HomeMy WebLinkAboutAgenda Report - January 16, 2002 E-12O
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AGENDA TITLE: Adopt resolution approving the form of and authorizing the execution and delivery of a
Standby Certificate Purchase Agreement relating to Electric System Revenue Variable Rate
Demand Certificates of Participation, 2002 Series A (EUD)
MEETING DATE: January 16, 2002
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council adopt the attached resolution related to the issuance of
the Electric System Revenue Variable Rate Demand Certificate of
Participation, 2002 Series A.
BACKGROUND INFORMATION: Since the time the City Council approved the refinancing structure of the
1999 Electric Utility Bonds, the City's financial advisor has completed
negotiations with BNP Paribas to provide for a Standby Purchase Agreement
(Agreement) related to the new 2002 Series A Bonds. The Agreement provides the physical mechanism whereby the
bonds are purchased by BNP Paribas when and if tendered by the holder of the bonds. This type of arrangement is
necessary for the refinancing structure being used.
FUNDING: None required at this time
A . Vallow
Electric Utility Director
ANV/1st
C: City Attorney
Finance Director
APPROVED: -
on Flynn - City Manager
RESOLUTION NO. 2002-15
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LODI
APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND
DELIVERY OF A STANDBY PURCHASE AGREEMENT RELATING TO
ELECTRIC SYSTEM REVENUE VARIABLE RATE DEMAND CERTIFICATES
OF PARTICIPATION, 2002 SERIES A
WHEREAS, the City of Lodi, a municipal corporation duly organized and existing under
and by virtue of the Constitution and laws of the State of California (the "City") owns and
operates a municipal electric system (the "Electric System"), to provide the City and its
inhabitants with electricity; and
WHEREAS, the City and the Lodi Public Improvement Corporation, a non-profit, public
benefit corporation duly organized and existing under and by virtue of the laws of the State of
California (the "Corporation") propose to execute and enter into an Installment Purchase
Contract (the "Installment Purchase Contract"), whereby the Corporation will acquire from the
City certain improvements to the Electric System, as more fully described in the Installment
Purchase Contract (the "Facilities"), and whereby the Corporation will sell such Facilities back to
the City as provided in the Installment Purchase Contract; and
WHEREAS, pursuant to the Installment Purchase Contract, the City will be obligated to
make installment payments to the Corporation for the purchase of the Facilities; and
WHEREAS, the City has approved and authorized the refinancing of the Facilities with
the proceeds of the sale of Electric System Revenue Variable Rate Demand Certificates of
Participation, 2002 Series A (the "Certificates") evidencing the proportionate interests of the
owners thereof in certain installment payments to be made by the City pursuant to the
Installment Purchase Contract; and
WHEREAS, the Certificates will be subject to optional and mandatory tender for
purchase on the terms and conditions set forth in the Trust Agreement (the "Trust Agreement")
pursuant to which the Certificates are to be delivered; and
WHEREAS, the City proposes to execute and deliver a Standby Purchase Agreement
(the "Agreement") with BNP Paribas (the "Bank"), pursuant to which the Bank will purchase
Certificates tendered or deemed tendered for purchase pursuant to the Trust Agreement and
not remarketed.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LODI, AS FOLLOWS:
Section 1. The Agreement, in the form presented at this meeting and on file with the
City Clerk, and the performance by the City of its obligations thereunder, are hereby approved,
and the City Manager and the Director of the Electric Utility, each acting singly, are hereby
authorized and directed, for and in the name and on behalf of the City, to execute and deliver to
the Bank the Agreement in substantially said form, with such changes therein as the officer
executing such document may approve, such approval to be conclusively evidenced by the
execution and delivery thereof.
Section 2. The City Clerk is hereby authorized and directed to attest the signature of
the City Manager or the Director of the Electric Utility and to affix and attest the seal of the City,
as may be required or appropriate, in connection with the execution and delivery of the
Agreement.
Section 3. The 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 documents which they
may deem necessary or desirable in order to consummate the transactions authorized hereby
and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution
and the Agreement, including without limitation the entry into an agreement to indemnify and
reimburse the bond insurer with respect to the Certificates for amounts advanced or incurred by
such bond insurer, and the entry into and performance under such agreement are hereby
authorized and approved; and all such actions heretofore taken by such officers are hereby
ratified, confirmed and approved.
Section 4. This Resolution shall take effect immediately upon its passage.
Date: January 16, 2002
I hereby certify that Resolution 2002-15 was passed and adopted by the City Council of
the City of Lodi. in a regular meeting held January 16, 2002 by the following votes:
AYES: COUNCIL MEMBERS — Hitchcock, Howard, Land, Nakanishi, and
Mayor Pennino
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
Approved As to Form:
%;edu� Q
RANDALL A. HAYS
City Attorney
SUSAN J. BLACKSTON
City Clerk
2002-15
STANDBY PURCHASE AGREEMENT
Dated as of January 1, 2002
By and Among
CITY OF LODI, CALIFORNIA
LODI PUBLIC IMPROVEMENT CORPORATION,
BNY WESTERN TRUST COMPANY,
as Trustee
and
BNP PARIBAS,
acting through its San Francisco Branch
Relating to
City of Lodi
Electric System Revenue Variable Rate Demand
Certificates of Participation
$ 2002 Series A
standbyagreedraft. DOC
1551092/DMF
1/11/02
TABLE OF CONTENTS
SECTION HEADING PAGE
Parties............................................................................................................................................... l
ARTICLEI DEFINITIONS..................................................................................................2
Section 1.1. Certain Defined Terms.................................................................................2
Section 1.2. Accounting Terms and Determinations.....................................................10
Section 1.3. Rules of Construction................................................................................10
ARTICLE H PURCHASE OF CERTIFICATES.......................................................................11
Section2.1.
Purchases....................................................................................................1
l
Section 2.2.
Purchase of Pledged Certificates................................................................12
Section 2.3.
Interest on Overdue Amounts....................................................................13
Section 2.4.
Remarketing or Prepayment of Pledged Certificates.................................13
Section 2.5.
Reduction and Reinstatement of Commitment..........................................13
Section 2.6.
Manner of Payments..................................................................................13
Section 2.7.
Payment on Non -Business Days................................................................13
Section2.8.
Book Entries...............................................................................................14
Section 2.9.
Obligations Unconditional.........................................................................14
Section2.10.
Waivers, Etc...............................................................................................14
Section 2.11.
Increased Costs..........................................................................................15
Section 2.12.
Capital Adequacy.......................................................................................15
Section2.13.
Taxes..........................................................................................................16
Section 2.14.
Alternate Liquidity Facility........................................................................17
Section 2.15.
Term of Agreement....................................................................................17
Section 2.16.
Limited Obligations...................................................................................18
Section 2.17.
Voluntary Termination...............................................................................18
ARTICLE III INTEREST ON PLEDGED CERTIFICATES; FEES...............................................18
Section 3.1. Pledged Certificates to Represent Interest at Bank Rate ............................18
Section 3.2. Liquidity Facility Fee.................................................................................19
Section 3.3. Draw Fee; Amendment Fee.......................................................................20
Section3.4. Closing Fee................................................................................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................20
Section 4.1. Representations of the City........................................................................20
Section 4.2. Representations of Corporation.................................................................23
ARTICLEV COVENANTS................................................................................................26
Section 5.1. Affirmative Covenants of the City and the Corporation ............................26
Section 5.2. Negative Covenants of the City and the Corporation................................30
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ARTICLE VI CONDITIONS PRECEDENT............................................................................31
Section 6.1.
Conditions Precedent to Effectiveness.......................................................31
Section 6.2.
Conditions Precedent to Each Purchase.....................................................33
ARTICLE VII
EVENTS OF DEFAULT, REMEDIES................................................................34
Section7.1.
Payments....................................................................................................34
Section7.2.
Fee Payments.............................................................................................34
Section 7.3.
Representations..........................................................................................34
Section 7.4.
Certain Covenants......................................................................................34
Section 7.5.
Other Covenants.........................................................................................34
Section7.6.
Insolvency..................................................................................................34
Section 7.7.
Other Documents.......................................................................................35
Section7.8.
Invalidity....................................................................................................35
Section 7.9.
Bond Insurer Event of Insolvency..............................................................35
Section 7.10.
Bond Insurer Default..................................................................................35
Section 7.11.
Bond Insurer Contest of Validity...............................................................35
Section 7.12.
Invalidity of Series A Insurance Policy......................................................35
Section7.13.
Termination................................................................................................35
Section 7.14.
Ratings Downgrade....................................................................................36
Section 7.15.
Default on Other Debt................................................................................36
Section7.16.
Judgment....................................................................................................36
Section7.17.
Remedies....................................................................................................36
ARTICLE VIII MISCELLANEOUS.........................................................................................38
Section 8.1. Payments to the Bank.................................................................................38
Section 8.2.
Right to Set-off..........................................................................................38
Section 8.3.
Liability of the Bank..................................................................................38
Section 8.4.
Indemnification..........................................................................................39
Section 8.5.
Costs and Expenses....................................................................................39
Section8.6.
Participants.................................................................................................40
Section 8.7.
Successors and Assigns..............................................................................40
Section 8.8.
Modification or Waiver of this Agreement................................................40
Section 8.9.
No Waiver of Rights by the Bank; Cumulative Rights..............................40
Section 8.10.
Governing Law; Jurisdiction; Waiver of Jury Trial...................................40
Section8.11.
Notices.......................................................................................................41
Section8.12.
Counterpart................................................................................................43
Section 8.13.
Certificates, etc..........................................................................................43
Section8.14.
Severability................................................................................................43
Section 8.15.
Waiver of Rules of Construction...............................................................43
Section 8.16.
Assignment to Federal Reserve Bank........................................................43
Section8.17.
Integration..................................................................................................43
Section 8.18.
Third Party Beneficiary ..............................................................................43
Exhibits
EXHIBIT A —
Form of Request for Purchase
EXHIBIT B
Form of Request for Extension
EXHIBIT C —
Form of Notice of Termination or Reduction
EXHIBIT D —
Form of Request for Reinstatement
EXHIBIT E
Form of Notice of Extension
EXHIBIT F —
Form of Notice of Mandatory Tender
STANDBY PURCHASE AGREEMENT
This STANDBY PURCHASE AGREEMENT dated as of January 1, 2002 (this `Agreement"),
entered into by and among the CITY OF LODI, a municipal corporation, duly organized and
existing under and by virtue of the laws of the State of California, the LODI PUBLIC
IMPROVEMENT CORPORATION, a nonprofit, public benefit corporation duly organized and existing
by virtue of the laws of the State of California (the "Corporation'), BNY WESTERN TRUST
COMPANY, a banking corporation duly organized and existing hereunder and by virtue of the laws
of the State of California (the "Trustee"), and BNP PARIBAS, acting through its San Francisco
Branch (the "Bank");
WITNESSETH:
WHEREAS, the Corporation is authorized and empowered to assist the City in acquiring
and financing and refinancing certain additions, betterments, extensions and improvements to the
City's Electric System; and
WHEREAS, the Corporation and the City have entered into the Contract under and
pursuant to which the Corporation has agreed to assist the City by refinancing certain additions,
betterments, extensions and improvements to the City's Electric System consisting of the
Existing Facilities; and
WHEREAS, the City is obligated to make certain Installment Payments to the Corporation
under the Contract; and
WHEREAS, all rights to receive Installment Payments have been assigned by the
Corporation to the Trustee pursuant to the Trust Agreement; and
WHEREAS, in consideration of such assignment and the execution and entering into of the
Trust Agreement, the Trustee has agreed to execute and deliver the Certificates in an aggregate
principal amount equal to the aggregate Principal Installments of such Installment Payments,
each evidencing and representing a proportionate interest in such Installment Payments; and
WHEREAS, the City has requested that in order to provide liquidity for the Series A
Certificates in a principal amount equal to the aggregate principal components of the Series A
Installment Payments to be made under the Contract, which Series A Certificates will be
executed and delivered as variable rate certificates, the Bank establishes for the benefit of the
holders from time to time of the Series A Certificates, this Agreement in the initial stated amount
of $ pursuant to which the Bank will agree to purchase the Series A Certificates
evidencing interest in a Covered Mode at a purchase price of up to $ principal
amount and $ accrued interest; and
WHEREAS, in order to induce the Bank to establish this Agreement, the City and the
Corporation have agreed to the terms and conditions hereof,
Now, THEREFORE, in consideration of the mutual promises contained herein and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Certain Defined Terms. As used in this Agreement and unless otherwise
expressly indicated, or unless the context clearly requires otherwise:
(a) All the agreements or instruments herein defined shall mean such agreements or
instruments as the same may from time to time be supplemented or amended or the terms thereof
waived or modified to the extent permitted by, and in accordance with, the terms thereof and of
this Agreement.
(b) The following terms shall have the following meanings (such meanings to be
equally applicable to both singular and plural forms of the terms defined):
"Agreement" shall mean this Standby Purchase Agreement dated as of January 1, 2002,
by and among the City, the Corporation, the Trustee and the Bank, as the same may be
supplemented and amended from time to time in accordance with the provisions hereof.
"Alternate Liquidity Facility" shall mean any credit facility or Liquidity Facility for the
Series A Certificates, the provider of which is acceptable to the Insurer, delivered pursuant to
Section 7.18(b) of the Contract.
"Authorized Denomination " shall have the meaning set forth in the Trust Agreement.
"Authorized Representative" shall mean any person at the time designated to act on
behalf of the City, the Corporation, the Insurer, the Remarketing Agent, the Paying Agent, the
Tender Agent or the Trustee, as the case may be, for purposes of this Agreement by written
certificate furnished to the Bank containing the specimen signature of such person.
"Available Commitment" means on any day, the sum of the Available Principal
Commitment and the Available Interest Commitment on such day, initially $
"Available Interest Commitment" initially means days of interest calculated at an
assumed rate of % per annum based on a year of 365 days for the actual number of days
elapsed and thereafter means such amount adjusted from time to time as follows: (a) downward
by an amount that bears the same proportion to such amount as the amount of any reduction in
the Available Principal Commitment pursuant to the definition of `Available Principal
Commitment" bears to the Available Principal Commitment prior to such reduction; and
(b) upward by an amount that bears the same proportion to such amount as the amount of any
increase in the Available Principal Commitment pursuant to clause (c) of the definition of
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"Available Principal Commitment" bears to the Available Principal Commitment prior to such
increase; provided that after giving effect to such adjustment the Available Interest Commitment
shall never exceed $ . Any adjustments pursuant to clauses (a) and (b) above shall
occur simultaneously with the event requiring such adjustment.
"Available Principal Commitment" initially means $ , and thereafter means
such amount adjusted from time to time as follows: (a) downward by the amount of any
reduction of the Available Principal Commitment pursuant to Section 2.5 hereof, (b) downward
by the principal amount of any Series A Certificates purchased by the Bank pursuant to Section
2.2 hereof; and (c) upward by the principal amount of any Series A Certificates theretofore
purchased by the Bank pursuant to Section 2.1 hereof, which are remarketed pursuant to Section
2.4 hereof and for which the Bank has received immediately available funds equal to the
principal amount thereof and accrued interest thereon; provided that the Available Principal
Commitment shall never exceed $ . Any adjustments pursuant to clauses (a), (b) and
(c) above shall occur simultaneously with the event requiring such adjustment.
"Bank" shall have the meaning set forth in the preamble hereto.
"Bank Rate" shall mean, with respect to the interest components of Schedule A
Installment Payments evidenced by a Pledged Certificate, a rate per annum sufficient to produce
a yield on the unpaid amount of the Purchase Price of such Pledged Certificate equal to: (i) the
Base Rate from time to time in effect, from and including the date of such Purchase to and
including the date thirty (30) days from the date of such Purchase, (ii) the Base Rate from time to
time in effect plus 1.0%, from and including the date thirty-one (31) days from the date of such
Purchase to and including the date sixty (60) days from the date of such Purchase, and (iii) the
rate per annum equal to the Base Rate from time to time in effect plus 2.0%, at all times
thereafter; provided that from and after the occurrence of an Event of Default, the "Bank Rate"
shall mean the Default Rate.
"Bank Purchase Price " shall mean the purchase price of any Pledged Certificates, which
purchase price shall be equal to (i) the principal amount evidenced thereby, (ii) plus any accrued
and unpaid interest paid by the Bank as part of the Purchase Price of such remarketed Pledged
Certificates and not repaid to the Bank prior to the date such Pledged Certificates are purchased
from the Bank to the extent not otherwise paid pursuant to Section 3.1(a) hereof, (iii) plus
accrued and unpaid interest on the aggregate amount of the Purchase Price of such remarketed
Pledged Certificates (calculated at the Bank Rate) to the extent not included in the amounts paid
pursuant to clause (ii) above.
"Bankruptcy Law" shall mean Title 11, U.S. Code, as amended or supplemented, any
successor statute thereto, or any similar Federal, state, or foreign law for the relief of debtors.
"Base Rate" means, for any day, the greater of (i) the Prime Rate or (ii) the Fed Funds
Rate plus 1.0%. Each change in the Base Rate shall take effect at the time of such change in the
Prime Rate or the Fed Funds Rate, as applicable.
"Business Day" shall have the meaning set forth in the Trust Agreement.
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"Certificates " shall have the meaning set forth in the Trust Agreement.
"City" shall have the meaning set forth in the preamble hereto.
"Closing Date " means January , 2002.
"Code" shall mean the Internal Revenue Code of 1986, as amended and supplemented
from time to time, including relevant regulations, proposed and temporary regulations and
published rulings of the Department of the Treasury promulgated thereunder.
"Commitment Period" means the period commencing on the Closing Date and ending on
the Expiration Date.
"Contract" shall mean the Installment Purchase Contract, dated as of January 1, 2002, by
and between the City and the Corporation, as the same may be amended or supplemented from
time to time.
"Conversion Date" means the date upon which all of the Series A Certificates are
converted to bear interest at a rate other than a Covered Mode.
"Corporation " shall mean the Lodi Public Improvement Corporation, a non-profit,
public benefit corporation duly organized and existing under and by virtue of the laws of the
State.
"Covered Mode " means the Weekly Interest Rate.
"Debt" of any Person shall mean at any date, without duplication, (i) all obligations of
such Person for borrowed money and reimbursement obligations which are not contingent, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of property or services
which purchase price is due twelve (12) months or more from the date of incurrence of the
obligation in respect thereof, (iv) all obligations of such Person as lessee under capital leases,
(v) all Debt of others Guaranteed by such Person, and (vi) all payment obligations of such
Person, in addition to any obligations set forth in clauses (i) through (v) above, arising under any
interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest
rate futures contract, interest rate option contract or other similar arrangement and under any
foreign exchange contract, currency swap agreement, foreign exchange futures contract, foreign
exchange option contract, synthetic cap or other similar agreement; provided that it is understood
that Debt does not include contingent obligations of such Person to reimburse any other Person in
respect of surety bonds or letters of credit to the extent that such surety bonds or letters of credit
support Debt of such Person. For purposes of this definition, if any of the agreements or
contracts set forth in clause (vi) above relate to any other obligation of the City which is
otherwise included in this definition of Debt, such agreements and contracts shall constitute Debt
only to the extent that the payment obligations of the City thereunder, less any amounts
receivable by the City thereunder, exceed or are expected to exceed the interest payable on the
related Debt.
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"Default" shall mean any event or condition which constitutes an Event of Default or
which, with the giving of notice or the lapse of time, or both would, unless cured or waived,
become an Event of Default.
"Default Rate" means the sum of the Base Rate from time to time in effect plus 3.0%.
"Deferred Interest" shall have the meaning given such term in Section 3.1(b) hereof.
"Deferred Interest Fee Amount" shall have the meaning given such term in
Section 3.1(b) hereof.
"Differential Interest Amount" means, with respect to any Pledged Certificate, the excess
of (i) interest which has accrued and could actually be paid with respect to such Pledged
Certificate at the Bank Rate, as determined in accordance with Section 3.1 hereof, up to but
excluding the Business Day on which such Pledged Certificate is purchased from the Bank
pursuant to Section 2.4(b), less (ii) the interest accrued with respect to such Pledged Certificate
received by the Bank as part of the proceeds from the remarketing of such Pledged Certificate.
"Downgrade" means each rating category reduction by either Fitch or S&P of the
unenhanced long-term rating assigned to the Series A Certificates assigned to the City below
`A-" (or its equivalent) by Fitch or `A-" (or its equivalent) by S&P (for example, a rating
reduction by S&P from "AA-" (or its equivalent) to "A+" (or its equivalent) would constitute
one rating category reduction for purposes of this definition).
"Electric System " shall have the meaning set forth in the Trust Agreement.
"Eligible Certificates " means Series A Certificates other than (i) Series A Certificates
bearing interest at a rate other than a Covered Mode and (ii) Pledged Certificates or Series A
Certificates owned by or held on behalf of or for the benefit of or for the account of the City or
the Corporation.
"Environmental Laws " shall mean any and all federal, state and local laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use treatment, storage, disposal, transport or handling of
Hazardous Materials.
"Event of Default" shall have the meaning set forth in Section 7.1 hereof.
"Existing Facilities " shall have the meaning set forth in the Trust Agreement.
"Expiration Date" shall mean the earliest to occur of (i) the Scheduled Expiration Date;
(ii) the date the City reduces the Available Commitment to zero by delivery of a certification in
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the form of Exhibit C hereto pursuant Section 2.5 hereof; (iii) the Conversion Date; (iv) the
Termination Date; (v) the date on which the Available Commitment has been terminated in its
entirety pursuant to Section 7.17 hereof; or (vi) the Substitution Date.
"Facilities " shall have the meaning set forth in the Trust Agreement.
"Fed Funds Rate" means, for any day, the rate of interest per annum at which overnight
Federal Funds are offered to the Bank for such day by major banks in the interbank market, with
any change in such rate to become effective on the date of any change in such rate. Each
determination of the Fed Funds Rate by the Bank shall be deemed conclusive and binding on the
City absent manifest error.
"Financing Documents " shall mean the Trust Agreement, the Series A Certificates, the
Insurance Policy, the Remarketing Agreement, the Contract, the certificates of the Corporation
and the City delivered pursuant to Section 6.1 hereof, the Tax Certificates or similar certificates
of the City and the Corporation dated the Closing Date relating to the use of proceeds of the
Series A Certificates and related matters and the Contract of Purchase by and between the City,
the Corporation and Salomon Smith Barney Inc., as underwriter, as the same may be amended or
supplemented from time to time in compliance with Section 5.2(a) hereof.
"Fitch " means Fitch, Inc., and its successors and assigns.
"Funds " means all of the funds and accounts created under the Trust Agreement for the
benefit of the Series A Certificates.
"Guarantee" by any Person shall mean any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to keep -well, to
purchase assets, goods, securities or services, to take -or -pay, or to maintain financial statement
conditions or otherwise), (ii) entered into for the purpose of assuring in any other manner the
obligee of such Debt of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part) or (iii) with respect to any letter of credit issued for the account of
such other Person or as to which such other Person is otherwise liable for reimbursement of
drawings, provided that the term Guarantee shall not include (i) endorsements for collection or
deposit in the ordinary course of business, or (ii) performance or completion guarantees. The
term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Materials " shall mean (a) any petroleum or petroleum products, flammable
substance, explosives, radioactive materials, hazardous waste or contaminants, toxic wastes,
substance or contaminants, or any other wastes, contaminants, or pollutants; (b) asbestos in any
form that is or could become friable, urea formaldehyde foam insulation, transformers, or other
equipment that contains dielectric fluid containing levels of polychlorinated biphenyls or radon
gas; (c) any chemicals, materials, or substances defined as or included in the definition of
"hazardous substances," "hazardous materials," "extremely hazardous wastes," "restricted
0
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; (d) any other chemical,
material, or substance, exposure to which is prohibited, limited, or regulated by any
governmental authority; and (e) any other chemical, material, or substance which may or could
pose a hazard to the environment.
"Installment Payments" shall have the meaning set forth in the Trust Agreement.
"Insurer" shall mean MBIA Insurance Corporation, an insurance corporation organized
under the laws of the State of New York.
"Insurer Downgrade " means each rating category reduction by any of Fitch, Moody's or
S&P of the claims paying ability or financial strength rating assigned to the Insurer below
"Aaa " (or its equivalent) by Moody's, "AAA" (or its equivalent) by Fitch, or "AAA" (or its
equivalent) by S&P (for example, a rating reduction by S&P from `AA-" (or its equivalent) to
"A+" (or its equivalent) would constitute one rating category reduction for purposes of this
definition).
"Insurer Event of Default" means any Event of Default described in any of Section 7.9,
7.10, 7.11, 7.12, 7.13 and 7.14(ii).
"Insurer Event of Insolvency" means the occurrence and continuance of one or more of
the following events: (a) a proceeding is instituted in a court having jurisdiction in the premises
seeking an order for relief, rehabilitation, reorganization, conservation, liquidation or dissolution
in respect to the Insurer or for any substantial part of its property under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or other similar official) and
such proceeding is not terminated for a period of sixty (60) consecutive days or such court enters
an order granting the relief sought in such proceeding or the Insurer shall institute or take any
corporate action for the purpose of instituting any such proceeding; (b) the Insurer becomes the
subject of a proceeding under Article 74 of the New York Insurance Law (or any successor
provision) and such proceeding is not terminated for a period of sixty (60) consecutive days,
(c) the Insurer shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (d) the Insurer shall consent to the entry of an order
for relief in an involuntary case under any such law or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of the Insurer or for any substantial part of its property, (e) the Insurer shall make
a general assignment for the benefit of creditors, or (f) the Insurer shall fail generally to pay its
debts or claims as they become due, or shall take any corporate action in furtherance of any of the
foregoing.
"Interest Component" shall have the meaning set forth in Section 2.1(a) hereof.
"Interest Payment Date" shall have the meaning assigned that term in the Trust
Agreement.
bA
"Investment Grade " means a financial strength or claims -paying ability rating of "Baa3 "
(or its equivalent) or better by Moody's, "BBB-" (or its equivalent) or better by S&P and
"BBB- " (or its equivalent) or better by Fitch.
"Lien " shall mean, with respect to any asset (i) any lien, charge, claim, mortgage,
security interest, pledge or assignment of revenues of any kind in respect of such asset or (ii) the
interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Liquidity Facility" shall have the meaning set forth in the Trust Agreement.
"Maximum Rate" shall mean, for any day, the maximum rate per annum permitted on
that day by applicable law.
"Moody's " shall mean Moody's Investors Service, and its successors and assigns.
"Net Revenues " shall have the meaning set forth in the Trust Agreement.
"Official Statement" shall mean the Official Statement relating to the Series A
Certificates, including any supplement or amendment to such Official Statement, and any other
offering document from time to time distributed concerning any of the Series A Certificates other
than Series A Certificates evidencing interest at a rate other than a Covered Mode.
"Other Taxes " shall have the meaning set forth in Section 2.13 hereof.
"Outstanding" shall have the meaning assigned that tern in the Trust Agreement.
"Participant" shall mean each Person purchasing a participation from the Bank pursuant
to a Participation Agreement.
"Participation Agreement" shall mean any Participation Agreement, among the Bank and
any person purchasing participations and named therein, relating to this Agreement and the
Series A Certificates.
"Payment Account " shall mean the following account, or such account as may be
designated by the Bank in writing to the City, the Corporation and the Trustee:
ABA No. Acct. No. Reference:
Attention:
"Permitted Investments " shall have the meaning set forth in the Trust Agreement.
"Person " shall mean an individual, a corporation, a partnership, an association, a joint
venture, a trust, an unincorporated organization or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pledged Certificates " shall have the meaning set forth in Section 2.2 hereof.
"Prime Rate" means, for any day, the rate of interest announced by the Bank from time
to time as its prime commercial rate for U.S. dollar denominated loans, or equivalent, as in effect
on such day, with any change in such rate to be effective on the date of any change in such rate.
Each determination of the Prime Rate by the Bank shall be deemed conclusive and binding on
the City absent manifest error.
"Principal Installments " shall have the meaning set forth in the Trust Agreement.
"Purchase" shall mean any purchase of Series A Certificates by the Bank pursuant to
Section 2.1 hereof.
"Purchase Date" shall mean the date on which any Series A Certificates are required to
be purchased pursuant to Section 2.04 or 2.05 of the Trust Agreement.
"Purchase Price" shall mean the purchase price of Series A Certificates required to be
purchased by the Trustee with funds made available under this Agreement, which purchase price
shall be equal to the principal evidenced thereby plus accrued and unpaid interest evidenced
thereby to the Purchase Date, if any, but shall in no event exceed the Available Commitment on
such Purchase Date.
and
"Quarterly Date" shall mean the first day of each ,
"Rating Agencies " shall mean Moody's, Fitch and S&P.
"Remarketing Agent" shall have the meaning assigned that term in the Trust Agreement.
"Remarketing Agreement" shall have the meaning assigned that term in the Trust
Agreement.
"Request for Purchase" shall mean a written request for a Purchase substantially in the
form of Exhibit "A" hereto.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors and assigns.
"ScheduleA Installment Payments" shall have the meaning assigned that term in the
Trust Agreement.
"Scheduled Expiration Date" shall mean January , 2007, as such date may be
extended from time to time pursuant to Section 2.15 hereof.
"Series A Certificates" shall mean the Electric System Revenue Variable Rate Demand
Certificates of Participation $ 2002 Series A.
U
"Series A Insurance Policy" shall have the meaning assigned that term in the Trust
Agreement.
"State" shall mean the State of California.
"Subsidiary" of a Person shall mean any corporation of which more than 50% of the
voting stock, is owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.
"Substitution Date" means the effective date of the Alternate Liquidity Facility in
accordance with the Contract.
"Suspension Event" means the occurrence of an event which causes the suspension of the
obligation of the Bank to purchase Series A Certificates hereunder pursuant to Section 7.17(a) or
7.17(c) hereof.
"Taxes " shall have the meaning set forth in Section 2.13 hereof.
"Tender Agent" shall mean BNY Western Trust Company, or any successor tender agent
appointed under the Trust Agreement.
"Termination Date" shall have the meaning set forth in Section 7.17(d) hereof.
"Trust Agreement" shall mean the Trust Agreement dated as of January 1, 2002, by and
among the Corporation and the Trustee, as the same may be supplemented, amended or otherwise
modified from time to time in accordance with its terms.
"Trustee " shall mean BNY Western Trust Company, or any other association or
corporation which may at any time be substituted in its place as provided in the Trust Agreement.
"Weekly Interest Rate " shall have the meaning set forth in the Trust Agreement.
Section 1.2. Accounting Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered hereunder shall be prepared,
in accordance with generally accepted accounting principles for government entities as in effect
from time to time, applied on a basis consistent (except for changes approved by the City's
independent public accountants, if any) with the most recent financial statements of the City
delivered to the Bank.
Section 1.3. Rules of Construction. When used in this Agreement:
(a) the singular includes the plural and the plural includes the singular;
(b) "or" is not exclusive;
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(c) a reference to a law includes any amendment or modification to such law;
(d) a reference to a person includes any amendment or modification to such
person;
(e) a reference to an agreement, instrument or document shall include such
agreement, instrument or document as the same may be amended, modified or
supplemented from time to time in accordance with its terms and as permitted hereby;
and
(f) all references to time shall mean New York time, unless otherwise
specified.
ARTICLE II
PURCHASE OF CERTIFICATES
Section 2.1. Purchases. (a) Commitment to Purchase. Subject to the terms and
conditions of this Agreement, including without limitation the conditions set forth in Section 6.2
hereof, the Bank agrees to extend credit through the purchase with its own funds of Eligible
Certificates which are tendered pursuant to Sections 2.04 or 2.05 of the Trust Agreement from
time to time on any Business Day during the Commitment Period, at the Purchase Price. The
aggregate principal amount (or portion thereof) of any Eligible Certificate purchased by the Bank
on any Purchase Date shall be an Authorized Denomination and in any case the aggregate
principal amount of all Eligible Certificates purchased on any Purchase Date shall not exceed the
Available Principal Commitment (calculated without giving effect to any purchase of Eligible
Certificates by the Bank on such date) at 10:00 a.m., New York time, on such date. The
aggregate amount of the Purchase Price comprising interest with respect to the Eligible
Certificates (the "Interest Component") purchased on any Purchase Date shall not exceed the
lesser of (i) the Available Interest Commitment on such date and (ii) the actual aggregate amount
of interest accrued with respect to each such Eligible Certificate, to but excluding such Purchase
Date; provided that if the applicable Purchase Date is an Interest Payment Date the amount
described in this clause (ii) shall be reduced by the amount of interest payable with respect to
each such Eligible Certificate on such Interest Payment Date. All purchases of Eligible
Certificates by the Bank pursuant to this Agreement shall be made by the Bank in immediately
available funds with its own funds.
(b) Method of Requesting a Purchase. Upon receipt of a Request for Purchase by the
Bank from the Trustee, on behalf of the City, not later than [12:30 p.m.], New York time, on the
day of the proposed Purchase, the Bank, subject to the terms and conditions of this Agreement,
shall be required to pay to the Trustee by 13:00 p.m.], New York time, on such day the Purchase
Price of any Eligible Certificates and not remarketed on such day, in an amount equal to the
amount which, when added to any remarketing proceeds paid to the Trustee by the Remarketing
Agent, will be sufficient to pay the principal amount plus accrued and unpaid interest with
respect to all such Eligible Certificates required to be purchased on such date. With respect to
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any such Request for Purchase received by the Bank after [12:30 p.m.], New York time, on any
date, the Bank shall be required to make such Purchase by [12:30 p.m.], New York time, on the
next succeeding Business Day. Any Request for Purchase shall be signed by an Authorized
Representative of the Trustee. Each Purchase shall be made by the Bank by wire transfer of
immediately available funds to the Trustee in accordance with written instructions provided by
the Trustee. The Bank shall have no responsibility for, nor incur any liability in respect of, any
act, or any failure to act, by the Trustee which results in the failure of the Trustee to effect the
purchase of Eligible Certificates for the account of the Bank with such funds provided pursuant
to this Section 2.1(b) or otherwise.
Section 2.2. Purchase of Pledged Certificates. (a) Rights as Holder. Any Series A
Certificates purchased pursuant to this Agreement shall, from the date of such Purchase until the
date the Bank has received the Bank Purchase Price thereof, be designated as "Pledged
Certificates" in accordance with Section 2.06(C)(2) of the Trust Agreement, from the date of
such purchase and, while they are Pledged Certificates, represent interest at the Bank Rate and
have other characteristics of Pledged Certificates as set forth herein and in the Trust Agreement;
provided, however, that, so long as no Event of Default shall have occurred and be continuing, if
the Remarketing Agent shall notify the Bank that it has remarketed any Pledged Certificates and
the Bank shall determine not to deliver such Pledged Certificates in exchange for the Bank
Purchase Price thereof, such Pledged Certificates shall no longer be designated as "Pledged
Certificates." The Bank, as owner of any Series A Certificates, shall have the rights of owners of
Series A Certificates under the Trust Agreement to the extent specified in the Trust Agreement,
other than the right to require purchase of such Series A Certificates from proceeds of an advance
under this Agreement.
(b) Principal. In accordance with the Trust Agreement, all Pledged Certificates will be
repurchased from the Bank on the date such Pledged Certificates are successfully remarketed in
accordance with the Trust Agreement, any such repurchase to be made from the proceeds of such
remarketing. Any repurchase of the Pledged Certificates shall be at the Bank Purchase Price. In
the event any Pledged Certificates remain unremarketed for a period of thirty (30) days following
the related Purchase Date therefor, and notwithstanding anything to the contrary contained in the
Series A Certificates, the Trust Agreement, the Contract or herein, the City shall prepay
Schedule A Installment Payments pursuant to Section of the Contract in such principal and
interest amounts so as to prepay such Pledged Certificates, in equal semi-annual installments on
the first Business Day of each and commencing on the first such date at
least ninety (90) days following the related Purchase Date, provided that in any event all of the
then unpaid Pledged Certificates shall be prepaid in full on the earliest to occur of (i) the fifth
anniversary of the related Purchase Date and (ii) the fifth anniversary of the Expiration Date.
(c) Interest. Interest payable to the Bank with respect to Pledged Certificates shall be
computed and payable in the manner set forth in Section 3.1 hereof.
(d) Prepayment. Pledged Certificates may be prepaid in whole or in part, in Authorized
Denominations at any time, without penalty or premium.
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Section 2.3. Interest on Overdue Amounts. Amounts due with respect to Pledged
Certificates that are not paid when due are payable on demand, in the amounts and with interest
at the rates as provided in the Contract and the Trust Agreement. Any amount due to the Bank
hereunder (whether fees, advances, commissions, expenses or otherwise) which is not paid when
due shall bear interest, payable on demand, from the date the same becomes due until such
amount is paid in full at the Default Rate, calculated on the basis of a year of 365 days and actual
days elapsed.
Section 2.4. Remarketing or Prepayment of Pledged Certificates. (a) Remarketing of
Pledged Certificates. Simultaneously with the remarketing of any Pledged Certificates, the City
will, pursuant to the Contract and the Trust Agreement, pay or cause the Trustee to pay to the
Bank the Bank Purchase Price of any such Pledged Certificates remarketed. To the extent that
the Remarketing Agent remarkets the Pledged Certificates for an amount less than the full
amount of the Bank Purchase Price, the City shall pay, or cause the Trustee to pay, to the Bank
on the date of repurchase from the Bank, an amount equal to the difference between (i) such
Bank Purchase Price and (ii) the amount actually received from the purchasers of such Pledged
Certificates. Upon receipt by the Bank of the Bank Purchase Price with respect to remarketed
Pledged Certificates, the Bank shall give notice to the Trustee to the effect that the Available
Commitment shall be reinstated as provided in the definitions of "Available Principal
Commitment" and "Available Interest Commitment" set forth in Article I hereof.
(b) Prepayment of Pledged Certificates. The City shall cause the Trustee, pursuant to
the Trust Agreement, to first prepay Pledged Certificates prior to any prepayment of any other
Series A Certificates pursuant to Section 2.09 of the Trust Agreement.
Section 2.5. Reduction and Reinstatement of Commitment. The Available Commitment
shall be reduced following each Purchase by an amount equal to the Purchase Price of the
Series A Certificates purchased. Provided that the Expiration Date shall not have occurred,
effective immediately upon the receipt by the Bank of the notice from the Trustee in the form of
Exhibit "D" hereto, the Available Commitment shall be reinstated by an amount equal to the
Purchase Price received from the purchasers of the remarketed Pledged Certificates plus the
Interest Component with respect thereto. The City may from time to time reduce the amounts of
the Available Commitment by delivering to the Bank a certificate in substantially the form of
Exhibit "C" hereto.
Section 2.6. Manner of Payments. All payments to be made by or on behalf of the City
or the Trustee to the Bank on account of amounts at any time owing hereunder or in connection
herewith shall be made, and shall not be considered made until received, in United State dollars
in the Payment Account in immediately available funds. The City or the Trustee shall make each
payment hereunder not later than 5:00 p.m. (New York time) on the day when due in lawful
money of the United States of America to the Payment Account in immediately available funds.
Any payment received after 5:00 p.m. (New York time) shall be deemed made on the next
succeeding Business Day.
Section 2.7. Payment on Non -Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day other than a Business Day, such payment shall be
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made on the next succeeding Business Day (and if so made, shall be deemed to have been made
when due), and such extension of time shall in such case be included in the computation of the
payment of interest due hereunder.
Section 2.8. Book Entries. The Bank shall maintain in accordance with its usual practice
and the terms of this Agreement an account or accounts of the amounts payable to the Bank
resulting from the purchase of Pledged Certificates and the amounts payable to the Bank
hereunder. In any legal action or proceeding in respect of this Agreement, the entries made in
such account or accounts shall, in the absence of demonstrable error in the calculation of such
amounts, be conclusive.
Section 2.9. Obligations Unconditional. Subject to Section 2.16 hereof, the City's
obligation to pay Schedule A Installment Payments and all of its obligations under this
Agreement shall be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment which the City may have against the Bank, any
Participant, the Trustee, the Insurer, or any other Person, including, without limitation, any
defense based on the failure of any Request for Purchase submitted by the Trustee to conform to
the terms hereof or based on invalidity, inaccuracy, falsity, or lack of genuineness, whether by
forgery, fraud or otherwise, of any document, demand, or statement presented pursuant hereto or
any failure of the City to receive all or any part of the proceeds of the sale of any Series A
Certificates or any nonapplication or misapplication by the Trustee of the proceeds of any
Request for Purchase, and irrespective of the legality, validity, regularity or enforceability of all
or any of the Financing Documents, and notwithstanding any amendment or waiver of (other than
an amendment or waiver signed by the Bank explicitly reciting the release or discharge of any
such obligation), or any consent to departure from, all or any of the Financing Documents (other
than the written consent of the Bank) or any exchange, release, or nonperfection of any collateral
securing the Series A Certificates or the obligations of the City hereunder or under the Contract
or any expiration of the term hereof, any default by the Insurer under the Series A Insurance
Policy, or any other circumstances or happening whatsoever, whether or not similar to any of the
foregoing.
Section 2.10. Waivers, etc. To the full extent permitted by law: (i) the City hereby
waives (a) presentment, demand, notice of demand, protest, notice of protest, notice of dishonor
and notice of non-payment; (b) the right, if any, to the benefit of, or to direct application of, any
security hypothecated to the Bank until all obligations of the City to the Bank hereunder,
however arising, shall have been paid; (c) the right to require the Bank to proceed against the
City hereunder, or against any Person under any guaranty or similar arrangement, or under any
agreement between the Bank and any Person or to pursue any other remedy in the Bank's power;
(d) all statutes of limitation; and (e) any defense arising out of the election by the Bank to
foreclose on any security by one or more nonjudicial or judicial sales; (ii) the Bank may exercise
any other right or remedy, even though any such election operates to impair or extinguish the
City's right to reimbursement from, or any other right or remedy it may have against, any person,
or any security; and (iii) the City agrees that the Bank may proceed against the City or any Person
directly and independently of any other, and that any forbearance, change of rate of interest, or
acceptance, release or substitution of any security, guaranty, or loan or change of any term or
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condition thereunder or under any Financing Document (other than by mutual agreement between
the City and the Bank) shall not in any way affect the liability of the City hereunder.
Section 2.11. Increased Costs. If the Bank or any Participant shall determine that (a) any
change in any law or regulation or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof shall either (i) impose, modify, or
deem applicable any reserve, special deposit or similar requirement against lines of credit issued
by, or assets held by, or deposits in or for the account of, or loans made by, the Bank or any
Participant, or (ii) impose on the Bank or any Participant any other condition regarding this
Agreement, any Purchase or any participating interest in any thereof, and (b) the result of any
event referred to in the preceding clause (i) or (ii) shall be to increase the cost to the Bank or any
Participant of issuing or maintaining this Agreement, or funding Purchases or owning Pledged
Certificates or funding or maintaining any participating interest in any thereof (which increase in
cost shall be determined by the Bank's or such Participant's reasonable allocation of the
aggregate of such cost increases resulting from such event, documented as provided below), then,
promptly, and in any event within thirty (30) days after receipt of written notice thereof from the
Bank, the City shall pay, or cause to be paid, to the Bank, from time to time as specified by the
Bank for itself or such Participant, additional amounts which shall be sufficient to compensate
the Bank or such Participant for such increased cost, together with interest on the amount of such
increased cost from the due date specified in such notice at the Default Rate. The Bank shall
notify the City of any event occurring after the Closing Date that will entitle the Bank or such
Participant to compensation pursuant to this Section 2.11 not later than ninety (90) days
following the date on which the Bank obtains knowledge thereof. A certificate as to such
increased cost incurred by the Bank or any Participant as a result of any event mentioned in
clause (i) or (ii) above, prepared in reasonable detail and in accordance with this Section 2.11,
submitted by the Bank to the City, shall be conclusive, absent demonstrable error, as to the
amount thereof.
Section 2.12. Capital Adequacy. If the Bank or any Participant shall determine that the
adoption of any applicable law, rule, or regulation regarding capital adequacy, or change therein,
or any change in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or administration thereof, or
compliance by the Bank or its head office or such Participant or its head office with any request
or directive regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has the effect of reducing the rate of return on the
Bank's or such Participant's capital as a consequence of its commitment hereunder, its issuance
or maintenance of this Agreement, its funding Purchases or holding Pledged Certificates or its
funding or maintaining any participating interest in any thereof to a level below that which the
Bank or such Participant could have achieved but for such adoption, change or compliance
(taking into consideration the Bank's or such Participant's policies with respect to capital
adequacy) by an amount deemed by the Bank or such Participant to be material, then, promptly,
and in any event within thirty (30) days after receipt of written notice thereof from the Bank, the
City shall pay to the Bank, from time to time as specified by the Bank for itself or such
Participant, additional amounts which shall be sufficient to compensate the Bank or such
Participant for such reduction in respect of its commitment hereunder, its issuance or
maintenance of this Agreement, its funding Purchases or holding Pledged Certificates or its
SMI
funding or maintaining any participating interest in any thereof, together with interest on such
additional amounts from the due date specified in such notice at the Default Rate. The Bank shall
notify the City of any event occurring after the Closing Date that will entitle the Bank or such
Participant to compensation pursuant to this Section 2.12 not later than ninety (90) days
following the date on which the Bank obtains knowledge thereof. A certificate as to such
additional amount describing the event which has the effect of reducing the rate of return on the
Bank's or any Participant's capital, prepared in reasonable detail and in accordance with this
Section 2.12, submitted by the Bank to the City, shall be conclusive, absent demonstrable error,
as to the amount thereof.
Section 2.13. Taxes. (a) To the extent permitted by law, any and all payments by the City
hereunder or with respect to the Pledged Certificates shall be made, in accordance with
Section 2.9, free and clear of and without deduction for any and all taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes
imposed on the overall net income of the Bank (and franchise taxes imposed in lieu of net
income taxes) by the jurisdiction of the Bank's applicable lending office or any political
subdivision thereof (all such non -excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes'). If the City shall be
required by law to withhold or deduct any Taxes from or in respect of any sum payable hereunder
or with respect to any Pledged Certificates then, to the extent permitted by law, (i) the sum
payable by the City shall be increased as may be necessary so that after making all required
withholdings or deductions (including those Taxes payable solely by reason of additional sums
payable under this Section 2.13) the Bank receives an amount equal to the sum it would have
received had no such withholdings or deductions been made, (ii) the City shall make such
withholdings, or deductions and (iii) the City shall pay the full amount withheld or deducted to
the relevant taxation authority or other authority in accordance with applicable law.
(b) In addition, to the extent permitted by law, the City agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges or similar levies
that arise under the laws of the United States or the State from any payment made hereunder or
with respect to any Pledged Certificates or from the execution or delivery or otherwise with
respect to this Agreement or any Pledged Certificates (hereinafter referred to as "Other Taxes').
(c) If the City fails to pay Taxes and/or Other Taxes (including Taxes imposed by any
jurisdiction on amounts payable under this Section 2.13) required to be paid by the City pursuant
to clause (a) or (b) in accordance with applicable law, then the City will, to the extent permitted
by law, indemnify and hold harmless the Bank and reimburse the Bank as applicable, for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.13) paid by the Bank or any
liability (including penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted. Payments by the
City pursuant to this Section 2.13 shall be made within thirty (30) days from the date the Bank
makes written demand therefor which demand shall be accompanied by a certificate describing in
reasonable detail the basis thereof.
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(d) Within thirty (30) days after the date of any payment of Taxes by the City, the City
shall furnish to the Bank with respect to which such payment was made, at its address referred to
in Section 8.11 hereof, the original or a certified copy of a receipt evidencing payment thereof.
The City shall compensate the Bank for all reasonable losses and expenses sustained by the Bank
as a result of any failure by such party to so furnish such copy of such receipt.
(e) Any amounts paid by the City to the Bank pursuant to this Section 2.13 which are
subsequently recovered by the Bank from any taxing agency (including any accrued interest or
penalties recovered) shall be repaid to the City within thirty (30) days of receipt thereof by the
Bank.
(f) Without prejudice to the survival of any other agreement of the City hereunder, the
agreements and obligations contained in this Section 2.13 shall survive the payment in full of all
obligations hereunder and with respect to the Pledged Certificates.
Section 2.14. Alternate Liquidity Facility. Subject to the payment of all amounts owing to
the Bank as set forth in Section 2.17 hereof, the City may at any time provide an Alternate
Liquidity Facility in full and complete substitution for this Agreement upon payment to the Bank
of all amounts owing hereunder and upon repurchase of any Pledged Certificates at the Bank
Purchase Price. The City hereby agrees to give the Bank, the Insurer the Trustee and the Rating
Agencies forty (40) days' prior written notice of any such substitution and, upon such
substitution and payment of such fees and all amounts owing under this Agreement and upon
repurchase of any Pledged Certificates at the Bank Purchase Price, this Agreement shall expire.
Section 2.15. Term of Agreement. (a) The term of this Agreement shall be until the later
of (i) the Expiration Date and (ii) the payment to the Bank, in immediately available funds, the
Bank Purchase Price of all Pledged Certificates and all amounts due hereunder (including,
without limitation, unpaid Deferred Interest).
(b) Upon the written request of the City to extend the then current Scheduled Expiration
Date by facsimile (with an original to follow by overnight courier), not more than one hundred
eighty (180) days nor less than ninety (90) days prior to the Scheduled Expiration Date, the Bank
shall within forty-five (45) days of such request notify the City, the Trustee and the Insurer in
writing whether or not the Bank will extend the Scheduled Expiration Date with respect to the
Available Commitment as of such date for an additional period, and if so will deliver to the City
a Notice of Extension in the form of Exhibit "E" hereto. If the Bank fails to notify the City of the
Bank's decision within such forty-five (45) day period, the Bank shall be deemed to have
rejected such request. Any such request by the City for an extension of the Scheduled Expiration
Date shall be substantially in the form of Exhibit "B" hereto (or in such other form to which the
Bank may consent in writing) and, unless the Bank shall otherwise consent, shall include (i) a
statement of the outstanding principal evidenced by the Series A Certificates, (ii) a reasonably
detailed description of any and all Defaults that shall have occurred and be continuing,
(iii) confirmation that all representations and warranties of the City, as set forth in Article N
hereof, are true and correct as of the date of such request and (iv) any other pertinent information
reasonably requested by the Bank.
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Section 2.16. Limited Obligations. Notwithstanding any other provision of this
Agreement to the contrary, all obligations of the City of the Bank hereunder are special, limited
obligations of the city payable solely from Net Revenues and the Funds.
Section 2.17. Voluntary Termination. Upon (i) the payment by the City to the Bank of a
termination fee in an amount equal to the amount the Bank would have received as a Liquidity
Facility Fee through the first anniversary of the Closing Date payable pursuant to Section 3.2
hereof (based upon an Available Commitment in an amount equal to that in effect on the Closing
Date) at the rate per annum in effect under Section 3.2 hereof as of the date of such termination,
less the actual amount of Liquidity Facility Fees the City has previously paid to the Bank
pursuant to Section 3.2 hereof, (ii) the payment to the Bank of all fees, expenses and other
amounts payable hereunder and (iii) the payment to the Bank of all principal and accrued interest
owing on any Series A Certificates, the City may with the consent of the Insurer, terminate this
Agreement; provided, however, that all payments to the Bank referred to herein shall be made
with immediately available funds.
ARTICLE III
INTEREST WITH RESPECT TO PLEDGED CERTIFICATES; FEES
Section 3.1. Pledged Certificates to Represent Interest at Bank Rate. (a) Any Certificate
purchased by the Bank pursuant to this Agreement shall bear interest at the Bank Rate for the
period commencing from the date that the Bank shall have purchased such Series A Certificate
and, subject to Section 2.2(a) and the last sentence of this Section 3.1(a), continuing until the
Bank shall no longer be the owner of such Series A Certificate, payable on each Interest Payment
Date, on the date of each prepayment of the Schedule A Installment Payments with respect to
Pledged Certificates repaid in accordance with Section 2.2(b) hereof and on the date of
repurchase of any Pledged Certificates, provided that the Interest Component of the Purchase
Price in connection with the purchase of any Series A Certificates shall be payable on the related
Purchase Date. With respect to any Series A Certificates which the Bank so elects not to sell
pursuant to Section 2.2(a), the Bank Rate for such Series A Certificates for the period
commencing on the day the Bank so elects not to sell such Series A Certificates until such time
as the Bank shall cease to be the holder of such Series A Certificates shall be equal at any time
during such period to the interest rate applicable to Series A Certificates other than Pledged
Certificates, or if all Pledged Certificates are then held by the Bank the rate established by the
Remarketing Agent as the rate at which the Pledged Certificates would represent interest if sold
by the Remarketing Agent pursuant to Section 2.2(a).
(b) Deferred Interest. For any period during which Pledged Certificates are outstanding
and as to each monthly interest period, in the event that the amount of interest which would be
payable with respect to the Pledged Certificates (calculated at the Bank Rate for a monthly
interest period, or in the case of the payment of the Differential Interest Amount, if any, with
respect to a Pledged Certificate, for the period from the date of the most recent first day of a
calendar month through but not including the date on which such Pledged Certificate is
remarketed) exceeds the Maximum Rate, the amount of such excess shall not be payable on the
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Interest Payment Date for such monthly interest period as interest with respect to such Pledged
Certificates but shall be deferred ( "Deferred Interest"). Deferred Interest shall be allocated
among the Pledged Certificates outstanding on such Interest Payment Date based upon the
principal amount of such Pledged Certificates and the length of time such Pledged Certificates
were outstanding during the monthly interest period related to such Interest Payment Date.
Deferred Interest occurring on any Interest Payment Date (i) shall, to the extent permitted by law,
represent interest (compounded quarterly on each Quarterly Date) at a rate per annum equal to
the Base Rate plus 2.0% (computed on the basis of a year of 365 days and actual days elapsed)
until paid in full and (ii) shall become payable, together with interest thereon, to the extent
permitted by law, on the next succeeding Interest Payment Date or Dates to the extent the interest
(including Deferred Interest and, to the extent permitted by law, interest on such Deferred
Interest) payable with respect to the Pledged Certificates (if any) for the monthly interest period
ending on such Interest Payment Date does not exceed the Maximum Rate for such monthly
interest period. All amounts of interest payable with respect to a Certificate which is a Pledged
Certificate, including without limitation, Deferred Interest (and interest thereon, to the extent
permitted by law), for so long as such Certificate shall remain a Pledged Certificate, shall
constitute interest with respect to such Certificate and shall be insured by the Insurance Policy.
To the extent Deferred Interest (or, to the extent permitted by law, any interest thereon) shall be
unpaid with respect to Pledged Certificates, and such Certificates shall be prepaid or remarketed
or shall otherwise cease to be Pledged Certificates, such unpaid Deferred Interest (including, to
the extent permitted by law, any unpaid interest thereon) shall be converted into a fee payable by
the City to the Bank (herein, the "Deferred Interest Fee Amount') on the date such Certificates
cease to be Pledged Certificates. The Bank, by acceptance of the Pledged Certificates,
acknowledges that payment of any Deferred Interest Fee Amount and any interest thereon are not
insured under the terms of the Insurance Policy.
Section 3.2. Liquidity Facility Fee. In consideration of the Bank's undertakings
hereunder, the City agrees to pay, or cause the Trustee to pay, to the Bank on each Quarterly Date
subsequent to the date of execution of this Agreement by the parties hereto and prior to the
Expiration Date, commencing 1, 2002, and on the Expiration Date (each a "Fee
Payment Date"), for each day in the period ending on a Fee Payment Date and beginning on the
next preceding Fee Payment Date (or, if not applicable, beginning on the Closing Date), an
amount equal to the product of (A) the Available Commitment as in effect as of the close of
business on each day during such period and (B) 0.30% per annum, calculated on the basis of a
year of 360 days, but accrued on the actual number of days elapsed (the "Liquidity Facility
Fee"); provided, however, that the rate per annum set forth above shall increase by (i) 0.10%
from and after the date of each Downgrade, (ii) an additional 0.05% from and after the date of
each Insurer Downgrade below "AAA " (or its equivalent) by S&P, "Aa3 " or its equivalent by
Moody's or "AAA" (or its equivalent) by Fitch and (iii) an additional 0.25% from and after the
date of each Insurer Downgrade below `AA-" (or its equivalent) by S&P, `Aa3" (or its
equivalent) by Moody's, or "AA- " (or its equivalent) by Fitch; provided further that rate increase
set forth in clause (iii) above with respect to the initial Insurer Downgrade shall not be effective
until the sixtieth (60th) calendar day following such Insurer Downgrade. The Bank shall
endeavor to mail to the Trustee and the City an invoice setting forth the Liquidity Facility Fee
due on each Fee Payment Date at least five (5) Business Days prior to such Fee Payment Date;
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provided, however, that the failure of the Bank to so send such an invoice shall not in any manner
affect the obligation of the City to pay such Liquidity Facility Fee on such Fee Payment Date.
Section 3.3. Draw Fee; Amendment Fee. In consideration of the use of this Agreement,
the City agrees to pay to the Bank (i) a fee equal to $200 for each aggregate Purchase made by
the Bank hereunder, payable upon each Fee Payment Date and (ii) on the date this Agreement or
any Financing Document is amended or any successor tender agent is appointed, a processing fee
of $2,500 plus reasonable fees of any legal counsel retained by the Bank in connection therewith.
Section 3.4. Closing Fee. The City hereby agrees to pay to the Bank on the Closing
Date, a non-refundable closing fee in the amount of $35,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations of the City. In order to induce the Bank to enter into and
perform this Agreement, the City hereby represents and warrants to the Bank, as of the date this
Agreement is executed, as follows:
(a) Organization and Authorization. The City is a municipal corporation
organized and existing under and by virtue of the Constitution and laws of the state.
(b) Authority to Adopt or Execute Documents. The City had, as of the date of
adoption thereof, full power and authority to adopt its resolution authorizing the
execution and delivery of this Agreement and the Financing Documents to which it is a
party and the transactions contemplated hereby and thereby, and has, or had as of the date
of execution and delivery, full power and authority to execute and deliver this Agreement
and the Financing Documents to which it is a party, and has full power and authority to
perform its obligations under each of the foregoing.
(c) Obligations Legal, Valid and Binding. (i) This Agreement and the
Financing Documents to which the City is a party have been duly and validly authorized,
executed and delivered and constitute the legal, valid and binding obligations of the City
enforceable against the City in accordance with their respective terms, except insofar as
enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights and remedies
generally, and by general principles of equity.
(ii) The City is not in default hereunder or under the Financing Documents to
which it is a party or under any other material mortgage, indenture, contract, agreement or
undertaking to which it is a party or which purports to be binding on the City or on any of
its assets.
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(d) No Legal Bar. (i) The City is in compliance with and not in violation
under any laws of the State which would adversely affect the City's existence or its
powers and authority referred to in Section 4.1(b).
(ii) The execution, delivery and performance by the City of this Agreement
and the Financing Documents to which it is a party, and all other agreements and
instruments relating to this Agreement and the Financing Documents executed and
delivered by the City in connection herewith and therewith (i) do not violate any
provision of the Constitution of the State or the laws of the State or any other applicable
law, regulation, order, writ, judgment or decree of any court, arbitrator or governmental
authority, and (ii) do not violate any provision of, constitute a default under, or result in
the creation or imposition of any Lien on any of the assets of the City pursuant to the
provisions of, any mortgage, resolution, indenture, contract, agreement or other
undertaking to which the City is a party or which purports to be binding on the City or on
any of its assets other than the Liens created hereby or by the Financing Documents.
(iii) The City is not a party to, or otherwise subject to, any provision contained
in any instrument evidencing Debt of the City, any agreement relating thereto, or any
other contract or agreement which limits the amount of, or otherwise imposes restrictions
on the incurring of, obligations of the City that would adversely affect the ability of the
City to perform its obligations hereunder or under any of the Financing Documents to
which it is a party.
(e) Consents. The City has obtained, or will obtain on or before the Closing
Date, all consents, permits, licenses and approvals of, and has made all filings,
registrations and declarations with, governmental authorities required under law, to
authorize the execution, delivery and sale of the Series A Certificates, the execution,
delivery and performance of this Agreement and the Financing Documents to which it is a
party and all other agreements delivered or to be delivered in connection with any of the
foregoing, and all such consents, permits, licenses, approvals, filings, registrations and
declarations remain in full force and effect.
(f) Litigation. Except as disclosed in writing to the Bank or in the Official
Statement, there is no action, suit, inquiry or investigation or proceeding to which the
City is a party, at law or in equity, before or by any court, arbitrator, governmental or
other board, body or official which is pending or, to the best knowledge of the City,
threatened in connection with any of the transactions contemplated by this Agreement or
against or affecting the assets of the City, nor, to the best knowledge of the City, is there
any basis therefor, wherein an unfavorable decision, ruling or finding (i) would adversely
affect the validity or enforceability of, or the authority or ability of the City to perform its
obligations under, the Financing Documents to which the City is a party, (ii) would, in the
reasonable opinion of the City, have a materially adverse effect on the ability of the City
to conduct its business as presently conducted or as proposed or contemplated to be
conducted or (iii) would adversely affect the exclusion of interest on the Series A
Certificates from gross income for Federal income tax purposes or the exemption of such
interest from State personal income taxes.
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(g) Disclosure. The representations and statements made by the City herein or
in any Financing Document, or made by the City in any other document furnished to the
Bank by the City in connection herewith or therewith are accurate as of the date of this
Agreement. All financial statements of the City furnished to the Bank were prepared in
accordance with generally accepted accounting principles for government entities and
applied on a consistent basis throughout the periods involved. Since the date of the most
recent financial statements referred to in the preceding sentence, no material adverse
change has occurred in the business, operations or condition (financial or otherwise) of
the City. The Official Statement does not as of its date, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided that no
representation is made as to information with respect to the Insurer or the Bank.
(h) Incorporation of Representations and Warranties by Reference. The
representations and warranties of the City set forth in the Financing Documents to which
it is a party are true and accurate in all material respects on the date of this Agreement as
fully as though made on the date of this Agreement. The City makes, as of the date of
this Agreement, each of the representations and warranties therein, to be made by the City
in the Financing Documents to which it is a party, and for the benefit of, the Bank, as if
the same were set forth at length herein together with all applicable definitions thereto.
Except as otherwise provided herein, no amendment, modification, termination or
replacement of any such representations, warranties, covenants and definitions contained
in the Financing Documents to which it is a party shall be effective to amend, modify,
terminate or replace the representations, warranties, covenants and definitions
incorporated herein by this reference, without the prior written consent of the Bank.
(i) Liens. No filings, recordings, registrations or other actions are necessary
to create and perfect the Liens provided for in the Contract, the Trust Agreement and
herein.
0) No Proposed Legal Changes. There is no amendment, or to the
knowledge of the City, no proposed amendment certified for placement on a statewide or
local ballot, to the Constitution of the State or any published administrative interpretation
of the Constitution of the State or any State law, or any legislation that has passed either
house of the State legislature, or any published judicial decision interpreting any of the
foregoing, the effect of which is (i) to materially adversely affect the Series A Certificates
or any holder thereof in its capacity as such, or (ii) to materially adversely affect the
ability of the City to perform its obligations under this Agreement or any other Financing
Document to which it is a party.
(k) No Immunity. The City is not entitled to sovereign immunity from any
legal proceedings to enforce or collect upon this Agreement or any Financing Document
to which it is a party or the transactions contemplated hereby or thereby (including,
without limitation, immunity from service of process and immunity from jurisdiction of
any court or tribunal in respect of itself). To the extent that the City has or hereafter may
acquire under any applicable law any right to immunity from set-off or legal proceedings
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on the grounds of sovereignty, the City hereby irrevocably waives, to the extent permitted
by law, such rights to immunity for itself in respect of its obligations arising under or
related to this Agreement or the Financing Documents to which it is a party.
(1) Environmental Matters. The City has not received notice to the effect that
its operations are not in compliance with any of the requirements of applicable federal,
state or local environmental, health and safety statutes and regulations or are the subject
of any governmental investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could have a material adverse effect on the
assets, financial condition, or operations of the City or its ability to perform its
obligations under the Financing Documents.
(m) Default, Etc. (i) The City is not in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in any
Financing Document or other resolution, agreement or instrument to which it is a party
which could have a material adverse effect on the ability of the City to perform its
obligations hereunder or the other Financing Documents or which could affect the
enforceability hereof or thereof and (ii) no Event of Default or Default has occurred and is
continuing.
(n) Tax -Exempt Status. The City has not taken any action or omitted to take
any action, and knows of no action taken or omitted to be taken by any other Person,
which action, if taken or omitted, would adversely affect the exclusion of interest on the
Series A Certificates from gross income for Federal income tax purposes or the
exemption of such interest from the State's personal income tax.
(o) Regulations U and X. The City is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U or X issued by the Board of Governors of the Federal Reserve
System); and no proceeds of the Series A Certificates will be used to extend credit to
others for the purpose of purchasing or carrying any margin stock.
Section 4.2. Representations of Corporation. In order to induce the Bank to enter into
and perform this Agreement, the Corporation hereby represents and warrants to the Bank, as of
the date this agreement is executed, as follows:
(a) Organization and Authorization. The Corporation is a nonprofit, public
benefit corporation duly organized and existing under and by virtue of the laws of the
State.
(b) Authority to Adopt or Execute Documents. The Corporation had, as of the
date of adoption thereof, full power and authority to adopt its resolution authorizing the
execution and delivery of this Agreement and the Financing Documents to which it is a
party and the transactions contemplated hereby and thereby, and has, or had as of the date
of execution and delivery, full power and authority to execute and deliver this Agreement
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and the Financing Documents to which it is a party, and has full power and authority to
perform its obligations under each of the foregoing.
(c) Obligations Legal, Valid and Binding. (i) This Agreement and the
Financing Documents to which the Corporation is a party have been duly and validly
authorized, executed and delivered, and constitute the legal, valid and binding obligations
of the Corporation enforceable against the Corporation in accordance with their
respective terms, except insofar as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights and remedies generally, and by general principles of
equity.
(ii) The Corporation is not in default hereunder, or under the Financing
Documents to which it is a party or under any other material mortgage, indenture,
contract, agreement or undertaking to which it is a party or which purports to be binding
on the Corporation or on any of its assets.
(d) No Legal Bar. (i) The Corporation is in compliance with and not in
violation under any laws of the State which would adversely affect the Corporation's
existence or its powers and authority referred to in Section 4.2(b).
(ii) The execution, delivery and performance by the Corporation of this
Agreement and the Financing Documents to which it is a party, and all other agreements
and instruments relating to this Agreement and the Financing Documents executed and
delivered by the Corporation in connection herewith and therewith (i) do not violate any
provision of the Constitution of the State or the laws of the State or any other applicable
law, regulation, order, writ, judgment or decree of any court, arbitrator or governmental
authority, and (ii) do not violate any provision of, constitute a default under, or result in
the creation or imposition of any Lien on any of the assets of the Corporation pursuant to
the provisions of, any mortgage, resolution, indenture, contract, agreement or other
undertaking to which the Corporation is a party or which purports to be binding on the
Corporation or on any of its assets other than the Liens created hereby or by the Financing
Documents.
(iii) The Corporation is not a party to, or otherwise subject to, any provision
contained in any instrument evidencing Debt of the Corporation, any agreement relating
thereto or to the Facilities, or any other contract or agreement which limits the amount of,
or otherwise imposes restrictions on the incurring of, obligations of the Corporation that
would adversely affect the ability of the Corporation to perform its obligations hereunder
or under any of the Financing Documents to which it is a party.
(e) Consents. The Corporation has obtained, or will obtain on or before the
Closing Date, all consents, permits, licenses and approvals of, and has made all filings,
registrations and declarations with, governmental authorities required under law, to
authorize the execution, delivery and sale of the Series A Certificates, the execution,
delivery and performance of this Agreement and the Financing Documents to which it is a
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party and all other agreements delivered or to be delivered in connection with any thereof,
and all such consents, permits, licenses, approvals, filings, registrations and declarations
remain in full force and effect.
(f) Litigation. Except as disclosed in writing to the Bank or in the Official
Statement, there is no action, suit, inquiry or investigation or proceeding to which the
Corporation is a party, at law or in equity, before or by any court, arbitrator, governmental
or other board, body or official which is pending or, to the best knowledge of the
Corporation, threatened in connection with any of the transactions contemplated by this
Agreement or against or affecting the assets of the Corporation, nor, to the best
knowledge of the Corporation, is there any basis therefor, wherein an unfavorable
decision, ruling or finding (i) would adversely affect the validity or enforceability of, or
the authority or ability of the Corporation to perform its obligations under, the Financing
Documents to which the Corporation is a party, (ii) would, in the reasonable opinion of
the Corporation, have a materially adverse effect on the ability of the Corporation to
conduct its business as presently conducted or as proposed or contemplated to be
conducted or (iii) would adversely affect the exclusion of interest on the Series A
Certificates from gross income for Federal income tax purposes or the exemption of such
interest from State personal income taxes.
(g) Disclosure. The representations and statements made by the Corporation
herein or in any Financing Document, or made by the Corporation in any other document
furnished to the Bank by the Corporation in connection herewith or therewith are accurate
as of the date of this Agreement. All financial statements of the Corporation furnished to
the Bank were prepared in accordance with generally accepted accounting principles for
governmental entities as in effect from time to time applied on a consistent basis
throughout the periods involved. Since the date of the most recent financial statements
referred to in the preceding sentence, no material adverse change has occurred in the
business, operations or condition (financial or otherwise) of the Corporation. The
Official Statement does not and will not, as of its date, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided that no
representation is made as to information with respect to the Insurer or the Bank.
(h) Incorporation of Representations and Warranties by Reference. The
representations and warranties of the Corporation set forth in the Financing Documents to
which it is a party are true and accurate in all material respects on the date of this
Agreement as fully as though made on the date of this Agreement. The Corporation
makes, as of the date of this Agreement, each of the representations and warranties
therein, to be made by the Corporation in the Financing Documents to which it is a party,
and for the benefit of, the Bank, as if the same were set forth at length herein together
with all applicable definitions thereto. Except as otherwise provided herein, no
amendment, modification, termination or replacement of any such representations,
warranties, covenants and definitions contained in the Financing Documents to which it is
a party shall be effective to amend, modify, terminate or replace the representations,
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warranties, covenants and definitions incorporated herein by this reference, without the
prior written consent of the Bank.
(i) Liens. No filings, recordings, registrations or other actions are necessary
to create and perfect the Liens provided for in the Contract, the Trust Agreement and
herein.
0) No Immunity. The Corporation is not entitled to sovereign immunity from
any legal proceedings to enforce or collect upon this Agreement or any Financing
Document to which it is a party or the transactions contemplated hereby or thereby
(including, without limitation, immunity from service of process and immunity from
jurisdiction of any court or tribunal in respect of itself). To the extent that the
Corporation has or hereafter may acquire under any applicable law any right to immunity
from set-off or legal proceedings on the grounds of sovereignty, the Corporation hereby
irrevocably waives, to the extent permitted by law, such rights to immunity for itself in
respect of its obligations arising under or related to this Agreement or the Financing
Documents to which it is a party.
(k) Title to Property. The Corporation has a valid and enforceable fee simple
interest in the Facilities.
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of the City and the Corporation. Each of the City
and the Corporation covenants and agrees with the Bank that it will do the following until all
amounts payable hereunder, and under any Pledged Certificates, are indefeasibly paid in full
unless the Bank shall otherwise consent in writing:
(a) Compliance with this Agreement and the Other Financing Documents.
Each of the City and the Corporation will observe and perform each term, covenant,
condition and agreement to be performed or observed under the Financing Documents as
though such terms, covenants, conditions and agreements were set forth in full herein (for
the purpose of this provision the Financing Documents shall be deemed to continue in
full force and effect notwithstanding any earlier termination thereof so long as any
obligation shall be unpaid or unfulfilled or the Bank shall have any liability under any
Bank Certificates).
(b) Laws, Permits and Obligations. (i) Each of the City and the Corporation
will comply with all applicable laws, rules, regulations, orders and directions of any
Governmental Authority noncompliance with which would have a material adverse effect
on the Corporation or the City, their financial conditions, assets, or ability to perform
their obligations under this Agreement and the other Financing Documents to which the
Corporation or the City is a party.
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(ii) Each of the City and the Corporation will take all necessary and
appropriate action to ensure the continuance in force of all material consents, licenses,
permits, orders, decrees, approvals, authorizations, registrations and filings obtained or
made in connection with this Agreement or the other Financing Documents to which the
City or the Corporation is a party or necessary to authorize the execution, delivery and
performance by the City or the Corporation of this Agreement, the other Financing
Documents to which the City or the Corporation is a party and all other agreements to be
delivered in connection with any thereof.
(c) Use of Proceeds. Each of the City and the Corporation will use or cause to
be used the proceeds of the sale of the Certificates in accordance with the provisions of
the Trust Agreement, the Contract and this Agreement.
(d) Maintenance of Existence. Each of the City and the Corporation will at all
times preserve and maintain its existence in the State and its rights, franchises and
privileges material to the conduct of its business and shall not reorganize, merge or
consolidate with or into any Person, wind up, liquidate or dissolve its affairs (or suffer
any liquidation or dissolution) or convert, sell, assign, transfer, lease or otherwise dispose
of (or agree to do any of the foregoing at any future time), whether in one transaction or a
series of transactions, all or substantially all of its property and assets.
(e) Maintenance of Facilities. Each of the City and the Corporation will
maintain, preserve and keep the Facilities in good repair, working order and condition
(ordinary wear and tear excepted) and will from time to time make all needful and proper
repairs, renewals, replacements, additions and betterments thereto so that at all times the
efficiency thereof shall be fully preserved and maintained.
(f) Reporting Requirements. Each of the City and the Corporation will
maintain a standard system of accounting in accordance with generally accepted
accounting principles for governmental entities consistently applied and will furnish to
the Bank and its duly authorized representatives such information respecting the financial
condition of the City or the Corporation as the Bank may reasonably request; and without
any request, the City shall furnish to the Bank:
(i) as soon as available, and in any event within one hundred eighty
(180) days after the close of each fiscal year of the City, a copy of the balance
sheet of the City as of the close of such fiscal year and the related statements of
changes in fund balances and current funds, revenues, expenditures and other
charges of the City for such period, and accompanying notes thereto, all in
reasonable detail showing in comparative form, when appropriate, the figures for
the previous fiscal year, accompanied by an unqualified opinion thereon of
, or as otherwise approved by the Bank, to the effect that the
financial statements have been prepared in accordance with generally accepted
accounting principles for governmental entities consistently applied consistently
applied and present fairly the consolidated changes in fund balances of the City as
of the close of such fiscal year and the results of operations for the fiscal year then
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ended and that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards for governmental entities and, accordingly, such examination included
such tests of the accounting records and such other auditing procedures as were
considered necessary under the circumstances;
(ii) on the date of delivery of the information provided in
Section 5.1(f)(i) above, a written statement from the chief financial officer or
other appropriate officer of the City certifying that he/she has no knowledge of
any Default or Event of Default, or, if the chief financial officer or other
appropriate officer has obtained knowledge of any such Default or Event of
Default, he/she shall disclose in such statement the nature and period of the
existence thereof;
(iii) promptly after receipt thereof, any additional written reports,
management letters or other detailed information contained in writing concerning
significant aspects of the City's operations and financial affairs given to it by its
independent public accountants or required to be provided to the Trustee under the
Contract or the Trust Agreement;
(iv) promptly after knowledge thereof shall have come to the attention
of any representative of the City or the Corporation, written notice of any
threatened or pending litigation or governmental proceeding against the City or
the Corporation which, if adversely determined, would result in a material adverse
effect on the financial condition, properties, business or operations of the City or
the Corporation or of the occurrence of any Default or Event of Default
hereunder;
(v) promptly such other information respecting the condition or
operations, financial or otherwise, of the City or the Corporation as the Bank may
from time to time reasonably request.
(g) Visitation and Examination. Each of the City and the Corporation will
permit any Person designated by the Bank to visit any of its offices to examine the books
and financial records, and make copies thereof or extracts therefrom, and to discuss its
affairs, finances and accounts with its principal officers, all at such reasonable times and
as often as the Bank may reasonably request.
(h) Litigation Notice. Each of the City and the Corporation will, promptly
after obtaining knowledge thereof, notify the Bank in writing of any action, suit or
proceeding at law or in equity by or before any governmental instrumentality or other
agency which (i) has remained unsettled for a period of thirty (30) days from the
commencement thereof and involves claims for damages or relief in an amount which
would be likely to have a material adverse effect on the assets, operations or financial
condition of the City or the Corporation or (ii) has resulted in a final judgment or
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judgments which would be likely to have a material adverse effect on the assets,
operations or financial condition of the City.
(i) Defaults. Each of the City and the Corporation will promptly notify the
Bank of any Event of Default or Default of which the City or the Corporation has
knowledge, setting forth the details thereof and any action which the City or the
Corporation, as applicable, proposes to take with respect thereto.
0) Insurance. Each of the City and the Corporation will insure and keep
insured all in accordance with the terms of the Contract.
(k) Environmental Laws. Each of the City and the Corporation will comply in
all material respects with the requirements of all Environmental Laws applicable to or
pertaining to the Facilities.
(1) Incorporation of Covenants by Reference. Each of the City and the
Corporation agrees that it will perform and comply with each and every covenant and
agreement required to be performed or observed by it in the Financing Documents to
which it is a party, which provisions, as well as related defined terms contained herein,
are hereby incorporated by reference herein with the same effect as if each and every such
provision were set forth herein in its entirety. To the extent that any such incorporated
provision permits any Person to waive compliance with or consent to such provision or
requires that a document, opinion or other instrument or any event or condition be
acceptable or satisfactory to any Person, for purposes of this Agreement, such provision
shall be complied with only if it is waived or consented to by the Bank and such
document, opinion or other instrument shall be acceptable or satisfactory only if it is
acceptable or satisfactory to the Bank.
(m) Annual Budget. Within ninety (90) days following the end of the City's
fiscal year, deliver to the Bank an annual budget which has been adopted by the City for
the ensuing fiscal year which shall set forth in reasonable detail the respective amounts
included in such budget with respect to Schedule A Installment Payments. The Bank
shall have no duty to review the annual budget. Following the end of each three-month
period of each fiscal year, the City shall review its estimates set forth in such annual
budget for such fiscal year, and in the event such estimates deviate in a material way from
the actual revenues and expenses known to the City as of such date, or if there are at any
time during any such fiscal year unanticipated costs or expenses or revenue shortfalls of a
material amount, the chief financial officer or other appropriate officer of the City shall
prepare an amended annual budget for the remainder of such fiscal year and promptly
submit the same to the City with a copy to the Bank.
(n) Annual Appropriation. The City shall make annual appropriations at
levels required under the Contract to pay all Schedule A Installment Payments.
(o) Series A Insurance Policy. (i) The City shall at all times maintain the
Series A Insurance Policy so that such Series A Insurance Policy (i) provides coverage in
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an amount equal to all payments of principal of and interest on the Series A Certificates
(whether at the stated rate for Series A Certificates not purchased hereunder or at the
Bank Rate), (ii) includes an endorsement insuring the scheduled repayment of the
redemption of Pledged Certificates pursuant to Section _ of the Trust Agreement and
Section 2.2(b) hereof, and (iii) remains in full force and effect for so long as any payment
of principal or interest is outstanding with respect to any Series A Certificate (including
any Pledged Certificate).
(ii) Notwithstanding any provision of the Trust Agreement to the contrary, the
City shall not replace the Series A Insurance Policy without the prior written consent of
the Bank. Notwithstanding the foregoing, if the long-term claims paying rating of the
Bond Insurer is lowered below `Aa3" (or its equivalent) by Moody's, `AA-" (or its
equivalent) by Fitch or "AA- " (or its equivalent) by S&P, the City shall use its best
efforts to replace the Insurer with an Insurer acceptable to the Bank.
(iii) The City shall promptly forward to the Bank all notices, if any, received by
the City from the Insurer under the Series A Insurance Policy.
Section 5.2. Negative Covenants of the City and the Corporation. Each of the City and
the Corporation covenants and agrees with the Bank that so long as any amounts hereunder, or
under any Pledged Certificates remain unpaid or any other obligations hereunder remain unpaid
or unfilled, neither the City nor the Corporation shall:
(a) cancel, terminate, amend, supplement, modify or waive any of the
provisions of the Financing Documents, and will not consent to any such cancellation,
termination, amendment, supplement, modification or waiver in each case without the
prior written consent of the Bank; or
(b) use, or permit the use of, any Series A Certificate proceeds in any manner
which would cause the Series A Certificates to be "arbitrage bonds" within the meaning
of Section 148(a) of the Internal Revenue Code of 1986, as amended; or
(c) without prior written notice to of the Bank, permit an optional prepayment
of Series A Certificates; or
(d) take any action or omit to take any action which, if taken or omitted,
would adversely affect the exclusion of interest with respect to the Series A Certificates
from gross income for purposes of federal income taxation or the exemption of such
interest from State personal income taxes; or
(e) create, incur or permit to exist any Lien of any kind on any of the Facilities
or any amount payable by the City under the Contract, including without limitation all
Schedule A Installment Payments, except as expressly provided in the Trust Agreement;
or
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(f) appoint, remove or consent to the appointment or removal of the Trustee,
Tender Agent or Remarketing Agent without the prior written consent of the Bank, which
consent will not be unreasonably withheld; or
(g) violate any law, rule, regulation, or governmental order to which it is
subject, which violation involves a reasonable likelihood of adversely affecting the
Facilities, the financial condition, business or results of operations of the City or the
Corporation or its ability to perform its obligations under this Agreement or any other
Financing Document to which it is a party; or
(h) permit the marketing of Series A Certificates pursuant to any Official
Statement or other offering document unless the Bank shall have approved in writing of
the description of the Bank contained in such document; or
(i) invest any amounts on deposit in any of the funds or accounts established
under the Trust Agreement in any investments other than Permitted Investments; or
0) take any action, or cause the Trustee or Tender Agent to take any action
under the Trust Agreement, inconsistent with the rights of the Bank under this
Agreement; or
(k) abandon, vacate or close the Facilities; or
(1) encumber, transfer, sell, lease, convey or otherwise dispose of, any interest
in, nor create, suffer or assume any Lien to be created on the Facilities.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1. Conditions Precedent to Effectiveness. The initial Commitment Period
shall commence on the date (the "Closing Date ") that each of the following conditions precedent
have been fulfilled to the satisfaction of the Bank and its counsel:
(a) Financing Documents. (i) the Financing Documents shall be in full force
and effect and shall be in form and substance satisfactory to the Bank; and (ii) the Bank
and its counsel shall have received copies of each such document and the Official
Statement along with a certificate of an Authorized Representative of the City and the
Corporation, dated the Closing Date to the effect that (A) such copies are true, correct and
complete copies of such documents and (B) such documents were duly issued, adopted or
executed and delivered and are in full force and effect.
(b) Opinions. The Bank shall have received legal opinions of counsel to the
City, the Corporation, the Insurer and the Trustee, as to such matters as the Bank may
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reasonably request, each such opinion to be addressed to the Bank, dated the Closing Date
and in form and substance satisfactory to the Bank and its counsel.
(c) Defaults; Representations and Warranties. (i) No Default or Event of
Default and no default under any of the Financing Documents shall have occurred and be
continuing or will occur upon the purchase by the Bank of any Series A Certificates and
(ii) the representations of the City and the Corporation set forth in Article IV and of the
City and the Corporation set forth in any Financing Document shall be true and correct on
and as of the Closing Date with the same force and effect as if made on and as of such
date.
(d) No Litigation. No action, suit, investigation or proceeding shall be
pending or, to the knowledge of the City or the Corporation, threatened (i) in connection
with the Series A Certificates, the Financing Documents or this Agreement or any
transactions contemplated thereby or hereby or (ii) against or affecting the City or the
Corporation, in which an adverse decision could have a material adverse effect on the
business, operations or condition (financial or otherwise) of the City or the Corporation,
as the case may be, or the ability of the City or the Corporation to perform their
obligations hereunder, or the ability of the City or the Corporation to perform their
obligations under the Financing Documents to which each is a party.
(e) Financial Statements. The Bank shall have received the most recent
audited financial statements of the City for the fiscal years ended , 1999, 2000
and 2001.
(f) No Material Adverse Change. Since the date of the most recent financial
statements of the City, no material adverse change shall have occurred in the status of the
business, operations or conditions (financial or otherwise) of the City or its ability to
perform its obligations under the Financing Documents to which it is a party.
(g) Series A Certificates. The Bank shall have received (i) certified copies of
all proceedings taken by the City and the Corporation authorizing the execution, delivery
and performance of this Agreement and the Financing Documents to which each is a
party, as applicable, and the transactions contemplated hereby and thereby, (ii) a
certificate or certificates of one or more Authorized Representatives of the City and the
Corporation, as applicable, dated the Closing Date certifying (A) as to the matters set
forth in clauses (c), (d) and (f) of this Section 6. 1, (B) to the effect that all consents,
permits, licenses and approvals of, and filings, registrations and declarations with,
governmental authorities that are required to be obtained or made by the City or the
Corporation in connection with the Series A Certificates, the Financing Documents and
this Agreement have been obtained or made and (C) the name, incumbency and signature
of each individual authorized to sign this Agreement, the Financing Documents to which
the City or the Corporation is a party and the other documents or certificates to be
delivered by the City or the Corporation pursuant hereto or thereto, on which the Bank
may conclusively rely until a revised certificate is similarly delivered and (iii) a certificate
of the Insurer acknowledging that Pledged Certificates constitute Series A Certificates for
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purposes of the Series A Insurance Policy and that the Bank shall be entitled to rights as
the owner thereof.
(h) Payment of Fees. All fees and expenses due and payable in accordance
with the provisions of Article III and Section 8.5 hereof shall have been paid.
(i) Ratings. (i) The Bank shall have received evidence that the Series A
Certificates shall have been assigned long and short-term ratings of `Aaa " and
"VMIG-1 ", respectively, by Moody's, long and short-term ratings of "AAA" and
"A-1 + ", respectively, by S&P, and long and short-term ratings of "AAA " and "F-1 + ",
respectively, by Fitch and (ii) the Rating Agencies shall not have lowered the rating of the
claims -paying ability of the Insurer in effect as of January _, 2002.
0) Trustee and Tender Agent Certificates. The Bank shall have received
certificates of Authorized Representatives of the Trustee and the Tender Agent certifying
as to the authority, incumbency and specimen signatures of the Authorized
Representatives of the Tender Agent and the Trustee authorized to execute the Financing
Documents to which they are a party and any other documents to be delivered by them
hereunder and who will be authorized to represent the Tender Agent and the Trustee in
connection with this Agreement, upon which the Bank may rely until it receives a new
certificate.
(k) No Prohibition. No law, regulation, ruling or other action of the United
States, the State or any political subdivision or authority therein or thereof shall be in
effect or shall have occurred, the effect of which would be to prevent the Bank from
fulfilling its obligations under this Agreement.
(1) Evidence of Insurance. The Bank shall have received evidence that the
insurance policies required by Section 5.10) hereof are in full force and effect.
(m) Other Matters. All other legal matters pertaining to the execution and
delivery of this Agreement, the Official Statement and the Financing Documents shall be
satisfactory to the Bank and its counsel, and the Bank shall have received such other
statements, certificates, agreements, documents and information with respect to the City,
the Corporation, the Insurer and the other parties to the Financing Documents and matters
contemplated by this Agreement as the Bank may reasonably request.
The Bank shall deliver a certificate dated as of the Closing Date stating that all conditions
precedent set forth in this Section 6.1 have been satisfied or waived by the Bank.
Section 6.2. Conditions Precedent to Each Purchase. The obligation of the Bank to
make any Purchase on any date is subject to the conditions precedent that on the date of such
Purchase (a) the Bank shall have received a Request for Purchase and (b) no Insurer Event of
Default or Suspension Event shall have occurred and be continuing. Unless the City shall have
otherwise previously advised the Bank in writing, delivery to the Bank of a Request for Purchase
shall be deemed to constitute a representation and warranty by the City that on the date of such
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Purchase, to the City's knowledge, no Insurer Event of Default or Suspension Event shall have
occurred and be continuing.
ARTICLE V11
EVENTS OF DEFAULT, REMEDIES
Each of the following events shall constitute an "Event of Default" hereunder:
Section 7.1. Payments. Any principal of, or interest on, any Series A Certificate
(including any Pledged Certificate) or any other amount owed to the Bank pursuant to Section
2.2 or Section 3.1 hereof, shall not be paid when due; or
Section 7.2. Fee Payments. The City shall fail to pay any amount owing under
Section 3.2 of this Agreement within ten (10) days after the Insurer shall have been provided
written notice of such failure to pay (the Bank hereby acknowledges and agrees that the Insurer
shall have the right to cure any default under this Section 7.2 prior to the expiration of such 10 -
day period); or
Section 7.3. Representations. Any representation or warranty made by or on behalf of
the City or the Corporation in this Agreement or in any Financing Document or in any certificate
or statement delivered hereunder or thereunder shall be incorrect or untrue in any material respect
when made or deemed to have been made; or
Section 7.4. Certain Covenants. The City or the Corporation shall default in the due
performance or observance of any of the covenants set forth in Section 5.1(m) (after expiration of
any applicable grace period), 5.1(b), 5.1(p) or 7.7 hereof; or
Section 7.5. Other Covenants. The City or the Corporation shall default in the due
performance or observance of any other term, covenant or agreement contained in this
Agreement (other than those referred to in Sections 7.1, 7.2, 7.3, 7.4 and 7.6 hereof) and such
default shall remain unremedied for a period of thirty (30) days after the Bank shall have given
written notice thereof to the City; or
Section 7.6. Insolvency. (i) The City or the Corporation shall commence any case,
proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding -up, liquidation, dissolution,
composition or other relief with respect to it or its Debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any substantial part of its
assets, or the City or the Corporation shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the City or the Corporation any case,
proceeding or other action of a nature referred to in clause (i) above which (x) results in an order
for such relief or in the appointment of a receiver or similar official or (y) remains undismissed,
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undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced
against the City or the Corporation, any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or any substantial part of
its assets, which results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry
thereof; or (iv) the City or the Corporation shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii)
above; or (v) the City or the Corporation shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its Debts; or
Section 7.7. Other Documents. Any "event of default" under the Trust Agreement or
any "event of default" which is not cured within any applicable cure period under any of the
Financing Documents shall occur which, if not cured, would give rise to remedies available
thereunder; or
Section 7.8. Invalidity. Any material provision of this Agreement or any Financing
Document (other than the Series A Insurance Policy) shall at any time for any reason cease to be
valid and binding on the City or the Corporation or any other party thereto or shall be declared to
be null and void, or the validity or enforceability thereof shall be contested by the City or the
Corporation or such other party thereto or by any Governmental Agency having jurisdiction, or
the City or the Corporation or such other party shall deny that it has any or further liability or
obligation under any such document; or
Section 7.9. Bond Insurer Event of Insolvency. An Insurer Event of Insolvency shall
have occurred; or
Section 7.10. Bond Insurer Default. The Insurer shall fail, wholly or partially, to make a
payment when due of principal or interest as required under the Series A Insurance Policy; or
Section 7.11. Bond Insurer Contest of Validity. An Authorized Representative of the
Insurer shall, in writing, claim that the Series A Insurance Policy, with respect to the payment of
principal of or interest on the Series A Certificate, is not valid and binding on the Insurer, and
repudiate the obligations of the Insurer under the Series A Insurance Policy, with respect to
payment of principal of and interest on the Series A Certificate, or the Insurer shall initiate any
legal proceedings to seek an adjudication that the Series A Insurance Policy, with respect to the
payment of principal of or interest on the Series A Certificate, is not valid and binding on the
Insurer; or
Section 7.12. Invalidity of Series A Insurance Policy. Any Governmental Agency with
jurisdiction to rule on the validity of the Series A Insurance Policy shall announce, find or rule
that the Series A Insurance Policy or any provision thereof regarding the obligation of the Insurer
to make a payment with respect to the Series A Certificate is not valid and binding on the Insurer;
or
Section 7.13. Termination. The Series A Insurance Policy is surrendered, canceled or
terminated for any reason, or amended or modified in any material respect or a new Insurer is
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substituted for MBIA Insurance Corporation as the Insurer without the prior written consent of
the Bank; or
Section 7.14. Ratings Downgrade. (i) The claims -paying ability or financial strength
rating assigned to the Insurer by Moody's, S&P and Fitch remains below `Aa3, " `AA-" and
"AA-, " respectively, for a period of 90 consecutive days or (ii) the claims -paying ability or
financial strength rating assigned to the Insurer by Moody's, S&P or Fitch is reduced below
Investment Grade; or
Section 7.15. Default on Other Debt. The City or the Corporation shall default in any
payment of principal of or premium, if any, or interest on any general obligation of the City or
the Corporation for borrowed money in excess of $1,000,000 and such default shall continue
beyond the expiration of the applicable grace period, if any, or the City or the Corporation shall
fail to perform any other agreement, term or condition contained in any agreement under which
any such obligation is created or secured, which shall permit or result in the declaring due and
payable of such obligation prior to the date on which it would otherwise have become due and
payable; or
Section 7.16. Judgment. A final judgment or order for the payment of money in excess of
$5,000,000 shall have been rendered against the City or the Corporation and such judgment or
order shall not have been satisfied, stayed or bonded pending appeal within a period of sixty (60)
days from the date on which it was first so rendered.
Section 7.17. Remedies. (a) In the case of an Event of Default as specified in Section 7.11
or 7.12 hereof, the Bank's obligations to purchase Series A Certificates under this Agreement
shall immediately be suspended without notice or demand to any Person and thereafter the Bank
shall be under no obligation to purchase Series A Certificates until the Available Principal
Commitment is reinstated as described below. Promptly upon such Event of Default, the Bank
shall notify the City and the Trustee of such suspension in writing; provided, that the Bank shall
incur no liability or responsibility whatsoever by reason of its failure to give such notice and such
failure shall in no way affect the suspension of the Bank's Available Principal Commitment and
of its obligation to purchase Series A Certificates pursuant to this Agreement. If a court with
jurisdiction to rule on the validity of the Series A Insurance Policy shall thereafter enter a final,
nonappealable judgment that such Series A Insurance Policy is not valid and binding on the
Insurer, then the Available Principal Commitment and the obligation of the Bank to purchase the
Series A Certificates shall immediately terminate without notice or demand and thereafter the
Bank shall be under no obligation to purchase Series A Certificates. If a court with jurisdiction
to rule on the validity of the Series A Insurance Policy shall find or rule that such Series A
Insurance Policy is valid and binding on the Insurer, then the Available Principal Commitment
and the obligations of the Bank under this Agreement shall thereupon be reinstated (unless the
Commitment Period shall otherwise have expired or the Available Principal Commitment shall
otherwise have been terminated or suspended as provided in this Agreement). Notwithstanding
the foregoing, if three (3) years after the effective date of suspension of the Bank's obligations
pursuant to this clause (a) litigation is still pending and a judgment regarding the validity of the
Series A Insurance Policy has not been obtained, then the Available Principal Commitment and
the obligation of the Bank to purchase the Series A Certificates shall, unless previously
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terminated pursuant to any other provision of this Agreement, at such time terminate without
notice or demand and thereafter, the Bank shall be under no obligation to purchase Series A
Certificates. The City shall cause the Trustee to notify all holders of Series A Certificates of the
suspension of the Available Principal Commitment and the obligation of the Bank to purchase
Series A Certificates.
(b) In the case of any Insurer Event of Default other than as specified in Section 7.11 or
7.12 hereof, the Available Principal Commitment and the obligation of the Bank to purchase
Series A Certificates shall immediately terminate without notice or demand to any Person, and
thereafter the Bank shall be under no obligation to purchase Series A Certificates. Promptly
upon such Event of Default, the Bank shall give written notice of the same to the City, the
Trustee and the Remarketing Agent; provided, that the Bank shall incur no liability or
responsibility whatsoever by reason of its failure to give such notice and such failure shall in no
way affect the termination of the Bank's Available Principal Commitment and of its obligation to
purchase Series A Certificates pursuant to this Agreement. The City shall cause the Trustee to
notify all holders of Series A Certificates of the termination of the Available Principal
Commitment and the obligation of the Bank to purchase the Series A Certificates.
(c) Upon the commencement against the Insurer of any involuntary case or other
proceedings or the occurrence of any event which, with the lapse of time, would constitute a
Insurer Event of Insolvency under clause (c) of the definition thereof, the Bank's obligations to
purchase Series A Certificates hereunder shall immediately be suspended without notice or
demand to any Person, and thereafter the Bank shall be under no obligation to purchase Series A
Certificates until the case or proceeding referred to therein is terminated. In the event such case
or proceeding is terminated, then the Bank's obligations to purchase Series A Certificates
hereunder shall be reinstated and the terms of this Agreement shall continue in full force and
effect (unless this Agreement shall have otherwise terminated or there shall have occurred a
Insurer Event of Default) as if there had been no such suspension.
(d) In the case of an Event of Default specified in Section 7.2 or 7.14(i) hereof, the
Bank may give written notice of such Event of Default and termination of the Agreement (a
"Notice of Termination Date") to the Trustee, the Trustee, the Corporation, the City, the Insurer
and the Remarketing Agent specifying the date on which the Available Principal Commitment
shall terminate (the "Termination Date"). The obligation of the Bank to purchase Series A
Certificates shall terminate on the Termination Date and on such date the Available Principal
Commitment shall terminate and on and after the Termination Date the Bank shall be under no
obligation hereunder to purchase Bonds.
(e) Upon the occurrence of any Event of Default, the Bank may declare all amounts
payable hereunder immediately due and payable, and the Bank shall have all remedies provided
at law or equity, including, without limitation, specific performance; provided, however, the
Bank agrees to purchase Series A Certificates on the terms and conditions of this Agreement
notwithstanding the occurrence of an Event of Default which does not suspend or terminate its
obligation to purchase Series A Certificates under Section 7.17(a), (b) or (c). The Bank shall
provide the Insurer with notice of the occurrence of any Event of Default with respect to which
the Bank elects to exercise remedies hereunder.
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(f) The remedies provided in Sections 7.17(a), (b) and (c) hereof with respect to the
Events of Default described therein shall only be exclusive with respect to such Events of Default
to the extent they are obtained by the Bank. If, for any reason whatsoever the Bank is not able to
obtain all such remedies, then the Bank hereby reserves the right and shall have the right to
pursue any other available remedies, whether provided by law, equity or this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Payments to the Bank. All payments to the Bank hereunder shall be made
without setoff or counterclaim in accordance with Sections 2.9 and 2.10 hereof.
Section 8.2. Right to Set-off. (a) Upon the occurrence and during the continuance of any
Event of Default, the Bank is hereby authorized at any time and from time to time, without notice
to the City (any such notice being expressly waived by the City) and to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by the Bank to or for the credit or the account of the City
against any and all of the obligations of the City to the Bank now or hereafter existing under this
Agreement, irrespective of whether or not the Bank shall have made any demand hereunder.
(b) The Bank agrees promptly to notify the City in writing after any such set-off and
application; provided that the failure to promptly give such notice shall not affect the validity of
such set-off and application. The rights of the Bank under this Section 8.2 are in addition to other
rights and remedies (including, without limitation, other rights of set-off) which the Bank may
have.
Section 8.3. Liability of the Bank. The City assumes all risks of the acts or omissions of
the Trustee, the Insurer, the Corporation, the Tender Agent and the Remarking Agent with
respect to the Series A Certificates. Neither the Bank, nor any of its officers, directors,
employees or agents, shall be liable or responsible for (i) the use which may be made of the
proceeds of the Series A Certificates or of any acts or omissions of the Trustee, the Tender
Agent, the Insurer or the Corporation or any transferee in connection therewith, (ii) the validity,
sufficiency or genuineness of documents, or of any endorsement(s) thereon (other than the
validity as against the Bank of any agreement to which the Bank is a party), even if such
documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or
forged, (iii) the lack of validity or enforceability of this Agreement, the Series A Certificates, the
Financing Documents or any other agreement or instrument relating thereto (other than the
validity or enforceability as against the Bank of any agreement to which the Bank is a party), or
(iv) any other circumstances whatsoever in making or failing to make payment under this
Agreement; provided, that the City shall have a claim against the Bank, and the Bank shall be
liable to the City, to the extent of any direct, as opposed to consequential, damages suffered by
the City which the City proves were caused by (i) the Bank's willful misconduct or gross
negligence in determining whether a Request for Purchase presented hereunder complied with
the terns hereof, or (ii) the Bank's willful failure to make a Purchase required to be made by it
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hereunder after the presentation to it by the Trustee of a conforming Request for Purchase. In
furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on
their face to be in order, without responsibility for further investigation, regardless of any notice
or information (other than actual knowledge to the contrary) to the contrary.
Section 8.4. Indemnification. The City, to the extent permitted by law, hereby
indemnifies and holds the Bank harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses which the Bank may incur or which may be claimed against the
Bank by any person:
(a) by reason of any inaccuracy in any material respect, or any untrue
statement or alleged untrue statement of any material fact, contained in the Official
Statement or any amendment or supplement thereto (other than information regarding the
Bank), or by reason of the omission or alleged omission to state therein a material fact
necessary to make the statements contained in the Official Statement, in the light of the
circumstances under which they were made, not misleading; or
(b) by reason of or in connection with the execution, delivery or performance
of this Agreement or any other Financing Document or any transaction contemplated
hereby or thereby; provided, however, that the City and the Corporation shall not be
required to indemnify the Bank pursuant to this paragraph (b) for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (i) the
willful misconduct or gross negligence of the Bank in determining whether a Request for
Purchase presented under complied with the terms hereof, or (ii) the Bank's willful
failure to make a Purchase required to be made by it hereunder after the presentation to it
by the Trustee of a conforming Request for Purchase.
Section 8.5. Costs and Expenses. The City will promptly pay (i) all costs and expenses
paid or incurred by the Bank and the reasonable fees and expenses of counsel to the Bank
incurred in connection with the preparation, execution and delivery of this Agreement and the
other Financing Documents (but in no event shall (x) such costs and expenses of the Bank exceed
$5,000, (y) such fees of the Bank's foreign counsel exceed $3,500 or (z) such fees of Messrs.
Chapman and Cutler exceed $35,000 plus expenses), (ii) reasonable fees and disbursements of
counsel to the Bank with respect to advising the Bank as to the rights and responsibilities under
this Agreement after the occurrence of an Event of Default, and (iii) all reasonable costs and
expenses, if any, in connection with the enforcement of this Agreement and any other documents
which may be delivered in connection herewith or therewith, including in each case the fees and
disbursements of counsel to the Bank. In addition, the City shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the execution, delivery,
filing, and recording of this Agreement and the security contemplated by the Financing
Documents and any related documents and agrees to hold the Bank harmless from and against
any and all liabilities with respect to or resulting from any delay in paying or omission to pay
such taxes and fees. In addition, the City agrees to pay, after the occurrence of an Event of
Default, all costs and expenses (including attorneys' fees and costs of settlement) incurred by the
Bank in enforcing any obligations or in collecting any payments due from the City hereunder by
reason of such Event of Default or in connection with any refinancing or restructuring of the
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credit arrangements provided under this Agreement in the nature of a "workout" or of any
insolvency or bankruptcy proceedings.
Section 8.6. Participants. The Bank shall have the right to grant participations from
time to time (to be evidenced by one or more Participation Agreements) in this Agreement and
the Pledged Certificates to one or more other Participants; provided that the grant of any such
participation shall not terminate or otherwise affect any obligation of the Bank hereunder. Each
Participant purchasing such a participation shall in the discretion of the Bank have all rights of
the Bank hereunder to the extent of the participation purchased. In connection with the granting
of participations, the Bank may disclose to any proposed Participant any information that the City
or the Insurer delivers or discloses pursuant to this Agreement.
Section 8.7. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the City, the Corporation, the Trustee and the Bank, and their respective successors
and assigns, except that neither the City, the Corporation, the Trustee nor the Bank (except as
provided in Section 8.16 hereof) shall have the right to assign it rights hereunder or any interest
herein without the prior written consent of the other parties hereto, and provided further, that no
such assignment shall be made which would result in the lowering, withdrawal or suspension of
the then existing rating on the Series A Certificates by Moody's, S&P or Fitch.
Section 8.8. Modification or Waiver of this Agreement. This Agreement is intended by
the parties hereto as a final expression of their agreement with respect to the subject matter
hereof, and is intended as a complete and exclusive statement of the terms and conditions of that
agreement. No modification or waiver of any provision of this Agreement (including this
Section 8.8) shall be effective unless the same shall be in writing and signed by the Bank, the
Corporation and the City. Any modification or waiver referred to in this Section 8.8 shall be
effective only in the specific instance and for the specific purpose for which given. No notice to
or demand on the City or the Corporation in any case shall entitle the City or the Corporation to
any other or further notice or demand in the same, similar or other circumstances. The City or
the Corporation agree to notify the Insurer and the Rating Agencies of any modification or
amendment to this Agreement.
Section 8.9. No Waiver of Rights by the Bank; Cumulative Rights. No course of dealing
or failure or delay on the part of the Bank in exercising any right, power or privilege hereunder
shall preclude any other or further exercise or the exercise of any right, power or privilege. The
rights of the Bank under this Agreement and the other Financing Documents are cumulative and
not exclusive of any rights or remedies which the Bank would otherwise have.
Section 8.10. Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement
shall be governed by, and construed in accordance with, the internal laws of the State of New
York with respect to the obligations of the Bank and the internal laws of the State with respect to
the obligations of the City and the Corporation.
(b) Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. The City and the Corporation further agree
.n
that, in the event of litigation, they will not personally or through their agents or attorneys seek to
repudiate the validity of this Section 8.10, and it acknowledges that it freely and voluntarily
entered into this agreement to waive trial by jury in order to induce the Bank to enter into this
Agreement.
Section 8.11. Notices. All notices, requests and other communications to any party under
this Agreement shall be in writing (including telecopy, bank wire, telex or similar writing) or by
telephone or telecopy (promptly confirmed in writing) and shall be given to such party, addressed
to it, at its address or telephone number set forth below or such other address or telephone
number as such party may hereafter specify for the purpose by notice to each other party. Each
such notice, request or communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified below and the appropriate answerback is received,
(ii) if given by mail, ten (10) days after such communication is deposited in the mail with first-
class postage prepaid, addressed as aforesaid, (iii) if given by telephone or telecopy, when given
by telephone or telecopy to the party at its telephone number. (if any) specified below or (iv) if
given by any other means, when delivered at the address specified below:
If to the Bank, to: BNP Paribas
San Francisco Branch
[ 1
San Francisco, California [__]
Attention: [ 1
Facsimile: (_)
Telephone: (_)
With a copy to: BNP Paribas
San Francisco Branch
I 1
San Francisco, California []
Attention: [ 1
Facsimile: (�
Telephone: (,) _-
If to the City, to: City of Lodi
221 West Pine Street
Lodi, California 95241-1910
Attention: City Manager
Facsimile: (� _-
Telephone: (_) _-
-41-
If to the Corporation, to: Lodi Public Improvement Corporation
c/o City of Lodi
221 West Pine Street
Lodi, California 95241-1910
Attention: City Clerk
Facsimile: () -
Telephone: (_)
If to the Trustee or Tender
Agent, to: BNY Western Trust Company
550 Kearney Street, Suite 600
San Francisco, California 94108
Attention: Corporate Trust Administration
Facsimile: () -
Telephone: (� _-
If to the Remarketing Agent to: Salomon Smith Barney Inc.
[ 1
Attention: [ ]
Facsimile: () _-
Telephone: (_) _-
If to the Insurer to: MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Surveillance
Facsimile: (�
Telephone: �) -
If to S&P, to: Standard & Poor's Ratings Services
55 Water Street, 38th Floor
New York, New York 10041
Attention: Municipal Structured Group
Facsimile: (212) 438-2152
Telephone: (212) 438-2124
If to Moody's to: Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Structured Finance Department
Facsimile: (212) 553-0882
Telephone: (212) 553-0300
-42-
If to Fitch to: Fitch, Inc.
One State Street Plaza, 28th Floor
New York, New York 10004
Attention: Municipal Structured Finance
Facsimile: (212) 480-4421
Telephone: (212) 908-0689
Section 8.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but both or all of which, when taken
together, shall constitute but one document, and shall become effective when copies hereof
which, when taken together, bear the signatures of each of the parties hereto.
Section 8.13. Certificates, etc. In connection with the execution and delivery of this
Agreement, the parties hereto may rely on any certificates delivered by or on behalf of each other
respective party hereto as representations and warranties as to the matters therein certified.
Section 8.14. Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall negotiate in good faith to replace any invalid, illegal or
unenforceable provision with a valid provision, which, to the extent possible, will preserve the
economic effect of the invalid, illegal or unenforceable provisions.
Section 8.15. Waiver of Rules of Construction. The City and the Corporation hereby
waives any and all provisions of law to the effect that an ambiguity in a contract or agreement
should be interpreted against the party responsible for its drafting.
Section 8.16. Assignment to Federal Reserve Bank. The Bank may assign and pledge all
or any portion of the obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operation Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned obligations made by the City to the Bank in accordance
with the terms of this Agreement shall satisfy the City's obligations hereunder in respect of such
assigned obligation to the extent of such payment. No such assignment shall release the Bank
from its obligations hereunder.
Section 8.17. Integration. This Agreement is intended to be the final agreement between
the parties hereto relating to the subject matter hereof and this Agreement and any agreement,
document or instrument attached hereto or referred to herein shall supersede all oral negotiations
and prior writings with respect to the subject matter hereof.
Section 8.18. Third Party Beneficiary. The Bank, the Trustee, the City and the
Corporation acknowledge that so long as the Series A Insurance Policy is in effect, the Insurer
shall be an express third party beneficiary of the provisions of this Agreement, with the power to
enforce the same.
-43-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered by their respective officers thereunto authorized as of the date first above written.
CITY OF LODI
Attest:
By:
Name:
City Clerk Title:
Approved: LODI PUBLIC IMPROVEMENT CORPORATION
By:
Name:
City Attorney Title:
BNP PARIBAS, acting through its San Francisco
Branch
Attest:
By:
Name:
Secretary for the Corporation Title:
Approved: BNY WESTERN TRUST COMPANY, as Trustee
By:
Name:
Attorney for the Corporation Title:
-44-
EXHIBIT A
FORM OF REQUEST FOR PURCHASE
[Purchase Date]
BNY Western Trust Company
550 Kearney St., Suite 600
San Francisco, California 94108
Attention: Corporate Trust Administration
Ladies and Gentlemen:
The undersigned, BNY Western Trust Company, as Trustee, refers to the Standby
Purchase Agreement dated as of January 1, 2002 (the `Agreement'), by and among the City of
Lodi, California, Lodi Public Improvement Corporation, BNY Western Trust Company, as
trustee, and you (the terms defined therein being used herein as therein defined) and hereby
requests, pursuant to Section 2.1 of the Agreement, that you make a Purchase under the
Agreement of Series A Certificates for which we have not received remarketing proceeds from
the Remarketing Agent, and in that connection sets forth below the following information
relating to such Purchase:
(a) The Purchase Price of the Series A Certificates to be purchased pursuant
hereto is $ , which amount is comprised of $ representing the
principal amount and $ representing accrued and unpaid interest with respect to
such Series A Certificates;
(b) To our knowledge, the Purchase Price of the Series A Certificates does not
exceed the Available Commitment as of the date hereof; and
(c) We are not aware of the occurrence of any event constituting an Insurer
Event of Default or a Suspension Event.
Your purchase of Series A Certificates hereunder should be made by wire transfer of
immediately available funds to the undersigned in accordance with the instructions set forth
below:
BNY Western Trust Company
ABA #
Corporate Trust Administration
Account #
Ref
Very truly yours,
BNY WESTERN TRUST COMPANY, as Trustee
0
Authorized Representative
A-2
EXHIBIT B
FORM OF REQUEST FOR EXTENSION
[Date]
BNY Western Trust Company
550 Kearney St., Suite 600
San Francisco, California 94108
Attention: Corporate Trust Administration
Ladies and Gentlemen:
Reference is made to the Standby Purchase Agreement dated as of January 1, 2002 (the
`Agreement'), by and among the City of Lodi, California (the "City'), the Lodi Public
Improvement Corporation (the "Corporation "), BNY Western Trust Company, as trustee and
you (the terms defined therein being used herein as therein defined).
The City hereby requests, pursuant to Section 2.15 of the Agreement, that the Scheduled
Expiration Date with respect to the Available Commitment as of the date hereof be extended to
. Pursuant to such Section 2.15, we have enclosed with this request the
following information:
The outstanding principal evidenced by the Series A Certificates;
2. A reasonably detailed description of any and all Defaults and Events of Default that
have occurred and are continuing;
3. Confirmation that all representations and warranties of the City and the Corporation
as set forth in Article IV of the Agreement are true and correct as though made on the date hereof
and that no Default has occurred and is continuing on the date hereof except for the defaults
referenced in paragraph 2 above; and
4. Any other pertinent information previously requested by the Bank.
The Bank is required to notify the City of its decision with respect to this request within
forty-five (45) days of the date of receipt hereof. If the Bank fails to notify the City of its
decision within such 45 -day period, the Bank shall be deemed to have rejected such request.
Very truly yours,
CITY OF LODI
By:
Name:
Title:
Im
EXHIBIT C
FORM OF NOTICE OF TERMINATION OR REDUCTION
BNY Western Trust Company
550 Kearney St., Suite 600
San Francisco, California 94108
Attention: Corporate Trust Administration
Ladies and Gentlemen:
Reference is made to the Standby Purchase Agreement dated as of January 1, 2002 (the
`Agreement"), by and among the City of Lodi, California (the "City"), the LODI Public
Improvement Corporation (the "Corporation"), BNY Western Trust Company, as trustee and
you (the terms defined therein being used herein as therein defined).
[(1) The City and the Corporation hereby inform you that the Available
Commitment is terminated in accordance with the Agreement because (a) the interest rate
with respect to the Series A Certificates has been converted to a rate other than a Covered
Mode or (b) the City and the Corporation have delivered to the Trustee a Alternate
Liquidity Facility.]
no
[(1) (a) The City and the Corporation hereby inform you that the Available
Commitment is reduced from [insert amount as of the date of Certificate] to [insert new
amount], such reduction to be effective on
(b) Upon the foregoing reductions, the amount of the Available Commitment will
not be less than the sum of the principal evidenced by all outstanding Series A Certificates
plus interest evidenced thereby calculated at percent (_%) per annum for a period of
days.]
IN WITNESS WHEREOF, the City and the Corporation have executed and delivered this
Notice this day of ,
cc: BNY Western Trust Company
CITY OF LODI
By:
Name:
Title:
LODI PUBLIC IMPROVEMENT CORPORATION
By:
Name:
Title:
C-2
EXHIBIT D
FORM OF REQUEST FOR REINSTATEMENT
BNY Western Trust Company
550 Kearney St., Suite 600
San Francisco, California 94108
Attention: Corporate Trust Administration
Ladies and Gentlemen:
Reference is made to the Standby Purchase Agreement dated as of January 1, 2002 (the
"Agreement'), by and among the City of Lodi, California (the "City"), the Lodi Public
Improvement Corporation (the "Corporation"), BNY Western Trust Company, as trustee and
you (the terms defined therein being used herein as therein defined).
The undersigned is the Trustee under the Trust Agreement.
2. We are holding for the account of the Bank, or will be holding upon receipt of
payment for the Pledged Certificates remarketed by the Remarketing Agent on the date hereof,
for delivery to the Bank in accordance with the Trust Agreement and the Agreement the amount
of $
3. The Bank is requested to reinstate the Available Commitment by an amount equal to
[the amount specified in paragraph 2 plus, to the extent such amount specified in
paragraph 2 is less than the Bank Purchase Price, the amount of such deficiency paid by
the City to the Bank, as specified in a notice from the City and the Corporation to the
Trustee].
D-1
IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of the
day of
Reinstatement as Requested Acknowledged
this _ day of ,
BNP PARIBAS, acting through its
San Francisco Branch
LN
LIM
[Title of Authorized Officer]
[Title of Authorized Officer]
BNY WESTERN TRUST COMPANY, as Trustee
IDDA
[Title of Authorized Officer]
EXHIBIT E
FORM OF NOTICE OF EXTENSION
[Date]
City of Lodi
221 West Pine Street
Lodi, California 95241-1910
Attention: City Manager
Lodi Public Improvement Corporation
c/o City of Lodi
221 West Pine Street
Los Angeles, California 95241-1910
Attention: City Clerk
Ladies and Gentlemen:
Reference is made to the Standby Purchase Agreement dated as of January 1, 2002 (the
"Agreement"), by and among the City of Lodi, California, the Lodi Public Improvement
Corporation, BNY Western Trust Company, as trustee and the undersigned (the terms defined
therein being used herein as therein defined).
We hereby notify you that, pursuant to Section 2.15 of the Agreement, as of
(the "Closing Date'), the Scheduled Expiration Date with respect
to the Available Commitment shall be extended to . Your acknowledgment
hereof shall be deemed to be your representation and warranty that all your representations and
warranties contained in Article IV of the Agreement are true and correct and will be true and
correct as of the Closing Date and that no Default has occurred and is continuing.
Very truly yours,
BNP PARIBAS, acting through its San Francisco
Branch
LIM
Name:
Title:
E-1
Receipt of the above Notice of Extension is hereby acknowledged as of this day of
cc: BNY Western Trust Company
CITY OF LODI
Name:
Title:
LODI PUBLIC IMPROVEMENT CORPORATION
L-A
E-2
Name:
Title: