf and at the expense of the
Authority, shall send by first class mail (or if there is only one Owner of the Series 2009 Bonds,
by such method as acceptable to such Owner) notice of any redemption to the respective Owners
of any Series 2009 Bonds designated for redemption at their respective addresses appearing on
the Registration Books at least 30 but not more than 60 days prior to the date fixed for
S7296-1123/1096805.1 _12_
redemption; provided, however, that, except for notice to the Original Purchaser, neither failure
to receive any such notice so sent nor any defect therein shall affect the validity of the
proceedings for the redemption of such Series 2009 Bonds or the cessation of the accrual of
interest thereon. Such notice shall state the date of the notice, the redemption date, the
redemption place and the redemption price and shall specify the bond numbers and the principal
amounts of the Series 2009 Bonds to be redeemed, and shall require that such Series 2009 Bonds
be then surrendered at the Trust Office of the Trustee for redemption at the redemption price,
giving notice also that further interest on such Series 2009 Bonds will not accrue from and after
the redemption date.
(d) Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of less than all of the Series 2009 Bonds, the Trustee shall select the
Series 2009 Bonds to be redeemed from all Outstanding Series 2009 Bonds or such given portion
thereof not previously called for redemption, on a pro rata basis among the principal installments
payable by the Authority on each Payment Date, in the manner which the Trustee in its
discretion shall deem appropriate.
(e) Partial Redemption of Bonds. In the event only a portion of any Bond is
called for redemption, then upon surrender of such Series 2009 Bond the Authority shall execute
and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the
Authority, a new Series 2009 Bond or Series 2009 Bonds of the same maturity date in aggregate
principal amount equal to the unredeemed portion of the Series 2009 Bond being redeemed.
(f) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the principal of and interest (and premium, if any) on the Series
2009 Bonds so called for redemption shall have been duly provided, such Series 2009 Bonds so
called shall cease to be entitled to any benefit under this Indenture other than the right to receive
payment of the redemption price, and no interest shall accrue thereon from and after the
redemption date. All Bonds redeemed pursuant to this Section 2.3 shall be canceled by the
Trustee. All moneys held by or on behalf of the Trustee for the payment of principal of or
interest or premium on Bonds, whether at redemption or maturity, shall be held in trust for the
account of the Owners thereof and the Trustee shall not be required to pay Owners any interest
on, or be liable to Owners for any interest earned on, moneys so held.
(g) Right to Rescind Optional Redemption. The Authority may rescind any
optional redemption by written notice to the Trustee on or prior to the date fixed for redemption.
Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or
are not available on the date fixed for redemption for the payment in full of the Series 2009
Bonds then called for redemption, and such cancellation shall not constitute an Event of Default
hereunder. The Authority and the Trustee shall have no liability to the Owners or any other party
related to or arising from such rescission. The Trustee shall send notice of such rescission in the
same manner as that prescribed in subsection (c) of this Section 2.3.
SECTION 2.4. Form of Series 2009 Bonds. The Series 2009 Bonds, the form of
Trustee's certificate of authentication, and the form of assignment to appear thereon, shall be
substantially in the form set forth in Exhibit A attached hereto and by this reference incorporated
S7296-1123/1096805.1 -13-
herein, with necessazy or appropriate variations, omissions and insertions, as permitted or
required by this Indenture.
SECTION 2.5. Execution of Bonds. The Bonds shall be signed in the name and on
behalf of the Authority with the manual or facsimile signatures of its Chair or Vice Chair and
attested with the manual or facsimile signature of its Secretary or any Assistant Secretazy duly
appointed by the Authority Boazd, and shall be delivered to the Trustee for authentication by it.
In case any officer of the Authority who shall have signed any of the Series 2009 Bonds shall
cease to be such officer before the Series 2009 Bonds so signed shall have been authenticated or
delivered by the Trustee or issued by the Authority, such Series 2009 Bonds may nevertheless be
authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as
binding upon the Authority as though the individual who signed the same had continued to be
such officer of the Authority. Also, any Series 2009 Bond may be signed on behalf of the
Authority by any individual who on the actual date of the execution of such Series 2009 Bond
shall be the proper officer although on the nominal date of such Series 2009 Bond such
individual shall not have been such officer.
Only such of the Series 2009 Bonds as shall bear thereon a certificate of authentication,
manually executed on behalf of the Trustee, shall be valid or obligatory for any purpose or
entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive
evidence that the Series 2009 Bonds so authenticated have been duly authenticated and delivered
hereunder and aze entitled to the benefits of this Indenture.
SECTION 2.6. Transfer of Bonds. Subject to the delivery by a transferor of an
Investor Letter described below, any Series 2009 Bond, or any portion thereof, may, in
accordance with its terms, be transferred, upon the Registration Books, by the person in whose
name it is registered, in person or by his duly authorized attorney, upon presentation and
surrender of such Series 2009 Bond for cancellation, accompanied by delivery of a written
instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Series
2009 Bond shall be surrendered for transfer, the Authority shall execute and the Trustee shall
thereupon authenticate and deliver to the transferee a new Series 2009 Bond or Series 2009
Bonds of like tenor, maturity and aggregate principal amount. The cost of printing any Series
2009 Bonds and any services rendered or expenses incurred by the Trustee in connection with
any such transfer shall be paid by the Authority, except that the Trustee shall require the payment
by the Owner requesting such transfer of any tax or other governmental charge required to be
paid with respect to such transfer. The Trustee shall not be required to transfer, pursuant to this
Section, (a) any Series 2009 Bond during the period established by the Trustee for the selection
of Bonds for redemption or (b) any Series 2009 Bond selected for redemption pursuant to
Section 2.3(d).
Neither this Indenture nor the Series 2009 Bonds have been registered with any federal
or state securities agency or commission. The City has not prepared any offering document or
undertaken any continuing disclosure obligation in connection with the issuance of the Series
2009 Bonds. Therefore, notwithstanding the foregoing provisions of this Section 2.06, the Series
2009 Bonds shall be transferred only to a "qualified institutional buyer" as defined in Rule 144a
of the Securities Act of 1933 ("QIB ") or an "accredited investor" as defined in Rule S01(a) of
Regulation D promulgated under the Securities Act of 1933. In addition, no transfer of a Series
S7296-1123/1096805.1 -14-
2009 Bond shall be effective until a transferee certifies to the City and the Trustee as to certain
matters set forth in the Investor Letter attached hereto as Exhibit D (which may contain such
reasonable or necessary deviations therefrom as acceptable to the City).
SECTION 2.7. Exchange of Bonds. Series 2009 Bonds may be exchanged at the
Trust Office of the Trustee for the same aggregate principal amount of Series 2009 Bonds of the
same tenor. The cost of printing any Series 2009 Bond and any services rendered or expenses
incurred by the Trustee in connection with any such exchange shall be paid by the Authority,
except that the Trustee shall require the payment by the Owner requesting such exchange of any
tax or other governmental charge required to be paid with respect to such exchange. The Trustee
shall not be required to exchange, pursuant to this Section, (a) any Series 2009 Bond during the
period established by the Trustee for the selection of Series 2009 Bonds for redemption or (b)
any Series 2009 Bond selected for redemption pursuant to Section 2.3(d).
SECTION 2.8. Temporary Bonds. The Series 2009 Bonds may be issued initially in
temporary form exchangeable for definitive Series 2009 Bonds when ready for delivery. The
temporary Series 2009 Bonds may be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the Authority and may contain such reference to any of
the provisions of this Indenture as may be appropriate. Every temporary Series 2009 Bond shall
be executed by the Authority and be registered and authenticated by the Trustee upon the same
conditions and in substantially the same manner as the definitive Series 2009 Bonds. If the
Authority issues temporary Series 2009 Bonds, it will execute and furnish definitive Bonds
without delay, and thereupon the temporary Series 2009 Bonds shall be surrendered, for
cancellation, in exchange therefor at the Trust Office of the Trustee, and the Trustee shall
authenticate and deliver in exchange for such temporary Series 2009 Bonds definitive Series
2009 Bonds of like tenor, maturity and aggregate principal amount. Until so exchanged, the
temporary Series 2009 Bonds shall be entitled to the same benefits under this Indenture as
definitive Series 2009 Bonds authenticated and delivered hereunder.
SECTION 2.9. Registration Books. The Trustee will keep or cause to be kept at its
Trust Office sufficient records for the registration and transfer of the Series 2009 Bonds, which
shall at all times during regular business hours be open to inspection by the Authority with
reasonable prior notice; and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer, or cause to be registered or
transferred, on said records, Series 2009 Bonds as herein provided.
SECTION 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Series 2009
Bond shall become mutilated, the Authority, at the expense of the Owner of said Series 2009
Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Series 2009
Bond of like tenor, maturity and aggregate principal amount in exchange and substitution for the
Series 2009 Bond so mutilated, but only upon surrender to the Trustee of the Series 2009 Bond
so mutilated. Every mutilated Series 2009 Bond so surrendered to the Trustee shall be canceled
by it. If any Series 2009 Bond issued hereunder shall be lost, destroyed or stolen, evidence of
such loss, destruction or theft may be submitted to the Trustee and, if such evidence shall be
satisfactory to it and indemnity satisfactory to it shall be given, the Authority, at the expense of
the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new
Series 2009 Bond of like tenor in lieu of and in substitution for the Series 2009 Bond so lost,
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destroyed or stolen (or if any such Series 2009 Bond shall have matured or shall have been called
for redemption, instead of issuing a substitute Series 2009 Bond the Trustee may pay the same
without surrender thereof upon receipt of indemnity satisfactory to the Trustee). The Authority
may require payment of a reasonable fee for each new Series 2009 Bond issued under this
Section and of the expenses that may be incurred by the Authority and the Trustee. Any Series
2009 Bond issued under the provisions of this Section in lieu of any Series 2009 Bond alleged to
be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the
Authority whether or not the Series 2009 Bond alleged to be lost, destroyed or stolen shall be at
any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits
of this Indenture with all other Series 2009 Bonds secured by this Indenture.
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS
SECTION 3.1. Issuance of Series 2009 Bonds. Upon the execution and delivery of
this Indenture, the Authority shall execute and deliver the Series 2009 Bonds to the Trustee for
authentication and delivery to or on the order of the Original Purchaser upon the Request of the
Authority.
SECTION 3.2. Application of Proceeds of Sale of Series 2009 Bonds. On the
Closing Date for the Series 2009 Bonds, the Trustee shall receive, on behalf of the Authority,
$ from the Original Purchaser. The Trustee shall apply the Series 2009 Bonds
proceeds as follows:
(a) Deposit $ in the Costs of Issuance Fund; and
(b) Deposit $ in the Reserve Account; and
(c) Deposit the remaining $ in the Project Fund.
For record keeping purposes the Trustee may establish such funds and accounts as may
be necessary to reflect such deposits.
SECTION 3.3. Costs of Issuance Fund. The Trustee shall establish a fund known as
the "Costs of Issuance Fund." Pursuant to Section 3.2(a), the Trustee shall deposit a portion of
the proceeds of the sale of the Series 2009 Bonds into the Costs of Issuance Fund. The moneys
within the Costs of Issuance Fund shall be used from time to time to pay Costs of Issuance with
respect to the Series 2009 Bonds and shall be disbursed by the Trustee upon delivery to the
Trustee of a requisition, substantially in the form attached hereto as Exhibit B, executed by an
authorized officer of the Authority. On the date that is 180 days following the Closing Date of
the Series 2009 Bonds, or upon the earlier receipt by the Trustee of a Request of the Authority to
do so, the Trustee shall transfer all remaining amounts in the Costs of Issuance Fund to the Lease
Revenue Fund.
SECTION 3.4. Project Fund. The Trustee shall establish and maintain a separate
fund to .be known as the "Project Fund." On the Closing Date for the Series 2009 Bonds, the
Trustee shall deposit a portion of the sale proceeds of the Series 2009 Bonds into the Project
Fund pursuant to Section 3.2(b). The Trustee shall disburse or transfer amounts from the Project
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Fund, as stated in a Request of the City, substantially in the form attached hereto as Exhibit C,
for the payment of the Project Costs relating to the Project (including reimbursement to the City
for any such costs paid by it). Upon receipt of each such Request of the City, the Trustee shall
pay the amount set forth in such Request as directed by the terms thereof. When the Project, or
the portions thereof determined by the City to be financed hereunder, have been completed, the
Authority shall deliver or shall cause the City to deliver to the Trustee a Certificate of the City,
stating the fact and date of such completion. Following the delivery of such certificate and upon
receipt of a Request of the City, the Trustee shall transfer amounts then on deposit in the Project
Fund (or such portion thereof as may be specified in such Request of the City) to the Lease
Revenue Fund.
SECTION 3.5. Validity of Bonds. The validity of the authorization and issuance of
the Series 2009 Bonds shall not be affected in any way by any proceedings taken with respect to
the application of the proceeds of the Series 2009 Bonds, and the recital contained in the Series
2009 Bonds that the same are issued pursuant to the Bond Law shall be conclusive evidence of
their validity and of the regularity of their issuance.
ARTICLE IV
REVENUES; FLOW OF FUNDS
SECTION 4.1. Pledge of Revenues; Assignment of Rights. Subject to the
provisions of Section 6.3, the Series 2009 Bonds shall be secured by a first lien on and pledge
(which shall be effected in the manner and to the extent hereinafter provided) of all of the
Revenues and a pledge of all the moneys in the Interest Account, the Principal Account and the
Reserve Account, including all amounts derived from the investments of such moneys. The
Series 2009 Bonds shall be equally secured by a pledge, charge and lien upon the Revenues and
such moneys without priority for number, date of the Series 2009 Bonds, date of execution or
date of delivery; and the payment of the interest on and principal of the Series 2009 Bonds and
any premiums upon the redemption of any portion thereof shall be and are secured by an
exclusive pledge, charge and lien upon the Revenues and such moneys. So long as any of the
Series 2009 Bonds are Outstanding, the Revenues shall not be used for any other purpose; except
that out of the Revenues and such moneys there may be apportioned such sums, for such
purposes, as are expressly permitted by Section 4.2.
The Trustee is authorized and has been requested by the Authority to enter into the
Assignment Agreement. Pursuant to the Assignment Agreement, the Authority transfers in trust
and assigns to the Trustee, for the benefit of the Owners from time to time of the Series 2009
Bonds, all of the Revenues and all of the right, title and interest of the Authority in the Sublease
(other than its rights to indemnification and payment or reimbursement for any costs or
expenses), including its rights to receive the Base Rental scheduled to be paid by the City under
and pursuant to the Sublease and any and all of the other rights of the Authority under the
Sublease as may be necessary to enforce payment of such Base Rental when due or otherwise to
protect the interest of the Owners of the Series 2009 Bonds, including the Authority's leasehold
title to the Leased Property leased to the City pursuant to the Sublease. The Trustee accepts such
assignments. The Trustee shall be entitled to and shall receive all of the Revenues, and any
Revenues collected or received by the Authority shall be deemed to be held, and to have been
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collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by
the Authority to the Trustee.
SECTION 4.2. Lease Revenue Fund. All Base Rental Payments shall be deposited
by the Trustee in a special fund designated as the "Lease Revenue Fund," which the Trustee shall
establish, maintain and hold in trust hereunder.
On or before each Payment Date, the Trustee shall transfer from the Lease Revenue Fund
and deposit into the following respective accounts (each of which the Trustee shall establish and
maintain within the Lease Revenue Fund), the following amounts in the following order of
priority, the requirements of each such account (including the making up of any deficiencies in
any such account resulting from lack of Revenues sufficient to make any earlier required deposit)
at the time of deposit to be satisfied before any transfer is made to any account subsequent in
priority:
(a) Interest Account. On or before each Payment Date, the Trustee shall deposit
in the Interest Account an amount required to cause the aggregate amount on deposit in the
Interest Account to equal the amount of interest becoming due and payable on such Payment
Date on all Outstanding Bonds. No deposit need be made into the Interest Account if the amount
contained therein is at least equal to the interest becoming due and payable upon all Outstanding
Bonds on each succeeding Payment Date within the then current Bond Year. All moneys in the
Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the
interest on the Series 2009 Bonds as it shall become due and payable (including accrued interest
on any Bonds redeemed prior to maturity pursuant to Section 2.3).
(b) Principal Account. On or before each Payment Date, the Trustee shall deposit
in the Principal Account an amount required to cause the aggregate amount on deposit in the
Principal Account to equal the principal amount of the Series 2009 Bonds maturing or required
to be redeemed through mandatory sinking account redemption on such Payment Date pursuant
to Section 2.2 or Section 2.3 or pursuant to a Supplemental Indenture, as the case may be. All
moneys in the Principal Account shall be used and withdrawn by the Trustee solely for the
purpose of paying the principal of the Series 2009 Bonds.
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(c) Reserve Account.
(1) On or before each Payment Date, the Trustee shall deposit in the
Reserve Account such amount as may be necessary, if any, to restore a balance therein equal to
the Reserve Requirement. No deposit need be made in the Reserve Account so long as there
shall be on deposit an amount equal to the Reserve Requirement. Except as otherwise provided
herein, money in (or available to) the Reserve Account shall be used and withdrawn by the
Trustee solely for the purpose of replenishing the Interest Account or the Principal Account in
such order, in the event of any deficiency at any time in either of such accounts, or for the
purpose of paying the interest on or principal of or redemption premiums, if any, on the Series
2009 Bonds, or for the retirement of all Series 2009 Bonds then Outstanding. Any amount in the
Reserve Account in excess of the Reserve Requirement shall be transferred monthly to the Lease
Revenue Fund.
(2) With the prior written consent of the Original Purchaser, the Reserve
Requirement may be satisfied by crediting to the Reserve Account moneys or one or more
Qualified Reserve Account Credit Instruments or any combination thereof, which in the
aggregate make funds available in the Reserve Account in an amount equal to the Reserve
Requirement. Upon the deposit with the Trustee of such Qualified Reserve Account Credit
Instrument, the Trustee shall release moneys then on hand in the Reserve Account to the City, to
be used for any lawful purpose, in an amount equal to the face amount of the Qualified Reserve
Account Credit Instrument.
(d) Surplus. On or promptly after each Payment Date, the Trustee shall
determine the amount, if any, remaining in the Lease Revenue Fund after making the deposits
required by paragraphs (a) through (b) above and the transfers of investment earnings pursuant to
Section 4.4, and shall notify the City of the amount so determined. The Trustee shall apply such
amount as a credit against the next following Base Rental Payment; provided that, if directed in a
Request of the City, the Trustee shall, with respect to all or any portion of such amount; (i) pay,
or set an amount aside for the payment of, any rebate amount in accordance with a computation
made by the City pursuant to the Code; or (ii) transfer an amount to the Project Fund.
SECTION 4.3. Redemption Fund. There is hereby established a fund to be held by
the Trustee known as the "Redemption Fund." At any time the Trustee receives money from the
City pursuant to Section 9 (Net Proceeds from insurance payments or taking proceedings) or
Section 11(b) (optional prepayment of Base Rental Payments) of the Sublease, the Trustee shall
immediately deposit such money as follows: (i) an amount equal to the interest on the Series
2009 Bonds to be redeemed pursuant to Section 2.3(a) or 2.3(b), as applicable, accrued to the
redemption date shall be deposited in the Interest Account; and (ii) the balance of such moneys
shall be deposited in the Redemption Fund. Amounts on deposit in the Redemption Fund shall
be applied solely for the purpose of paying the principal of and premium, if any, on the Series
2009 Bonds to be redeemed pursuant to Section 2.3(a) or 2.3(b), as applicable; rovided,
however, that at any time prior to giving notice of redemption of any Series 2009 Bonds, the
Trustee may apply such amounts to the purchase of Series 2009 Bonds at public or private sale,
as and when and at such prices (including brokerage and other charges, but excluding accrued
interest, which is payable from the Interest Account) as shall be directed in writing by the
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Authority, except that the purchase price (exclusive of accrued interest) may not exceed the
redemption price then applicable to the Series 2009 Bonds.
SECTION 4.4. Investments. All moneys in any of the funds or accounts established
with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted
Investments pursuant to the written direction of the Authority given to the Trustee in advance of
the making of such investments (and promptly confirmed in writing, as to any such direction
given orally); which Permitted Investments shall, as nearly as practicable, mature (or be subject
to redemption or disposition by the Trustee) on or before the dates on which such money is
anticipated to be needed for disbursement hereunder. In the absence of any such direction from
the Authority, the Trustee shall invest any such moneys in money market funds described in
clause (7) of the definition of Permitted Investments. Obligations purchased as an investment of
moneys in any fund or account shall be deemed to be part of such fund or account.
The Trustee shall transfer at least semiannually all investment earnings on amounts in the
Principal Account and the Interest Account to the Lease Revenue Fund. If the balance of the
Reserve Account is then at least equal to the Reserve Requirement, then the Trustee shall
promptly transfer all investment earnings in the Reserve Account, which are in excess of the
Reserve Requirement, to the Lease Revenue Fund. Unless otherwise specified in this Indenture,
investment earnings on amounts in all other funds and accounts established and maintained
pursuant to this Indenture shall be retained in such respective funds and accounts. For purposes
of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder.
The Trustee may act as principal or agent in the acquisition or disposition of any investment and
may impose its customary charges therefor. The Trustee shall incur no liability for losses arising
from any investments made pursuant to this Section.
The Authority acknowledges that regulations of the [Comptroller of the Currency] or
other applicable regulatory entity grant the Authority the right to receive brokerage
confirmations of security transactions to be effected by the Trustee hereunder as they occur. The
Authority specifically waives the right to receive such notification to the extent permitted by
applicable law and agrees that it will instead receive periodic cash transaction statements which
include details for the investment transactions effected by the Trustee hereunder; rovided,
however, that the Authority retains its right to receive brokerage confirmation on any investment
transaction requested by the Authority.
SECTION 4.5. Valuation and Disposition of Investments. For the purpose of
determining the amount in any fund or account,,Permitted Investments credited to such fund or
account shall be valued semiannually at the lower of cost or market value thereof (excluding any
brokerage commissions and excluding any accrued interest).
ARTICLE V
COVENANTS OF THE AUTHORITY
SECTION 5.1. Punctual Payment. The Authority shall punctually pay or cause to be
paid the principal, interest and premium (if any) to become due in respect of all the Series 2009
Bonds, in strict conformity with the terms of the Series 2009 Bonds and of this Indenture,
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according to the true intent and meaning thereof, but only out of Revenues and other assets
pledged for such payment as provided in this Indenture.
SECTION 5.2. Extension of Payment of Bonds. The Authority shall not directly or
indirectly extend or assent to the extension of the maturity of any of the Series 2009 Bonds or the
time of payment of any claims for interest by the purchase of such Series 2009 Bonds or by any
other arrangement, and in case the maturity of any of the Series 2009 Bonds or the time of
payment of any such claims for interest shall be extended, such Series 2009 Bonds or claims for
interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture,
except subject to the prior payment in full of the principal of all of the Series 2009 Bonds then
Outstanding and of all claims for interest thereon which shall not have been so extended.
Nothing in this Section shall be deemed to limit the right of the Authority to issue Bonds for the
purpose of refunding any Outstanding Series 2009 Bonds, and such issuance shall not be deemed
to constitute an extension of maturity of the Series 2009 Bonds.
SECTION 5.3. Against Encumbrances. The Authority shall not create, or permit the
creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets
pledged or assigned under this Indenture while any of the Series 2009 Bonds are Outstanding,
except the pledge and assignment created by this Indenture. Subject to this limitation, the
Authority expressly reserves the right to enter into one or more other indentures for any of its
corporate purposes, including other programs under the Bond Law, and reserves the right to issue
other obligations for such purposes.
SECTION 5.4. Power to Issue Bonds and Make Pledge and Assignment. The
Authority is duly authorized pursuant to law to issue the Series 2009 Bonds and to enter into this
Indenture and to pledge and assign the Revenues, the Sublease and other assets purported to be
pledged and assigned, respectively, under this Indenture in the manner and to the extent provided
in this Indenture. The Series 2009 Bonds and the provisions of this Indenture are and will be the
legal, valid and binding special obligations of the Authority in accordance with their terms, and
the Authority and the Trustee (subject to the provisions of Section 6.2 hereof) shall at all times,
to the extent permitted by law, defend, preserve and protect said pledge and assignment of
Revenues and other assets and all the rights of the Bond Owners under this Indenture against all
claims and demands of all persons whomsoever.
SECTION 5.5. Accounting Records and Financial Statements. The Trustee shall at
all times keep, or cause to be kept, proper books of record and account, prepared in accordance
with corporate trust industry standards, in which complete and accurate entries shall be made of
all transactions by the Trustee relating to the proceeds of Series 2009 Bonds, the Revenues, the
Sublease and all funds and accounts established pursuant to this Indenture. Such books of record
and account shall be available for inspection by the Authority and the City during regular
business hours with reasonable prior notice.
SECTION 5.6. Additional Obligations. The Authority covenants that no additional
bonds, notes or indebtedness shall be issued or incurred that are payable out of the Revenues in
whole or in part.
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SECTION 5.7. Sublease. The Trustee, as assignee of the Authority's rights under the
Sublease pursuant to Section 4.1 and under the Assignment Agreement, shall receive all amounts
due from the City pursuant to the Sublease.
The Authority will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms contained in the Sublease required to be complied with, kept,
observed and performed by it and, together with the Trustee, will enforce the Sublease against
the City in accordance with its terms.
The Authority will not alter, amend or modify the Sublease without the prior written
consent of the Trustee, which consent shall be given only (i) if the Trustee receives an opinion of
Bond Counsel that such alteration, amendment or modification will not result in any material
impairment of the security given or intended to be given for the payment of the Base Rental
Payments, or (ii) if the Trustee first obtains the written consent of the Owners of at least a
majority in aggregate principal amount of the Series 2009 Bonds then Outstanding to such
alteration, amendment or modification. Prior to any amendment or modification of the Sublease
pursuant to this Section 5.7, the Trustee may require the Authority to deliver to the Trustee an
opinion of Bond Counsel to the effect that such amendment or modification has been adopted in
accordance with the requirements of this Indenture. Notwithstanding the foregoing, the Sublease
may not be amended without the prior written consent of the Original Purchaser so long as the
Original Purchaser is the owner of the Series 2009 Bonds.
SECTION 5.8. Tax Covenants.
(a) The Authority hereby covenants it shall not take any action, or fail to take any
action, if any such action or failure to take action would adversely affect the tax-exempt status of
interest on any tax-exempt bond under Section 103 of the Code. Without limiting the generality
of the foregoing, the Authority shall comply with the requirements of the Tax Certificate, if any,
delivered in connection with the issuance of the Series 2009 Bonds.
(b) In the event that at any time the Authority is of the opinion that, in order to
comply with its obligations under subsection (a) of this Section, it is necessary or helpful to
restrict or limit the yield on the investment of any moneys in any of the funds and accounts held
by the Trustee pursuant to the Indenture, the Authority shall so instruct the Trustee in writing,
and cause the Trustee to take such action as may be necessary in accordance with such
instructions.
(c) Notwithstanding any provisions of this Section, if the Authority shall provide
to the Trustee an opinion of Bond Counsel to the effect that any specified action required under
this Section or a Tax Certificate is no longer required or that some further or different action is
required to maintain the exclusion from federal income tax of interest on the tax-exempt bonds
under Section 103 of the Code, the Authority and the Trustee may conclusively rely on such
opinion in complying with the requirements of this Section and of the applicable Tax Certificate,
and the covenants hereunder shall be deemed to be modified to that extent.
(d) The covenants in this Section shall survive payment in full or discharge of the
tax-exempt bonds.
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(e) Notwithstanding any provision of this Section 5.8, if the Authority or the City
shall provide to the Trustee an opinion of Bond Counsel that any specified action required under
this Section 5.8 is no longer required or that some further or different action is required to
maintain the exclusion from federal income tax of interest on the Series 2009 Bonds, the Trustee,
the Authority and the City may conclusively rely on such opinion in complying with the
requirements of this section and, notwithstanding Article VII, the covenants hereunder shall be
deemed to be modified to that extent.
SECTION 5.9. Further Assurances. The Authority will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Indenture,
and for the better assuring and confirming unto the Owners of the Series 2009 Bonds the rights
and benefits provided in this Indenture.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Appointment of Trustee. Wells Fargo Bank, National Association, a
national banking association duly organized and existing under and by virtue of the laws of the
United States of America, is hereby appointed Trustee by the Authority for the purpose of
receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and
apply the same as provided in this Indenture. The Authority agrees that it will maintain a Trustee
which has (or which is a wholly-owned subsidiary of a corporation which has) a combined
capital and surplus of at least $50,000,000, and which is subject to supervision or examination by
Federal or State authority, so long as any Series 2009 Bonds are Outstanding. If such bank,
national banking association or trust company or such parent corporation publishes a report of
condition at least annually pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purpose of this Section 6.1 the combined
capital and surplus of such bank, national banking association or trust company or such parent
corporation shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
The Trustee is hereby authorized to pay the principal of and interest and redemption
premium (if any) on the Series 2009 Bonds when duly presented for payment at maturity, or on
redemption prior to maturity, and to cancel all Series 2009 Bonds upon payment thereof. The
Trustee shall keep accurate records of all funds and accounts administered by it and of all Series
2009 Bonds paid and discharged.
SECTION 6.2. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed
upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the
following express terms and conditions:
(a) The Trustee shall not be liable for any error of judgment made in good faith
by a responsible officer of the Trustee, unless the Trustee was negligent in ascertaining the
pertinent facts.
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(b) Whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon a Certificate of the Authority.
(c) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to
this Indenture, unless such Owners shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(d) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, facsimile transmission, electronic mail, order bond or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(e) The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred, undertakes to perform such
duties and only such duties as aze specifically set forth in this Indenture and no covenants of or
against the Trustee shall be implied in this Indenture. In case an Event of Default hereunder or
under the Sublease has occurred (which has not been cured or waived), the Trustee may exercise
such of the rights and powers vested in it by this Indenture and by the Sublease, and shall use the
same degree of care and skill in the exercise of such rights and powers as a prudent person would
exercise or use under the circumstances in the conduct of such person's own affairs.
(f) The Trustee may execute any of the trusts or powers hereunder and perform
the duties required of it hereunder either directly or by or through attorneys or agents, and shall
be entitled to advice of counsel concerning all matters of trust and its duty hereunder.
(g) The Trustee shall not be responsible for any recital herein, in the Sublease, or
in the Series 2009 Bonds, or for any of the supplements thereto or instruments of further
assurance, or for the sufficiency of the security for the Series 2009 Bonds issued hereunder or
intended to be secured hereby and makes no representation as to the validity or sufficiency of the
Series 2009 Bonds, this Indenture or the Sublease. The Trustee shall not be bound to ascertain or
inquire as to the observance or performance of any covenants, conditions or agreements on the
part of the Authority hereunder or on the part of the Authority or the City under the Sublease.
The Trustee shall not be responsible for the application by the Authority or the City of the
proceeds of the Series 2009 Bonds.
(h) The Trustee may become the Owner or pledgee of Series 2009 Bonds secured
hereby with the same rights it would have if not the Trustee; may acquire and dispose of other
bonds or evidences of indebtedness of the Authority with the same rights it would have if it were
not the Trustee; and may act as a depositazy for and permit any of its officers or directors to act
as a member of, or in any other capacity with respect to, any committee formed to protect the
rights of Owners of Bonds, whether or not such committee shall represent the Owners of the
majority in aggregate principal amount of the Series 2009 Bonds then Outstanding.
S7296-1123/1096805.1 -24-
(i) The Trustee may rely and shall be protected in acting or refraining from
acting, in good faith and without negligence, upon any notice, resolution, opinion, report,
direction, request, consent, certificate, order, affidavit, letter, telegram, facsimile transmission,
electronic mail or other paper or document believed by it to be genuine and to have been signed
or presented by the proper person or persons. Any action taken or omitted to be taken by the
Trustee in good faith and without negligence pursuant to this Indenture or the Sublease upon the
request or authority or consent of any person who at the time of making such request or giving
such authority or consent is the Owner of any Series 2009 Bond, shall be conclusive and binding
upon all future Owners of the same Series 2009 Bond and upon Series 2009 Bonds issued in
exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as
an Owner of any Series 2009 Bond or to take any action at such person's request unless the
ownership of such Series 2009 Bond by such person shall be reflected on the Registration Books.
(j) The permissive right of the Trustee to do things enumerated in this Indenture
or in the Sublease shall not be construed as a duty and it shall not be answerable for other than its
negligence or willful misconduct. The immunities and exceptions from liability of the Trustee
shall extend to its officers, directors, employees and agents.
(k) The Trustee shall not be required to take notice or be deemed to have notice of
any Event of Default hereunder or under the Sublease except failure by the Authority or the City
to make any of the payments to the Trustee required to be made by the Authority or the City
pursuant hereto or thereto or failure by the Authority or the City to file with the Trustee any
document required by this Indenture or the Sublease to be so filed subsequent to the issuance of
the Series 2009 Bonds, unless the Trustee shall be specifically notified in writing of such default
by the Authority or by the Owners of at least 25 percent in aggregate principal amount of the
Series 2009 Bonds then Outstanding and all notices or other instruments required by this
Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Trust
Office of the Trustee, and in the absence of such notice so delivered the Trustee may
conclusively assume there is no Event of Default hereunder except as aforesaid.
(1) At any and all reasonable times the Trustee and its duly authorized agents,
attorneys, experts, accountants and representatives, shall have the right fully to inspect all books,
papers and records of the Authority pertaining to the Series 2009 Bonds, and to make copies of
any of such books, papers and records which are not privileged by statute or by law.
(m)The Trustee shall not be required to give any bond or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the premises hereof.
(n) Notwithstanding anything elsewhere in this Indenture with respect to the
execution of any Series 2009 Bonds, the withdrawal of any cash, the release of any property, or
any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but
shall not be required, to demand any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, as may be deemed desirable for the purpose
of establishing the right of the Authority to the execution of any Series 2009 Bonds, the
withdrawal of any cash or the taking of any other action by the Trustee.
57296-1123/1096805.1 -25-
(o) All moneys received by the Trustee shall, until used or applied or invested as
provided herein, be held in trust for the purposes for which they were received but need not be
segregated from other funds except to the extent required by law.
(p) Whether or not expressly provided therein, every provision of this Indenture
and the Sublease relating to the conduct or affecting the liability of the Trustee shall be subject to
the provisions of this Section 6.2.
(q) The Trustee shall not be considered in breach of or in default with respect to
any obligations created hereunder, in the event of an enforced delay in the performance of such
obligations due to unforeseeable causes beyond its control and without its fault or negligence,
including, but not limited to, acts of God, or of the public enemy, acts of a government, acts of
the other party hereto, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes,
earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing
of labor, equipment, facilities, sources of energy, material or supplies in the open market,
litigation or arbitration involving a party or others relating to governmental action or inaction
pertaining to the Leased Property, malicious mischief, condemnation, and unusually severe
weather or delays of suppliers or subcontractors due to such causes or any similar event and/or
occurrences beyond the control of the Trustee; provided, that in the event of any such enforced
delay, the Trustee shall notify the Authority in writing within five business days after (i) the
occurrence of the event giving rise to such delay, (ii) the Trustee's actual knowledge of the
impending enforced delay, or (iii) the Trustee's knowledge of sufficient facts under which a
reasonable person would conclude the enforced delay will occur.
(r) The Trustee shall have no responsibility or liability with respect to any
information, statements or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Series 2009 Bonds.
(s) The Trustee shall not be liable in connection with the performance of its
duties in accordance with this Indenture, except for its own negligence or willful misconduct.
SECTION 6.3. Fees, Charges and Expenses of Trustee. The Trustee shall be
entitled to payment and reimbursement for reasonable fees for its services rendered hereunder
and all advances (with interest on such advances at the maximum rate allowed by law), counsel
fees (including expenses) and other expenses reasonably and necessarily made or incurred by the
Trustee in connection with such services. Upon the occurrence of an Event of Default
hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of
payment prior to payment of any Series 2009 Bond upon the amounts held hereunder for the
foregoing fees, charges and expenses incurred by it.
SECTION 6.4. Notice to Bond Owners of Default. If an Event of Default hereunder
or under the Sublease occurs with respect to any Series 2009 Bonds of which the Trustee has
been given or is deemed to have notice, as provided in Section 6.2(k) hereof, then the Trustee
shall, within 30 days of the receipt of such notice, give written notice thereof by first class mail
to the Owner of each such Series 2009 Bond, unless such Event of Default shall have been cured
before the giving of such notice; provided, however, that unless such Event of Default consists of
the failure by the Authority to make any payment when due, the Trustee may elect not to give
S7296-1123/1096805.1 _2C_
such notice if and so long as the Trustee in good faith determines that it is in the best interests of
the Bond Owners not to give such notice.
SECTION 6.5. Intervention by Trustee. In any judicial proceeding to which the
Authority or the City is a party that, in the opinion of the Trustee and its counsel, has a
substantial bearing on the interests of Owners of any of the Series 2009 Bonds, the Trustee may
intervene on behalf of such Bond Owners, and subject to Section 6.2(c), shall do so if requested
in writing by the Owners of at least 25 percent in aggregate principal amount of such Series 2009
Bonds then Outstanding.
SECTION 6.6. Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing, filed with the Trustee and signed by the Owners
of a majority in aggregate principal amount of the Outstanding Series 2009 Bonds. The
Authority may also remove the Trustee at any time upon 30 days notice, except during the
existence of an Event of Default. The Trustee may be removed at any time for any breach of the
Trustee's duties set forth herein.
SECTION 6.7. Resignation by Trustee. The Trustee and any successor Trustee may
at any time give written notice of its intention to resign as Trustee hereunder, such notice to be
given to the Authority and the City by registered or certified mail. Upon receiving such notice of
resignation, the Authority shall promptly appoint a successor Trustee. Any resignation or
removal of the Trustee and appointment of a successor Trustee shall become effective upon
acceptance of appointment by the successor Trustee. Upon such acceptance, the Authority shall
cause notice thereof to be given by first class mail, postage prepaid, to the Bond Owners at their
respective addresses set forth on the Registration Books.
SECTION 6.8. Appointment of Successor Trustee. In the event of the removal or
resignation of the Trustee pursuant to Sections 6.6 or 6.7, respectively, the Authority shall
promptly appoint a successor Trustee. In the event the Authority shall for any reason whatsoever
fail to appoint a successor Trustee within 90 days following the delivery to the Trustee of the
instrument described in Section 6.6 or within 90 days following the receipt of notice by the
Authority pursuant to Section 6.7, the Trustee may, at the expense of the Authority, apply to a
court of competent jurisdiction for the appointment of a successor Trustee meeting the
requirements of Section 6.1. Any such successor Trustee appointed by such court shall become
the successor Trustee hereunder notwithstanding any action by the Authority purporting to
appoint a successor Trustee following the expiration of such 90-day period.
SECTION 6.9. Merger or Consolidation. Any company into which the Trustee may
be merged or converted or with which it may be consolidated or any company resulting from any
merger, conversion or consolidation to which it shall be a party or any company to which the
Trustee may sell or transfer all or substantially all of its corporate trust business, rop vided that
such company shall meet the requirements set forth in Section 6.1, shall be the successor to the
Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
S7296-1123/1096805.1 -27-
SECTION 6.10 Concerning any Successor Trustee. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the
Authority an instrument in writing accepting such appointment hereunder and thereupon such
successor, without any further act, deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such
predecessor shall, nevertheless, on the Request of the Authority, or of the Trustee's successor,
execute and deliver an instrument transferring to such successor all the estates, properties, rights,
powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all
securities and moneys held by it as the Trustee hereunder to its successor. Should any
instrument in writing from the Authority be required by any successor Trustee for more fully and
certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended
to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request,
be executed, acknowledged and delivered by the Authority.
SECTION 6.11 Appointment of Co-Trustee. It is the purpose of this Indenture that
there shall be no violation of any law of any jurisdiction (including particularly the law of the
State) denying or restricting the right of banking corporations or associations to transact business
as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture,
and in particular in case of the enforcement of the rights of the Trustee on default, or in the case
the Trustee deems that by reason of any present or future law of any jurisdiction in may not
exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the
properties, in trust, as herein granted, or take any other action that may be desirable or necessary
in connection therewith, it may be necessary that the Trustee or the Authority appoint an
additional individual or institution as a separate trustee or co-trustee. The following provisions
of this Section 6.11 are adopted to these ends.
In the event that the Trustee or the Authority appoints an additional individual or
institution as a separate trustee or co-trustee, each and every remedy, power, right, claim,
demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be
exercisable by and vest in such separate trustee or co-trustee but only to the extent necessary to
enable such separate trustee or co-trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate trustee or co-trustee
shall run to and be enforceable by either of them.
Should any instrument in writing from the Authority be required by the separate trustee
or co-trustee so appointed by the Trustee for mare fully and certainly vesting in and confirming
to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the Authority. In case any
separate trustee or co-trustee, or a successor to either, shall become incapable of acting, shall
resign or shall be removed, all the estates, properties, rights, powers, trusts, duties and
obligations of such separate trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new trustee or successor to such separate
trustee or co-trustee.
SECTION 6.12 Indemnification; Limited Liability of Trustee. The Authority
further covenants and agrees, to the extent permitted by law, to indemnify and save the Trustee
S7296-1123/1096805.1 -28-
and its officers, directors, agents and employees, harmless against any loss, expense and
liabilities arising out of or in the exercise and performance of its powers and duties hereunder,
including the costs and expenses of defending against any claim of liability, but excluding any
and all losses, expenses and liabilities that are due to the negligent or intentional act or omission
of the Trustee, its officers, directors, agents or employees. No provision in this Indenture shall
require the Trustee to risk its own funds or otherwise incur any financial liability hereunder if it
shall have reasonable grounds for believing repayment of such funds or adequate indemnity
against such liability or risk is not assured to it. The Trustee shall not be liable for any action
taken or omitted to be taken by it in accordance with the direction of the Owners of at least 25
percent in aggregate principal amount of Series 2009 Bonds Outstanding relating to the time,
method and place of conducting any proceeding or remedy available to the Trustee under this
Indenture or exercising any power conferred upon the Trustee under this Indenture. The
obligations of the Authority under this Section shall survive the resignation or removal of the
Trustee under this Indenture.
SECTION 6.13 Trustee's Acceptance of Instructions by Electronic Transmission.
The Trustee agrees to accept and act upon facsimile transmission of written instructions or
directions pursuant to this Indenture, provided, however, that: (i) subsequent to such facsimile
transmission of written instructions or directions the Trustee shall forthwith receive the originally
executed instructions or directions, (ii) such originally executed instructions or directions shall
be signed by a person as may be designated and authorized to sign for the party signing such
instructions or directions, and (iii) the Trustee shall have received a current incumbency
certificate containing the specimen signature of such designated person.
ARTICLE VII
MODIFICATION AND AMENDMENT OF THE INDENTURE
SECTION 7.1. Amendment Hereof. This Indenture and the rights and obligations of
the Authority and of the Owners of the Series 2009 Bonds may be modified or amended at any
time by a Supplemental Indenture which shall become binding upon adoption, without consent of
any Bond Owner to the extent permitted by law but only for any one or more of the following
purposes:
(a) to add to the covenants and agreements of the Authority contained in this
Indenture, other covenants and agreements thereafter to be observed, or to limit or surrender any
rights or powers herein reserved to or conferred upon the Authority so long as such limitation or
surrender of such rights or powers shall not materially adversely affect the Owners of the Series
2009 Bonds;
(b) to make such provisions for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained in this Indenture, or in any other
respect whatsoever as the Authority may deem necessary or desirable, provided under any
circumstances that such modifications or amendments shall not materially adversely affect the
interests of the Owners of the Series 2009 Bonds in the reasonable judgment of the Authority;
S7296-1123/1096805.1 -29-
(c) for any other purpose that does not materially adversely affect the interests of
the Owners.
Notwithstanding the foregoing, the Sublease may not be amended without the prior
written consent of the Original Purchaser so long as the Original Purchaser is the owner of the
Series 2009 Bonds.
Except as set forth in the preceding paragraph of this Section 7.1, this Indenture and the
rights and obligations of the Authority and of the Owners of the Series 2009 Bonds may only be
modified or amended at any time by a Supplemental Indenture which shall become binding when
the written consent of the Owners of a majority in aggregate principal amount of the Series 2009
Bonds then Outstanding are filed with the Trustee. No such modification or amendment shall (I)
extend the maturity of or reduce the interest rate on any Series 2009 Bond or otherwise alter or
impair the obligation of the Authority to pay the principal, interest or redemption premiums (if
any) at the time and place and at the rate and in the currency provided therein of any Bond
without the express written consent of the Owner of such Series 2009 Bond, (II) reduce the
percentage of Series 2009 Bonds required for the written consent to any such amendment or
modification, or (III) modify any of the rights or obligations of the Trustee without its written
consent thereto.
SECTION 7.2. Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners of Outstanding Series 2009 Bonds, as
the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modification and amendment, and all the terms and conditions of any
Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
Prior to entering into any Supplemental Indenture pursuant to this Section 7.2, the
Trustee may require the Authority to deliver to the Trustee an opinion of Bond Counsel to the
effect that such Supplemental Indenture has been adopted in accordance with the requirements of
this Indenture.
SECTION 7.3. Endorsement or Replacement of Bonds after Amendment. After
the effective date of any action taken as hereinabove provided, the Authority may determine that
the Series 2009 Bonds shall bear a notation, by endorsement in form approved by the Authority,
as to such action, and in that case upon demand of the Owner of any Series 2009 Bond
Outstanding at such effective date and presentation of such Owner's Series 2009 Bond for that
purpose at the Trust Office of the Trustee, a suitable notation as to such action shall be made on
such Series 2009 Bond. If the Authority shall so determine, new Series 2009 Bonds so modified
as, in the opinion of the Authority, shall be necessary to conform to such Bond Owners' action,
then new Series 2009 Bond certificates shall be prepared and executed, and in that case upon
demand of the Owner of any Series 2009 Bond Outstanding at such effective date such new
Series 2009 Bonds shall be exchanged at the Trust Office of the Trustee, without cost to each
Bond Owner, for Series 2009 Bonds then Outstanding, upon surrender of such Outstanding
Series 2009 Bonds.
57296-1123/1096805.1 -30-
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 8.1. Events of Default. The following events shall be Events of Default
hereunder:
(a) Default in the due and punctual payment of the principal of, premium or
interest on any Series 2009 Bond, whether at maturity as therein expressed, or by proceedings for
redemption.
(b) A default by the City as described in Section 10 of the Sublease has occurred
and is continuing.
(c) Failure by the Authority to observe and perform any of the covenants,
agreements or conditions on its part in this Indenture or in the Series 2009 Bonds contained,
other than as referred to in the preceding clause (a), for a period of 30 days after written notice,
specifying such failure and requesting that it be remedied has been given to the Authority by the
Trustee or the Original Purchaser, or to the Authority and the Trustee by the Owners of not less
than 25 percent in aggregate principal amount of the Outstanding Series 2009 Bonds; provided,
however, that if in the reasonable opinion of the Authority and the Original Purchaser, the failure
stated in such notice can be corrected, but not within such 30-day period, the Trustee, the
Original Purchaser and such Owners shall not unreasonably withhold their consent to an
extension of such time not to exceed 180 days total if corrective action is instituted by the
Authority within such 30-day period and diligently pursued until such failure is corrected.
(d) The filing by the Authority of a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other applicable law of the United States
of America, or if a court of competent jurisdiction shall approve a petition, filed with or without
the consent of the Authority, seeking reorganization under the Federal bankruptcy laws or any
other applicable law of the United States of America, or if, under the provisions of any other law
for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or
control of the Authority or of the whole or any substantial part of the Leased Property.
SECTION 8.2. Remedies; No Acceleration. Upon the occurrence of an Event of
Default the Trustee shall promptly give written notice to the Original Purchaser, and the Trustee
shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the Authority or any member, officer or employee thereof, in order to
compel the Authority or any such member, officer or employee to perform and carry out its or
his or her duties under law and the agreements and covenants required to be performed by it or
him contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee; or
(c) by suit in equity upon the happening of an Event of Default to require the
Authority and its members, officers and employees to account as the trustee of an express trust.
S7296-1123/1096805.1 -31-
If an Event of Default shall have occurred and be continuing and if requested so to do by
the Owners of at least 25 percent in aggregate principal amount of Outstanding Series 2009
Bonds and indemnified as provided in Section 6.2(c), the Trustee shall be obligated to exercise
such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being
advised by counsel, shall deem most expedient in the interests of the Bond Owners.
It is hereby further acknowledged and agreed that the Trustee, as the Authority's assignee
under the Assignment Agreement, has the right to enforce all remedies available to the Authority
pursuant to Section 10 of the Sublease in the event that a default by the City has occurred and is
continuing under the Sublease.
Notwithstanding the foregoing, the Trustee shall not take any action with respect to any
default hereunder or under the Sublease without the prior written consent or written direction of
the Original Purchaser so long as the Original Purchaser is the Owner of the Series 2009 Bonds.
No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to
the Bond Owners) is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or
the Bond Owners hereunder or now or hereafter existing at law or in equity.
No delay or omission to exercise any right or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver or any such Event of
Default or acquiescence therein; such right or power may be exercised from time to time as often
as may be deemed expedient.
The Trustee shall have no right to declare the principal of or interest on the Series 2009
Bonds to be due and payable immediately.
SECTION 8.3. Application of Revenues and Other )H~nds After Default. All
amounts then held or received by the Trustee pursuant to any right given or action taken by the
Trustee under the provisions of this Indenture shall be applied by the Trustee, in the following
order upon presentation of the Series 2009 Bonds, and the stamping thereon of the amount of the
payment if only partially paid, or upon the surrender thereof if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee, including reasonable
compensation to its agents, attorneys and counsel; and
Second, to the payment of the whole amount of principal of and interest (including the
penalty interest pursuant to Section 2.2) on the Series 2009 Bonds, then due and unpaid;
rovided, however, that in the event such amounts shall be insufficient to pay in full the full
amount of such interest and principal, then such amounts shall be applied to the payment of such
principal and interest without preference or priority of principal over interest, or interest over
principal, or of any installment of interest over any other installment of interest, ratably to the
aggregate of such principal and interest.
SECTION 8.4. Power of Trustee to Control Proceedings. Except when the Original
Purchaser is the Owner of the Series 2009 Bonds, in the event that the Trustee, upon the
happening of an Event of Default, shall have taken any action, by judicial proceedings or
S7296-1123/1096805.1 -32
otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request
of the Owners of at least a majority in aggregate principal amount of the Series 2009 Bonds then
Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the
Owners of the Series 2009 Bonds, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; rovide however, that the Trustee
shall not, unless there no longer continues an Event of Default, discontinue, withdraw,
compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the
time there has been filed with it a written request signed by the Owners of a majority in
aggregate principal amount of the Outstanding Series 2009 Bonds hereunder opposing such
discontinuance, withdrawal, compromise, settlement or other disposal of such litigation and if
the Trustee is indemnified as provided in Section 6.2(c). Any suit, action or proceeding which
any Owner of Series 2009 Bonds shall have the right to bring to enforce any right or remedy
hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of
Bonds similarly situated and the Trustee is hereby appointed (an the successive respective
Owners of the Series 2009 Bonds issued hereunder by taking and holding the same, shall be
conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the
respective Owners of the Series 2009 Bonds for the purpose of bringing any such suit, action or
proceeding and to do and perform any and all acts and things for and on behalf of the respective
Owners of the Series 2009 Bonds as a class or classes, as may be necessary or advisable in the
opinion of the Trustee as such attorney-in-fact.
SECTION 8.5. Appointment of Receivers. Upon the occurrence of an Event of
Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings
to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee
shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the
Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as
the court making such appointment shall confer.
SECTION 8.6. Non-Waiver. A waiver of any default or breach of duty or contract by
the Trustee or any Bond Owners shall not affect any subsequent default or breach of duty or
contract, or impair any rights or remedies on any such subsequent default or breach. No delay or
omission of the Trustee or any Owner of any of the Series 2009 Bonds to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be
a waiver of any such default or an acquiescence therein; and every power and remedy conferred
upon the Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and
exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond
Owners, as the case may be.
SECTION 8.7. Rights of Bond Owners. No Owner of any Series 2009 Bond issued
hereunder other than the Original Purchaser shall have the right to institute any suit, action or
proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such
Owner shall have previously given to the Trustee written notice of the occurrence of an Event of
Default; (b) the Owners of a majority in aggregate principal amount of all the Series 2009 Bonds
then Outstanding shall have made written request upon the Trustee to exercise the powers
hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said
Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee
against the costs, expenses and liabilities to be incurred in compliance with such request; and (d)
S7296-1123/1096805.1 -33-
the Trustee shall have refused or omitted to comply with such request for a period of 60 days
after such written request shall have been received by, and said tender of indemnity shall have
been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of Series 2009
Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of
Bonds shall have any right in any manner whatever by his or their action to enforce any right
under this Indenture, except in the manner herein provided, and that all proceedings at law or in
equity to enforce any provision of this Indenture shall be instituted, had and maintained in the
manner herein provided and for the equal benefit of all Owners of the Outstanding Series 2009
Bonds.
The right of any Owner of any Series 2009 Bond to receive payment of the principal of
and interest and premium (if any) on such Series 2009 Bond as herein provided or to institute
suit for the enforcement of any such payment, shall not be impaired or affected without the
written consent of such Owner, notwithstanding the foregoing provisions of this Section or any
other provision of this Indenture.
SECTION 8.8. Termination of Proceedings. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a receiver or
otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or
shall have been determined adversely, then and in every such case, the Authority, the Trustee and
the Bond Owners shall be restored to their former positions and rights hereunder, respectively,
with regard to the Leased Property subject to this Indenture, and all rights, remedies and powers
of the Trustee shall continue as if no such proceedings had been taken.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Limited Liability of Authority. Notwithstanding anything in this
Indenture contained, the Authority shall not be required to advance any moneys derived from
any source of income other than the Revenues for the payment of the principal of or interest on
the Series 2009 Bonds, or any premiums upon the redemption thereof, or for the performance of
any covenants herein contained (except to the extent any such covenants are expressly payable
hereunder from the Revenues or otherwise from amounts payable under the Sublease). The
Authority may, however advance funds for any such purpose, provided that such funds are
derived from a source legally available for such purpose and may be used by the Authority for
such purpose without incurring indebtedness.
The Series 2009 Bonds shall be revenue bonds, payable exclusively from the Revenues
and other funds as provided in this Indenture. The general fund of the Authority is not liable,
and the credit of the Authority is not pledged, for the payment of the interest and premiums (if
any) on or principal of the Series 2009 Bonds. The Owners of the Series 2009 Bonds shall never
have the right to compel the forfeiture of any property of the Authority except the Revenues and
other funds pledged to the payment of the Series 2009 Bonds as provided in this Indenture. The
S7296-1123/1096805.1 -34-
principal of and interest on the Series 2009 Bonds, and any premiums upon the redemption of
any thereof, shall not be a legal or equitable pledge, charge, lien or encumbrance upon any
property of the Authority or upon any of its income, receipts or revenues except the Revenues
and other funds pledged to the payment thereof as provided in this Indenture.
SECTION 9.2. Benefits of Indenture Limited to Parties. Nothing in this Indenture,
expressed or implied, is intended to give to any person other than the Authority, the Trustee, the
City and the Owners of the Series 2009 Bonds, any right, remedy or claim under or by reason of
this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained
by and on behalf of the Authority shall be for the sole and exclusive benefit of the Trustee, the
City and the Owners of the Series 2009 Bonds.
SECTION 9.3. Discharge of Indenture. If the Authority shall pay and discharge any
or all of the Outstanding Bonds in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and interest and
premiums (if any) on such Series 2009 Bonds, as and when the same become due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before maturity,
money which, together with the available amounts then on deposit in the funds and accounts
established with the Trustee pursuant to this Indenture, is fully sufficient to pay such Series 2009
Bonds, including all principal, interest and redemption premiums (if any); or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
Federal Securities in such amount as an Independent Certified Public Accountant (defined
below) shall determine in a written report filed with the Trustee (upon which report the Trustee
may conclusively rely) will, together with the interest to accrue thereon and available moneys
then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture,
be fully sufficient to pay and discharge the indebtedness on such Series 2009 Bonds (including
all principal, interest and redemption premiums) at or before their respective maturity dates; and
if such Series 2009 Bonds are to be redeemed prior to the maturity thereof notice of such
redemption shall have been mailed pursuant to Section 2.3(c) or provision satisfactory to the
Trustee shall have been made for the mailing of such notice, then, at the Request of the
Authority, and notwithstanding that any of such Series 2009 Bonds shall not have been
surrendered for payment, the pledge of the Revenues and other funds provided for in this
Indenture with respect to such Series 2009 Bonds, and all other pecuniary obligations of the
Authority under this Indenture with respect to all such Series 2009 Bonds, shall cease and
terminate, except only the obligation of the Authority to pay or cause to be paid to the Owners of
such Series 2009 Bonds not so surrendered and paid all sums due thereon from amounts set aside
for such purpose as aforesaid, and all amounts due the Trustee. Any funds held by the Trustee
following any payment or discharge of the Outstanding Series 2009 Bonds pursuant to this
Section 9.3, which are not required for said purposes, shall after payment of amounts due the
Trustee hereunder be paid over to the Authority.
SECTION 9.4. Trustee's Additional Acknowledgment of Certain Provisions of the
Sublease. Without limiting any other provisions herein, the Trustee hereby acknowledges and
agrees to comply with Sections 8(e) and 9 of the Sublease.
S7296-1123/1096805.1 -3$-
SECTION 9.5. Successor Deemed Included in All References to Predecessor.
Whenever in this Indenture or any Supplemental Indenture the Authority is named or referred to,
such reference shall be deemed to include the successor to the powers, duties and functions, with
respect to the management, administration and control of the affairs of the Authority, that are
presently vested in the Authority, and all the covenants, agreements and provisions contained in
this Indenture by or on behalf of the Authority shall bind and inure to the benefit of its successors
whether so expressed or not.
SECTION 9.6. Content of Certificates and Opinions. Any such certificate made or
given by an officer of the Authority or the City may be based, insofar as it relates to legal
matters, upon a certificate or opinion of or representations by counsel, unless such officer knows
that the certificate or opinion or representations with respect to the matters upon which such
officer's certificate may be based, as aforesaid, are erroneous, or in the exercise of reasonable
care should have known that the same were erroneous. Any such certificate or opinion or
representation made or given by counsel may be based, insofar as it relates to factual matters, on
information with respect to which is in the possession of the Authority or the City, as applicable,
or upon the certificate or opinion of or representations by an officer or officers of the Authority
or the City, unless such counsel knows that the certificate or opinion or representations with
respect to the matters upon which such counsel's certificate, opinion or representation may be
based, as aforesaid, are erroneous, or in the exercise of reasonable care should have known that
the same were erroneous.
SECTION 9.7. Execution of Documents by Bond Owners. Any request, consent or
other instrument required by this Indenture to be signed and executed by Bond Owners may be in
any number of concurrent writings of substantially similar tenor and may be signed or executed
by such Bond Owners in person or by their agent or agents duly appointed in writing. Proof of
the execution of any such request, consent or other instrument or of a writing appointing any
such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor
of the Trustee and of the Authority if made in the manner provided in this Section 9.7.
The fact and date of the execution by any person of any such request, consent or other
instrument or writing may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof
to take acknowledgments of deeds, certifying that the person signing such request, consent or
other instrument or writing acknowledged to him the execution thereof.
The ownership of Series 2009 Bonds shall be proved by the Registration Books. Any
request, consent or vote of the Owner of any Bond shall bind every future Owner of the same
Series 2009 Bond and the Owner of any Bond issued in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Trustee or the Authority in pursuance of
such request, consent or vote. In lieu of obtaining any demand, request, direction, consent or
waiver in writing, the Trustee may call and hold a meeting of the Bond Owners upon such notice
and in accordance with such rules and obligations as the Trustee considers fair and reasonable
for the purpose of obtaining any such action.
SECTION 9.8. Disqualified Bonds. In determining whether the Owners of the
requisite aggregate principal amount of Series 2009 Bonds have concurred in any demand,
57296-1123/1096805.1 -36-
request, direction, consent or waiver under this Indenture, Series 2009 Bonds which aze owned
or held by or for the account of the City or the Authority (but excluding Series 2009 Bonds held
in any employees' retirement fund) shall be disregarded and deemed not to be Outstanding for
the purpose of any such determination, provided, however. that for the purpose of determining
whether the Trustee shall be protected in relying on any such demand, request, direction, consent
or waiver, only Series 2009 Bonds which the Trustee knows to be so owned or held shall be
disregarded.
SECTION 9.9. Waiver of Personal Liability. No officer, agent or employee of the
Authority shall be individually or personally liable for the payment of the interest on or principal
of the Series 2009 Bonds; but nothing herein contained shall relieve any such officer, agent or
employee from the performance of any official duty provided by law.
SECTION 9.10. Partial Invalidity. If any one or more of the covenants or agreements,
or portions thereof, provided in this Indenture on the part of the Authority (or of the Trustee) to
be performed should be contrazy to law, then such covenant or covenants, such agreement or
agreements, or such portions thereof, shall be null and void and shall be deemed separable from
the remaining covenants and agreements or portions thereof and shall in no way affect the
validity of this Indenture or of the Series 2009 Bonds; but the Bond Owners shall retain all rights
and benefits accorded to them under the Bond Law or any other applicable provisions of law.
SECTION 9.11. Destruction of Canceled Bonds. Whenever in this Indenture
provision is made for the surrender of any Series 2009 Bonds which have been paid or canceled
pursuant to the provisions of this Indenture, the Trustee shall cancel and destroy such Series
2009 Bonds and upon Request of the Authority furnish to the Authority a certificate of such
destruction.
SECTION 9.12. finds and Accounts. Any fund or account required by this Indenture
to be established and maintained by the Authority or the Trustee may be established and
maintained in the accounting records of the Authority or the Trustee, as the case may be, either
as a fund or an account, and may, for the purpose of such records, any audits thereof and any
reports or statements with respect thereto, be treated either as a fund or as an account. All such
records with respect to all such funds and accounts held by the Authority shall at all times be
maintained in accordance with generally accepted accounting principles and all such records
with respect to all such funds and accounts held by the Trustee shall be at all times maintained in
accordance with corporate trust industry practices; in each case with due regazd for the
protection of the security of the Series 2009 Bonds and the rights of every Owner thereof.
SECTION 9.13. Payment on Business Days. Whenever in this Indenture any amount
is required to be paid on a day that is not a Business Day, such payment shall be required to be
made, without accruing additional interest thereby, on the Business Day immediately following
such day.
SECTION 9.14. Notices. Any notice, request, demand or other communication under
this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at
its address set forth below, or by telecopy or other form of telecommunication, with prompt
telephone confirmation. Notice shall be effective (a) if personally served or delivered, upon
S7296-1123/ 1096805.1 -37-
delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier,
upon the sender's receipt of an appropriate answer back or other written acknowledgment or
confirmation of receipt of the entire notice, approval, demand, report or other communication,
(c) if given by first class, registered or certified mail, return receipt requested, deposited with the
United States mail postage prepaid, 72 hours after such notice is deposited with the United States
mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to
said overnight courier, or (e) if by other means of personal delivery, upon receipt by the intended
recipient of the notice. The Authority, the City, or the Trustee may, by written notice to the other
party, from time to time modify the address or number to which communications are to be given
hereunder.
If to the Authority: Seal Beach Public Financing Authority
211 8th Street
Seal Beach, CA 90740
Attention: Executive Director
Fax: (562) 493-9857
If to the City: City of Seal Beach
211 8th Street
Seal Beach, CA 90740
Attention: City Attorney
Fax: (562) 493-9857
If to the Trustee: Wells Fargo Bank, National Association
707 Wilshire Blvd., 17th Floor
Los Angeles, California 90017
Attention: Corporate Trust Services
Fax: (213) 614-3355
If to the Original Purchaser: Bank of America, N.A.
330 S. Hope Street, 13th Floor
CA9-193-13-17
Los Angeles, California 90071
Attention: Government Banking Credit Products
Fax: (213) 621-3606
Any party listed above may designate any further or different addresses to which subsequent
notices, certificates or other communications shall be sent.
SECTION 9.15. Unclaimed Moneys. Anything in this Indenture to the contrary
notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of
the Series 2009 Bonds that remain unclaimed for two years after the date when such Series 2009
Bonds have become due and payable, either at their stated maturity dates or by call for earlier
redemption, if such moneys were held by the Trustee at such date, or for two years after the date
of deposit of such moneys if deposited with the Trustee after said date when such Series 2009
Bonds become due and payable, shall be repaid by the Trustee to the Authority, as its absolute
property and free from trust, and the Trustee shall thereupon be released and discharged with
S7296-1123/1096805.1 -3$-
respect thereto and the Bond Owners shall look only to the Authority for the payment of such
Series 2009 Bonds; rovide however. that before being required to make any such payment to
the Authority, the Trustee shall, at the expense of the Authority, cause to be mailed to the
Owners of all such Series 2009 Bonds, at their respective addresses appearing on the
Registration Books, a notice that said moneys remain unclaimed and that, after a date named in
said notice, which date shall not be less than 30 days after the date of mailing of such notice, the
balance of such moneys then unclaimed will be returned to the Authority.
SECTION 9.16. Governing Law. This Indenture shall be construed and governed in
accordance with the laws of the State of California.
SECTION 9.17. Execution in Counterparts. This Indenture may be executed in any
number of counterparts. Each of such counterparts shall for all purposes be deemed to be an
original and all such counterparts shall together constitute but one and the same instrument.
[Remainder of Page Intentionally Lef7 Blank]
57296-1123/1096805.1 -39-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be signed by
their respective authorized representatives, all as of the day and year first above written.
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By
Chair
ATTEST:
Secretary
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Officer
57296-1123/1096805.1 -40-
EXHIBIT A
[FORM OF SERIES 2009 BOND]
[NO TRANSFER OF THIS BOND SHALL BE MADE EXCEPT TO A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A OF THE SECURITES ACT
OF 1933 (A "QIB") OR AN "ACCREDITED INVESTOR" AS THAT TERM IS
DEFINED IN RULE 501(A) OF REGULATION D PROMULGATED UNDER THE
SECURITES ACT OF 1933 AND SHALL BE SUBJECT TO THE TRANSFER
RESTRICTIONS SET FORTH IN THE INDENTURE].
No. R-
SEAL BEACH PUBLIC FINANCING AUTHORITY
LEASE REVENUE BOND
SERIES 2009
INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE
% , 2009
REGISTERED OWNER: BANK OF AMERICA, N.A.
PRINCIPAL AMOUNT: DOLLARS
The SEAL BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority
organized and existing under the laws of the State of California (the "Authority"), for value
received, hereby promises to pay (but only out of the Revenues, as defined in the Indenture
hereinafter referred to, and certain other moneys) to the Registered Owner identified above or
registered assigns (the "Registered Owner"), subject to the right of prior redemption hereinafter
reserved, the aggregate Principal Amount identified above, together with interest on the unpaid
balance hereof from the date hereof until the principal hereof shall have been paid in full, with
such Principal Amount in installments and interest shall be payable in the amounts and on the
dates (each a "Payment Date") set forth in the table below:
S7296-1123/1096805.1 A-1
Payment Date Principal Interest Total
Total
Notwithstanding the foregoing, the Authority shall have a 10-day grace period with
respect to the principal installment and interest (in the amounts shown above) due on each
Payment Date. If at any time the Authority fails to make a principal payment or an interest
payment in full within 10 days after the related Payment Date, the overdue portion of the
principal and/or interest shall be subject to a penalty interest at the rate of the lesser of five
percent per annum or the maximum rate permitted by law, accruing from and including the
Payment Date with respect to which such principal or interest was payable to but not including
the date of actual payment. The Outstanding principal of each Series 2009 Bond shall bear
interest from the Payment Date next preceding the date of authentication thereof, unless (i) it is
executed during the period from the day after the Record Date for a Payment Date to and
including such Payment Date, in which event it shall bear interest from such Payment Date, or
(ii) it is executed on or prior to the Record Date for the first Payment Date, in which event it
shall bear interest from its dated date.
Except for the final principal installment with respect to a Series 2009 Bond (either
scheduled or at the earlier redemption thereof), (i) principal installments and interest with respect
to any Series 2009 Bond shall be payable in lawful money of the United States of America on
each Payment Date to the Registered Owner thereof as of the close of business on the Record
Date, and (ii) such principal of and interest on the Series 2009 Bonds shall be paid by check or
draft of the Trustee, mailed by first class mail no later than the Payment Date to the Registered
Owner at his address as it appears, on such Record Date, on the Registration Books maintained
by the Trustee; provided, however, that at the written request of a Registered Owner filed with
the Trustee prior to any Record Date, such principal and interest on such Series 2009 Bonds shall
be paid to such Registered Owner on each succeeding Payment Date (unless such request has
been revoked in writing) by wire transfer of immediately available funds to an account in the
United States designated in such written request. Payments of defaulted interest with respect to
the Series 2009 Bonds shall be paid by check or draft to the Registered Owners of the Series
2009 Bonds as of a special record date to be fixed by the Trustee, notice of which special record
date shall be given to the Registered Owners of the Series 2009 Bonds not less than ten days
prior thereto. The final principal installment with respect to a Series 2009 Bond (either
scheduled or at earlier redemption thereof) and premium, if any, are payable by check when due
upon surrender of such Series 2009 Bond at the Trust Office in lawful money of the United
States of America.
This Series 2009 Bond is one of a duly authorized issue of bonds of the Authority
designated the "Seal Beach Public Financing Authority, Lease Revenue Bonds, Series 2009" (the
"Series 2009 Bonds"), limited in principal amount to ($)
S7296-1123/1096805.1 A_2
secured by an Indenture, dated as of January 1, 2009 (the "Indenture"), by and between the
Authority and the Trustee. Reference is hereby made to the Indenture and all indentures
supplemental thereto for a description of the rights thereunder of the owners of the Series 2009
Bonds, of the nature and extent of the Revenues (as that term is defined in the Indenture), of the
rights, duties and immunities of the Trustee and of the rights and obligations of the Authority
thereunder; and all of the terms of the Indenture are hereby incorporated herein and constitute a
contract between the Authority and the Registered Owner hereof, and to all of the provisions of
which Indenture the Registered Owner hereof, by acceptance hereof, assents and agrees.
The Series 2009 Bonds are authorized to be issued pursuant to the provisions of the
Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4, Chapter 5, Division 7, Title
1 of the Government Code of the State of California (the "Act"). The Series 2009 Bonds are
special obligations of the Authority and, as and to the extent set forth in the Indenture, are
payable solely from and secured by a first lien on and pledge of the Revenues and certain other
moneys and securities held by the Trustee as provided in the Indenture. All of the Series 2009
Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues and such
other moneys and securities, and the Revenues and such other moneys and securities constitute a
trust fund for the security and payment of the principal of and interest on the Series 2009 Bonds.
The full faith and credit of the Authority are not pledged for the payment of the principal of or
interest or premium (if any) on the Series 2009 Bonds. The Series 2009 Bonds are not secured
by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the
Authority or any of its income or receipts, except the Revenues and such other moneys and
securities as provided in the Indenture.
The Series 2009 Bonds have been issued for the purpose of providing financing of public
capital improvements of the City of Seal Beach (the "City"). The Authority has entered into a
Sublease Agreement, dated as of January 1, 2009 (the "Sublease") with the City, under which the
City is obligated to pay amounts which are anticipated to be sufficient to enable the Authority to
pay the principal of and interest on the Series 2009 Bonds.
The Series 2009 Bonds are subject to redemption prior to their respective maturity dates,
upon notice as hereinafter provided, as a whole or in part, on any Payment Date, from prepaid
Base Rental Payments made by the City from funds received by the City due to a taking of the
Leased Property (as defined in the Sublease) or any portion thereof under the power of eminent
domain or from net proceeds of insurance received for material damage or destruction, defects in
title to the Leased Property, under the circumstances and upon the conditions and terms
prescribed in the Indenture and in the Sublease, at the following redemption prices expressed as a
percentage of the principal amount to be redeemed, together with accrued interest to the date of
redemption:
Redemption
Redemption Dates Prices
S7296-1123/ 1096805.1 A-3
The Series 2009 Bonds shall be subject to redemption prior to the maturity date, as a
whole only, from prepayments of Base Rental made at the option of the City under the Sublease
on any Payment Date with respect to which such prepayment have been made. The Series 2009
Bonds so called for redemption shall be redeemed at the following redemption prices expressed
as a percentage of the principal amount to be redeemed, together with accrued interest to the date
of redemption:
Redemption
Redemption Dates Prices
The Trustee, on behalf and at the expense of the Authority, shall send by first class mail
(or if there is only one Registered Owner of the Series 2009 Bonds, by such method as
acceptable to such Registered Owner) notice of any redemption to the respective Registered
Owners of any Series 2009 Bonds designated for redemption at their respective addresses
appearing on the Registration Books at least 30 but not more than 60 days prior to the date fixed
for redemption; urovided, however, that neither failure to receive any such notice so mailed nor
any defect therein shall affect the validity of the proceedings for the redemption of such Series
2009 Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of
the notice, the redemption date, the redemption place and the redemption price and shall specify
the Series 2009 Bond numbers and the maturity or maturities (in the event of redemption of all of
the Series 2009 Bonds of such maturity or maturities in whole) of the Series 2009 Bonds to be
redeemed, and shall require that such Series 2009 Bonds be then surrendered at the Trust Office
of the Trustee for redemption at the redemption price, giving notice also that further interest on
such Series 2009 Bonds will not accrue from and after the redemption date
The Series 2009 Bonds may be issued in denominations of $5,000 or any integral
multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in
the Indenture, this Series 2009 Bond may be exchanged at the Trust Office of the Trustee for a
like aggregate principal amount, interest rate and maturity of fully registered Series 2009 Bonds
of other authorized denominations.
This Series 2009 Bond is transferable by the Registered Owner hereof, in person or by his
attorney duly authorized in writing, at the Trust Office of the Trustee, but only in the manner,
subject to the limitations and upon payment of the charges provided in the Indenture, and upon
surrender and cancellation of this Series 2009 Bond. Upon such transfer a new fully registered
Series 2009 Bond or Series 2009 Bonds, of authorized denomination or denominations, for the
same aggregate principal amount and of the same maturity will be issued to the transferee in
exchange herefor. The Authority and the Trustee may treat the Registered Owner hereof as the
absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by
any notice to the contrary. The Trustee shall not be required to register the transfer or exchange
of any Series 2009 Bond during the period in which the Trustee is selecting Series 2009 Bonds
for redemption or any Series 2009 Bond selected for redemption.
57296-1123/1096805.1 A-4
[No transfer of this Bond shall be made except to a "Qualified Institutional Buyer"
as defined in Rule 144A of the Securites Act of 1933 (a "QIB") or an "Accredited Investor"
as that term is defined in Rule 501(a) of Regulation D promulgated under the Securites Act
of 1933. Any transfer of this Bond shall be subject to the condition precedent that the
proposed transferee deliver an Investor Letter (as defined in the Indenture) to the City, the
Authority and the Trustee that meets the requirements set forth in the Indenture.]
Subject to the restrictions set forth in the Indenture, this Series 2009 Bond is transferable
by the Registered Owner hereof, in person or by the attorney of the Registered Owner duly
authorized in writing, at the office of the Trustee, but only in the manner, subject to the
limitations and upon payment of the charges provided in the Indenture, upon surrender and
cancellation of this Series 2009 Bond. Upon such transfer a new fully registered Series 2009
Bond of authorized denomination or denominations for the same aggregate outstanding principal
amount will be issued to the transferee in exchange therefor. No exchange or transfer shall be
made between the fifteenth (15th) business day preceding any Payment date and such Payment
date
The Indenture and the rights and obligations of the Authority and of the Registered
Owners of the Series 2009 Bonds and of the Trustee may be modified or amended from time to
time and at any time in the manner, to the extent, and upon the terms provided in the Indenture;
rovided that no such modification or amendment shall (a) extend the maturity of or reduce the
interest rate on any Series 2009 Bond or otherwise alter or impair the obligation of the Authority
to pay the principal, interest or premiums at the time and place and at the rate and in the currency
provided therein of any Series 2009 Bond without the express written consent of the Owner of
such Series 2009 Bond, (b) reduce the percentage of Series 2009 Bonds required for the written
consent to any such amendment or modification, or (c) without its written consent thereto,
modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture.
It is hereby certified that all things, conditions and acts required to exist, to have
happened and to have been performed precedent to and in the issuance of this Series 2009 Bond
do exist, have happened and have been performed in due time, form and manner as required by
the Constitution and statutes of the State of California and by the Act (as such term is defined on
the reverse side hereof) and the amount of this Series 2009 Bond, together with all other
indebtedness of the Authority, does not exceed any limit prescribed by the Constitution or
statutes of the State of California or by the Act.
This Series 2009 Bond shall not be entitled to any benefit under the Indenture, or become
valid or obligatory for any purpose, until the certificate of authentication hereon shall have been
signed by the Trustee.
5729(-1123/1096805.1 A-5
IN WITNESS WHEREOF, the Authority has caused this Series 2009 Bond to be
executed in its name and on its behalf, and attested, by the facsimile signatures of its Chair and
Secretary all as of the Original Issue Date identified above.
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By
Chair
Attest:
Secretary
57296-1123/1096805.1 A-6
[TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2009 Bonds described in the within-mentioned Indenture and
registered on the Bond Registration Books.
Date:
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Signatory
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto, whose tax
identification number is ,the within-mentioned registered Bond
and hereby irrevocably constitute(s) and appoint(s) attorney to transfer the same on the books of
the Trustee with full power of substitution in the premises.
Dated:
Signature guaranteed:
NOTE: The signature(s) on this Assignment
must correspond with the name(s) as written
on the face of the within bond in every
particular without alteration or enlargement
or any change whatsoever.
NOTICE: Signature must be guaranteed by a
member of an institution which is a participant
in the Securities Transfer Agent Medallion
Program (STAMP) or other similar program.
S7296-1123/1096805.1 A-7
EXHIBIT B
[FORM OF REQUISITION
COSTS OF ISSUANCE FUND]
REQUISITION NO.
(Costs of Issuance Fund)
with reference to
Seal Beach Public Financing Authority
Lease Revenue Bonds
Series 2009
[Date]
I. The Seal Beach Public Financing Authority (the "Authority") hereby requests
Wells Fargo Bank, National Association, as trustee (the "Trustee") pursuant to that certain
Indenture, dated as of January 1, 2009 (the "Indenture"), by and between the Authority and the
Trustee, under the terms of which the above-captioned bonds, to pay from the moneys in the
Costs of Issuance Fund established pursuant to the Indenture, the amounts shown on Schedule I
attached hereto to the parties indicated in Schedule I.
II. The payees, the purposes for which the costs have been incurred, and the amount
of the disbursements requested are itemized on Schedule I hereto.
IlI. Each obligation mentioned in Schedule I hereto has been properly incurred and is
a proper charge against the Costs of Issuance Fund. None of the items for which payment is
requested has been reimbursed previously from the Costs of Issuance Fund.
Indenture.
All capitalized terms not defined herein have the meanings ascribed to them in the
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By:
[Name]
[Title]
S7296-1123/1096805.1 $_ 1
Schedule I
(Requisition No. _-Costs of Issuance Fund)
Payee
Description
Amount
S7296-1123/1096805.1 B-2
EXHIBIT C
[FORM OF REQUISITION (PROJECT FUND)]
REQUISITION NO.
(Project Fund)
with reference to
Seal Beach Public Financing Authority
Lease Revenue Bonds
Series 2009
I. Pursuant to Section 3.4 of that certain Indenture, dated as of January 1, 2009 (the
"Indenture"), by and between the Seal Beach Public Financing Authority (the "Authority") and
Wells Fargo Bank, National Association, as trustee (the "Trustee"), under the terms of which the
above-captioned bonds were issued, the undersigned, City of Seal Beach, hereby requests the
Trustee, to pay from the moneys in the Project Fund the amounts shown on Schedule I attached
hereto to the parties indicated in Schedule I.
II. The payees, the purposes for which the costs have been incurred, and the amount
of the disbursements requested are itemized on Schedule I hereto.
III. Each obligation mentioned in Schedule I hereto has been properly incurred and is
a proper charge against the Project Fund. None of the items for which payment is requested has
been reimbursed previously from the Project Fund.
Indenture.
DATED:
All capitalized terms not defined herein have the meanings ascribed to them in the
CITY OF SEAL BEACH
By:
[Name]
[Title]
S7296-1123/1096805.1 C-1
EXHIBIT D
FORM OF INVESTOR'S LETTER
20_
City of Seal Beach
211 Eighth Street
Seal Beach, CA 90740
Seal Beach Public Financing Authority
211 8th Street
Seal Beach, California 90740
Wells Fargo Bank, National Association
Corporate Trust Services
707 Wilshire Boulevard, 17th Floor
Los Angeles, CA 90017
Re: Seal Beach Public Financing Authority Lease Revenue Bonds, Series 2009
(the "Series 2009 Bonds")
Ladies and Gentlemen:
This letter is being delivered to you in connection with the purchase by the undersigned
(the "Purchaser") of [all] [a portion] of the currently Outstanding Series 2009 Bonds, in the
aggregate principal amount of $ .Capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Indenture, dated as of January 1, 2009 (the
"Indenture"), by and between the Authority and Wells Fargo Bank, National Association, as
Trustee, relating to the Series 2009 Bonds.
Pursuant to Section 2.6 of the Indenture, the undersigned hereby certifies, represents,
warrants and agrees for the benefit of the Authority as follows:
1. The Purchaser has the authority to acquire the Series 2009 Bonds, and to execute
this letter and any other instruments and documents required to be executed by the Purchaser in
connection with taking such assignment.
2. The person signing this letter on behalf of the Purchaser is a duly appointed,
qualified and acting representative of the Purchaser and is authorized to execute this letter and
make the certifications, representations, warranties and agreements contained herein.
3. The Purchaser has received a copy of the Indenture and reviewed the same.
4. The Purchaser understands that the obligation of the City to make debt service
payments on the Series 2009 Bonds does not constitute an obligation for which the City is
S7296-1123/1096805.1 C-1
obligated to levy or pledge any form of taxation or for which the City has levied or pledged any
form of taxation. Neither the Series 2009 Bonds nor the obligation of the City to make payments
on the Series 2009 Bonds constitutes an indebtedness of the City, the State of California or any
of its political subdivisions within the meaning of any constitutional or statutory debt limitation
or restriction.
5. The Purchaser is either a "qualified institutional buyer" within the meaning of
Rule 144A of the Securities Act of 1933 (the "1933 Act") or an "accredited investor" within the
meaning of Rule 501(a) of Regulation D of the 1933 Act, and is duly and validly organized
under the laws of the Purchaser's jurisdiction of incorporation or organization. The Purchaser
has sufficient knowledge and experience in financial and business matters, including purchase
and ownership of municipal obligations, to be able to evaluate the risks and merits of the
investment represented by the Series 2009 Bonds. The Purchaser is able and prepared to bear the
economic risks of such investment.
6. The Purchaser is acquiring the Series 2009 Bonds for investment for its own
account for an indefinite period of time and not with a view to distribute, or for resale in
connection with any distribution of, any interest therein. The Purchaser has not offered to sell,
solicited offers to buy or agreed to sell the Series 2009 Bonds or any part thereof, and has no
present intention of reselling or otherwise disposing of the Series 2009 Bonds. The Purchaser
understands that it may need to bear the risks of this investment for an indefinite time, since any
sale prior to maturity may not be possible. Nothing in this letter prohibits the Purchaser from
transferring its interest in the Series 2009 Bonds as described in Paragraph 7 below.
7. The Purchaser understands that no assignment, sale or transfer by the Purchaser of
its rights and interest in the Series 2009 Bonds will be effective until the Purchaser complies with
Section 2.6 of the Indenture and this Paragraph 7, including the requirement that any transferee
execute and deliver to the City a letter, substantially similar to this letter. Any such Purchaser or
transferee shall be (i) either a "qualified institutional buyer" within the meaning of Rule 144A of
the 1933 Act or an "accredited investor" within the meaning of Rule 501(x) of Regulation D of
the 1933 Act, (ii) duly and validly organized under the laws of its jurisdiction of incorporation or
organization, and (iii) has sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal obligations, to be able to evaluate the risks and
merits of the investment represented by the Agreements.
8. The Purchaser has made its own inquiry and analysis with respect to the Series
2009 Bonds and the security therefor.
9. The Purchaser acknowledges that it has either been supplied with or been given
full access to information, including records, financial statements and other financial
information, to which the Purchaser attaches significance in making investment decisions, and
the Purchaser has had the opportunity to ask questions and receive answers from knowledgeable
individuals concerning the City, the Indenture, the Series 2009 Bonds and the security therefor in
connection with its decision to acquire the Series 2009 Bonds. The Purchaser did not base its
decision to invest in the Series 2009 Bonds in reliance on any information that is not in written
form.
S7296-1123/1096805.1 C_2
10. The Purchaser acknowledges that the City has not prepared any offering
document with respect to the Series 2009 Bonds. The Purchaser acknowledges that, as between
the Purchaser and the City, or any of the City's officers, employees, agents, legal counsel or
advisors, or any other party: (i) the Purchaser has assumed responsibility for obtaining such
information and making such review as the Purchaser has deemed necessary or desirable' in
connection with the decision to purchase the Series 2009 Bonds, and (ii) with the investigation
made by the Purchaser (including specifically investigation of the City) prior to acquiring the
Series 2009 Bonds, the Purchaser has conducted a review as deemed necessary or desirable in
connection with the decision to make such investment.
11. The Purchaser understands that none of the Series 2009 Bonds, the Indenture nor
any of the documents securing the Series 2009 Bonds is registered under the 1933 Act or
registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of any state.
The Purchaser further acknowledges that the Series 2009 Bonds (i) will not be listed in any stock
or other securities exchange; (ii) will not carry a rating from any rating service, and (iii) represent
a speculative investment which involves a degree of risk.
12. The Purchaser has read the form of approving opinion of Richards, Watson &
Gershon, A Professional Corporation, regarding the Series 2009 Bonds.
13. The Purchaser agrees that the foregoing certifications, representations, warranties
and agreements shall survive the registration of a transferee as a new Owner of the Series 2009
Bonds.
Very truly yours,
[PURCHASER]
By: _
Name:
Title:
By: _
Name:
Title:
S7296-1123/1096805.1 C-3
Attachment D
Lease Document
Recording requested by and when
recorded mail to:
Seal Beach Public Financing Authority
c/o Richards, Watson & Gershon,
A Professional Corporation
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.
LEASE AGREEMENT
by and between
the
CITY OF SEAL BEACH,
as lessor
and the
SEAL BEACH PUBLIC FINANCING AUTHORITY,
as lessee
Dated as of January 1, 2009
This document is exempt from recording fees pursuant to California Government Code Section
6103 and Section 27383. This document is exempt from Documentary Transfer Tax pursuant to
California Revenue and Taxation Code Section 11922.
S7296-1123\1096102v2.doc
LEASE AGREEMENT
This Lease Agreement, dated as of January 1, 2009 (this "Lease"), is made by and
between the CITY OF SEAL BEACH, a municipal corporation duly organized and existing
under the laws of the State of California (the "City"), as lessor, and the SEAL BEACH PUBLIC
FINANCING AUTHORITY, a joint powers authority duly created and validly existing under the
laws of the State of California (the "Authority"), as lessee.
RECITALS:
A. The Authority is a joint powers authority duly organized and existing
under and pursuant to that certain Joint Exercise of Powers Agreement, dated May 8, 2000, by
and between the City and the Redevelopment Agency of the City of Seal Beach, and under the
provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title
1 of the Government Code of the State of California, and is authorized pursuant to Article 4 of
the Act to issue bonds for the purpose of financing public capital improvements.
B. The Authority is issuing its Lease Revenue Bonds, Series 2009 (the
"Series 2009 Bonds"), pursuant to an Indenture, dated as of January 1, 2009 (the "Indenture"),
by and between the Authority and Wells Fargo Bank, National Association, as trustee.
C. Proceeds from the sale of the Series 2009 Bonds will be used to finance
the costs with respect to certain public capital projects of the City, including the construction of a
fire station.
D. In connection with the issuance of the Series 2009 Bonds, the City and the
Authority desire to enter into this Lease, whereby the Authority will lease certain property from
the City (the "Leased Property");
E. The Authority will sublease the Leased Property to the City pursuant to
the Sublease Agreement, dated as of even date herewith, under which the City will pay certain
base rental payments to the Authority.
F. All rights to receive such base rental payments will be assigned by the
Authority to the Trustee pursuant to an Assignment Agreement, dated as of even date herewith,
by and between the Authority and the Trustee.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE
AS FOLLOWS:
SECTION 1. DEFINITIONS.
Terms used and not otherwise defined herein but which are defined in the
Indenture shall have the meanings ascribed to them in the Indenture. Unless the context
57296-1123\1096102v2.doc I
otherwise requires, the terms defined in this Section shall, for all purposes of this Lease, have the
meanings specified in this Section (the following definitions to be equally applicable to both the
singular and plural forms of such defined terms):
"Assignment Agreement" means the Assignment Agreement, dated as of even
date herewith, by and between the Authority and the Trustee, as the same may be amended,
supplemented or otherwise modified from time to time, pursuant to the terms thereof.
"Commencement Date" means , 2009.
"Indenture" means the Indenture, dated as of even date herewith, by and between
the Authority and the Trustee, relating to the Series 2009 Bonds, as the same may be amended,
supplemented or otherwise modified from time to time, pursuant to the terms thereof.
"Lease" means this Lease, and as the same may be amended, supplemented or
otherwise modified from time to time pursuant to the terms hereof.
"Leased Property" means the Site, the [city hall and police station] facilities and
all other improvements constructed on the Site.
"Original Purchaser" means Bank of America, N.A.
"Series 2009 Bonds" means the Authority's Lease Revenue Bonds, Series 2009.
"Site" means that certain real property more particularly described in Exhibit A
attached hereto, and incorporated herein by reference.
"Sublease" means the Sublease Agreement, dated as of even date herewith, with
respect to the Leased Property, by and between the Authority, as lessor, and the City, as lessee,
and as the same may be amended, supplemented or otherwise modified from time to time
pursuant to the terms thereof.
`"Trustee" means Wells Fargo Bank, National Association, its successors and
assigns, acting as the Trustee under the Indenture.
SECTION 2. TERM.
The term of this Lease shall commence on the Commencement Date and shall end
on the last day of the term of the Sublease, which is the earlier of (i) 1, 20_, (ii) the date
that the last Base Rental payment is made under the provisions of the Sublease or (iii) the date of
discharge of the Indenture.
SECTION 3. RENTAL.
The Authority agrees to pay to the City, on the Commencement Date, the sum of
$1.00, as advance rental for the use and right to possession of the Leased Property for the term of
this Lease.
S7296-1123\1096102v2.doc 2
SECTION 4. TITLE.
The City represents and warrants to the Authority that the City has a fee simple
title to the Leased Property. In accordance with the Sublease, the City shall obtain one or more
CLTA (or at the City's sole discretion, ALTA) policies of title insurance at the time of and dated
as of the Commencement Date in an amount not less than the aggregate principal amount of the
Series 2009 Bonds, payable to the Trustee, insuring the respective interests of the City and the
Authority in the Leased Property, and insuring the validity of this Lease and the Sublease, issued
by a title insurance company qualified to do business in the State of California and acceptable to
the Original Purchaser. To the extent permitted under the Indenture, the costs of obtaining such
title insurance policy or policies may be paid out of the sale proceeds of the Series 2009 Bonds.
SECTION 5. DEFAULT.
If the following shall have occurred:
(a) the Authority shall fail to keep, observe or perform any term, covenant or
condition contained herein to be kept or performed by the Authority, or
(b) the Authority's interest in this Lease or any part thereof is assigned or
transferred without the written consent of the City, either voluntarily or by operation of law or
otherwise, except as provided in Section 9 hereof, or
(c) any proceeding under the United States Bankruptcy Code or any federal or
state bankruptcy, insolvency or similar law or any law providing for the appointment of a
receiver, liquidator, trustee or similar official of the Authority or of all or substantially all of its
assets is instituted by or with the consent of the Authority, or is instituted without its consent and
is not permanently stayed or dismissed within 60 days, or
(d) the Authority offers to the Authority's creditors to effect a composition or
extension of time to pay the Authority's debts, or asks, seeks or prays for a reorganization or to
effect a plan or reorganization or for readjustment of the Authority's debts, or
(e) the Authority shall make an assignment for the benefit of creditors in
connection with the Authority's bankruptcy, insolvency, liquidation, winding up or similar event,
then the Authority shall be deemed to be in default hereunder and it shall be lawful for the City
to exercise any and all rights and remedies available pursuant to law; rovided, however, that, so
long as any Series 2009 Bonds remain outstanding, the City shall have no power to terminate this
Lease by reason of any default on the part of the Authority.
Neither the City nor the Authority shall in any event be in default in the
performance of any of its obligations hereunder or imposed by law unless and until the City or
the Authority (as the case may be) shall have failed to perform such obligation within 60 days
after notice by the Authority or the City (as the case may be) to the nonperforming party properly
specifying wherein such party has failed to perform any such obligation.
S729fi-1123\1096102v2.doc 3
SECTION 6. EMINENT DOMAIN.
If the whole or any part of the Leased Property shall be taken under the power of
eminent domain, the interest of the Authority shall be recognized and any condemnation award
shall be applied as provided in Section 9 of the Sublease.
SECTION 7. RIGHT OF ENTRY.
The City and its assignees shall have the right to enter any part of the Leased
Property during reasonable business hours (and in emergencies at all times) (a) to inspect the
same, (b) for any purpose connected with the City's or the Authority's rights or obligations under
this Lease and (c) for all other lawful purposes.
SECTION 8. QUIET ENJOYMENT BY THE AUTHORITY.
The Authority shall at all times during the term of this Lease peaceably and
quietly have, hold and enjoy the real property leased hereunder without suit, trouble or hindrance
from the City, subject to and recognizing (a) the rights granted to the City under the Sublease,
(b) the Authority's compliance with the terms and provisions hereof, and (c) the assignment of
certain rights of the Authority under the Sublease pursuant to the Assignment Agreement.
SECTION 9. ASSIGNMENTS AND SUBLEASES.
Unless the City shall be in default under this Lease, the Authority may not,
without the written consent of the City, assign its rights hereunder or sublet the Leased Property,
except as provided in the Sublease.
SECTION 10. WAIVER OF PERSONAL LIABILITY.
All liabilities hereunder on the part of the Authority shall be solely liabilities of
the Authority as a separate legal entity, and no member, officer or employee of the Authority
shall at any time or under any circumstances be individually or personally liable hereunder for
anything done or omitted to be done by the Authority hereunder.
SECTION 11. TAXES.
The City shall be responsible for the payment of any and all assessments of any
kind or character and also all taxes, including possessory interest taxes, levied or assessed upon
the Leased Property.
SECTION 12. LAW GOVERNING.
This Lease shall be governed exclusively by the provisions hereof and by the laws
of the State of California.
S7296-1123\1096102v2.doc 4,
SECTION 13. NOTICES.
All notices, statements, demands, consents, approvals, authorizations, offers,
designations, requests or other communications hereunder by either party to the other shall be in
writing and shall be sufficiently given and served upon the other party if delivered personally or
by facsimile transmission, or if mailed by United States registered or certified mail, return receipt
requested, postage pre-paid, and, if to the City, addressed to the Director of Finance, City of Seal
Beach, 211 Eighth Street, Seal Beach, CA 90740, or if to the Authority, addressed to the
Executive Director, Seal Beach Public Financing Authority, 211 Eighth Street, Seal Beach, CA
90740, or to such other addresses as the respective parties may from time to time designate by
notice in writing.
SECTION 14. VALIDITY AND SEVERABILITY.
If for any reason this Lease shall be held by a court of competent jurisdiction to be
void, voidable, or unenforceable by the City or by the Authority, or if for any reason it is held by
such a court that any of the covenants and conditions of the Authority hereunder is unenforceable
for the full term hereof, then and in such event this Lease is and shall be deemed to be a lease
from year to year and all of the rental and other terms, provisions and conditions of this Lease,
except to the extent that such terms, provisions and conditions are contrary to or inconsistent
with such holding, shall remain in full force and effect.
SECTION 15. WAIVER OF DEFAULT.
Failure of the City to take advantage of any default on the part of the Authority
shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may
grow up between the parties in the course of administering this Lease be construed to waive or to
lessen the right of the City to insist upon performance by the Authority of any term, covenant or
condition hereof, or to exercise any rights given the City on account of such default. A waiver of
a particular default shall not be deemed to be a waiver of the same or any subsequent default.
The acceptance of rent hereunder shall not be, nor be construed to be, a waiver of any term,
covenant or condition of this Lease.
SECTION 16. SECTION HEADINGS.
All section headings contained are for convenience of reference only and are not
intended to define or limit the scope of any provision of this Lease.
SECTION 17. AMENDMENTS.
This Lease may not be amended unless such amendment is agreed upon in writing
by the parties hereof; provided that, that no such amendment shall materially affect the interests
and rights of the Trustee or the Owners of the Bonds under the Indenture or the Sublease unless
(i) there shall have been delivered to the Trustee an opinion of Bond Counsel that such
amendment will not adversely affect the tax-exempt status of the Series 2009 Bonds, or (ii) the
Trustee ~ shall have obtained written consent of the affected Owners of at least a majority in
aggregate principal amount of the Series 2009 Bonds then Outstanding to such amendment.
Notwithstanding the foregoing, this Lease may not be amended without the prior written consent
S7296-1123\1096102v2.doc
of the Original Purchaser so long as the Original Purchaser is the owner of the Series 2009
Bonds.
SECTION 18. EXECUTION.
This Lease may be executed in any number of counterparts, each of which shall
be deemed to an original, but all together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the City and the Authority have caused this Lease to
be executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
CITY OF SEAL BEACH
By
Mayor
Attest:
City Clerk
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By
Chair
Attest:
Secretary
57296-1123\1096102v2.doc 6
EXHIBIT A
Description of Site
(See Attached)
S7296-1123\1096102v2.doc A_1
STATE OF CALIFORNIA )
ss
COUNTY OF )
On ,before me,
a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
STATE OF CALIFORNIA
COUNTY OF
ss
On ,before me, ,
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
a
S7296-1123\1096102v2.doc
STATE OF CALIFORNIA
COUNTY OF
On
ss
before me,
notary public, personally appeazed
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aze
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing pazagraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
a
S7296-(123\1096102v2.doc
Attachment E
Sub-Lease Document
Recording requested by and when
recorded mail to:
Seal Beach Public Financing Authority
c/o Richards, Watson & Gershon,
A Professional Corporation
355 South Grand Avenue, 40~' Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.
SUBLEASE AGREEMENT
by and between
the
SEAL BEACH PUBLIC FINANCING AUTHORITY
and the
CITY OF SEAL BEACH
Dated as of January 1, 2009
This document is exempt from recording fees pursuant to California Government Code Section
6103 and Section 27383. This document is exempt from Documentary Transfer Tax pursuant to
California Revenue and Taxation Code Section 11922.
S7296-1123\1096804v2.doc
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS ..................................................................................................... 1
SECTION 2. TERM ..................... 3
SECTION 3. ...........................................................................................
RENTAL ............................................................................................................ ..
.. 3
SECTION 4. USE OF PROCEEDS ........................................................................................ .. 5
SECTION 5. MAINTENANCE, UTII.ITIES, TAXES AND ASSESSMENTS .................... .. 5
SECTION 6. CHANGES TO THE LEASED PROPERTY .................................................... .. 5
SECTION 7. TITLE INSURANCE ......................................................................................... .. 6
SECTION 8. OTHER INSURANCE ...................................................................................... .. 6
SECTION 9. DAMAGE, DESTRUCTION AND CONDEMNATION; APPLICATION OF
NET PROCEEDS .............................................................................................. .. 8
SECTION 10. DEFAULT ......................................................................................................... .. 9
SECTION 11. PREPAYMENT AND CREDITS ...................................................................... 10
SECTION 12. RIGHT OF ENTRY ........................................................................................... 11
SECTION 13. MECHANICS' LIENS ...................................................................................... 11
SECTION 14. QUIET ENJOYMENT ....................................................................................... 11
SECTION 15. INDEMNIFICATION ........................................................................................ 12
SECTION 16. ASSIGNMENT .................................................................................................. 12
SECTION 17. ABATEMENT OF RENTAL ............................................................................ 13
SECTION 18. ADDITIONAL COVENANTS OF THE CITY ................................................ 13
SECTION 19. SUBSTITUTION OF PROPERTY ................................................................... 13
SECTION 20. REMOVAL OF PROPERTY ............................................................................ 14
SECTION 21. WATVER ............................................................................................................ 14
SECTION 22. NET LEASE ...................................................................................................... 15
SECTION 23. LAW GOVERNING .......................................................................................... 15
SECTION 24. NOTICES ........................................................................................................... 15
SECTION 25. VALIDITY AND SEVERABII..ITY ................................................................. 15
SECTION 26. SECTION HEADINGS ..................................................................................... 15
SECTION 27. EXECUTION ..................................................................................................... 16
EXHIBIT A DESCRIPTION OF THE SITE
EXHIBIT B BASE RENTAL PAYMENT SCHEDULE
57296-1123\1096804v2.doc
SUBLEASE AGREEMENT
This Sublease Agreement, dated as of January 1, 2009 (this "Sublease"), is made
by and between the SEAL BEACH PUBLIC FINANCING AUTHORITY, a joint powers
authority duly formed and existing pursuant to the laws of the State of California (the
"Authority"), as sublessor, and the CITY OF SEAL BEACH, a municipal corporation duly
organized and existing under the laws of the State of California (the "City"), as sublessee.
RECITALS:
A. The Authority is a joint powers authority duly organized and existing
under and pursuant to that certain Joint Exercise of Powers Agreement, dated July 5, 1988, as
amended by Amendment to Joint Exercise of Powers Agreement Creating the Seal Beach Public
Financing Authority, dated May 8, 2000, by and between the City and the Redevelopment
Agency of the City of Seal Beach, and under the provisions of Articles 1 through 4 (commencing
with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of
California, and is authorized pursuant to Article 4 of the Act to issue bonds for the purpose of
financing public capital improvements.
B. The Authority is issuing its Lease Revenue Bonds, Series 2009 (the
"Series 2009 Bonds"), pursuant to the Indenture, dated as of even date herewith (the
"Indenture"), by and between the Authority and Wells Fargo Bank, National Association, as
trustee.
C. Proceeds from the sale of the Series 2009 Bonds will be used to finance
the costs with respect to certain public capital projects of the City, including the construction of a
fire station.
D. In connection with the issuance of the Series 2009 Bonds, the City and the
Authority shall enter into the Lease Agreement, dated as of even date herewith (the "Lease"),
whereby the Authority will lease certain property from the City (the "Leased Property");
E. Pursuant to this Sublease, the Authority will sublease the Leased Property
to the City, and the City will pay certain base rental payments to the Authority.
F. All rights to receive such base rental payments will be assigned by the
Authority to the Trustee pursuant to an Assignment Agreement, dated as of even date herewith,
by and between the Authority and the Trustee. .
NOW, THEREFORE, in consideration of the above premises and of the mutual
covenants hereinafter contained and for other good and valuable consideration, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
Terms used and not otherwise defined herein but which are defined in the
Indenture shall have the meanings ascribed to them in the Indenture. Unless the context
otherwise requires, the terms defined in this Section shall, for all purposes of this Sublease, have
S7296-1123\1096804v2.doc 1
the meanings specified in this Section (the following definitions to be equally applicable to both
the singular and plural forms of any of such defined terms):
"Assignment Agreement" means the Assignment Agreement, dated as of even
date herewith, by and between the Authority and the Trustee.
"Base Rental" has the meaning assigned to that term in Section 3(a) hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Commencement Date" means , 2009.
"Expiration Date" means , 20_; provided, however, if the City is in default
with respect to any Base Rental payment on , 20_, then the Expiration Date shall be
automatically extended to , 20_.
"Indenture" means the Indenture, dated as of even date herewith, by and between
the Authority and the Trustee relating to the Series 2009 Bonds, as the same may be amended
and supplemented from time to time in accordance with the terms thereof.
"Leased Property" means the Site, the [city hall and police station] facilities and
all other improvements constructed on the Site.
"Net Proceeds" means any insurance or condemnation proceeds, paid with respect
to the Leased Property remaining after payment therefrom of all expenses in the collection
thereof.
"Payment Date" means, with respect to a Base Rental payment, the date listed as
its related "Payment Date" in Exhibit B of this Sublease. The Payment Dates are on each [March
1, June 1, September 1 and December 1], commencing 1, 2009.
"Permitted Encumbrances" means (a) liens for general ad valorem taxes, special
taxes and assessments, if any, not then delinquent, or which the City may, pursuant to this
Sublease, permit to remain unpaid; (b) liens created pursuant to or permitted under the Lease or
this Sublease; (c) easements, right of way, mineral rights, drilling rights and other rights,
reservations, covenants, conditions or restrictions which exist of record as of the Commencement
Date; (d) utility, access and other easements and rights of way, restrictions and exceptions that
do not interfere with or impair the use intended to be made of the Leased Property; (e) any right
or claim of any mechanic, laborer, materialman, supplier or vendor filed or perfected in the
manner prescribed by law after the Commencement Date; (f) such minor defects, irregularities,
encumbrances and clouds on title as normally exist with respect to property similar in character
to the Leased Property and as do not materially impair the use intended to be made of property
affected thereby; and (g) easements, right of way, mineral rights, drilling rights and other rights,
reservations, covenants, conditions or restrictions established following the Commencement
Date and to which the Authority and the City consent in writing..
"Purchaser" means Bank of America, N.A., its successors and assigns.
S7296-1123\1096804v2.doc 2
"Series 2009 Bonds" means the Authority's Lease Revenue Bonds, Series 2009.
"Site" means that certain real property more particularly described in Exhibit A
attached hereto and by this reference incorporated herein.
"Sublease" means this Sublease Agreement, as the same may be amended and
supplemented from time to time in accordance with the terms hereof.
"Trustee" means Wells Fargo Bank, National Association, its successors and
assigns, acting as the Trustee under the Indenture.
SECTION 2. TERM
(a) The Authority hereby subleases to the City and the City hereby hires from the
Authority, on the terms and conditions hereinafter set forth, the Leased Property.
(b) The term of this Sublease shall commence on the Commencement Date, and
shall end on the earlier of (i) the Expiration Date; (ii) the date on which the Base Rental
payments are paid (or prepaid) in full under the provisions hereof; or (iii) the date of discharge of
the Indenture pursuant to Section [10.3] thereof. provided, however Throughout the term of this
Sublease, fee title to the Leased Property shall remain in the City.
SECTION 3. RENTAL
Subject to the provisions of Sections 8(d) and 17 hereof, the City agrees to pay to
the Authority, its successors or assigns, as rental for the use and possession of the Leased
Property, the following amounts at the following times:
(a) Base Rental. The City shall pay as "Base Rental" to the Trustee,
as hereinafter provided, quarterly each year, the rental payments in accordance with the Base
Rental Payment Schedule attached hereto as Exhibit B, less any amounts credited against Base
Rental pursuant to Section 4.2(c) of the Indenture. Each Base Rental payment shall be payable
in arrears by wire transfer to the Trustee at least five (5) days before its Payment Date, and shall
be made in consideration for the City's use and possession of the Leased Property for the
three-month period preceding the Payment Date of such payment.
(b) Additional Rental. The City shall also pay, as "Additional Rental"
hereunder, in addition to the Base Rental, to the Authority or to the Trustee, as hereinafter
provided, such amounts in each year as shall be required for the payment of all costs and
expenses (not otherwise paid for or provided for out of the proceeds of sale of the Series 2009
Bonds) incurred by the Authority or the Trustee in connection with the execution, performance
or enforcement of this Sublease or the assignment hereof, the Indenture, or the Authority's or the
Trustee's respective interests in the Leased Property, including, but not limited to, all fees, costs
and expenses, all administrative costs of the Authority relating to the Leased Property (including,
without limiting the generality of the foregoing, salaries and wages of employees, overhead,
insurance premiums, taxes and assessments (if any), expenses, compensation and
indemnification of the Trustee payable by the Authority under the Indenture), any amount
required to be deposited by the Trustee under the Indenture to restore the balance in the Reserve
S729Cr 1123\1096804v2.doc 3
Account to the full amount of the Reserve Requirement, fees of auditors, accountants, attorneys
or engineers, and all other reasonable and necessary administrative costs of the Authority or
charges required to be paid by it to comply with the terms of the Series 2009 Bonds or of the
Indenture. The Authority or the Trustee shall bill such Additional Rental to the City from time to
time. The City shall pay amounts so billed within 30 days after receipt of the bill by the City.
Such payments of Base Rental and Additional Rental for each rental payment
period shall constitute the total rental for said rental payment period, and shall be paid by the
City in each rental payment period for and in consideration of the right of the use and possession
of, and the continued quiet use and enjoyment of, the Leased Property during each such period
for which said rental is to be paid. The parties hereto have agreed and determined that such total
rental represents the fair rental value of the Leased Property for each such period. In making
such determination, consideration has been given to other obligations of the parties under this
Sublease, the uses and purposes which may be served by the Leased Property and the benefits
therefrom which will accrue to the City and the general public. The determination of fair rental
value of the Leased Property pursuant to this paragraph shall not be deemed to be controlling in
connection with a determination of fair value of the Leased Property by the parties hereto for any
other purpose.
Each installment of Base Rental payable hereunder shall be paid in lawful money
of the United States of America to the order of the Trustee at the corporate trust office of the
Trustee in Los Angeles, California, or such other place as the Trustee shall designate.
Notwithstanding any dispute between the City and the Authority, the City shall make all rental
payments when due, without deduction or offset of any kind, and shall not withhold any rental
payments pending the final resolution of any such dispute. In the event of a determination that
the City was not liable for said rental payments or any portion thereof, said payments or excess
of payments, as the case may be, at the option of the City, shall be credited against subsequent
rental payments due hereunder or be refunded at the time of such determination.
The City covenants to take such action as may be necessary to include all such
rental payments due hereunder in its annual budget and to make the necessary annual
appropriations for all such rental payments. The City will furnish to the Authority and the
Trustee annually, on or before July 1 of each year, a certificate stating that it has complied with
the covenant set forth in this paragraph. The covenants on the part of the City herein contained
shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty
of each and every public official of the City to take such action and do such things as are
required by law in the performance of the official duty of such officials to enable the City to
carry out and perform the covenants and agreements in this Sublease agreed to be carried out and
performed by the City; provided, the obligation of the City to make Base Rental or Additional
Rental payments does not constitute an obligation of the City for which the City is obligated to
levy or pledge any form of taxation or for which the City has levied or pledged any form of
taxation. Neither the Series 2009 Bonds nor the obligation of the City to make Base Rental or
Additional Rental payments constitutes an indebtedness of the City, the State of California or
any of its political subdivisions within the meaning of any constitutional or statutory debt
limitation or restriction.
S7296-1123\1096804v2.doc 4
SECTION 4. USE OF PROCEEDS
The parties hereto agree that the proceeds of the Series 2009 Bonds will be used
to finance the costs of certain public capital projects of the City as described in the Indenture.
SECTION 5. MAINTENANCE, UTII.ITIES, TAXES AND ASSESSMENTS
During such time as the City or any assignee or sublessee thereof is in possession
of the Leased Property, all maintenance and repair, ordinary or extraordinary, of the Leased
Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for
the payment of (a) all utility services supplied to the Leased Property, (b) the cost of operation of
the Leased Property, and (c) the costs of maintenance of and repair to the Leased Property
resulting from ordinary wear and tear or want of care on the part of the City. The City shall, at
the City's sole cost and expense, keep and maintain the Leased Property clean and in a safe and
good condition and repair. The Authority shall have no obligation to alter, remodel, improve,
repair, decorate, or paint the Leased Property or any part thereof, and the parties hereto affirm
that the Authority has made no representations or warranties to the City respecting the condition
of the Leased Property.
The City shall comply with all statutes, ordinances, regulations, and other
requirements of all governmental entities that pertain to the occupancy or use of the Leased
Property. The Authority has no responsibility or obligation whatsoever to construct any
improvements, modifications or alterations to the Leased Property.
The parties hereto contemplate that the City will use the Leased Property for
public purposes and, therefore, that the Leased Property will be exempt from all taxes presently
assessed and levied with respect to real and personal property, respectively. In the event that the
use, possession or acquisition by the Authority or the City of the Leased Property is found to be
subject to taxation in any form, the City will pay during the term hereof, as the same respectively
become due, all taxes and governmental charges of any kind whatsoever that may at any time be
lawfully assessed or levied against or with respect to the Leased Property and any other property
acquired by the City in substitution for, as a renewal or replacement of, or a modification,
improvement or addition to the Leased Property; provided, that with respect to any governmental
charges or taxes that may lawfully be paid in installments over a period of years, the City shall
be obligated to pay only such installments as are accrued during such time as this Sublease is in
effect.
SECTION 6. CHANGES TO THE LEASED PROPERTY
The City shall have the right during the term of this Sublease to acquire and
construct improvements or to attach fixtures, structures or signs to the Leased Property if the
improvements, fixtures, structures or signs are necessary or beneficial for the use of the Leased
Property by the City; provided, however, that no such acquisition or construction shall result in a
material reduction in the aggregate value of the Leased Property or reduce the aggregate fair
rental value thereof, or substantially alter the nature of the Leased Property.
Upon termination of this Sublease, the City may remove any fixture, structure or
sign added by the City, but such removal shall be accomplished so as to leave the Leased
57296-1123\1096804v2.doc 5
Property, except for ordinary wear and tear and damage by casualty, in substantially the same
condition as they were in before the fixture, structure or sign was attached.
SECTION 7. TITLE INSURANCE
The City shall obtain one or more California Land Title Association insurance
policies (or, at the City's sole discretion, American Land Title Association insurance policies) at
the time of and dated as of the Commencement Date in an aggregate amount not less than the
aggregate principal amount of the Series 2009 Bonds, payable to the Trustee, insuring the
respective interests of the City and the Authority in the Leased Property, and insuring the validity
of this Sublease, subject only to Permitted Encumbrances, naming the Trustee as an insured
thereunder, issued by a title insurance company qualified to do business in the State of California
and acceptable to the Original Purchaser. To the extent permitted under the Indenture, the costs
of obtaining such title insurance policy or policies may be paid out of the sale proceeds of the
Bonds.
SECTION 8. OTHER INSURANCE
(a) Liability Insurance.
The City shall procure (or cause to be procured) and maintain (or cause to be
maintained), throughout the term of this Sublease, a standard commercial general liability
insurance policy or policies, naming as additional insureds the Authority, the Trustee, and their
directors, officers, agents and employees, insuring against all direct or contingent loss or liability
for damages for bodily injury, death or property damage occasioned by reason of the use or
operation of the Leased Property, in the form of a combined single limit policy in the minimum
amount of $10,000,000. Such liability insurance may be maintained as part of or in conjunction
with any other liability insurance carried by the City.
(b) Workers Compensation Insurance.
The City will at all times comply with the workers' compensation insurance laws
of the State of California to the extent applicable to the City.
(c) Fire and Extended Coverage Insurance.
The City shall procure (or cause to be procured) and maintain (or cause to be
maintained), throughout the term of this Sublease, insurance against loss or damage to any part
of the Leased Property against all perils included within the classification of fire, extended
coverage, vandalism, and malicious mischief. Said fire and extended coverage insurance shall,
as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle
damage, smoke, sprinkler damage, boiler explosion and such other hazards as are normally
covered by such insurance. Such insurance shall be in an amount equal to 100 percent of the
replacement cost of the improvements on the Leased Property. Such insurance may be
maintained as part of or in conjunction with any other fire and extended coverage insurance
carried or required to be carried by the City. Without limiting any other provision of this Section
8, it is hereby recognized that the insurance policy required under this Subsection (c) may
include a deductible in an amount not exceeding $50,000, to be adjusted annually for the rate of
57296-1123\1096804v2.doc
inflation, as measured by the Consumer Price Index for the State, as maintained by the Bureau of
Labor Statistics, United States Department of Labor.
(d) Rental Interruption Insurance.
The City shall procure (or cause to be procured) and maintain (or cause to be
maintained), throughout the term of this Sublease, rental interruption insurance to cover loss,
total or partial, of the use of any part of the Leased Property as the result of any of the hazards
covered in the insurance required by subsection (c) hereof and the resulting loss of rental income
to the Trustee, as assignee of the Authority, in an amount sufficient to pay the maximum
remaining principal and interest portions of Base Rental due under this Sublease for a period of
at least 24 months. The Net Proceeds of such insurance shall be paid to the Trustee for deposit in
the Lease Revenue Fund and shall be credited towards the payment of Base Rental in the order in
which such Base Rental payments become due and payable.
(e) Self-Insurance.
As an alternative to providing the insurance required by Subsection (a), (b) or (c)
of this Section, with the consent of the Original Purchaser so long as the Original Purchaser is
the Owner of the Series 2009 Bonds, which consent shall not be unreasonably withheld, the City
may provide aself-insurance method or plan of protection (but only from a special fund of the
City or other source for which the General Fund of the City is not in any fashion obligated nor to
which the City is otherwise obligated to make payments), covering one or all of the insurance
coverages required to be provided by Subsections (a), (b) and (c), so long as (i) such
self-insurance method or plan of protection shall afford reasonable protection to the Authority
and the Trustee, in light of all circumstances, giving consideration to cost, availability and
similar plans or methods of protection adopted by counties in the State other than the City,
(ii) the City shall have provided evidence to the Authority and the Trustee that the City has
segregated amounts in a special insurance reserve meeting the requirements of this Section, and
(iii) in the reasonable opinion of the City's risk manager or a reputable independent insurance
consultant, such self-insurance is maintained at an actuarially sound level for the purpose of this
Sublease.
(f) Net Proceeds of Insurance: Form of Policies.
The policies of insurance required by subsections (c) and (d) shall provide that all
proceeds thereunder shall be payable to the Trustee pursuant to a lender's loss payable
endorsement. The Net Proceeds of policy of insurance under subsection (c) hereof shall be
applied as provided in Section 9. All policies of insurance required by this Sublease and any
statements of self-insurance shall be in form satisfactory to the Authority. The City shall pay or
cause to be paid when due the premiums for all insurance policies required by this Sublease and
shall promptly furnish or cause to be furnished evidence of such payments to the Authority and
the Trustee. All such policies shall provide that the Authority and the Trustee shall be given 30
days' notice of each expiration, and any intended cancellation thereof or reduction of the
coverage provided thereby. The City shall deliver to the Trustee on or before each anniversary
of the Commencement Date a certificate that all insurance required under this Sublease is in full
force and effect. In the event that the City obtains insurance through a pooled insurance program
S7296-1123\1096804v2.doc 7
of governmental entities, an annual statement or memorandum of coverage delivered to the
Authority, the Trustee and the Bond Insurer will satisfy the requirements of this subsection. The
Trustee and the Authority shall not be responsible for the sufficiency of any insurance herein
required or payment of premium and shall be fully protected in accepting payment on account of
such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee.
(g) Advances.
If the City shall fail to perform any of its obligations under this Section, then the
Authority may, but shall not be obligated to, take such action as may be necessary to cure such
failure, including the advancement of money on behalf of the City, and the City shall be
obligated to repay all such advances as soon as possible.
(h) Waivers of Subrogation. Each of the parties hereby waives any and all rights
to recovery against the other or against any other tenant or occupant of the Leased Property, or
against the officers, employees, agents, representatives, customers, and business visitors of such
other party or of such other tenant or occupant of the Leased Property, for loss or damage to such
waiving party or its property or the property of others under its control, arising from any cause
insured against under the standard form of property damage insurance policy with all permissible
extensions and endorsements covering extended perils or under any other policy of insurance
carried by such waiving party in lieu thereof, to the extent such policies then in force permit such
waiver.
SECTION 9. DAMAGE, DESTRUCTION AND CONDEMNATION;
APPLICATION OF NET PROCEEDS
Prior to the expiration of the term hereof, if (a) the Leased Property is destroyed
(in whole or in part) or is damaged by fire or other casualty, (b) title to, or the temporary use of,
any portion of the Leased Property or the estate of the Authority or the City in the Leased
Property or any portion shall be taken under the exercise of the power of eminent domain by any
governmental body or by any person or firm or corporation acting under governmental authority,
or (c) leasehold interest in Leased Property is materially impaired by reason of a defect of title,
then the Authority and the City will cause the Net Proceeds of any insurance payment (other than
the Net Proceeds of rental interruption insurance which shall be applied pursuant to Section 8(d)
hereof) or any condemnation award to be applied to the prompt repair, restoration, modification,
improvement or replacement of the damaged, destroyed or condemned portion of the Leased
Property or cure the defect of title to the Leased Property, and any balance of Net Proceeds
remaining after such work or cure of title defect has been completed shall be paid to the City.
Notwithstanding the foregoing, if the proceeds of such insurance or condemnation award
(together with any other money that the City in its discretion has determined to use for such
purpose) are at least sufficient to redeem all of the then outstanding Bonds, then the City may
elect not to replace the destroyed, damaged or condemned portion of the Leased Property or cure
the defect of title to the Leased Property and thereupon shall cause said proceeds to be used for
the prepayment of Base Rental pursuant to Section 11(a); provided, that so long as the Bond
Insurance Policy is in full force and effect, unless the Bond Insurer otherwise consents in
writing, the City shall make a determination on whether to prepay Base Rental pursuant to this
Section within 45 days of the date on which the destruction of the Leased Property occurred, the
S7296-1123\1096804v2.doc 8
condemnation proceedings were completed or the leasehold interest in the Leased Property was
determined to be materially impaired, whichever is applicable.
SECTION 10. DEFAULT
(a) If default shall be made by the City in the observance or performance of any
agreement, condition, covenant or term contained herein required to be observed or performed
by it (including, without limitation, the payment of any Base Rental or Additional Rental due
hereunder), subject to the provisions of subsection (c) below, the Authority may at any time
thereafter (with or without notice and demand and without limiting any other rights or remedies
the Authority may have) recover rent and other monetary charges as they become due hereunder
without terminating the City's right to possession of the Leased Property (regardless of whether
or not the City has abandoned the Leased Property). Furthermore, upon the occurrence of such a
default, the Authority shall have the right, and the City hereby irrevocably appoints the Authority
as its agent and attorney-in-fact for such purpose, to attempt to relet the Leased Property at such
rent, upon such conditions and for such term, and to do all other acts to maintain or preserve the
Leased Property, including the removal of persons or property therefrom or taking possession
thereof, as the Authority deems desirable or necessary. The City hereby waives any and all
claims for any damages that may result to the Leased Property upon any action taken by the
Authority under this Section 10(a). No action taken by the Authority under this Section 10(a)
shall be deemed to terminate the Lease or the Sublease and the City shall continue to remain
liable for any deficiency that may arise out of such releting, taking into account expenses
incurred by the Authority due to such releting, payable at the same time and manner as provided
for Base Rental in Section 3(a).
The Authority expressly waives the right to receive any amount from the City
pursuant to Section 1951.2(a)(3) of the California Civil Code.
Each and all of the remedies given to the Authority hereunder or by any law now
existing or hereafter enacted are cumulative and the exercise of any one remedy shall not impair
the right of the Authority to any or all other remedies.
(b) In addition to any default resulting from breach by the City of any agreement,
condition, covenant or term hereof, if:
(i) the City's interest herein or any part thereof is assigned or
transferred, either voluntarily or by operation of law, except as provided in Section 16; or
(ii) the City shall file any petition or institute any proceedings under
any act or acts, state or federal, dealing with or relating to the subject of bankruptcy or
insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or
as a debtor or in any similar capacity, wherein or whereby the City asks or seeks or prays to be
adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers
to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or
prays for a reorganization or to effect a plan of reorganization or for a readjustment of its debts
or for any other similar relief, or if the City shall make a general or any assignment for the
S729fi-1123\1096804v2.doc 9
benefit of its creditors in connection with the City's bankruptcy, insolvency, liquidation, winding
up or similar event; or
(iii) the City shall abandon the Leased Property or any portion thereof,
then in each and every such case the City shall be deemed to be in default hereunder.
(c) Neither the Authority nor the City shall be in default in the performance of
any of its obligations hereunder (except for the obligation of the City to pay Base Rental when
due pursuant to Section 3(a)) unless and until it shall have failed to perform such obligation
within 30 days after notice by the Authority or the City, as the case may be, to the other party
properly specifying wherein it has failed to perform such obligation.
SECTION 11. PREPAYMENT AND CREDITS
(a) The City may prepay, from Net Proceeds of insurance or a condemnation
award received by it pursuant to Section 9, the principal components of Base Rental then unpaid,
in whole on any date, at a prepayment price equal to the sum of the principal components prepaid
plus accrued interest thereon to the date of prepayment. In such event, the Series 2009 Bonds
shall be redeemed pursuant to Section 2.3(a) of the Indenture.
(b) The City may, at its option, with the prior written consent of the Original
Purchaser, prepay from any source of available moneys, Base Rental then unpaid, in whole only,
for the redemption of Series 2009 Bonds, which redemption date(s) shall be on any Payment
Date. In such event, the Series 2009 Bonds shall be redeemed pursuant to Section 2.3(b) of the
Indenture. A prepayment under this Section 11(b) shall be deemed made upon the occurrence of
either of the following:
(i) The City shall have deposited with the Trustee an amount equal to
the sum of (A) the principal components of Base Rental being so prepaid, l~us
(B) the interest components with respect thereto accrued to the related redemption
date(s) of the Series 2009 Bonds plus (C) the breakage cost determined by the
Original Purchaser, so long as the Original Purchaser is the Owner of the Series
208 Bonds; or
(ii) There shall have been deposited, on behalf of the Authority, with
the Trustee or another fiduciary, Federal Securities (or a combination of cash and
Federal Securities) in a sufficient amount to satisfy the requirements of Section
9.3(b) of the Indenture to discharge the Series 2009 Bonds to be redeemed in
connection with such prepayment, including payment of the breakage cost
determined by the Original Purchaser, so long as the Original Purchaser is the
Owner of the Series 2009 Bonds.
Except in the case of a prepayment of Base Rental to redeem all of the then
Outstanding Bonds, a prepayment of principal components of Base Rental pursuant to this
Section •11(b) shall (1) apply only to Base Rental previously unpaid and not yet due, and (2) be
applied to reduce Base Rental so that, after such prepayment (and the related redemption of
Bonds), (A) each annual installment of principal components of Base Rental due hereunder shall
S7296-1123\1096804v2.doc 10
be an integral multiple of $5,000 and (B) the principal components of Base Rental due in any
year shall correspond with the principal amount of Bonds due and payable in such year.
In the event of a partial prepayment of Base Rental under this Section 11, the City
shall provide the Trustee with an amended Exhibit B approved by the Original Purchaser
reflecting the new schedule of Base Rental payments. A prepayment made pursuant to this
Section 11 shall not cause a defeasance of Series 2009 Bonds unless the requirements of Section
9.3 of the Indenture are satisfied.
(c) Before making any prepayment pursuant to this Section 11, the City shall
give written notice to the Authority, the Original Purchaser and the Trustee specifying the date
on which the prepayment will be made, which date shall be not less than 45 days from the date
such notice is given.
(d) In the event of a prepayment under this Section 11, such that this Sublease
shall be terminated by its terms as provided in Section 2, all amounts then on deposit under the
Indenture which are to be credited to the City's obligations to make Base Rental payments shall
be credited towards the amounts then required to be so prepaid.
SECTION 12. RIGHT OF ENTRY
The Authority and its assignees shall have the right to enter any of the Leased
Property during reasonable business hours (and in emergencies at all times) (a) to inspect the
same, (b) for any purpose connected with the City's or the Authority's rights or obligations under
this Sublease, and (c) for all other lawful purposes.
SECTION 13. MECHANICS' LIENS
In the event the City shall at any time before or during the term of this Sublease
cause any improvements or other work to be done or performed or materials to be supplied, in or
upon the Leased Property, the City shall pay, when due, all sums of money that may become due
for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or
alleged to have been furnished to or for the City in, upon or about the Leased Property and which
may be secured by any mechanics', materialmen's or other liens against the Leased Property or
the Authority's interest therein, and will cause any such lien to be fully discharged and released
at the time the performance of any obligation secured by any such lien matures or becomes due,
except that, if the City desires to contest any such lien it may do so. If any such lien shall be
reduced to final judgment and such judgment or such process as may be issued for the
enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the
City shall forthwith pay and discharge said judgment.
SECTION 14. QiJIET ENJOYMENT
The parties hereto mutually covenant that the City, so long as it keeps and
performs the covenants and agreements herein contained, shall at all times during the term of this
Sublease peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or
hindrance from the Authority.
57296-1123\1096804r2.doc 11
SECTION 15. INDEMNIFICATION
The City shall, to the full extent then permitted by law, indemnify, defend, protect
and hold harmless the Authority and its members, officers and employees and the Trustee from
and against any and all liabilities, obligations, losses, claims and damages whatsoever, regardless
of the cause thereof (except for any liability, obligation, loss, claim or damage arising out of the
negligent or intentional act or omission of the Trustee, its officers, directors or employees), and
expenses in connection therewith, including, without limitation, counsel fees and expenses,
penalties and interest arising out of or as the result of the entering into of this Sublease and the
Indenture, or any accident in connection with the operation, use, condition or possession of the
Leased Property or any portion thereof resulting in damage to property or injury to or death to
any person. The indemnification arising under this section shall continue in full force and effect
notwithstanding the full payment of all rent obligations hereunder, the termination hereof for any
reason, or the resignation or removal of the Trustee. The City agrees not to withhold or abate
any portion of the payments required pursuant hereto by reason of any defects, malfunctions,
breakdowns or infirmities of the Leased Property. The Authority and the City mutually agree to
promptly give notice to each other of any claim or liability hereby indemnified against following
either's learning thereof.
SECTION 16. ASSIGNMENT
The parties understand that this Sublease and the rights of the Authority hereunder
(except for the Authority's rights to indemnification and payment or reimbursement for any costs
or expenses of the Authority hereunder) will be assigned to the Trustee pursuant to the
Assignment Agreement and the Indenture, and accordingly, the City agrees to make all rental
payments due to the Authority hereunder directly to the Trustee, notwithstanding any claim,
defense, setoff or counterclaim whatsoever (whether arising from a breach hereof or otherwise)
that the City may have from time to time against the Authority, except as provided in Section 17
hereof. Without limiting the foregoing, to the extent that this Sublease or the Assignment
Agreement confer upon or grants the Trustee any right, remedy or claim under or by reason of
this Sublease, the Trustee is hereby further recognized as being a third party beneficiary
hereunder and may enforce such right, remedy or claim conferred, given or granted hereunder.
Neither this Sublease nor any interest of the City hereunder shall be mortgaged,
pledged, assigned or transferred by the City by voluntary act or by operation of law or otherwise;
provided that the City may sublease all or any portion of the Leased Property, and may grant
concessions to others involving the use of any. portion of the Leased Property, whether such
concessions purport to convey a leasehold interest or a license to use a portion of the Leased
Property. The City shall at all times remain liable for the performance of the covenants and
conditions on its part to be performed under this Sublease, notwithstanding any subletting or
granting of concessions which may be made. Nothing herein contained shall be construed to
relieve the City from its obligation to pay Base Rental and Additional Rental as provided in this
Sublease or to relieve the City from any other obligations contained herein.
S7296-1123\1096804v2.doc 12
SECTION 17. ABATEMENT OF RENTAL
The obligation of the City to pay Base Rental and Additional Rental shall be
abated during any period in which, by reason of any damage, destruction, condemnation or
impairment of leasehold interest, there is substantial interference with the use and occupancy of
the Leased Property or any portion thereof by the City. Such abatement shall be in an amount
agreed upon by the City and the Authority such that the resulting Base Rental in any year during
which such interference continues does not exceed the fair rental value of the portions of the
Leased Property as to which such damage, destruction, taking or impairment do not substantially
interfere with the City's use and right of possession. Such abatement shall continue for the
period commencing with the date of such interference and ending with the restoration of the
Leased Property to tenantable condition. Upon the cessation of the occurrence of any abatement
event during the term of this Sublease, the City shall cause the Leased Property to be appraised
by an MAI appraiser to determine its then current fair rental value. If such fair rental value is
greater than the fair rental value of the Leased Property determined under Section 3 as of the
Commencement Date, the Base Rental shall be increased by the Iesser of (i) such incremental
value or (ii) the amount needed to recoup all amounts abated during the remaining term of this
Sublease.
Except as set forth herein, in the event of any damage, destruction of
condemnation, this Sublease shall continue in full force and effect and the City hereby waives
any right to terminate this Sublease by virtue of such damage, destruction or condemnation. The
City further waives the benefit of Sections 1932(1), 1932(2), 1933(4), 1941 and 1942 of the
California Civil Code.
SECTION 18. ADDITIONAL COVENANTS OF THE CITY
The City covenants that during the term of this Sublease it shall not use or permit
the use of the Leased Property or any proceeds of the Series 2009 Bonds, directly or indirectly,
in any manner, and shall not take or omit to take any action, that would cause any of the Series
2009 Bonds to be treated as an obligation not described in Section 103(a) of the Code.
SECTION 19. SUBSTITUTION OF PROPERTY
Notwithstanding anything herein to the contrary, the Leased Property may be
substituted, in whole or in part, by other properties, at the option of the City with the prior
written consent of the Original Purchaser but without the consent of any other Owners of the
Series 2009 Bonds; provided, that the following conditions shall have been satisfied:
(i) such substitution does not, in the opinion of Bond Counsel, adversely affect the
tax-exempt status of the Series 2009 Bonds;
(ii) the City certifies to the Authority and the Trustee that (a) based upon the
findings of a certified real estate appraiser, the aggregate fair rental value of the Leased Property,
after such substitution, is at least equal to the Base Rental each year for the remaining term of
this Sublease; (b) the useful life of the substituted property meets or exceeds the remaining term
of the Series 2009 Bonds; and (c) the essentiality of the substituted property is comparable to that
of the portion of the Leased Property released;
S7296-1123\1096804v2.doc 13
(iii) the City has been advised by the rating agencies then rating the Series 2009
Bonds that such substitution will not, in and of itself, result in a reduction of such ratings on the
Series 2009 Bonds;
(iv) in the event that the substituted property consists in whole or in part of real
property, a California Land Title Association insurance policy (or, at the City's sole discretion,
an American Land Title Association insurance policy) on the substituted property has been
obtained and evidence that any existing title insurance with respect to the portion of the Leased
Property remaining after such substitution is not affected;
(v) evidence that, other than Permitted Encumbrances, no prior liens exist as to
the substituted property; and
(vi) the City shall cause to be recorded in the Office of the Los Angeles County
Recorder an executed amendment to the Sublease containing an amended Exhibit A, or a
memorandum reflecting such amendment to Exhibit A.
SECTION 20. REMOVAL OF PROPERTY
Notwithstanding anything herein to the contrary, any portion of the Leased
Property may be removed, at the option of the City with the prior written consent of the Original
Purchaser but without the consent of any other Owners of the Series 2009 Bonds; provided, that
the following conditions shall have been satisfied:
(i) such removal does not, in the opinion of Bond Counsel, adversely affect the
tax-exempt status of the Series 2009 Bonds;
(ii) the City certifies to the Authority and the Trustee that, based upon the findings
of a certified real estate appraiser, the aggregate fair rental value of the Leased Property, after
such removal, is at least equal to the Base Rental each year for the remaining term of this
Sublease;
(iii) the City has been advised by the rating agencies then rating the Series 2009
Bonds, if any, that such removal will not, in and of itself, result in a reduction of such ratings on
the Series 2009 Bonds; and
(iv) the City shall cause to be recorded in the Office of the Los Angeles County
Recorder an executed amendment to the Sublease containing an amended Exhibit A, or a
memorandum reflecting such amendment to Exhibit A.
SECTION 21. WAIVER
Failure of the Authority to take advantage of any default on the part of the City
shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may be
established between the parties in the course of administering this Sublease be construed to
waive or to lessen the right of the Authority to insist upon performance by the City of any term,
covenant or condition hereof, or to exercise any rights given the Authority on account of such
default. A waiver of a particular default shall not be deemed to be a waiver of the same or any
S7296-1123\ 1096804v2.doc 14
subsequent default. The acceptance of rent hereunder shall not be, nor be construed to be, a
waiver of any term, covenant or condition of this Sublease.
SECTION 22. NET LEASE
Subject to the provisions of Section 17 ("Abatement of Rental"), this Sublease
shall be deemed and construed to be a "Triple-Net Lease" and the City hereby agrees that rental
provided for herein shall be an absolute net return to the Authority, free and clear of any
expenses, charges or setoffs whatsoever.
SECTION 23. LAW GOVERNING
This Sublease shall be governed exclusively by the provisions hereof and by the
laws of the State of California.
SECTION 24. NOTICES
All notices, statements, demands, consents, approvals, authorizations, offers,
designations, requests or other communications hereunder by either party to the other shall be in
writing and shall be sufficiently given and served upon the other party if delivered personally or
by facsimile transmission or if mailed by United States registered or certified mail, return receipt
requested, postage pre-paid, and, if to the City, addressed to the Director of Finance, City of Seal
Beach, 211 Eighth Street, Seal Beach, CA 90255, or if to the Authority, addressed to the
Executive Director, Seal Beach Public Financing Authority, 211 Eighth Street, Seal Beach, CA
90255, or to such other addresses as the respective parties may from time to time designate by
notice in writing. All notices, statements, demands, consents, approvals, authorizations, offers,
designations, requests or other communications hereunder to the Trustee shall be governed by
Section 9.14 of the Indenture, which are incorporated herein.
SECTION 25. VALIDITY AND SEVERABILITY
If for any reason this Sublease shall be held by a court of competent jurisdiction
to be void, voidable, or unenforceable by the Authority or by the City, or if for any reason it is
held by such a court that any of the covenants of the City hereunder, including the covenant to
pay rentals hereunder, is unenforceable for the full term hereof, then and in such event this
Sublease is and shall be deemed to be a lease from year to year under which the rentals are to be
paid by the City monthly in consideration of the right of the City to possess, occupy and use the
Leased Property, and all of the rental and other terms, provisions and conditions of this Sublease,
except to the extent that such terms, provisions and conditions are contrary to or inconsistent
with such holding, shall remain in full force and effect.
SECTION 26. SECTION HEADINGS
All section headings contained are for convenience of reference only and are not
intended to define or limit the scope of any provision of this Sublease.
57296-1123\1096804v2.doc 1 S
SECTION 27. EXECUTION
This Sublease may be executed in any number of counterparts, each of which
shall be deemed to an original, but all together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Authority and the City have caused this Sublease
to be executed by their respective officers thereunto duly authorized, all as of the day and year
first above written.
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By
Chair
ATTEST:
Secretary
CITY OF SEAL BEACH
By
Mayor
ATTEST:
City Clerk
S7296-1123\1096804v2.doc 16
EXHIBIT A
Description of Site
(See Attached)
57296-1123\1096804v2.doc
EXHIBIT B
Base Rental Payment Schedule
Principal Interest
Payment Date * Component Component Total
Total
* The City shall wire each Base Rental payment to the Trustee no later than the Business Day before each scheduled
Payment Date.
S7296-1123\1096804v2.doc
STATE OF CALIFORNIA
COUNTY OF
ss
On ,before me, , a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERNRY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
STATE OF CALIFORNIA
COUNTY OF
ss
On ,before me, , a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJiJRY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
S7296•1123\1096804v2.doc
STATE OF CALIFORNIA
COUNTY OF
ss
On ,before me,
,a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
S7296-1123\1096804v2.doc
Attachment F
Assignment Agreement
Recording requested by and when
recorded mail to:
Seal Beach Public Financing Authority
c/o Richazds, Watson & Gershon,
A Professional Corporation
355 South Grand Avenue, 40`~ Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.
ASSIGNMENT AGREEMENT
by and between the
SEAL BEACH PUBLIC FINANCING AUTHORITY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee
Dated as of Januazy 1, 2009
This document is exempt from recording fees pursuant to California Government Code Section
6103 and Section 27383. This document is exempt from Documentary Transfer Tax pursuant to
California Revenue and Taxation Code Section 11922.
12168-0004/908388.3
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement"), dated as of January 1, 2009, is
made by and between the Seal Beach Public Financing Authority, a joint powers agency duly
organized and existing pursuant to the laws of the State of California (the "Authority"), and
Wells Fargo Bank, National Association, a national banking association, duly organized and
existing under and by virtue of the laws of the United States of America, as Trustee (the
`"Trustee").
RECITALS:
A. The Authority and the City of Seal Beach, California (the "City"), have
executed and entered into a Sublease Agreement, dated as of even date herewith (the
"Sublease"), pursuant to which the Authority subleases to the City, as provided therein, certain
parcels of land described in the Exhibit A attached hereto and incorporated by reference, together
with the city hall and fire station facilities and all other improvements thereon (collectively, the
"Leased Property").
B. Pursuant to the Sublease, the City is obligated to make certain base rental
payments (the "Base Rental Payments") to the Authority for the sublease of the Leased Property.
C. The Authority desires to assign to the Trustee, without recourse, all of the
Authority's rights to receive the Base Rental Payments scheduled or required to be paid by the
City under and pursuant to the Sublease.
D. In consideration of such assignment and the execution and entering into of
an Indenture, dated as of even date herewith (the "Indenture"), by and between the Authority and
the Trustee, the Authority will issue its Lease Revenue Bonds, Series 2008 (the "Series 2008
Bonds"), in an aggregate principal amount of $~
E. The Authority has determined that all acts, conditions and things required
by law to exist, to have happened and to have been performed precedent to and in connection
with the execution and entering into of the Agreement do exist, have happened and have been
performed in regular and due time, form and manner as required by law, and the parties hereto
are now duly authorized to execute and enter into the Agreement.
NOW, THF.RRFORE, IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE
AS FOLLOWS:
SECTION 1. DEFINITIONS.
Unless context clearly requires otherwise, all capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
12168-0004/908388.3 1
SECTION 2. ASSIGNMENT.
The Authority hereby transfers in trust and assigns to the Trustee, for the benefit
of the Owners from time to time of the Series 2008 Bonds, all of the right, title and interest of the
Authority in the Sublease (except the Authority's rights to indemnification and payment or
reimbursement for any costs or expenses thereunder), including the Authority's rights to receive
the Base Rental Payments scheduled to be paid by the City under and pursuant to the Sublease,
and any and all of the other rights of the Authority under the Sublease as may be necessary to
enforce payment of such Base Rental Payments when due or otherwise to protect the interest of
the Owners of the Series 2008 Bonds.
SECTION 3. ACCEPTANCE.
The Trustee hereby accepts the foregoing assignment for the benefit of the Series
2008 Bond Owners, subject to the conditions and terms of the Indenture, and all such Base
Rental Payments shall be applied and all such rights so assigned shall be exercised by the Trustee
under and pursuant to the Indenture. This Agreement shall confer no rights and shall impose no
obligations upon the Trustee beyond those expressly provided in the Indenture.
SECTION 4. MISCELLEOUS.
This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
This Agreement shall be binding on and inure to the benefit of the parties hereto,
and their successors and assigns.
This Agreement may be executed in counterparts, and all such executed
counterparts shall constitute the same instrument. It shall be necessary to account for only one
set of such counterparts in proving this Agreement.
(Remainder of Page Intentionally Left Blank)
12168-0004/908388.3 2
IN WITNESS WHEREOF, the parties hereto have executed and entered into this
Agreement by their authorized signatories thereunto duly authorized as of the day and year first
above written.
ATTEST:
Secretary
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By
Chair
WELLS FARGO BANK, NATIONAL
ASSOCIATION
as Trustee
B y.
Authorized Officer
12168-0004/908388.3 3
EXHIBIT A
Description of Leased Property
(See Attached)
12168-0004/908388.3 A-1
STATE OF CALIFORNIA
COUNTY OF
On
ss
before me,
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
STATE OF CALIFORNIA
COUNTY OF
ss
On ,before me,
a
a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that byhis/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
12168-0004/908388.3
STATE OF CALIFORNIA
COUNTY OF
On
ss
before me,
a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
12168-0004/908388.3
Attachment G
Bond Purchases Agreement
$9,000,000
SEAL BEACH PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS
SERIES 2009
BOND PURCHASE AGREEMENT
Dated as of January _, 2009
Ladies and Gentlemen:
The undersigned, Bank of America, N.A. (the "Purchaser"), offers to enter into this Bond Purchase
Agreement (the "Bond Purchase Agreement") with City of Seal Beach, a charter city and municipal
corporation, duly organized, validly existing under the laws of the State of California (the "City"),
and the Seal Beach Public Financing Authority, a joint powers authority organized and existing
under the laws of the State of California (the "Authority"), which upon the acceptance of this offer
and execution of this Bond Purchase Agreement by the City, the Authority and the Purchaser shall be
in full force and effect in accordance with its terms and shall be binding upon such parties.
For purposes of this Bond Purchase Agreement, all defined terms indicated by the
capitalization of the first letter of such term shall have the meaning herein ascribed to such term or as
defined in the Indenture (hereinafter defined).
SECTION 1. PURCHASE OF BONDS.
Upon the basis of the representations and agreements herein contained, but subject to the
terms and conditions hereinafter set forth and set forth in the Indenture, the Purchaser hereby agrees
to purchase all the Authority's $9,000,000 aggregate principal amount of Lease Revenue Bonds
Series 2009 (collectively, the "Bonds") for a purchase price of $9,000,000.
-1-
The Bonds are delivered as fully registered Bonds, and, when delivered initially, shall be
registered in the name of, and shall be delivered to, the Purchaser.
SECTION 2. THE BONDS.
(A) General. The Bonds are being executed and delivered for the purpose of providing funds
to (i) finance the construction of a new firestation in the City (ii) pay certain costs of issuance
relating to the delivery of the Bonds, and (iii) fund an interest reserve with respect to the Bonds.
The Bonds are to be executed and delivered under and are equally and ratably secured by the
Indenture, dated as of January 1, 2009 (the "Indenture"), between Wells Fargo Bank, National
Association, as trustee (the "Trustee") and the Authority, which will create a lien on all revenues,
moneys and securities held from time to time by the Trustee for the holders of the Bonds pursuant to
the Indenture. Payments of principal and interest with respect to the Bonds by the Authority shall be
made from Base Rental Payments received from the City under that certain Sublease dated as of
January 1, 2009 (the "Sublease") between the City, as lessee, and the Authority, as lessor.
(B) Maturities. Amounts and Interest Rates.
(1) The Bonds shall be dated their date of delivery and shall mature on
December , 2023 and shall be payable in accordance with the terms set forth in the
Indenture. The Bonds will bear interest at % per annum.
(2) Upon the occurrence of any Event of Default hereunder, interest shall accrue
at a rate per annum equal to five percent (5.0%) above the fixed rate in effect with respect to
the Bonds.
(3) Principal and interest with respect to the Bonds shall be payable quarterly in
arrears in accordance with the amortization schedule attached hereto as Exhibit "A" in lawful
money of the United States at the principal office of the Trustee in Los Angeles, California.
SECTION 3. PAYMENT.
Upon satisfaction of the terms and conditions contained herein and in the Indenture, payment
for the Bonds shall be made by or on behalf of the Purchaser to the Trustee in immediately available
funds in the amount of the purchase price at the time of the execution and delivery of the Bonds (the
"Closing").
SECTION 4. FEES AND EXPENSES.
At the time of the Closing, the City shall pay or cause to be paid an origination fee equal to
$5,000 to the Purchaser, all of the fees and expenses incurred in connection with the Closing
including the Purchaser's origination fee and out-of-pocket expenses, authentication and acceptance
fees of the Trustee, fees and expenses of counsel to the Trustee, fees and expenses of Richards
-2-
Watson Gershon, Bond Counsel, fees and expenses of Kathleen C. Johnson, Esq., counsel to the
Purchaser, fees and expenses of the City and its counsel, and all fees necessary for closing. In
addition, the City will pay all fees and expenses incurred by the Purchaser in connection with (a) any
amendment of the documents relating to the Bonds, or (b) the exercise of any rights and remedies by
or on behalf of the Purchaser under the Indenture or this Agreement.
SECTION 5. PURPOSE OF BOND ISSUANCE.
The Bonds are being issued by the Authority to finance the construction of a new fire station
in the City, to fund an interest reserve and to pay costs of issuance of the Bonds. The proceeds from
the offering of the Bonds will be delivered to the Trustee and applied by the Trustee pursuant to the
terms of the Indenture.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CITY
AND THE AUTHORITY.
(A) The City represents, warrants and covenants to the Purchaser both as of the time of
acceptance hereof and as of the time of the Closing that:
(1) The City is duly formed, validly existing and in good standing as a charter
city, duly organized, existing and operating under the laws of the State of California and its
charter, and has legal power and authority to undertake the following actions:
(a) to enter into this Bond Purchase Agreement;
(b) to execute and deliver the Indenture, the Sublease, this Bond Purchase
Agreement and all other agreements, documents and Bonds contemplated thereby to
which the City is a party in connection with the issuance of the Bonds (collectively
hereinafter referred to as the "City's Documents"); and
(c) to carry out and to consummate the transactions contemplated by the
City's Documents, including making any and all payments as provided therein.
(2) The City will apply the proceeds of the Bonds as provided in the Indenture.
(3) The audited financial statements of the City for the fiscal year ending June 30,
2008 were prepared in conformity with generally accepted accounting principles applied on a
consistent basis in all material respects. Since June 30, 2008, no material or adverse change
has occurred in the financial position or results of operations of the City, and the City has not
incurred any material liabilities other than in the ordinary course of business as provided for
or contemplated herein.
(4) There is no action, suit, proceeding, inquiry or investigation at law or in equity
or before or by any court, public board or body pending and notice of which has been served
-3-
on and received by the City or, to the best knowledge of the City, threatened against or
affecting the City, or to the best knowledge of the City is there any basis therefor, wherein an
unfavorable decision, ruling or finding would have a material adverse effect on the validity or
enforceability of the Bonds, the City's Documents, or on the existence of the City or seeking
to prohibit, restrain or enjoin the sale or delivery of the Bonds or the execution and delivery
of any of the City's Documents.
(5) The City's Documents, when executed and delivered by an Authorized
Representative of the City, will be legal, valid and binding obligations of the City
enforceable in accordance with their terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors'
rights generally.
(6) The execution and delivery by an Authorized Representative, as such term is
hereinafter defined, of the City of the City's Documents and the performance by the City of
its obligations under the City's Documents, do not and will not violate any law or any court
order by which the City is bound, and such actions do not and will not constitute a default
under any material agreement, indenture, mortgage or lease, note or other obligation or
instrument to which the City is bound or to which any of its property is subject, and no
consent, approval, or other action by or filing with any governmental authority or agency is
required in connection therewith, except approvals which have been obtained. For purposes
of this Bond Purchase Agreement, an Authorized Representative is such person who has
been specifically delegated the authority to act on behalf of and to legally bind his or her
respective entity by such entity action as is legally required to create such authority.
(7) The City will deliver or cause to be delivered all opinions, Bonds and other
documents as required and as provided for in this Bond Purchase Agreement; including, but
not limited to, an opinion of its counsel, dated as of the date of delivery of the Bonds,
covering among other things the due authorization, execution and delivery of the City's
Documents and an opinion of Bond Counsel that (a) the Bonds are bank-qualified and (b)
interest with respect to the Bonds is exempt from federal and state income taxes.
(8) The City is not a party to or bound by any contract, agreement or other
instrument, or subject to any judgment, order, writ, injunction, decree, rule or regulation,
which, in the reasonable opinion of the City, materially adversely affects, or in the future
may, as far as they can now determine, materially adversely affect, the operations, properties,
assets or condition, financial or otherwise, of the City.
(9) The representations and warranties contained in this Bond Purchase
Agreement and the statements and information contained in all other documents, certificates
or statements furnished to the Purchaser by or on behalf of the City are true and correct in all
material respects.
-4-
(10) No consent or approval is required to be obtained from, and no action need to
be taken by, or document filed with, any governmental body in connection with the
execution, delivery and performance of any of the City's Documents by the City, provided,
however, that if any such action is required, the same has been duly taken, is in full force and
effect and constitutes valid and sufficient consent or approval therefor.
(11) Any certificate signed by an Authorized Representative of the City and
delivered to the Purchaser is true, correct and complete as to the statements contained
therein.
(12) The City is not currently in default in any material respect under any
indenture, Indenture, mortgage, deed of trust, bank loan or credit agreement or (in any respect
that is material in light of the financial condition, taken as a whole, of the City) any other
agreement or instrument to which the City is a party or by which it or any of its property may
be bound or affected.
(B) The Authority represents, warrants and covenants to the Purchaser both as of the time of
acceptance hereof and as of the time of the Closing that:
(1) The Authority is duly formed, validly existing and in good standing as a duly
organized, existing and operating under the laws of the State of California, and has legal
power and authority to undertake the following actions:
(a) to enter into this Bond Purchase Agreement;
(b) to execute and deliver the Indenture, the Sublease, this Bond Purchase
Agreement and all other agreements, documents and Bonds contemplated thereby to
which the Authority is a party in connection with the issuance of the Bonds
(collectively hereinafter referred to as the "Authority's Documents"); and
(c) to carry out and to consummate the transactions contemplated by the
Authority's Documents, including making any and all payments as provided therein.
(2) The Authority will apply the proceeds of the Bonds as provided in the
Indenture.
(3) There is no action, suit, proceeding, inquiry or investigation at law or in equity
or before or by any court, public board or body pending and notice of which has been served
on and received by the Authority or, to the best knowledge of the Authority, threatened
against or affecting the Authority, or to the best knowledge of the Authority is there any basis
therefor, wherein an unfavorable decision, ruling or finding would have a material adverse
effect on the validity or enforceability of the Bonds, the Authority's Documents, or on the
existence of the Authority or seeking to prohibit, restrain or enjoin the sale or delivery of the
Bonds or the execution and delivery of any of the Authority's Documents.
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(4) The Authority's Documents, when executed and delivered by an Authorized
Representative of the Authority, will be legal, valid and binding obligations of the Authority
enforceable in accordance with their terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors'
rights generally.
(5) The execution and delivery by an Authorized Representative, as such term is
hereinafter defined, of the Authority of the Authority's Documents and the performance by
the Authority of its obligations under the Authority's Documents, do not and will not violate
any law or any court order by which the Authority is bound, and such actions do not and will
not constitute a default under any material agreement, indenture, mortgage or lease, note or
other obligation or instrument to which the Authority is bound or to which any of its property
is subject, and no consent, approval, or other action by or filing with any governmental
authority or agency is required in connection therewith, except approvals which have been
obtained. For purposes of this Bond Purchase Agreement, an Authorized Representative is
such person who has been specifically delegated the authority to act on behalf of and to
legally bind his or her respective entity by such entity action as is legally required to create
such authority.
(6) The Authority will deliver or cause to be delivered all opinions, Bonds and
other documents as required and as provided for in this Bond Purchase Agreement,
including, but not limited to, an opinion of its counsel, dated as of the date of delivery of the
Bonds, covering among other things the due authorization, execution and delivery of the
Authority's Documents and an opinion of Bond Counsel as to the tax-exempt status of the
Bonds.
(7) The representations and warranties contained in this Bond Purchase
Agreement and the statements and information contained in all other documents, certificates
or statements furnished to the Purchaser by or on behalf of the Authority are true and correct
in all material respects.
(8) No consent or approval is required to be obtained from, and no action need to
be taken by, or document filed with, any governmental body in connection with the
execution, delivery and performance of any of the Authority's Documents by the Authority,
provided, however, that if any such action is required, the same has been duly taken, is in full
force and effect and constitutes valid and sufficient consent or approval therefor.
(9) Any certificate signed by an Authorized Representative of the Authority and
delivered to the Purchaser is true, correct and complete as to the statements contained
therein.
(10) The Authority is not currently in default in any material respect under any
indenture, Indenture, mortgage, deed of trust, bank loan or credit agreement or (in any respect
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that is material in light of the financial condition, taken as a whole, of the Authority) any
other agreement or instrument to which the Authority is a party or by which it or any of its
property may be bound or affected.
(C) The City and the Authority agree that all representations and wan: anties made by each
of them herein, and in the Indenture, the Sublease, the Bonds or other instruments delivered pursuant
hereto or in connection herewith, shall be deemed to have been relied on by the Purchaser, and
constitute an inducement to the Purchaser to purchase the Bonds. The City and the Authority
acknowledge and agree that such reliance shall be made notwithstanding any investigation heretofore
or hereafter made by the Purchaser and that all of the Purchaser's rights hereunder and thereunder
shall survive delivery of the Bonds.
SECTION 7. COVENANTS OF THE CITY
The City agrees, so long as the Purchaser is the owner of the Bonds:
(A) Use of Proceeds. To use the proceeds of the Bonds solely for the purposes set forth in
Section 5 of this Bond Purchase Agreement.
(B) Financial Information. To provide the following financial information and statements
in form and content acceptable to the Purchaser, and such additional information as requested by the
Purchaser from time to time:
(1) Within 210 days following the end of each of the City's fiscal years,
commencing after the end of the 2008-2009 fiscal year, the annual financial statements of the
City, certified and dated by an authorized financial officer of the City. These financial
statements must be audited (with an unqualified opinion) by a certified public accountant of
recognized regional or national standing.
(2) Within 45 days after the adoption of the City's annual budget, a copy of the
adopted budget.
(3) Within the period(s) provided in (1) above, a compliance certificate of the
City signed by an authorized financial officer of the City setting forth whether there existed
as of the date of such financial statements and whether there exists as of the date of the
certificate, any default under this Agreement and, if any such default exists, specifying the
nature thereof and the action the City is taking and proposes to take with respect thereto.
(4) Upon the request of the Purchaser, any official statement or similar disclosure
document circulated by the City in connection with the offering of any bonds, notes or other
evidence of indebtedness of, or issued on behalf of, the City.
(5) The City shall give prompt notice in writing to the Purchaser of any litigation,
administrative proceeding or business development which may materially adversely affect its
business, properties or affairs or the ability of the City to perform its obligations as set forth
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hereunder or under this Agreement, and shall in all events give prompt notice of any such
litigation or proceeding involving a claim in excess of $1,000,000.
(6) Such other information regarding the business, affairs and condition of the
City as the Purchaser may from time to time reasonably request.
(C) Books and Records. To maintain adequate books and records.
(D) Inspection Rights. The City shall, at any reasonable time and from time to time, upon
reasonable notice, permit the Purchaser or any agents or representatives thereof, at the Purchaser's
expense, to examine and make copies of the records and books of account related to the transactions
contemplated by this Bond Purchase Agreement, to visit its properties and to discuss its affairs,
finances and accounts with any of its officers and independent accountants. The City will not
unreasonably withhold its authorization for its independent accountants to discuss its affairs, finances
and accounts with the Purchaser.
(E) Compliance with Laws. To comply with the laws, regulations and orders of any
government body with authority over the City's business or activities.
(F) Maintenance of Approvals, Etc. The City shall at all times maintain in effect, renew
and comply with all the terms and conditions of all approvals and authorizations as may be necessary
or appropriate under any applicable law or regulation for its execution, delivery and performance of
this Agreement.
(G) Cooperation. To take any action reasonably requested by the Purchaser to carry out
the intent of this Bond Purchase Agreement and the Indenture.
(H) Payment of Obli ations. The City will pay and discharge all of its obligations and
liabilities when due and will appropriate funds for payment of the Bonds on an annual basis.
(I) Amendment of Cif Documents. The City shall not enter into any amendment of the
Indenture or the Sublease, including without limitation any supplemental Indenture providing for the
issuance of Additional Bonds (as defined in the Indenture), or any other City Documents without the
prior written consent of the Purchaser.
SECTION 8. EVENTS OF DEFAULT.
If any of the following events occur, the Purchaser may do one or more of the following:
declare the City and the Authority in default and require the City to prepay its obligations under the
Sublease and the Authority to repay the Bonds, together with all accrued but unpaid interest, in its
entirety immediately and without prior notice. If an event of default occurs under the paragraph
entitled "Bankruptcy," below, with respect to the City or the Authority, then the entire principal
amount of the Bonds, together with accrued interest and any other amount owed to the Purchaser
under this Agreement or any of the other City's Documents or Authority's Documents will
automatically be due immediately.
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(A) Failure to Pav. Any principal or interest owed to the Purchaser with respect to the
Bonds shall not be paid when due and shall remain unpaid for five (5) business days after written
notice of such failure has been given to the City, or the City fails to pay any other amounts owing
under this Agreement within fifteen (15) after the date when due.
(B) False Information. Any representation or warranty made by or on behalf of the City
or the Authority under this Agreement or in any certificate or statement delivered hereunder shall be
incorrect or untrue in any material respect when made or deemed to have been made.
(C) Bankruptcy. The City or the Authority files a bankruptcy petition or the City or the
Authority makes a general assignment for the benefit of creditors.
(D) Receivers. A receiver or similar official is appointed for a substantial portion of the
City's business, or the business is terminated.
(E) Judgments. Any judgments or arbitration awards are entered against the City, or the
City enters into any settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of One Million Dollars ($1,000,000) or more and any such judgment or award
shall not have been satisfied, stayed or bonded pending appeal within a period of sixty (60) days
from the date it was first so rendered.
(F) Material Adverse Change. A material adverse change occurs in the City's financial
condition, properties or prospects, which affects the City's ability to make Base Rental Payments
under the Sublease.
(G) Cross-default. The City shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) in respect of any debt
payable from the General Fund outstanding in a principal amount of $1,000,000 or more, and such
failure shall continue after the applicable grace period, if any, specified in the agreement or
instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the
maturity thereof.
(H) Rating Event. If, after the date hereof, the City should issue bonds or other obligations
that are rated by any of the rating agencies, the underlying ratings, if any, assigned by Fitch, Moody's
and S&P to such obligations shall, in any such case, be withdrawn (other than by reason of maturity,
redemption or defeasance of such debt), suspended, reduced below "BBB-", "Baa3" and "BBB-",
respectively, or revoked.
(I) Other Breach under Agreement. The City fails to meet the conditions of, or fails to
perform any obligation under, any term of this Agreement not specifically referred to in this Article.
This includes any failure or anticipated failure by the City to comply with any financial covenants set
forth in this Agreement, whether such failure is evidenced by financial statements delivered to the
Purchaser or is otherwise known to the City. If, in the Purchaser's opinion, the breach is capable of
being remedied, the breach will not be considered an Event of Default under this Agreement for a
period of thirty (30) days after the date on which the Purchaser gives written notice of the breach to
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the City and the same is not cured by the City within such 30-day period; provided, however, that the
Purchaser will not be obligated to extend any additional credit to the City during that period.
SECTION 9. REPRESENTATIONS AND AGREEMENTS OF THE PURCHASER.
The Purchaser does hereby represent to the City as follows:
(A) The Purchaser has legal power and authority to enter into this Bond Purchase
Agreement and that this Bond Purchase Agreement is a legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms.
(B) The Purchaser will not sell or transfer ownership, of any or all of the Bonds, unless
the subsequent Bond purchaser delivers an Investor Letter (as defined in the Indenture) and each
successive Bond purchaser or successive transferee to agree to the requirements of this Section.
SECTION 10. CLOSING.
On the terms and conditions set forth herein, the Purchaser shall purchase all of the Bonds
and the City shall cause the Trustee to sell and deliver the Bonds to the Purchaser. Closing shall be
at the offices of Richards Watson Gershon, Los Angeles, California, not later than December 19,
2008.
SECTION 11. CONDITIONS OF CLOSING.
The obligations of the Purchaser hereunder are subject to the following conditions precedent:
(i) the Indenture and all other documents essential to the execution and delivery of the Bonds shall be
satisfactory in form and substance to the Purchaser and its counsel, and (ii) the Purchaser's credit
committee shall have approved the purchase of the Bonds.
The obligations of the Purchaser hereunder are subject to the following conditions:
(A) At the time of the Closing (1) the Indenture, all of the Authority's Documents and all
the City's Documents shall be in full force and effect and shall not have been amended, modified or
supplemented in any material respect prior to the Closing except as may have been agreed to in
writing by the City, the Authority the Trustee and the Purchaser and there shall be in full force and
effect such resolutions or agreements as shall, in the opinions of the Counsel to the Purchaser, be
necessary in connection with the transactions contemplated hereby; (2) the representations and
warranties of the City and the Authority herein contained shall be true and accurate in all material
respects; (3) the City and the Authority shall perform or have performed all of their respective
obligations required under or specified in this Bond Purchase Agreement to be performed at or prior
to the Closing; and (4) no litigation shall be threatened or pending in any court (i) to restrain or
enjoin the sale or delivery of the Bonds, or the payment, collection or application of the proceeds
thereof or monies assigned, pledged or to be pledged under the Indenture, or (ii) in any way
questioning or affecting the validity of the Bonds or any of the City's Documents or any of the
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Authority's Documents or any proceedings taken by the City with respect to the foregoing, or (iii)
questioning the City's creation, organization or existence, or its power to enter into and perform its
obligations under the Indenture, the Sublease or this Bond Purchase Agreement.
(B) At the Closing, the Purchaser shall have received the following documents in form
and substance satisfactory to the Purchaser and its counsel:
(1) A certificate, dated the date of the Closing, signed by duly authorized officials
of the City and satisfactory in form and substance to the Purchaser to the effect that, to such
official's best knowledge, (i) the representations and warranties of the City contained in this
Bond Purchase Agreement are true and correct in all material respects on and as of the date
of Closing; and (ii) since June 30, 2008, there has been no material adverse change in the
financial condition of the City;
(2) A closing certificate signed by the Authorized Representative of the City,
dated the date of the Closing included in the record of proceedings prepared by Bond
Counsel, and including the following points:
(a) the City is a charter city, duly organized, existing and operating under
the laws of the State of California;
(b) the City has full legal power, right and authority to enter into the
Indenture and the Sublease, to own its properties and to carry on its business as then
conducted;
(c) the Indenture, the Sublease and all other documents essential to the
issuance of the Bonds have been duly authorized, executed and delivered by the City
and constitute legal, valid and binding agreements of the City, enforceable in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws affecting enforcement of creditors' rights
generally and by the application of equitable principles if equitable remedies are
sought; and to the best knowledge of such counsel, there are no legal or governmental
proceedings pending or threatened against the City which, if determined adversely to
the City, would materially adversely affect the City's ability to enter into or perform
its obligations under the City's Documents.
(d) the Resolution of the City has been duly adopted at a meeting of the
City' Council, at which a quorum was present and acting throughout;
(3) A closing certificate signed by the Authorized Representative of the
Authority, dated the date of the Closing included in the record of proceedings prepared by
Bond Counsel, and including the following points:
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(a) the Authority is a joint powers authority, duly organized, existing and
operating under the laws of the State of California;
(b) the Authority has full legal power, right and authority to enter into the
Indenture and the Sublease, to own its properties and to carry on its business as then
conducted;
(c) the Indenture, the Sublease and all other documents essential to the
issuance of the Bonds have been duly authorized, executed and delivered by the
Authority and constitute legal, valid and binding agreements of the Authority,
enforceable in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other laws affecting enforcement of creditors'
rights generally and by the application of equitable principles if equitable remedies
are sought; and to the best knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against the Authority which, if
determined adversely to the Authority, would materially adversely affect the
Authority's ability to enter into or perform its obligations under the Authority's
Documents.
(d) the Resolution of the Authority has been duly adopted at a meeting of
the Authority's Board of Directors, at which a quorum was present and acting
throughout;
(e) the representations and warranties of the Authority contained in this Bond
Purchase Agreement are true and correct in all material respects on and as of the date
of Closing;
(4) A closing certificate signed by a duly authorized officer of the Trustee, dated
the day of closing, in the form reasonably approved by the Purchaser and its counsel and
included in the record of proceedings prepared by Bond Counsel.
(5) An opinion of Richards Watson Gershon, Bond Counsel, in substantially the
form attached hereto as Exhibit A, dated the date of Closing and addressed to the City and
the Purchaser,
(6) Two (2) executed or certified copies of the City's Documents;
(7) Two (2) executed or certified copies of the Authority's Documents;
(8) Two certified copies of the general resolution of the Trustee authorizing the
execution and delivery of certain documents by certain officers of the Trustee, which
resolution authorizes the execution and delivery of the Bonds and the Indenture;
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(9) Two certified copies of the Resolution adopted by the City Council and
certified by the City Clerk authorizing the execution and delivery of the City Documents;
(10) Two certified copies of the Resolution adopted by the Authority's Board of
Directors and certified by the Secretary of the Authority authorizing the execution and
delivery of the Authority Documents and the issuance of the Bonds;
(11) Copies of the insurance policies required by Section 8 of the Sublease,
including without limitation evidence of 2 years of rental interruption insurance;
(12) Copy of the title insurance policy required by Section 7 of the Sublease;
(13) A certificate of fair rental value for the property subject to the Sublease in an
amount and backed by evidence satisfactory to the Purchaser; and
(14) Such other agreements, Bonds or opinions which in the reasonable judgment
of the Purchaser as are appropriate and necessary, all in the form and substance acceptable to
the Purchaser.
(C) At the time of Closing, no default shall have occurred or be existing under the City's
Documents, the Authority's Documents, the Indenture or the Sublease, and the City shall not be in
default of payment of principal or interest on any of its bonded indebtedness.
(D) Since the date of this Bond Purchase Agreement, there shall not have been any
change, or any development involving a prospective change, in or affecting the business, financial
condition or properties of the City, which change or development makes it impractical or inadvisable
in the reasonable judgment of the Purchaser to proceed with the purchase of the delivery of the
Bonds as contemplated in this Bond Purchase Agreement.
(E) At the time of Closing, the Purchaser shall have delivered to the City and the
Authority an executed Investor Letter (as defined on the Indenture) in the form attached to the
Indenture.
SECTION 12. INDEIVINIFICATION BY THE CITY.
To the extent permitted by law, the City agrees to indemnify, hold harmless and defend the
Purchaser, and each director, officer, partner, member, agent, employee and controlling person of or
Purchaser, within the meaning of Section 15 of the Securities Act of 1933, as amended, from and
against all losses, claims, damages, liabilities and expenses, joint or several, to which the Purchaser
or such director, officer, partner, member, agent employee or controlling person of the Purchaser
(collectively, the "Indemnified Parties" and each an "Indemnified Party") may become subject under
the federal securities laws or regulations or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of the purchase and sale of the Bonds
and the transactions contemplated by this Bond Purchase Agreement and the City's Documents for
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any expenses, including, but not limited to, any legal, professional and other reasonable expenses
reasonably incurred by the Indemnified Parties in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever.
Promptly after receipt by an Indemnified Party under this Section 12 of notice of the
commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be
made against an Indemnified Party under this Section 12, notify the City of the commencement
thereof. Incase any such action shall be brought against any Indemnified Party and it shall so notify
the City of the commencement thereof, (1) the City may assume the defense thereof unless in the
reasonable judgment of the Indemnified Parties there is a conflict of interest between the Indemnified
Parties and the City, in which event the City shall reimburse such Indemnified Parties for the legal
fees reasonably incurred by such Indemnified Parties, or (2) if the City does assume such defense, the
Indemnified Parties shall be entitled to participate therein to the extent that they may wish, jointly
with any other defense thereof, with counsel reasonably satisfactory to such Indemnified Parties,
After notice from the City to such Indemnified Party of their assumption of the defense thereof, The
City shall not be liable to such Indemnified Party under this Section 12 for any legal or other expense
subsequently incurred by such Indemnified Party, independently, in connection with the defense
thereof other than reasonable costs of investigation. The City shall have no obligation with respect
to any claim for which it has not received prompt notice thereof, but the failure to give such notice in
sufficient time shall not constitute a defense hereunder, nor in any way impair the obligations of the
City under this Section 12. Notwithstanding the foregoing provisions of this Section 12, the City
shall not be required to indemnify the Purchaser for any claims, damages, losses, liabilities, costs and
expenses to the extent caused by the gross negligence or willful misconduct of the Purchaser.
SECTION 13. SURVIVAL OF AGREEMENT.
The respective agreements, representations and warranties and other statements of the
Purchaser, the Authority and the City set forth in, or made pursuant to, this Bond Purchase
Agreement shall remain in full force and effect regardless of any investigations, or statement as to
the results thereof, made by or on behalf of the City, the Authority, the Purchaser or any of their
respective directors, officers, partners, members, agents or employees or any controlling person, and
shall survive delivery of and any payment for the Bonds. All representations, warranties, covenants
and other agreements of the City or the Authority contained in this Bond Purchase Agreement or in
any certificate delivered pursuant hereto shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Purchaser and shall survive the delivery of and
payment for the Bonds.
SECTION 14. NOTICES.
Any notice or other communication to be given to the City under this Bond Purchase
Agreement maybe given by delivering the same in writing to City of Seal Beach, 2118` Street, Seal
Beach, CA 90740; any notice or other communication to be given to the Authority under this Bond
Purchase Agreement may be given by delivering the same in writing to Seal Beach Financing
Authority, c/o City of Seal Beach, 211 8th Street, Seal Beach, CA 90740; and any notice or other
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communication to be given to the Purchaser under this Bond Purchase Agreement maybe given by
delivering the same in writing to Bank of America, N.A., 333 South Hope Street, 13~h floor, CA9-
193-13-17, Los Angeles, CA 90071, Attn: Government Banking Credit Products. All notices shall
be given by (i) facsimile with verbal confirmation of receipt from the recipient, in which case the
notice shall be deemed received upon such confirmation, or (ii) overnight courier to the address
indicated herein, in which case the notice shall be deemed received 24 hours after it is sent.
SECTION 15. BENEFIT.
This Bond Purchase Agreement is made solely for the benefit of the Purchaser, the Authority
and the City and the successors or assigns thereof, and no other person shall acquire or have any right
hereunder or by virtue hereof.
SECTION 16. APPLICABLE LAW; JURISDICTION.
The construction and enforcement of this Bond Purchase Agreement shall be governed by the
laws of the State of California. The parties hereto consent to the jurisdiction of any state or federal
court located in the State of California for the resolution of any claim or controversy arising directly
or indirectly from this Bond Purchase Agreement.
SECTION 17. NO RECOURSE; SPECIAL OBLIGATION.
The obligations and agreements of the City and the Authority contained herein and in the
Bonds, the Indenture, the Sublease and in the other documents and any other instrument or document
executed in connection therewith, and any other instrument or document supplemental thereto, shall
be deemed the special obligations and agreements of the City and the Authority, respectively, and not
of any member, director, officer, agent or employee of the City or the Authority and no member,
director, officer, agent or employee of the City or the Authority shall be liable personally hereon or
thereon or be subject to any personal liability by reason of any transaction contemplated hereby or
thereby.
SECTION 18. SEVERABILITY.
In the event any provision of this Bond Purchase Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
SECTION 19. COUNTERPARTS.
This Bond Purchase Agreement maybe signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
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SECTION 20. DISPUTE RESOLUTION.
(A) This Dispute Resolution Provision concerns the resolution of any controversies or
claims between the parties, whether arising in contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this agreement (including any renewals,
extensions or modifications); or (ii) any document related to this agreement (collectively a "Claim").
For the purposes of this Dispute Resolution Provision only, the term "parties" shall include any
parent corporation, subsidiary or affiliate of the Purchaser involved in the servicing, management or
administration of any obligation described or evidenced by this agreement.
(B) At the request of any party to this agreement, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the "Act"). The Act
will apply even though this agreement provides that it is governed by the law of a specified state.
(C) Arbitration proceedings will be determined in accordance with the Act, the then-
current rules and procedures for the arbitration of financial services disputes of the American
Arbitration Association or any successor thereof ("AAA"), and the terms of this Dispute Resolution
Provision. In the event of any inconsistency, the terms of this Dispute Resolution Provision shall
control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce any
provision of this arbitration clause, the Purchaser may designate another arbitration organization with
similar procedures to serve as the provider of arbitration.
(D) The arbitration shall be administered by AAA and conducted, unless otherwise
required by law, in any U.S. state where real or tangible personal property collateral for this credit is
located or if there is no such collateral, in the state specified in the governing law section of this
agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five
Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three
arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for
arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s)
shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s), upon a
showing of good cause, may extend the commencement of the hearing for up to an additional sixty
(60) days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The
arbitration award may be submitted to any court having jurisdiction to be confirmed and have
judgment entered and enforced.
(E) The arbitrator(s) will give effect to statutes of limitation in determining any Claim and
may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application of
any statutes of limitation, the service on AAA under applicable AAA rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a
Claim is arbitrable shall be determined by the arbitrator(s), except as set forth at subparagraph (j) of
this Dispute Resolution Provision. The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this agreement.
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(F) The procedure described above will not apply if the Claim, at the time of the proposed
submission to arbitration, arises from or relates to an obligation to the Purchaser secured by real
property. In this case, all of the parties to this agreement must consent to submission of the Claim to
arbitration.
(G) To the extent any Claims are not arbitrated, to the extent permitted by law the Claims
shall be resolved in court by a judge without a jury, except any Claims which are brought in
California state court shall be determined by judicial reference as described below.
(H) Any Claim which is not arbitrated and which is brought in California state court will
be resolved by a general reference to a referee (or a panel of referees) as provided in California Code
of Civil Procedure Section 638. The referee (or presiding referee of the panel) shall be a retired
Judge or Justice. The referee (or panel of referees) shall be selected by mutual written agreement of
the parties. If the parties do not agree, the referee shall be selected by the Presiding Judge of the
Court (or his or her representative) as provided in California Code of Civil Procedure Section 638
and the following related sections. The referee shall determine all issues in accordance with existing
California law and the California rules of evidence and civil procedure. The referee shall be
empowered to enter equitable as well as legal relief, provide all temporary or provisional remedies,
enter equitable orders that will be binding on the parties and rule on any motion which would be
authorized in a trial, including without limitation motions for summary judgment or summary
adjudication .The award that results from the decision of the referee(s) will be entered as a judgment
in the court that appointed the referee, in accordance with the provisions of California Code of Civil
Procedure Sections 644(a) and 645. The parties reserve the right to seek appellate review of any
judgment or order, including but not limited to, orders pertaining to class certification, to the same
extent permitted in a court of law.
(I) This Dispute Resolution Provision does not limit the right of any party to: (i) exercise
self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non judicial foreclosure
against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ
of possession or appointment of a receiver, or additional or supplementary remedies. The filing of a
court action is not intended to constitute a waiver of the right of any party, including the suing party,
thereafter to require submittal of the Claim to arbitration or judicial reference.
(J) Any arbitration, judicial reference or trial by a judge of any Claim will take place on
an individual basis without resort to any form of class or representative action (the "Class Action
Waiver"). Regardless of anything else in this Dispute Resolution Provision, the validity and effect of
the Class Action Waiver maybe determined only by a court or referee and not by an arbitrator. The
parties to this Agreement acknowledge that the Class Action Waiver is material and essential to the
arbitration of any disputes between the parties and is nonseverable from the agreement to arbitrate
Claims. If the Class Action Waiver is limited, voided or found unenforceable, then the parties'
agreement to arbitrate shall be null and void with respect to such proceeding, subject to the right to
appeal the limitation or invalidation of the Class Action Waiver. The Parties acknowledge and
agree that under no circumstances will a class action be arbitrated.
-17-
(K) By agreeing to binding arbitration or judicial reference, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury as permitted by law in respect of any Claim.
Furthermore, without intending in any way to limit this Dispute Resolution Provision, to the extent any
Claim is not arbitrated or submitted to judicial reference, the parties irrevocably and voluntarily waive
any right they may have to a trial by jury to the extent permitted by law in respect of such Claim. This
waiver of jury trial shall remain in effect even if the Class Action Waiver is limited, voided or found
unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION, BY JUDICIAL
REFERENCE, OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND
THAT THE EFFECT OF THIS AGREEMENT I5 THAT THEY ARE GIVING UP THE
RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.
IN WITNESS WHEREOF, the City and the Purchaser have caused this Bond Purchase
Agreement to be executed in their respective names by their respective duty authorized officers all as
of the date first above written.
"City"
CITY OF SEAL BEACH
"Purchaser"
BANK OF AMERICA, N.A.
By:
David Carmany
City Manager
By:
Name:
Title:
"Authority"
SEAL BEACH PUBLIC FINANCING AUTHORITY
By:_
Name:
Title:
-18-
EXHIBIT A
(Amortization Schedule)
Recording requested by and when
recorded mail to:
Seal Beach Public Financing Authority
c/o Richards, Watson & Gershon,
A Professional Corporation
355 South Grand Avenue, 40`h Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.
ASSIGNMENT AGREEMENT
by and between the
SEAL BEACH PUBLIC FINANCING AUTHORITY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee
Dated as of January 1, 2009
This document is exempt from recording fees pursuant to California Government Code Section
6103 and Section 27383. This document is exempt from Documentary Transfer Tax pursuant to
California Revenue and Taxation Code Section 11922.
12168-0004/908388.3
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement"), dated as of January 1, 2009, is
made by and between the Seal Beach Public Financing Authority, a joint powers agency duly
organized and existing pursuant to the laws of the State of California (the "Authority"), and
Wells Fargo Bank, National Association, a national banking association, duly organized and
existing under and by virtue of the laws of the United States of America, as Trustee (the
"Trustee").
RECITALS
A. The Authority and the City of Seal Beach, California (the "City"), have
executed and entered into a Sublease Agreement, dated as of even date herewith (the
"Sublease"), pursuant to which the Authority subleases to the City, as provided therein, certain
parcels of land described in the Exhibit A attached hereto and incorporated by reference, together
with the city hall and fire station facilities and all other improvements thereon (collectively, the
"Leased Property").
B. Pursuant to the Sublease, the City is obligated to make certain base rental
payments (the "Base Rental Payments") to the Authority for the sublease of the Leased Property.
C. The Authority desires to assign to the Trustee, without recourse, all of the
Authority's rights to receive the Base Rental Payments scheduled or required to be paid by the
City under and pursuant to the Sublease.
D. In consideration of such assignment and the execution and entering into of
an Indenture, dated as of even date herewith (the "Indenture"), by and between the Authority and
the Trustee, the Authority will issue its Lease Revenue Bonds, Series 2008 (the "Series 2008
Bonds"), in an aggregate principal amount of $
E. The Authority has determined that all acts, conditions and things required
by Iaw to exist, to have happened and to have been performed precedent to and in connection
with the execution and entering into of the Agreement do exist, have happened and have been
performed in regular and due time, form and manner as required by law, and the parties hereto
are now duly authorized to execute and enter into the Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE
AS FOLLOWS:
SECTION 1. DEFIlVTTIONS.
Unless context clearly requires otherwise, all capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
12168-0004/908388.3 1
SECTION 2. ASSIGNMENT.
The Authority hereby transfers in trust and assigns to the Trustee, for the benefit
of the Owners from time to time of the Series 2008 Bonds, all of the right, title and interest of the
Authority in the Sublease (except the Authority's rights to indemnification and payment or
reimbursement for any costs or expenses thereunder), including the Authority's rights to receive
the Base Rental Payments scheduled to be paid by the City under and pursuant to the Sublease,
and any and all of the other rights of the Authority under the Sublease as may be necessary to
enforce payment of such Base Rental Payments when due or otherwise to protect the interest of
the Owners of the Series 2008 Bonds.
SECTION 3. ACCEPTANCE.
The Trustee hereby accepts the foregoing assignment for the benefit of the Series
2008 Bond Owners, subject to the conditions and terms of the Indenture, and all such Base
Rental Payments shall be applied and all such rights so assigned shall be exercised by the Trustee
under and pursuant to the Indenture. This Agreement shall confer no rights and shall impose no
obligations upon the Trustee beyond those expressly provided in the Indenture.
SECTION 4. MISCELLEOUS.
This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
This Agreement shall be binding on and inure to the benefit of the parties hereto,
and their successors and assigns.
This Agreement may be executed in counterparts, and all such executed
counterparts shall constitute the same instrument. It shall be necessary to account for only one
set of such counterparts in proving this Agreement.
(Remainder of Page Intentionally Left Blank)
12168-0004!908388.3 2
IN WITNESS WHEREOF, the parties hereto have executed and entered into this
Agreement by their authorized signatories thereunto duly authorized as of the day and year first
above written.
SEAL BEACH PUBLIC FINANCING
AUTHORITY
By
Chair
ATTEST:
Secretary
WELLS FARGO BANK, NATIONAL
ASSOCIATION
as Trustee
By.
Authorized Officer
12168-0004/908388.3 3
EXHIBIT A
Description of Leased Property
(See Attached)
12168-0004/908388.3 A-j
STATE OF CALIFORNIA
COUNTY OF
On
ss
before me,
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that byhis/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
STATE OF CALIFORNIA
COUNTY OF
ss
a
On ,before me, , a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY•under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
12168-0004/908388.3
STATE OF CALIFORNIA
COUNTY OF
On
ss
before me,
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/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 the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
SEAL:
a
12168-0004/908388.3
Attachment H
Lease Revenue Bonds, Series 2009
Financing Schedule
MF WHIPPLE
& ASSOCIATES
DEVELOPMENT AND PUBLIC FINANCE, LLC
29222 Rancho VieJo Road, Suite 218, San Juan Capistrano, CA 92675 (949) 429-2222
City of Seal Beach
Lease Revenue Bonds, Series 2008
(Fire Station)
FINANCING SCHEDULE (As of November 20, 2008)
,
S M j T W T ' ' F
~ I , S;' .' ,S ~ M; ' ~=T, -, W, •; T'•• ' F ~ S ~ S , °M ,,i•; ~T.: : 1N
, :T;• ' • F $:
1 2 3 4 _ 1 1 2 3 4 5 6
5 6 7 8 9 10 11 2 3 4 5 6 7 8 -7 8~ 9~ 10 11 12 ~ 13
12 13 14 15 16 17 18 - 9 10 11 12 13 14 15 14 15 16 17 18 19 20
19 20 21 22 23 24 25 16 17 18 19 20 27 22 27 22 23 24 25 26 27
26 27 28 29 30 31 ~ 24 25 26 27 28 29 28 29 30 31
~
Issuer -City of Seal Beach (City) Bond Counsel - Rtchards, Watson & Gershon (RWG)
Financial Advisor - NIF Whipple & Associates (FA) Trustee - TR
Bank -Bank of Amenca (BofA)
Bank Counsel -Kathleen Johnson (xJ)
~~at _ ,"~~ ~'"~ <~ '~. ~ ~•~"5' 'r ~' 'Actioir~; ,,~.. ,~;~eS11~,.,onsib e'r ~t itu ;,~ yr ";,
September 30, 2008 City Hall Appraisal Package Completed City Complete
Conference Call
October 8, 2008 Dial In: 866-208-4418 /Code 3534171 All Complete
October 10, 2008 Distribute Indicative Term Sheet BofA Complete
Week of October 20, 2008 Engineer's Estimate City Complete
Ciry Police HQ Appraisal Package
October 30, 2008 Completed All Complete
November 13, 2008 Draft Legals Circulated RWG Complete
Conference Call:
November 20, 2008 Dial In: 866-801-2604 /Code 1936745 All Complete
November 25, 2008 Cutoff date for Council Agenda City
Final Review and Sign off on Legal and
Week of November 24, 2008 Financial Documents All
City Council's meeting to approve 2008
December 8, 2008 Lease Revenue Bond City
January 6, 2009 Receive Construction Bids City
January 7, 2009 Pre-Closing RWG / BofA
January 8, 2009 Closing RWG / BofA