Loading...
HomeMy WebLinkAboutA2060 - 1ST INTERSTATE BANK COGEN POLICE ASSIGNMENT Q Recording Requested by and When Recorded Mail To: ) 6 � ;Z o� �r m N c a ' City of Palm Springs ) oar � 3200 E. Tahquitz-McCallum Way ) > r o ¢ o (fit Palm Springs, California 92262 ) W ¢ $ m Attention: City Clerk Above For Recorder' s Use Only This document recorded for the benefit of the City of Palm Springs and the recording is fee exempt under § 6103 of the Government Codelst Interstate Bank of Calif, Cityof PS Public Facil Corp & City of PS - Assgmmnt & Trust agr re cogeneration facil & PD AGREEMENT f2060 (Orig 4-1-84) Res 15001, 4-4-84 ~ ASSIGNMENT AND TRUST AGREEMENT -- (Cogeneration Facilities and Police Building) Dated as of April 1, 1984 l� A� by and among FIRST INTERSTATE BANK OF CALIFORNIA CITY OF PALM SPRINGS PUBLIC FACILITIES CORPORATION and the CITY OF PALM SPRINGS, CALIFORNIA TABLE OF CONTENTS Page ARTICLE I ra APPOINTMENT OF TRUSTEE; DEFINITIONS QD Section 1.01 Appointment of Trustee. . . . . . . . . . . . 3 Section 1.02 Definitions . . . . . . . . . . . . . . . . . 3 Section 1.03 Rules of Construction . . . . . . . . . . . . 5 Section 1 . 04 Exhibits . . . . . . . . . . . . . . . . . . 5 Section 1.05 Authorization . . . . . . . . . . . . . . . . 5 ARTICLE II ASSIGNMENT Section 2 .01 Assignment. . . . . . . . . . . . . . . . . . 6 Section 2 .02 Acceptance. . . . . . . . . . . . . . . . . . 6 Section 2 .03 Conditions. . . . . . . . . . . . . . . . . . 6 ARTICLE III THE CERTIFICATES OF PARTICIPATION Section 3 .01 Authorization . . . . . . . . . . . . . . . . 6 Section 3 .02 Date. . . . . . . . . . . . . . . . . . . . . 6 Section 3 .03 Maturity; Interest Rates. . . . . . . . . . . 7 Section 3 .04 Certificates; Interest . . . . . . . . . . . 7 Section 3 .05 Form. . . . . . . . . . . . . . . . . . . . . 8 Section 3 . 06 Execution . . . . . . . . . . . . . . . . . . 8 Section 3 . 07 Application of Proceeds of Sale of Certificates . . . . . . . . . . . . . . . . 8 Section 3 .08 Transfer and Exchange . . . . . . . . . . . . 8 Section 3 .09 Certificates Mutilated, Lost, Destroyed or Stolen . . . . . . . . . . . . . . . . . . . 9 Section 3 . 10 Paying Agent; Payment . . . . . . . . . . . . 10 Section 3 . 11 Execution of Documents and Proof of Ownership. . . . . . . . . . . . . . . . . . 10 Section 3 . 12 Redemption. . . . . . . . . . . . . . . . . . 11 Section 3 . 13 Selection of Certificates for Redemption . . 12 Section 3 . 14 Notice of Redemption. . . . . . . . . . 12 Section 3 . 15 Partial Redemption. . . . . . . . . . . . . . 13 Section 3 . 16 Effect of Notice of Redemption. . . . . . . . 13 Section 3 . 17 Certificate Register. . . . . . . . . . . . . 14 Section 3 . 18 Temporary Certificates. . . . . . . . . . . . 14 i Page ARTICLE IV ESTABLISHMENT AND ADMINISTRATION OF FUNDS Section 4. 01 Establishment of Funds. . . . . . . . . . . . 15 Section 4. 02 Construction Fund . . . . . . . . . . . . . . 15 Section 4.03 Certificate Fund. . . . . . . . . . . . . . . 16 Section 4. 04 Reserve Fund. . . . . . . . . . . . . . 17 Section 4. 05 Insurance and Condemnation Fund . . . . . . . 18 Section 4. 06 Non-Presentment of Certificates . . . . . . . 21 • ARTICLE V MONEYS IN FUNDS; INVESTMENT Section 5 . 01 Held in Trust . . . . . . . . . . . . . . . . 21 Section 5. 02 Investments Authorized. . . . . . . . . . . . 21 Section 5 . 03 Qualified Investments . . . . . . . . . . . . 22 Section 5 . 04 Report . . . . . . . . . . . . . . . . . . . 22 Section 5 . 05 Allocation of Earnings . . . . . . . . . 23 Section 5 . 06 Valuation and Disposition of Investments. . . 23 ARTICLE VI THE TRUSTEE Section 6 . 01 Compensation of the Trustee . . . . . . . . . 23 Section 6. 02 Removal of the Trustee. . . . . . . . . . . . 23 Section 6. 03 Resignation of Trustee. . . . . . . . . . . . 24 Section 6. 04 Appointment of Agent. . . . . . . . . . . . . 24 Section 6. 05 Merger or Consolidation . . . . . . . . . 24 Section 6. 06 Protection and Rights of the Trustee. . . . . 24 ARTICLE VII TRANSFER OF TITLE TO CITY Section 7 . 01 Transfer of Title . . . . . . . . . . . . 26 Section 7 . 02 Discharge of Lien; Further Assurances . . . . 27 ARTICLE VIII MEETINGS OF CERTIFICATE OWNERS Section 8.01 Certificate Holders' Meeting. . . . . . . . . 27 Section 8. 02 Notice of Meeting . . . . . . . . . . . . . . 27 Section 8. 03 Voting Qualifications . . . . . . . . . . . . 27 Section 8. 04 Trustee or City Owned Certificates. . . . . . 28 ii Page Section 8. 05 Quorum and Procedure. . . . . . . . . . . . . 28 Section 8. 06 Vote Required . . . . . . . . . . . . . . . . 28 ARTICLE IX Cq ASSIGNMENT; AMENDMENTS Section 9 .01 Assignment. . . . . . . . . . . . . . . . . . 29 Section 9 . 02 Amendments. . . . . . . . . . . . . . . . . . 29 w• ARTICLE X COVENANTS; NOTICES Section 10.01 City to Perform Lease Agreement . . . . . . . 30 Section 10. 02 City Budgets. . . . . . . . . . . . . . . . . 30 Section 10. 03 Corporation to Perform Lease Agreement. . . . 30 Section 10. 04 Notice in Event of Late Lease Payments. . . . 30 Section 10. 05 Notice in Event of Default. . . . . . . . . . 30 Section 10. 06 Further Assurances. . . . . . . . . . . . . . 30 Section 10. 07 Maintenance of Insurance. . . . . . . . . . . 30 Section 10. 08 Title Insurance . . . . . . . . . . . . . . . 31 ARTICLE XI EVENT OF DEFAULT Section 11 . 01 Events of Default Defined . . . . . . . . . . 31 Section 11 .02 Remedies on Default . . . . . . . . . . . . . 31 Section 11 .03 No Remedy Exclusive . . . . . . . . . . . . . 31 Section 11 .04 No Additional Waiver Implied by One Waiver. 32 Section 11. 05 Application of Proceeds in Event of Default 32 Section 11. 06 Collection of Base Rental Payments. . . . . . 32 Section 11. 07 Action by Owners. . . . . . . . . . . . . . . 32 ARTICLE XII LIMITATION OF LIABILITY Section 12 . 01 Limited Liability of City . . . . . _ . . . . 33 Section 12 . 02 No Liability of Corporation or City for Trustee Performance. . . . . . . . . . . . . 33 Section 12 .03 No Liability of Corporation or Trustee for Lease. . . . . . . . . . . . . . . . . . 33 Section 12 .04 Limited Liability of Trustee. . . . . . . . . 33 Section 12 .05 Indemnification . . . . . . . . . . . . . . . 34 Section 12 .06 Opinion of Counsel. . . . . . . . . . . . . . 34 Section 12 .07 Limitation of Rights to Parties and Certificate Owners . . . . . . . . . . . . . 34 iii Page ARTICLE XIII MISCELLANEOUS Section 13 . 01 De£easance. . . . . . . . . 35 Section 13 . 02 Certificate Insurance . . . . . . . . . . . . 35 Q7 Section 13 . 03 Records . . . . . . . . . . . . . . . . . . . 36 Section 13 . 04 Notices . . . . . . . . . . . . . . . . . . . 36 Section 13 . 05 Governing Law . . . . . . . . . . . . . . . . 36 Section 13 . 06 Partial Invalidity. . . . . . . . . . . . . . 36 Section 13 . 07 Binding Effect; Successors. . . . . . . . . . 37 Section 13 . O8 Execution in Conterparts. . . . . . . . . . . 37 Section 13 . 09 Destruction of Cancelled Certificates . . . . 37 Section 13 . 10 Headings. . . . . . . . . . . . . . . . . . . 37 Exhibit A Form of Certificate of Participation Exhibit B Payment Request Form Exhibit C Payment Request Form iv ASSIGNMENT AND TRUST AGREEMENT TV (Cogeneration Facilities and Police Building) THIS ASSIGNMENT AND TRUST AGREEMENT (this "Trust Agreement" ) , made and entered into as of this 1st day of April, 1984, by and between FIRST INTERSTATE BANK OF CALIFORNIA, a corporation duly organized and existing as a state banking corporation under the laws of the State of California and authorized to accept and execute trusts of the nature herein set forth (the "Trustee" ) , CITY OF PALM SPRINGS PUBLIC FACILITIES CORPORATION, a nonprofit public benefit corporation, duly organized and existing under the laws of the State of California ( "Corporation" ) , and the CITY OF PALM SPRINGS, a municipal corporation duly organized and existing under the constitution and laws of said State (the "City" ) ; W I T N E S S E T H WHEREAS, the City has determined the need for a 1300 kilowatt cogeneration facility at the City' s municipal complex, a 650 kilowatt cogeneration facility at the City' s Sunrise Plaza Recreation Center and a new police building; and WHEREAS, the Corporation has been formed on behalf of the City to assist in the financing and construction of public facilities; and WHEREAS, the City and Corporation have entered into a Lease Agreement dated as of the date hereof (the "Lease Agreement" ) , a duplicate original of which has been furnished to each of the parties, whereby the Corporation has agreed to lease the Project to the City, and the City has agreed to lease the Project from Corporation, in the manner and on the terms set forth in the Lease Agreement; and WHEREAS, under the Lease Agreement, the City is obligated to make Base Rental Payments to Corporation for the use and occupancy of the Project, and Corporation has assigned the right to receive said payments to the Trustee pursuant to this Assignment and Trust Agreement; and WHEREAS, for the purpose of obtaining the moneys required to be deposited by the Corporation with the Trustee for the financing of the Project, and in consideration of the assignment set forth herein and the execution of this Assignment and Trust Agreement, the Trustee has agreed to execute and deliver Certificates of Participation (the "Certificates" ) , each evidencing an allocable share in the right to receive Base Rental Payments, to provide the moneys required herein to be deposited by Corporation; tf^ NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby 09 agree as follows: 04-06-84 7394P/2168/05 -2- ARTICLE I APPOINTMENT OF TRUSTEE; DEFINITIONS Section 1 . 01 . Appointment of Trustee. Corporation and the City hereby appoint and employ the Trustee, upon direction of the City, to receive, hold, invest and disburse the moneys to .� be paid to it pursuant to this Trust Agreement for credit to �p the various funds established by this Trust Agreement; to execute and deliver Certificates representing an allocable share of the Base Rental Payments; and to apply and disburse the Base Rental Payments received from the City to Owners of Certificates; and to perform certain other functions; all as hereinafter provided. By executing and delivering this Trust Agreement, the Trustee accepts the duties and obligations of the Trustee provided herein, but only upon the terms and conditions herein set forth. Section 1. 02 . Definitions. Unless the context otherwise requires, the terms defined in Section I of the Lease Agreement and capitalized herein shall, for all purposes of this Trust Agreement, have the meanings therein specified. In addition, the terms defined in this Section 1. 02 shall have the meanings herein specified for all purposes of this Trust Agreement unless the context clearly otherwise requires. (a) Insurance Company. The term "Insurance Company" shall mean American Municipal Bond Assurance Corporation, the insurer of the principal- -and interest payments on the Certificates. (b) Certificate Year. , The term "Certificate Year" shall mean the twelve ( 12 ) month period of each year commencing on the initial date of the Certificates . (c ) City Representative and Corporation Representative. The terms "City Representative" and "Corporation Representative" mean the City Manager and the President of the Board of Directors of the Corporation, respectively, or such other persons authorized by the City Council of the City or the members of the Corporation, as the case may be, to act on behalf of the City or the Corporation, respectively, under or with respect to this Trust Agreement or other agreements related thereto. (d) Cost of the Facilities. The term "Cost of the Facilities" shall mean the cost of the acquisition (by lease or otherwise) , construction and financing of the Facilities to and including the date of completion, and shall include, without limitation, the cost of acquisition of any land or interest therein required for the facilities; the cost of any taxes or assessments paid or to be paid in connection with the transfer 04-06-84 7394P/2168/05 -3- 9 of any property; the cost of any indemnity and surety bonds; premiums on title insurance; the administrative expenses of the Corporation, including, without limitation, compensation of employees of the Corporation and consultants engaged in supervision, inspection or testing of materials; legal fees; fees and expenses of the Trustee during construction; fees and expenses of the Trustee in connection with the preparation, N issuance and delivery of the Certificates; interest on the Certificates; the cost of issuance of the Certificates, including expenses relating to registering or qualifying the GO Certificates for distibution in any jurisdiction of the United States; commissions, financing charges and fees and expenses of attorneys, accountants, financial advisors and consultants; the cost of audits; the cost of engineering, architectural services, plans, specifications and surveys; the reimbursement of all moneys, if any, advanced by the City or any other public agency, instrumentality, commission or officer, from public funds for the payment of any item or items which constitute a part of the Cost of the Facilities; and such other costs and expenses, whether or not specified herein, as may be necessary or incidental to the acquisition, construction and financing of the Facilities and the placing of the same in operation and subsequent to placing the same in operation, and such other costs and expenses for changes, alterations and additions to the Facilities as may be requested by the City and authorized by the Board of Directors. (e) Maximum Annual Base Rental . The term "Maximum Annual Base Rental" shall mean, at the time of computations, the largest amount of Base Rental to be paid in a Certificate Year during the remainder of the life of the Certificates as shown on Exhibit B, of the Lease Agreement. (f) Net Proceeds. The term "Net Proceeds" means any insurance proceeds or condemnation award, paid with respect to the Project, remaining after payment therefrom of all expenses incurred in collection thereof. (g) Project. The term "Project" means the Site described on Exhibit D attached hereto and incorporated herein and the Facilities constructed thereon, as more fully described in the Lease Agreement. (h) Outstanding. The term "Outstanding" means, when used as of any particular time with respect to Certificates, all Certificates theretofore executed and delivered by the Trustee under this Agreement except: ( 1) Certificates theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2 ) Certificates for the payment or redemption of which funds or eligible securities in the necessary amount 04-06-84 7394P/2168/05 -4- shall have theretofore been deposited with the Trustee (whether upon or prior to the maturity or redemption date of such Certificates) , provided that, if such Certificates are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Section 3 . 14 or provision satisfactory to the Trustee shall have been made for the giving of such notice; and (3 ) Certificates in lieu of or in exchange for which other Certificates shall have been executed and delivered by the Trustee pursuant to Section 3 . 09 . (i ) Record Date. The term "Record Date" means the fifteenth day preceding any interest payment date. (j ) Reserve Requirement. The term "Reserve Requirement" means an amount equal to the Maximum Annual Base Rental . (k) Unpaid Principal Balance. The term "Unpaid Principal Balance" means the unpaid aggregate principal amount of all Base Rental Payments. Section 1 .03 . Rules of Construction. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and asso- ciations, including public bodies, as well as natural persons. The terms "hereby" , "hereof", "hereto" , "herein", "hereunder" and any similar terms, as used in this Trust Agreement, refer to this Trust Agreement. Section 1. 04 Exhibits. The following Exhibits are attached to, and by this reference made a part of this Trust Agreement: Exhibit A: Form of fully registered Certificates. Section 1 . 05 . Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Agreement, and has taken all actions necessary to authorize the execution of this Agreement by the officers and persons signing it. 04-06-84 7394P/2168/05 -5- ARTICLE II ASSIGNMENT t}= Section 2 .01. Assi nment. Corporation, for g p good and valuable consideration in hand received, does hereby sell, assign and transfer to the Trustee, for the benefit of the QD Owners of the Certificates executed and delivered under this Trust Agreement, all of its rights, title and interest in and to the Project, including its rights to receive Base Rental Payments and Additional Rental Payments from City under the Lease Agreement, insurance and condemnation proceeds, any rentals received from reletting the Project, the right to exercise such rights and remedies as are conferred on Corporation by the Lease Agreement as may be necessary to enforce payment of such Base Rental Payments when due or otherwise protect its interests in the event of a default by City, and all rights and remedies of Corporation as beneficiary of all security granted to Corporation under the Lease Agreement. The Base Rental Payments shall be applied, and the rights so assigned shall be exercised, by the Trustee as provided in this Trust Agreement. It is the intention of the parties hereto that the assignment of the rights and interests as set forth herein shall constitute a lien upon the Project. Section 2 . 02 . Acceptance. The Trustee hereby accepts such assignment for the purpose of securing such payments and rights to the Owners of the Certificates delivered pursuant to this Trust Agreement, and subject to the provisions of this Trust Agreement. Section 2 . 03 . Conditions. This Assignment shall impose no duties upon the Trustee beyond those expressly provided in the other provisions of this Trust Agreement. ARTICLE III THE CERTIFICATES OF PARTICIPATION Section 3 . 01 Authorization. The Trustee is hereby authorized and directed upon written request from Corporation to execute and deliver to the original purchaser of the Certificates, Certificates in an aggregate principal amount of $11, 820, 000. The Certificates shall be designated the Certificates of Participation (Cogeneration Facilities and Police Building) . Section 3 .02 . Date. Certificates delivered prior to October 1, 1984 shall be dated as of April 1, 1984; Certificates delivered on or after October 1, 1984 shall be dated by the Trustee as of the preceding interest payment date, 04-06-84 7394P/2168/05 -6- unless such date of delivery shall be an interest payment date, in which case they shall be dated as of the date of delivery. Section 3 . 03 . Maturity; Interest Rates. The Certificates shall mature on April 1 and in the principal amounts, and N interest with respect thereto shall be computed at the rates, Tr as shown below: V Year of Interest Principal Year of Interest Principal Maturity Rate Amount Maturity Rate Amount 1967 7.00% $150,000 1993 8.40% $365,000 1988 7.250 175,000 1994 8.600 435,000 1989 7.500 205,000 1995 8.800 470,000 1990 7.750 240,000 1996 9.00o 515,000 1991 8.000 275,000 1997 9.10% 560,000 1992 8.20% 320,000 1998 9.200 615,000 $7, 495, 000 9 .40% Term Certificates due April 1, 2006 The Certificates maturing on April 1, 2006 are sometimes referred to herein as the "Term Certificates" . Section 3 . 04. Certificates; Interest. The Certificates shall be fully registered Certificates in the denomination of $5, 000 or any integral multiple thereof. The Certificates shall be numbered from R1 upwards in consecutive numerical order. Interest with respect to the Certificates shall be payable on October 1, 1984, and thereafter semiannually on each April 1 and October 1 to and including the date of maturity or redemption, whichever is earlier. The total interest paid on October 1, 1984, April 1, 1985 and October 1, 1985 shall equal the interest component of the Base Rental Payment coming due on September 20, 1984, March 20, 1985 and a portion of the Base Rental Payment coming due on September 20, 1985, respectively. Thereafter, the total interest paid to Certificate owners on each April 1 and October 1 shall equal the interest component of the Base Rental payment coming due on the preceding March 20 and September 20, respectively. Interest with respect to any Certificate shall be payable from the interest payment date next preceding the date of registration of transfer thereof, unless such date of registration of transfer is an interest payment date, in which event interest with respect thereto shall be payable from such date of registration of transfer, or unless such date of registration of transfer is prior to the first interest payment date, in which event interest with respect thereto shall be payable from April 1, 1984; provided, however, that if at the time of registration of transfer of any Certificate, interest 04-06-84 7394P/2168/05 -7- with respect thereto is in default, interest with respect thereto shall be payable from the interest payment date to which interest has previously been paid or made available for payment. Payment of interest with respect to any Certificate shall be made to the person appearing on the registration books of the Trustee as the Owner thereof, -,such interest to be paid �p by check or draft mailed to such Owner at his address as it Q) appears on such registration books on the Record Date or at such other address as he may have filed with the Trustee for that purpose. Section 3 . 05 Form. The Certificates and the corresponding assignment shall be substantially in the forms set forth in Exhibit A attached hereto and by this reference incorporated herein. Section 3 . 06. Execution. The Certificates shall be executed by and in the name of the Trustee by the manual signature of an authorized officer of the Trustee . Section 3 . 07 Application of Proceeds of Sale of Certificates . Upon the receipt of payment for the Certificates when the same shall have been sold to the original purchaser thereof, the proceeds thereof shall be paid to the Trustee and shall be transferred and deposited as follows: ( 1) The Trustee shall deposit in the Certificate Fund an amount equal to accrued interest on the Certificates from April 1, 1984 to the date of delivery, if any, plus the set forth amount in Section 7(g) of the Lease Agreement, and shall be used to pay the interest on the Certificates on October 1, 1984, April 1, 1985 and a portion of the interest due on October 1, 1985 . (2) The Trustee shall deposit in the Reserve Fund $1, 182, 000. (3 ) The Trustee shall deposit in the Construction Fund the balance of the Certificate proceeds. Said amount shall be credited to each Account as follows: Amount Account of Deposit Municipal Cogeneration Facility Account $4, 386, 193 .29 Sunrise Cogeneration Facility Account $2 , 051, 550 . 00 Police Facility Account $2 , 500, 000. 00 $8, 937, 743 .29 Section 3 . 08. Transfer and Exchange. (a) Transfer of Certificates . The registration of any Certificate may, in accordance with its terms, be transferred upon the books required to be kept pursuant to the 04-06-84 7394P/2168/05 -8- 1 provisions of Section 3 . 17 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Certificate for cancellation, endorsed or accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed by the registered Owner or his duly authorized attorney. fQ Whenever any Certificate or Certificates shall be cc surrendered for transfer, the Trustee shall execute and deliver a new Certificate or Certificates. No registration or transfer of Certificates shall be required to be made during the fifteen days next preceding each interest payment date or fifteen days preceding mailing the redemption notice. The Trustee shall deem and treat the person in whose name any Outstanding Certificate shall be registered upon the Certificate Register as the absolute owner of such Certificate, whether such Certificate shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and interest payments with respect to such Certificate for all other purposes, and in such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Certificate to the extent of the sum or sums so paid, and neither City nor the Trustee shall be affected by any notice to the contrary. The Trustee may require the payment by the Certificate Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Section 3 . 09 . Certificates Mutilated Lost Destroyed or Stolen. I£ any Certificate shall become mutilated, the Trustee, at the expense of the Owner of said Certificate, shall execute and deliver a new Certificate of like tenor and maturity and numbered as the Trustee shall determine in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate so mutilated. Every mutilated Certificate so surrendered to the Trustee shall be cancelled by it and either delivered to the City upon its order or destroyed. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity satisfactory to the the Trustee shall be given, the Trustee, at the expense of the Certificate Owner, shall execute and deliver a new Certificate of like tenor and maturity and numbered as the Trustee shall determine in lieu of and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment of an appropriate fee for each new Certificate delivered under this Section 3 .09 and of the expenses which may 04-06-84 7394P/2168/05 -9- be incurred by the Trustee in carrying out the duties under this Section 3 .09. Any Certificate issued under the provisions of this Section 3 .09 in lieu of any Certificate alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Trust Agreement with all other e� Certificates secured by this Agreement. The Trustee shall not CNI to be required to treat both the original Certificate and any duplicate Certificate as being outstanding for the purpose of determining the principal amount of Certificates which may be executed and delivered hereunder or for the purpose of determining any percentage of Certificates outstanding hereunder, but both the original and duplicate Certificate shall be treated as one and the same. Notwithstanding any other provision of this Section 3 .09, in lieu of delivering a new Certificate which has been mutilated, lost, destroyed or stolen, and which has matured, or is about to mature, the Trustee may make payment with respect to such Certificate. Section 3 . 10. Paying Agent; Payment. The Trustee at its main offices in Los Angeles and San Francisco, California, is hereby appointed as paying agent for the Certificates. The principal and redemption price of and interest with respect to the Certificates shall be payable in lawful money of the United States of America. Section 3 . 11. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Trust Agreement to be signed or executed by Certificate Owners may be in any number of concurrent instruments or similar tenor, and may be signed or executed by such Owners in person or by their attorneys or agents appointed by an instrument in writing for that purpose, or by any bank, trust company or other depository for such Certificates. Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the holding and ownership of Certificates shall be sufficient for any purpose of this Agreement (except as otherwise herein provided) , if made in the following manner: (a) The fact and date of the execution by any Owner or his attorney or agent of any such instrument and of any instrument appointing any such attorney or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgements of deeds to be recorded in such jurisdictions, that the persons signing such instruments acknowledged before him the execution thereof. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such 04-06-84 7394P/2168/05 -10- certificate shall also constitute sufficient proof of his authority. (b) The fact of the ownership of Certificates by any Owner and the amount, the maturity and the numbers of such Certificates and the date of his ownership of the same may be Fa proved by reference to the Certificate Register maintained by r,� the Trustee pursuant to Section 3 . 17 hereof. The Trustee may CAD conclusively assume that such ownership continues until proper transfer of ownership has been accomplished in accordance with this Trust Agreement. Nothing contained in this Article III shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which the Trustee may deem sufficient. Any request or consent of the Owner of any Certificate shall bind every future Owner of the same Certificate in respect of anything done or suffered to be done by the Trustee pursuant to such request or consent. Section 3 . 12 . Redemption (a) The Certificates shall not be subject to redemption prior to their respective maturities except as set forth in paragraphs (b) and (c) hereof. (b) The Certificates maturing on or before April 1, 1994, are not subject to optional redemption prior to maturity. The Certificates maturing on or after April 1, 1995 are subject to optional redemption prior to maturity on or after April 1, 1994, at the option of the City, as a whole on any interest payment date, from amounts deposited with the Trustee by the City in furtherance of the exercise of the City' s option to purchase the Project in accordance with Section 26 of the Lease Agreement, or as a whole or in part (but not in a total redemption amount of less than $50, 000) , on any interest payment date, from any available source of funds therefor, at the following prices expressed as percentages of the principal amount to be received plus accrued interest to the redemption date: Period of Redemption (both dates inclusive) Redemption Price April 1, 1994 and October 1, 1994 102 .0% April 1, 1995 and October 1, 1995 101.5% April 1, 1996 and October 1, 1996 101. 0% April 1, 1997 and October 1, 1997 100. 5% April 1, 1998 and thereafter 100. 0% 04-06-84 7394P/2168/05 -11- (c) The Certificates are subject to mandatory redemption prior to maturity on any date, at par plus accrued interest, if any, to the date of redemption, without premium, (i ) from the Net Proceeds deposited by the Trustee in the Insurance and Condemnation Fund, or (ii ) in the event of termination of the Lease Agreement pursuant to Section 21 N thereof and the deposit by the Corporation or the Trustee of CDthe proceeds of the sale of the Project in the Certificate Fund. (d) The Term Certificates are subject to mandatory redemption prior to maturity in part from sinking fund install- ments made by the Trustee from the Certificate Fund on April 1, 1999 and on each October 1 and April 1 thereafter to and including October 1, 2005, in an amount sufficient to redeem the following principal amount of Term Certificates at a redemption price equal to 100% of the principal amount thereof plus accrued interest, if any, to the redemption date without premium: Year Principal April 1 Amount 1999 $ 670, 000 2000 735, 000 2001 800, 000 2002 875, 000 2003 960, 000 2004 1, 050, 000 2005 1, 150, 000 2006 (maturity) 1,255, 000 Section 3 . 13 . Selection of Certificates for Redemption. Whenever provision is made for the redemption of Certificates pursuant to subsections (b) and (d) of Section 3 . 12 and less than all outstanding Certificates are to be redeemed, the City shall give the Trustee notice, at least seventy-five (75) days before the redemption date (or such shorter period as may be acceptable to the Trustee) , of the aggregate principal amount of Certificates to be redeemed and the date of such redemption. Upon receipt of such notice, the Trustee shall select by lot the numbers of (or in the case of Certificates in denominations larger than $500, 000, the numbers assigned thereto as hereinafter provided) the Certificates (or portions thereof) to be redeemed. For the purpose of any selection as aforesaid (i ) Certificates shall be redeemed in inverse order of maturity, and (ii ) the Trustee may, for each Certificate in a denomination of more than $5, 000, assign one number for each $5, 000 principal amount thereof. Whenever provision is made for the redemption of Certificates pursuant to subsection (c) of Section 3 . 12 that percentage of the Certificates to be redeemed shall be redeemed pro rata from each maturity. If necessary because of the redemption of Certificates pursuant to subsection (c) of Section 3 . 12, the Base Rental payment 04-06-84 7394P/2168/05 -12- schedule set forth in the Lease Agreement shall be adjusted to provide for the timely payment of the Outstanding Certificates. The Trustee shall promptly notify the City and Corporation in writing of the serial numbers of the Certificates so selected for redemption. 04 Section 3 . 14. Notice of Redemption. When redemption is cc Q3 required pursuant to Section 3 . 12 (c) hereof, or in case the City shall have given notice to the Trustee of its desire to 04-06-84 7394P/2168/05 -12a- exercise the right to redeem all or any part of the Certificates pursuant to Sections 3 . 12 (a) or (b) hereof, the Trustee shall give notice, at the expense ,of the City, of the redemption of the Certificates. Such notice shall specify: C (a) that the Certificates or a designated portion thereof (in the case of redemption of a fully registered Certificate in part but not in whole) are to be redeemed, (b) the date of redemption, (c) the place or places where the redemption will be made, (d) the redemption price, and (e) state that the Trustee will require the Owner' s taxpayer' s identification number certified under penalty of perjury that it is correct. Such notice shall further state that on or after the specified date, payment of the principal amount of the Certificates (or portions thereof) to be redeemed, together with premium, if any, and interest accrued to said date, the date of redemption will be made at the offices of the Corporate Trust Department of the Trustee, upon presentation and surrender of such Certificates. Certificates so surrendered shall be accompanied by instruments of transfer satisfactory to the Trustee, if it shall so require, and that from and after such redemption date interest with respect thereto shall cease to accrue. Notice of such redemption shall be, after the moneys therefor have been deposited in the Certificate Fund, mailed, first-class postage prepaid to the respective Owners of the Certificates designated for redemption at their last addresses appearing on the Certificate registration books, at least twenty-five days but not more than sixty days prior to the redemption date, which notice shall, in addition to setting forth the above information, set forth, in the case of each registered Certificate called only in part, the portion of the principal thereof which is to be redeemed. Any defect in the giving of such notice or the mailing thereof shall not, except as to an Owner of a Certificate to whom the Trustee failed so to mail such notice or except as to an Owner of a Certificate as to whom notice was materially defective, effect the validity of the redemption of any Certificate (or portion thereof) . Section 3 . 15. Partial Redemption. Upon surrender of any Certificate redeemed in part only, the Trustee shall execute and deliver to the Owner thereof, at the expense of City, a new Certificate or Certificates of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Certificate surrendered and of the same interest rate and the same maturity. Such partial redemption shall be valid payment of the amount thereby required to be paid to such Owner, and the City, Corporation and the Trustee shall be released and discharged from all liability to the extent of such payment. Section 3 . 16. Effect of Notice of Redemption. Notice having been given as aforesaid, and the moneys for the redemption (including the interest to the applicable date of 04-06-84 7394P/2168/05 -13- redemption) , having been set aside in the Certificate Fund, the Certificates or portions thereof called for redemption shall become due and payable on said date of redemption, and, upon presentation and surrender thereof at the office or offices specified in said notice, said Certificates shall be paid at the redemption price. If, on said date of redemption, moneys for the redemption of all the Certificates to be redeemed, together with interest �y to said date of redemption, shall be held by the Trustee so as to be available therefor on such date of redemption, and, if notice of redemption thereof shall have been given as aforesaid, then, from and after said date of redemption, interest with respect to the Certificates shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Certificates shall be held in trust for the account of the Owners of the Certificates so to be redeemed. All Certificates paid at maturity or redeemed prior to maturity pursuant to the provisions of this Article shall be cancelled upon surrender thereof and delivered to or upon the order of Corporation. Section 3 . 17 . Certificate Register. The Trustee will keep or cause to be kept, at the offices of its Corporate Trust Department in Los Angeles, California, sufficient books for the registration of transfer of the Certificates. Such register shall at all times during regular business hours be open to inspection by the :City and Corporation; and, the Trustee shall, under such reasonable regulations as it may prescribe, make exchanges or transfers of Certificates as hereinbefore provided. Section 3 . 18. Temporary Certificates. Until the definitive Certificates are prepared, the Trustee may execute and deliver, in lieu of definitive Certificates, but subject to the same provisions, limitations and conditions as the definitive Certificates, except as to the denominations thereof and as to exchangeability for registered Certificates, one or more temporary Certificates registered as to principal and interest, substantially of the tenor of the definitive Certificates in lieu of which such temporary Certificate or Certificates are issued, in denominations of $5, 000 or any integral multiple thereof authorized, and with such omissions, insertions and variations as may be appropriate to temporary Certificates. The Trustee shall execute and, upon the surrender of such temporary Certificates, delivered in exchange therefor, at the principal Corporate Trust Department of the Trustee in Los Angeles or San Francisco, California, definitive fully registered Certificates, of the same aggregate principal amount and maturity as the temporary Certificates surrendered. Until so exchanged, the temporary Certificates shall in all 04-06-84 7394P/2168/05 -14- respects be entitled to the same benefits and security as definitive Certificates issued pursuant to this Trust Agreement. All temporary Certificates surrendered in exchange for a definitive Certificate or Certificates shall be forthwith a` canceled by Trustee. Gt� ARTICLE IV ESTABLISHMENT AND ADMINISTRATION OF FUNDS Section 4. 01 . Establishment of Funds. There are hereby established with the Trustee as special trust funds the following funds and accounts: a) Construction Fund ( 1) Municipal Cogeneration Facility Account (2 ) Sunrise Cogeneration Facility Account (3 ) Police Facility Account b) Certificate Fund c) Reserve Fund d) Insurance and Condemnation Fund The moneys in such Funds shall be maintained and applied by the Trustee in the manner and subject to the provisions of this Trust Agreement. Section 4. 02 . Construction Fund. There shall be credited to the appropriate Accounts within the Construction Fund from the proceeds of sale of the Certificates the amounts designated in Section 3 .07(3 ) hereof, as well as any other funds from time to time deposited with the Trustee for such purpose. The Trustee shall pay from the appropriate Accounts in the Construction Fund the Facilities Costs, as hereinafter provided, upon receipt of the following items with respect thereto: (a) in the case of payment of any Facilities Cost pursuant to a construction contract or purchase order, a payment request form, in substantially the form attached hereto as Exhibit C, duly executed by a City Representative, with a true copy of the Contractor' s statement attached, and/or bills of sale for any component of the Facilities for which a bill of sale may be delivered; and (b) in the case of payment of any Facilities Cost other than one pursuant to a construction contract or purchase order, a payment request form, in substantially the form 04-06-84 7394P/2168/05 -15- • • attached hereto as Exhibit C, duly executed by a City Representative. The total amount of the Facilities Costs for each portion of the Project to be paid pursuant to subsections (a) and (b) of this Section 4. 02 shall not exceed the amount in the appropriate Account in the Construction Fund; it being W understood by all parties that should said portion of the QD Facilities Costs payable pursuant to subsections (a) and (b) of this Section 4.02 exceed the balance available in the appropriate Account in the Construction Fund, such excess costs 4k, shall be paid by the City; provided, however, if there are moneys available in the Municipal Cogeneration Facility Account or the Sunrise Cogeneration Facility Account following the completion of the construction of either of those Facilities, any surplus money in either Account shall be transferred to the other Account if needed to complete the other Facility. In no event shall moneys in the Municipal Cogeneration Facility Account and the Sunrise Cogeneration Facility Account be transferred to the Police Facility Account nor shall excess money in the Police Facility Account be transferred to either of the Municipal Cogeneration Facility Account or the Sunrise Cogeneration Facility Account. Section 4. 03 . Certificate Fund. ( a) Except as provided in Section 4. 04, there shall be deposited in the Certificate Fund all Base Rental Payments received by the Trustee from the City, any moneys received by the trustee pursuant to %Section 21 and Section 26 of the Lease Agreement and any moneys required to be deposited therein pursuant to this Trust Agreement. The moneys contained in the Certificate Fund shall be applied by the Trustee for the benefit of the Owners of the Certificates. The Trustee shall promptly withdraw, on or prior to October 1, 1984 and on or prior to each April 1 and October 1 thereafter the funds on deposit in the Certificate Fund, in an amount equal to the amounts of interest and principal, if any, due and payable to the Owners of the Certificates, and shall cause the same to be applied to the payment of interest and principal, if any, due and payable to the Owners of the Certificates, in accordance with the provisions of Article III of this Trust Agreement. (b) The City shall be required to provide the Trustee only moneys required to meet each Base Rental Payment, taking into account those amounts contained in the Certificate Fund, which shall be applied as a credit towards the Base Rental Payment then due; and the Trustee shall, on each September 1 and March 1 commencing September 1, 1984, give the City notice of the amount of monies then on hand in the Certificate Fund. 04-06-84 7394P/2168/05 -16- (c) If on any April 1 or October 1 on or after October 1, 1984 the amount on deposit in the Certificate Fund is insufficient to make the payments of principal and interest r. then due with respect to the Certificates, including amounts trans£ered pursuant to Section 4. 04, the Trustee shall apply the moneys on hand in the Certificate Fund first to the payment of interest past due with respect to all Certificates, pro rata if necessary, and second to the payment of that portion of the principal with respect to each Certificate which is then past due, pro rata if necessary. (d) Any surplus remaining in the Certificate Fund, after payment of all Certificates, including accrued interest (if any) and payment of any applicable fees to the Trustee, or provision for such payment having been made to the satisfaction of the Trustee, shall then be remitted to the City upon the Trustee' s receipt of a written request therefor. Section 4. 04. Reserve Fund. (a) There shall be deposited in the Reserve Fund from the moneys paid to the Trustee pursuant to Section 3 . 07(2 ) , $1, 182, 000. Interest earned on money in the Reserve Fund shall remain in the Reserve Fund until the amount therein is equal to the Reserve Requirement. Such moneys shall be held in trust as a reserve for the payment when due of all the Base Rental Payments to be paid pursuant to the Lease Agreement, and shall be used and applied only as hereinafter provided. The Trustee shall, on or prior to each September 20 and March 20, transfer any moneys on hand in the Reserve Fund in excess of the Reserve Requirement to the Certificate Fund as a credit against the City' s Base Rental Payment. (b) If on any April 1 or October 1 the moneys on hand in the Certificate Fund, after the transfer of any amounts pursuant to Sections 4. 03 (a) and 4. 05, are not equal to the amount of the Base Rental Payments then on hand therein for the purpose of paying the Certificates as provided in Article III , the Trustee shall then use the moneys on hand in the Reserve Fund to make such payments on behalf of the City by transferring the amount necessary for this purpose to the Certificate Fund. Upon receipt of any delinquent Base Rental Payment with respect to which moneys have been advanced from the Reserve Fund, such Base Rental Payment shall be deposited in the Reserve Fund to the extent of such advance. (c) If the moneys in the Reserve Fund and the Certificate Fund are equal to or greater than all Base Rental Payments due during the entire remainder of the term of the Lease Agreement, the Trustee shall transfer all amounts then on hand in the Reserve Fund to the Certificate Fund to be applied to the 04-06-84 7394P/2168/05 -17- payment of such Base Rental Payments as such Base Rental Payments are due. qM (d) In the event of termination of the Lease Agreement pursuant to Section 21 of said Agreement, the subsequent sale by the Trustee of the Project, and the deposit of the proceeds therefrom by the Trustee into the Certificate Fund, the Trustee shall transfer all amounts then on hand in the Reserve Fund to the Certificate Fund, to be applied to the payment of Base Rental Payments past due and coming due on behalf of the City and to the redemption of the Certificates pursuant to Section 3 . 12 of this Agreement. Section 4. 05 . Insurance and Condemnation Fund. (a) Any Net Proceeds of any insurance against accident to or destruction of any structure constituting any part of the Project collected by the City or the Corporation in the event of any such accident or destruction shall be deposited with the Trustee in the Insurance and Condemnation Fund and shall be applied and disbursed by the Trustee as follows: ( 1) I£ the City Representative shall file a certificate with the Trustee stating that such proceeds are to be utilized for the repair, reconstruction or replacement of a damaged or destroyed portion of the Project, then Corporation shall cause such portion of the Project to be repaired, reconstructed or replaced to at least the same good order, repair and condition as it was in prior to the damage or destruction, insofar as the same may be accomplished by the use of said Net Proceeds. The Trustee shall permit withdrawals of said Net Proceeds from time to time upon receiving a certificate of the City Representative, stating that the City has expended moneys or incurred liabilities in an amount equal to the amount therein requested to be paid over to it for the purpose of such repair, reconstruction or replacement and specifying the items for which such moneys were expended, or such liabilities were incurred, in such reasonable detail as the Trustee may in its discretion require. (2 ) If the City Representative or Corporation Representative shall file a certificate with the Trustee stating that such proceeds are to be applied to the payment or prepayment of Base Rental Payments and to be utilized for the redemption of Certificates, then the Trustee shall transfer such proceeds to the Certificate Fund to be applied to the redemption of Certificates in the manner provided in Section 3 . 12 . (b) All Net Proceeds received under any policy of title insurance shall be deposited with the Trustee in the Insurance 04-06-84 7394P/2168/05 -18- and Condemnation Fund and shall be applied and disbursed by the Trustee as follows: (1) In reliance upon a certificate from the City that such title defect has not materially affected the operation of the Project or the ability of the City to meet any of its �y obligations under the Lease Agreement, the Trustee shall 00 transfer such proceeds to the Certificate Fund to be credited towards the Base Rental Payments next required to be paid by the City. (2 ) If all or any portion of the Project shall have been affected by such title defect, and in reliance upon a certificate from the City that such title defect has materially affected the operation of the Project or the ability of the City to meet any of its obligations under the Lease Agreement, the Trustee shall transfer such proceeds to the Certificate Fund to be applied to the payment or prepayment of Base Rental Payments and the redemption of Certificates in the manner provided in Section 3 . 12, or to be applied to the acquisition of real property so as to cure such title defect. (3 ) After the entire amount of principal and interest with respect to the Certificates has been paid in full and after the payment of any amounts owing to the Trustee pursuant to Section 6. 01 hereof, the Trustee shall pay the remainder of such proceeds to the City. (c) If all or any part of the Project or the Site shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Net Proceeds therefrom shall be deposited with the Trustee in the Insurance and Condemnation Fund and shall be applied and disbursed by the Trustee as follows: (1) (i ) If the City determines that such eminent domain proceedings have not materially affected the operation of the Project or the ability of the City to meet any of its obligations under the Lease Agreement or hereunder and has disclaimed any award in condemnation or in compensation for the acquisition, then no Net Proceeds shall be transmitted to the Trustee. (ii ) If the City has not disclaimed and if in the opinion of an independent engineer obtained by the City pursuant to Section 4.05(c) ( 1) (iv) hereof eminent domain proceedings have not materially affected the operation of the Project or the ability of the City to meet any of its obligations under the Lease Agreement or hereunder, and such proceeds are not needed for repair or improvement of the Project, the Trustee shall transfer such proceeds to the 04-06-84 7394P/2168/05 -19- Certificate Fund to be credited towards the Base Rental Payments next required to be paid by the City. (iii ) If such eminent domain proceedings have not materially affected the operation of the Project or the ability of the City to meet any of its obligations under the Lease Agreement or hereunder, and if such proceeds are needed for i repair or improvement of the Project, the Trustee shall pay to 00 the City, or upon its order, from said proceeds such amounts as the City may expend for such repair or improvement, upon the filing with the Trustee the requisitions of the City Representative pertaining to disbursement, together with such certificates of architects or engineers and other documents as the Trustee may at its discretion request as support for or evidence of payments to be made from such disbursements. (iv) The Trustee may obtain, but shall not be required to obtain, at the expense of the City, the report of an independent engineer or other independent professional consultant. (2 ) If less than all of the Project and the Site shall have been taken in such eminent domain proceedings, and if in the opinion of an independent engineer obtained by the City pursuant to Section 4. 05(c) ( 1) (iv) hereof such eminent domain proceedings have materially affected the operation of the Project or the ability of the City to meet any of its obligations under the Lease Agreement, the Trustee shall transfer such proceeds to the Certificate Fund to be applied to the payment or prepayment of Base Rental Payments and the redemption of Certificates in the manner provided in Section 3 . 12 . (3) (i ) If all of the Project and the Site shall have been taken in such eminent domain proceedings and if such proceeds, together with any other moneys then available to the Trustee for the purpose, are sufficient to provide for the payment of the entire amount of Base Rental Payments then due or to become due, the Trustee shall transfer such proceeds to the Certificate Fund to be applied to the payment of such Base Rental Payments and the redemption of Certificates in the manner provided in Section 3 . 12 . (ii) If all of the Project and the Site shall have been taken in such eminent domain proceedings and if such proceeds, together with any other moneys then available to the Trustee for the purpose, are insufficient to provide moneys for the purposes specified in paragraph ( 1) of this subsection (c) , the Trustee shall deposit such proceeds in the Certificate Fund to be applied to the payment of Base Rental Payments. 04-06-84 7394P/2168/05 -20- (4) After all of the Certificates have been retired and the entire amount of principal and interest with respect to the Certificates have been paid in full and after the payment of any amounts owing to the Trustee pursuant to Section 6 . 01 hereof, the Trustee shall pay the remainder of such Net Proceeds to the City. Section 4. 06. Non-Presentment of Certificates. In the event any Certificate shall not be presented for payment when W the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if monies sufficient to pay such Certificate shall have been deposited in the Certificate Fund, all liability of the City to the Owner thereof for the payment of such Certificate shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such monies, without liability for interest thereon, for the benefit of the Owner of such Certificate who shall thereafter be restricted exclusively to such monies, for any claim of whatever nature on his part under this Trust Agreement or on, or with respect to, said Certificate. Any monies so deposited with and held by the Trustee not so applied to the payment of Certificates within six years after the date on which the same shall have become due shall be paid by the Trustee to the City, free from the trusts created by this Trust Agreement, upon receipt of a written request of the City. Thereafter, Owners shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid by the Trustee. The City shall not be liable for any interest on the sums paid to it pursuant to this section and shall not be regarded as a trustee of such money. ARTICLE V MONEYS IN FUNDS; INVESTMENT Section 5 . 01 . Held in Trust. The moneys and investments held by the Trustee under this Agreement are irrevocably held in trust for the benefit of the Owners of the Certificates and for the purposes herein specified, and such moneys, and any income or interest earned thereon, shall be expended only as provided in this Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of either Corporation or the City or any Owner of Certificates, or any of them. Section 5.02 . Investments Authorized. Moneys held by the Trustee hereunder shall be invested by the Trustee, as may be directed by the City by telephone by 12 : 00 noon on the day prior to the day the requested investment is to be made and to 04-06-84 7394P/2168/05 -21- be followed with the request in writing, in Qualified Investments. Such investments shall be registered in the name of the Trustee, as Trustee, and held by the Trustee. The Trustee may purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this Section. Such investments and reinvestments shall be made giving full hconsideration to the time at which funds are required to be W available and to the highest yield which the Trustee deems practicable giving due regard to the safety of such funds and the date upon which such funds will be required for the uses and purposes thereof as required by this Agreement. The Trustee may act as agent in the making or disposing of any investment. Section 5 . 03 . Oualified Investments. "Qualified Investments" shall mean: (i ) direct general obligations of the United States of America; (ii ) obligations guaranteed by the United States; (iii ) general obligations of the agencies and instrumentalities of the United States; (iv) certificates of deposit, time deposits or demand deposits with any bank or savings institution having a combined capital (exclusive of borrowed capital) and surplus of at least Ten Million Dollars ($10,000, 000) qualified as a depository of public funds in the State of California, including the Trustee or any affiliate thereof, provided that such certificates of deposit, time deposits or demand deposits, if not insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, are fully secured by obligations described in Clauses (i ) , (ii) , or (iii ) . The Trustee may enter into agreements with itself or others that provide for the repurchase of investments authorized under this Article V at times which coincide with the times at which moneys are required to be expended. The investments that are the subject of such agreements shall be held as trust funds by the Trustee or by a Federal Reserve Sank and shall be deemed at all times to be part of the fund or account from which moneys were used to purchase Qualified Investments. Such agreements shall contain provisions which permit the Trustee to sell such investments if the investments do not mature on dates which coincide with the dates upon which the Trustee is required to use or apply monies invested pursuant to such agreements. In such event, the Trustee shall sell such investments at the best price obtainable. Section 5. 04 Report. The Trustee shall furnish to the City, no less than quarterly, a report of all investments made by the Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with this Section. 04-06-84 7394P/2168/05 -22- Section 5 .05 Allocation of Earnings. Any income, profit or loss on such investments shall be deposited in or charged to the respective funds from which such investments were made, and any interest on any deposit of funds shall be deposited in the fund from which such deposit was made, except that (i ) prior to the completion of construction of the Facilities interest income or profit earned on money in the Certificate Fund shall (a on each interest payment date be transferred to the Construction Fund for deposit in the accounts thereof as provided in Section 3 . 07(3 ) , and (ii ) any such interest, income or profit from the Reserve Fund, after the Reserve Requirement has been obtained, shall on or prior to September 1 and March 1 of each year be deposited in the Certificate Fund. Section 5. 06. Valuation and Disposition of Investments. For the purpose of determining the amount in any fund, all Qualified Investments credited to such fund shall be valued at the lower of cost or current market (exclusive of accrued interest after the first interest payments following purchase) . The Trustee may sell at the best price obtainable, or present for redemption, any Qualified Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Qualified Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment. ARTICLE VI THE TRUSTEE Section 6. 01 . Compensation of the Trustee. The City shall from time to time, on demand, pay to the Trustee reasonable compensation for its services and shall reimburse the Trustee for all its advances and expenditures, including but not limited to advances to and fees and expenses of independent appraisers, accountants, consultants, counsel, agents and attorneys-at-law or other experts employed by it in the exercise and performance of its powers and duties hereunder. Such compensation and reimbursement shall be paid by the City and amounts owing therefor shall constitute a first and prior lien on all funds held by the Trustee. Section 6 . 02 . Removal of Trustee. The City or Corporation may by itself, or the holders of a majority in aggregate principal amount of all Certificates then outstanding may by written request, at any time and for any reason remove the Trustee and any successor thereto, and shall thereupon appoint 04-06-84 7394P/2168/05 -23- a successor or successors thereto, but any such successor shall be a bank or trust company doing business and having an office in Los Angeles, California, having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50, 000, 000) , and subject to supervision or examination by federal or state authority. If such bank or G0 b. 04-06-84 7394P/2168/05 -23a- trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus set forth in its most recent report of condition so published. C�9 Section 6. 03 . Resignation of Trustee. The Trustee or any successor may at any time resign by giving written notice to the City and the Owners of its intention to resign and of the proposed date of resignation, which shall be a date not less „ than sixty (60) days after mailing of such notice, unless an earlier resignation date and the appointment of a successor Trustee shall have been or are approved by the Owners of a majority in aggregate dollar amount of the Certificates then outstanding. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing; provided however, that in the event the City fails to appoint a successor Trustee within thirty (30) days following receipt of such written notice or resignation, Corporation may appoint a successor Trustee, and in the event that Corporation fails to appoint a successor Trustee within 30 days following the expiration of such initial 30-day period, the resigning Trustee may petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of the Trustee shall become effective upon acceptance of appointment by the successor Trustee. Section 6.04. Appointment of Agent. The Trustee may appoint an agent to exercise any of the powers, rights or remedies granted to the Trustee under this Agreement, and to hold title to property or to take any other action which may be desirable or necessary. Section 6. 05 Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall be eligible under Section 6. 02 , shall be the successor to the Trustee without the execution of filing of any paper or further act, anything herein to the contrary notwithstanding. Section 6.06. Protection and Rights of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any resolution, notice, telegram, request, consent, waiver, certificates, statement, 04-06-84 7394P/2168/05 -24- T • • affidavit, voucher, bond, requisition or other paper or document which it shall in good faith believe to be genuine and to have been passed or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of this Agreement, and the Trustee shall be under no �.f duty to make any investigation or inquiry as to any statements C co contained or matters referred to in any such instrument, but Q1 may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall not be bound to recognize any person as an Owner of any Certificate or to take any action at his request unless such Certificate shall be deposited with the Trustee or satisfactory evidence of the ownership of such Certificate shall be furnished to the Trustee. The Trustee may consult with counsel, who may be counsel to Corporation or the City, with regard to legal questions and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith in accordance therewith. The Trustee shall not be liable for any error in judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be required to take notice, or be deemed to have notice, of any default hereunder (except an event of default as in Section 11 . 01 herein) unless the Trustee has been notified in writing of such default. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in aggregate principal amount of the Certificates at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Agreement. Whenever in the administration of its duties under this Agreement, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) shall be deemed to be conclusively proved and established by the certificate of the City Representative or the Corporation Representative and such certificate shall be full warranty to the Trustee for any action taken or suffered under the provisions of this Agreement upon the faith thereof, but in this discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable. 04-06-84 7394P/2168/05 -25- The Trustee may become the Owner of the Certificates with the same rights it would have if it were not Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the City and enforce its rights as Owner thereof to the same extent as if it were not Trustee hereunder; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, N any committee formed to protect the rights of Owners of t0 Certificates, whether or not such committee shall represent the Owners of the majority in principal amount of the Certificates then outstanding. The recitals, statements and representations by the City and Corporation contained in this Agreement or in the Certificates shall be taken and construed as made by and on the part of the City and Corporation, as the case may be, and not by the Trustee, and the Trustee does not assume, and shall not have, any responsibility or obligation for the correctness of any thereof. The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the Trustee shall not be answerable for the default or misconduct of any such attorney, agent, or receiver selected by it with reasonable care. The Trustee shall not be answerable for the execise of any discretion or power under this Agreement or for anything whatever in connection with the funds and accounts established hereunder, except only for its own willful misconduct or gross negligence. ARTICLE VII TRANSFER OF TITLE TO CITY Section 7. 01 . Transfer of Title. Upon (a) payment by the City of all Base Rental Payments during the term of the Lease Agreement, or (b) the exercise by the City of its option to purchase the Project by depositing the applicable Prepayment Price and other amounts with the Trustee in accordance with Section 26 of the Lease Agreement, or (c) the redemption of the Certificates pursuant to Section 3 . 12(c) (i ) hereof, all right, title and interest of Corporation and the City in and to the Project shall be conveyed to and vested in the City without the necessity of any other instrument or document of conveyance, and the City shall be deemed to have received transfer and conveyance of title in and to the Project from Corporation. Nothing herein is intended to prevent the City and Corporation from entering into an Amendment to the Lease Agreement to 04-06-84 7394P/2168/05 -26- accomplish any future refundings of the City' s obligations under the Lease Agreement. Section 7 . 02 . Discharge of Lien; Further Assurances. Notwithstanding Section 7 .01, upon the transfer to the City of N2 title in and to the Project pursuant to Section 7. 01 hereof, the Trustee shall execute and deliver a grant deed to the City, and shall execute and deliver any and all such further 00 instruments and assurances as may be reasonably necessary or proper to consummate such transfer and such discharge. ARTICLE VIII MEETINGS OF CERTIFICATE OWNERS Section 8. 01 . Certificate Holders' Meeting. If the Trustee, the City or Corporation shall desire to obtain the consent of the Certificate Holders in any proposed action, it shall give notice to the Trustee calling a meeting of the Certificate Holders for the purpose of considering the action, the consent to which is desired. Section 8. 02 . Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be mailed by the Trustee to the Owners of the Certificates by first class mail, postage prepaid, at their address appearing on the Certificate registry books not less than sixty (60) days and not more than ninety (90) days prior to the date fixed for the meeting. Such notice shall set forth the nature of the proposed action, consent to which is desired. The place, date and hour of holding such meeting and the date or dates of mailing such notice shall be determined by the Trustee in its discretion. The actual receipt by any Certificate Holder of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not affect the validity of the proceedings thereat. A certificate by the Trustee that the meeting has been called and that notice thereof has been given as herein provided shall be conclusive as against all parties and it shall not be open to any Certificate Holder to show that he failed to receive actual notice of such meeting. Section 8.03 . Voting Qualifications. The Trustee shall prepare and deliver to the chairman of the meeting a list of names and addresses of the Owners of Certificates, with a statment of the maturities and serial numbers of the Certificates held by each of such Certificate Holders, and no Certificate Holders shall be entitled to vote at such meeting unless their names appear upon such list. No Certificate 04-06-84 7394P/2168/05 -27- Holder shall be permitted to vote with respect to a larger aggregate principal amount of Certificates than is set against their names on such list, unless they shall produce the Certificates upon which they desire to vote. Section 8. 04. Trustee or City Owned Certificates. The Trustee covenants that it will present at the meeting a certificate or certificates, signed and verified by an Authorized Officer of the Trustee and by the Treasurer of the QD City, stating the maturities and serial numbers of all Certificates owned by, or held for account of, the Trustee or the City directly or indirectly. No person shall be permitted at the meeting to vote any Certificate which it shall be established at or prior to the meeting is owned by the Trustee or the City, directly or indirectly, and no such Certificate shall be counted in determining whether a quorum is present at the meeting. Section 6. 05 Quorum and Procedure. Representatives of at least sixty percent (60%) in aggregate principal amount of the Certificates then outstanding (exclusive of Trustee and City owned Certificates, if any) shall be necessary to constitute a quorum at any meeting of Certificate Holders, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meeting shall be organized by the election of a permanent chairman and secretary. At any meeting each Certificate Holder shall be entitled to one vote for every $5, 000 principal amount of Certificates with respect to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The Trustee may attend any meeting of the Certificate Holders, but shall not be required to do so. Section 8. 06. Vote Required. At such meeting held as aforesaid there shall be submitted for the consideration and action of the Certificate Holders a statement of the proposed action, consent to which is desired, and if such action shall be consented to and approved by Certificate Holders holding at least sixty percent (60%) in aggregate amount of the Certificates then outstanding (exclusive of Trustee and City owned Certificates) the chairman and secretary of the meeting shall so certify in writing to the Trustee, and such certificate shall constitute complete evidence of consent of Certificate Holders under the provisions of this Agreement. A certificate signed and verified by the chairman and the secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. 04-06-84 7394P/2168/05 -28- ARTICLE IX ASSIGNMENT; AMENDMENTS Ce Section 9. 01. Assignment. Except as p g p provided in Section Gfj 2 . 01 and in Articles VI , VII and X, the rights and duties of Q each of the parties under this Agreement shall not be assignable to any person or entity without the written consent of all of the parties; provided that under any circumstances w. the consent of the Owners shall not be required. Section 9 . 02 . Amendments. This Trust Agreement may be amended in writing by agreement among all of the parties, but no such amendment shall become effective as to the Owners of Certificates then outstanding unless and until approved by the Owners of a majority in aggregate principal amount of Certificates Outstanding and to the Insurance Company; provided that no such amendment shall impair the right of any Owner to receive his proportionate share of any Base Rental Payment in accordance with his Certificate. Notwithstanding the foregoing, this Trust Agreement and the rights and obligations provided thereby may also be modified or amended at any time without the consent of any Owners of the Certificates, but only ( 1) for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Trust Agreement, (2 ) in regard to questions arising under this Trust Agreement which the City may deem necessary or desirable and not inconsistent with this Trust Agreement and which shall not adversely affect the interests of the Owners of the Certificates; or (3 ) for the purpose of selling additional obligations to finance the construction, expansion, repair or rehabilitation of the Project or to refinance the Certificates, provided that neither the City nor Corporation is in default with respect to this Agreement or the Lease Agreement. Through a supplement or amendment to the Agreements, the City shall obligate itself to increase the Base Rentals and Additional Rentals in amounts sufficient to provide for the payment of the principal and interest on the additional obligations when due and to make all other necessary payments. Prior to the delivery of such additional obligations, the Reserve Fund shall be increased in an amount equal to the Reserve Requirement with respect to all obligations which will then be outstanding; provided that Corporation, the City and the Trustee shall not be required to enter into such amendment unless it receives the opinion of bond counsel whose opinion is acceptable by underwriters in the marketing of tax-exempt obligations of political subdivisions stating that the requirements of this sentence shall have been met with respect to such amendment. 04-06-84 7394P/2168/05 -29- ARTICLE X COVENANTS; NOTICES Section 10. 01 . City to Perform Lease Agreement. The City Cc covenants and agrees with the Owners of the Certificates to Ct perform all obligations and duties imposed on it under the GD Lease Agreement, and to enforce such Agreement against Corporation in accordance with its terms. Section 10. 02 . City Budgets. The City agrees to furnish to the Trustee and to the Insurance Company a copy of its final budget as provided in Section 7(d) of the Lease Agreement. Section 10.03 . Corporation to Perform Lease A reement. Corporation covenants and agrees with the Owners of the Certificates to perform all obligations and duties imposed on it under the Lease Agreement, and pledges all of its rights under the Lease Agreement to the Trustee for the benefit of the Owners of the Certificates, subject to the rights of the City therein as provided in this Agreement and the Lease Agreement. Section 10. 04. Notice in Event of Late Lease Payments. If the Trustee does not receive any Base Rental Payment on the Payment Date on which it is due in accordance with the Lease Agreement, the Trustee shall, after fourteen (14) business days following such delinquency give telephonic and written notice of such fact to the City and Corporation. Section 10. 05 . Notice in Event of Default. In the event the City is in default under Section 21 of the Lease Agreement, the Trustee shall give notice of such default to the Owners of Certificates and to the Insurance Company. Such notice shall specify that the City is in default under Section 21 of the Lease Agreement, together with a brief description of such default. The Trustee in its discretion may withhold notice if it deems it in the best interests of the Certificate Owners. The notice provided for in this Section shall be given, within fourteen (14) days of such occurrence of default. Section 10. 06. Further Assurances. Corporation and the City will make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonable necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming unto the Owners of the Certificates the rights and benefits provided herein. Section 10. 07 . Maintenance of Insurance. The City shall maintain or cause to be maintained, at all times while any of the Certificates are outstanding, insurance policies in the amounts, form and the coverage required pursuant to Section 11 of the Lease Agreement. 04-06-84 7394P/2168/05 -30- Section 10. 08 . Title Insurance. The City will also provide, as a part of the Project, upon the delivery of the Certificates, a policy of title insurance insuring the interests of the owners of the Certificates pursuant to the Trust Agreement. Such policy shall be in form satisfactory to the Trustee and in the amount of not less than Eleven Million tp Eight Hundred Twenty Thousand Dollars ($11, 820, 000) . ARTICLE XI EVENT OF DEFAULT Section 11 . 01 . Events of Default Defined. The following shall be "events of default" under this Agreement and the terms "events of default" and "default" shall mean, whenever they are used in this Agreement, any one or more of the following events: (a) Any event of default under the Lease Agreement, as defined in Section 21 thereof. (b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Agreement, other than as such failure may constitute an event of default under clause (a) of this Section, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the defaulting party by any other party hereto or the Owners of not less than five percent (5%) in aggregate principal amount of Certificates then outstanding; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, such other parties and Owners will not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the defaulting party within the applicable period and diligently pursued until the default is corrected. Section 11 . 02 . Remedies on Default. Pursuant to this Agreement, Corporation has assigned all of its rights and interests under Section 21 of the Lease Agreement to the Trustee. Upon the occurrence of and the failure of the City to remedy any default specified in Sections 21(a) and 21(c) of the Lease Agreement, the Trustee shall proceed, or upon the occurrence and continuance of any other event of default hereunder or under Sections 21(b) and (d) of the Lease Agreement, the Trustee may proceed and upon written request of the Owners of not less than a majority in aggregate principal amount of Certificates then Outstanding and with the written consent of the Insurance Company shall proceed, to exercise the remedies set forth in Section 21 of the Lease Agreement. Section 11 . 03 . No Remedy Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be 04-06-84 7394P/2168/05 -31- exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement to the Trustee, and given under the Lease .Agreement to Corporation and assigned under this Agreement to the Trustee, �p or now or hereafter existing at law or in equity. No delay or Q'J omission to exercise any right or power accruing upon any default shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved to it, it shall not be necessary to give any notice other than such notice as may be required in this Article or by law. Section 11 .04. No Additional Waiver Implied by One Waiver. In the event any provision contained in this Agreement should be breached by a party and thereafter waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. Section 11. 05. Application of Proceeds in Event of Default. All payments received by the Trustee with respect to the sale or lease of the Project upon the occurrence of an event of default, and all damages or other payments received by the Trustee from the enforcement of any rights and powers of the Trustee under this Article, shall be deposited by the Trustee in the Certificate Fund promptly upon the receipt thereof and applied to the payment of the obligations of the City under the Lease Agreement or under this Trust Agreement. Section 11.06, Collection of Base Rental Payments. The Trustee shall take any appropriate action to collect any Base Rental Payment not paid when due upon written request and authorization by the Owners of a majority in aggregate principal amount of the Certificates then Outstanding and unpaid, and upon being satisfactorily indemnified against any expense and liability with respect thereto and receiving payment for its fees and expenses. Section 11. 07. Action By Owners. In the event the Trustee fails to take any action to eliminate an occurrence of default under Section 21 of the Lease Agreement, the Owners of a majority in aggregate principal amount of Certificates then outstanding may institute any suit, action, mandamus, or other proceeding in equity or at law for the protection or enforcement of any right under the Lease Agreement or this Agreement, but only if such Certificate Owners have first made written request of the Trustee after the right to exercise such powers of right of action shall have occurred, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted therein or granted under the law or to institute such action, suit or proceeding in its name and 04-06-84 7394P/2168/05 -32- unless also, the Trustee shall have been offered reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request Ny within a reasonable time. L` GD QD ARTICLE XII LIMITATION OF LIABILITY Section 12 . 01 . Limited Liability of City. Except for the payment of Base Rental Payments when due in accordance with the Lease Agreement and the performance of the other covenants and agreements of the City contained in said Agreement and this Agreement, the City shall have no obligation or liability to any of the other parties or to the Owners of the Certificates with respect to this Agreement or the terms, execution, delivery or transfer of the Certificates, or the distribution of Base Rental Payments to the Owners by the Trustee. Section 12 . 02 . No Liability of Corporation or City for Trustee Performance. Neither the City nor Corporation shall have any obligation or liability to any of the other parties or to the Owners of the Certificates with respect to the performance by the Trustee of any duty imposed upon it under this Agreement. Section 12 . 03 . No Liability of Corporation or Trustee for Lease Payments By City. Except as provided herein, neither Corporation nor the Trustee shall have any obligation or liability to the Owners of the Certificates with respect to the payment of the Base Rental Payments by the City when due, or with respect to the performance by the City of any other covenant made by it in the Lease Agreement. Section 12 . 04. Limited Liability of Trustee. The Trustee shall have no obligation or responsibility for providing information to the Owners concerning the investment character of the Certificates, for the sufficiency or collection of any Base Rental Payments or other moneys required to be paid to it under the Lease Agreement, or for the actions or representations of any other party to this Agreement. The Trustee shall have no obligation or liability to any of the other parties or the Owners of the Certificates with respect to this Agreement or the failure or refusal of any other party to perform any covenant or agreement made by any of them under this Agreement or the Lease Agreement, but shall be responsible solely for the performance of the duties expressly imposed upon it hereunder. The recitals of facts, covenants and agreements contained herein and in the Certificates shall be taken as statements, covenants and agreements of the City or Corporation 04-06-84 7394P/2168/05 -33- i • (as the case may be) , and the Trustee assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Agreement, the Lease Agreement or of the Certificates, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein assigned to or imposed upon it. The Trustee shall not be liable in connection with CDthe performance of its duties hereunder, except for its own Go negligence or willful default. Section 12 . 05 . Indemnification. Corporation and the City hereby indemnify and agree to save the Trustee harmless from and against all claims, suits and actions brought against it, or to which it is made a party, and from all losses and damages suffered by it as a result thereof, where and to the extent such claim, suit or action arises out of the actions of any other party to this Agreement including but not limited to the ownership, operation or use of the Project by the City. Such indemnification shall not extend to claims, suits and actions brought against the Trustee for failure to perform and carry out the duties specifically imposed upon and to be performed by it pursuant to this Agreement. In the event Corporation or the City is required to indemnify the Trustee as herein provided, Corporation or the City shall be subrogated to the rights of the Trustee to recover such losses or damages from any other person or entity. Section 12 . 06. Opinion of Counsel . Before being required to take any action, the Trustee may require: (a) an opinion of independent counsel acceptable to the Trustee, which opinion shall be made available to the other parties hereto upon request, which counsel may be counsel to any of the parties hereto, or (b) a certificate of any party hereto, or both, concerning the proposed action. If it does so in good faith, Trustee shall be absolutely protected in relying thereon. Section 12 . 07 . Limitation of Rights to Parties and Certificate Owners. Nothing in this Agreement or in the Certificates expressed or implied is intended or shall be construed to give any person other than the City, Corporation, the Trustee, the Insurance Company and the Owners of the Certificates, any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenant, condition or provision hereof; and all such covenants, conditions and provisions are and shall be for the sole and exclusive benefit of the City, Corporation, the Trustee and said Owners. 04-06-84 7394P/2168/05 -34- ARTICLE XIII MISCELLANEOUS Section 13 . 01. Defeasance. If all outstanding "4 Certificates shall be paid and discharged in any one or more of El% the following ways - OD ( 1) by well and truly paying or causing to be paid the principal of and interest with respect to all Certificates Outstanding, as and when the same become due and payable; (2) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit in the Certificate Fund and the Reserve Fund, is fully sufficient to pay all Certificates Outstanding, including all principal and interest; or (3) by depositing with the Trustee, in trust, Qualified Investments in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit in the Certificate Fund and the Reserve Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge all Certificates (including all principal and interest) at or before their respective maturity dates - notwithstanding that any Certificates shall not have been surrendered for payment, all obligations of Corporation, the Trustee and the City under this Agreement with respect to all Certificates shall cease and terminate, except only the obligation of the Trustee to pay or cause to be paid to the Owners of the Certificates not so surrendered and paid all sums due thereon and the obligation of the Trustee to transfer title to City as provided in Article VII, and the obligation of the City to pay the Trustee the amounts owing to the Trustee under Section 6.01 hereof. Any funds held by the Trustee, at the time of one of the events described above in subsection (1) (2) or (3 ) , which are not required for the payment to be made to Owners, or for payments to be made to -the Trustee by the City, shall be paid over to the City. Section 13 . 02 . Certificate Insurance. In the event that the principal and redemption price, if applicable, and interest due on the Certificates shall be paid by the Insurance Company pursuant to a policy issued by the Insurance Company, the assignment and pledge set forth in Section 2 . 01 and all covenants, agreements and other obligations of the City and the Corporation to the Owners of the Certificates shall continue to exist and the Insurance Company shall be subrogated to the rights of such Owners of the Certificates. 04-06-84 7394P/2168/05 -35- Section 13 . 03 . Records. Prior to the full payment of principal and interest due with respect to the Certificates, the Trustee shall keep complete and accurate records of all moneys received and disbursed under this Agreement, which shall be available for inspection by the City, Corporation, the tPInsurance Company, and any Owner, or the agent of any of them, at any time during regular business hours. 00 Section 13 . 04. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Any such notice shall be deemed to have been received forty-eight (48) hours after deposit in the United States mail in first-class form, with postage fully prepaid: If to the City: City of Palm Springs 3200 Tahquitz-McCallum Way Palm Springs, California 92262 Attention: City Manager If to the Corporation: City of Palm Springs Public Facilities Corporation 3200 Tahquitz-McCallum Way Palm Springs, California 92262 Attention: President I£ to the Trustee: First Interstate Bank of California 707 Wilshire Boulevard Los Angeles, California 90017 Attention: Corporate Trust Department (W10-2 ) If to the Insurance Company: American Municipal Bond Assurance Corporation One State Street Plaza, 17th Floor New York, New York 10004 Section 13 . 05 . Governing Law. This Agreement shall be construed and governed in accordance with the laws of the State of California. Section 13 . 06. Partial Invalidity. Any provision of this Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Agreement. 04-06-84 7394P/2168/05 -36- Section 13 . 07. Binding Effect; Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Whenever in this Agreement any party hereto is named or referred to, such reference shall be deemed to include the successors or assigns W thereof, and all covenants and agreements contained in this OJ Agreement by or on behalf of any party hereto shall bind and inure to the benefit of the successors and assigns thereof whether so expressed or not. Section 13 . 08. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement. Section 13 . 09. Destruction of Cancelled Certificates. Whenever in this Agreement provision is made for the surrender to or cancellation by the Trustee of any Certificates, the Trustee shall destroy such Certificates and deliver a certificate of such destruction to Corporation. Section 13 . 10. Headings. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Agreement. All references herein to "Articles" , "Section" , and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. i' FIRST INTERSTATE BANK OF CALIFORNIA, ass Trustee By -":'f -a Vice Pre�y.deT1� TO 7945 CA (8-74) (Corporation) TITLE INSURANCE ANDTRUST STATE OF CALIFORNIA � gTlCen COMPANY (-AUNTY OF Inc Angje ( SS. C 1 TOn April 23 1984 before me, the undersigned, a Notary Public in and for said State,personally appeared R. Lucl known to me to be the Vj ce— President, and 4 R))Sj- k wknown to me to be Trust Officer xe�1,4 of the corporation that executed the within Instrument, OTJx :known to me to be the persons who executed the within a(:T_Instrumeut on behalf of the corporation therein named, and N LrJacknowledged to me that such corporation executed the 0-16ithin instrument pursuant to its by-laws or a resolution of OC ICIAL ,EAL i its board of directors. t,�\ M4 WITNESS my hand and official seal. ' "!r ",' I5I fV rub it G�luemn �!1 I i ri}ISE n i Col,rn Eup. Ji.dy 1. 19;7 Signature <.�.f --r -. - (This area for offwlal notarial seao 4 CITY OF PALM SPRINGS PUBLIC FACIL7I7TIIEES_ COORPORATION (SEAL) Preseent to ATTEST: Secretary CITY OF PALM SPRINGS i By � � (SEAL) ay r, City — alm Springs ATTEST: City-"lerk, City of Palm Springs 04-06-84 7394P/2168/05 -38- STATE OF CALIFORNIA ) ss. .nw COUNTY OF RIVERSIDE ) V9 /r/ On this > f�, day of > > 1984, before me, the QD undersigned, a Notary Publi and for said State, personally appeared T known to me to be the President and �LrF /_ /cn.uirE} known to me to be the Secre ary of CITY OF PALM SPRINGS PUBLIC FACILITIES CORPORATION, the non-profit public benefit corporation that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument pursuant to a resolution of its board of directors. WITNESS my hand and official seal . OFFICIAL SEAL ✓ BELLE A LITTLETON / I�iP�� b 1a NOTARY PUBLIC -CALIFORNIA o ary u in -And or the e RIVERSIDE COUNTY State of California My comm. expires MAR 15, 1981' (SE .x7'1`�, STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On this day of � <�,� 1984, before me, the undersigned, a Notary Public in °and for said State, personally appeared �Ip known to me to be the Mayor and known to me to be the City Clerk of—the CITY OF PALM SPRINGS, the municipal corporation that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument pursuant to a resolution of its board of directors. WITNESS my hand and official seal. 6 4 _r '/�l Notctry Public in and for the OFFICIAL SEAL State of California OLIVE S MARSHALL (SEAL) of LNOTARY PUBLIC - CAL CALIFORNIA 1 RIVERSIDE COUNTY r, omm, expires JUN 1D, 1986 04-06-84 7209P/2168/05 -21- EXHIBIT A (Form of Certificate of Participation) CERTIFICATE OF PARTICIPATION (COGENERATION FACILITIES AND POLICE FACILITIES) Evidencing an Allocable Share of the Holder Hereof in Base Rental Payments to be Made by the CITY OF PALM SPRINGS, CALIFORNIA As Rental for Certain Property Pursuant to the Lease Agreement with the City of Palm Springs Public Facilities Corporation $ No. R- THIS IS TO CERTIFY THAT or registered assigns, as the registered owner of this Certificate of Participation (the "Certificate" ) is the owner of an undivided percentage interest in the right to receive certain Base Rental Payments under and defined in that certain Lease Agreement (the "Lease Agreement" ) dated as of April 1, 1984, by and between the City of Palm Springs Public Facilities Corporation, a public nonprofit benefit corporation (the "Corporation" ) , and the City of Palm Springs, California, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of California (the "City" ) . The registered owner of this Certificate is entitled to receive, subject to the terms of the Lease Agreement, on April 1, the sum Dollars ($ ) designated as principal coming due on said date, and to receive on October 1, 1984, and semiannually thereafter on April 1 and October 1 of each year until payment in full of said portion of principal, the owner' s allocable share of the Base Rental Payments designated as interest coming due on each of said dates; provided that interest with respect hereto shall be payable from the interest payment date next preceding the date of registration of this Certificate (unless this Certificate is registered on an interest payment date, in which event interest shall be payable from such date of registration, or unless this Certificate is registered prior to October 1, 1984, in which event interest shall be payable from April 1, 1984) . Said allocable share of the portion of the Base Rental Payments designated as interest is the result of the multiplication of the aforesaid portion of the Base Rental Payments designated as principal at the rate 04-06-84 7394P/2168/05 EXHIBIT A-1 of percent (_%) per annum. Said amounts are payable in lawful money of the United States of America and (except for interest which is payable by check or draft, mailed to the Owner as shown on the registration books of the Trustee on the Record Date) are payable at the Corporate Trust Department of RFirst Interstate Bank of California, as Trustee (the CD "Trustee" ) , in Los Angeles or San Francisco, California. VJ The City is authorized to enter into the Lease Agreement pursuant to the laws of the State of California. The City has entered into the Lease Agreement for the purpose of leasing from the Corporation two Cogeneration Facilities and a Police Facility and related and appurtenant facilities and property (the "Project" ) . The Corporation has assigned its right to receive Base Rental Payments to the Trustee pursuant to the Assignment and Trust Agreement by and among the City, the Corporation and the Trustee (the "Trust Agreement" ) , dated as of April 1, 1984. This Certificate has been executed and delivered by the Trustee pursuant to the terms of the Trust Agreement. Reference is hereby made to the Lease Agreement and the Trust Agreement (copies of which are on file at said office of the Trustee) for a description of the terms on which the Certificates are delivered, and the rights thereunder of the owners of the Certificates and the rights, duties and immunities of the Trustee and the rights and obligations of the City under the Lease Agreement, to all of the provisions of which Lease Agreement and Trust Agreement the owner of this Certificate, by acceptance hereof, assents and agrees. The City is required under the Lease Agreement to pay Base Rental Payments to the Trustee from any source of legally available funds and has covenanted in the Lease Agreement to make the necessary annual appropriations for such purpose. The obligation of the City to pay Base Rental Payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay Base Rental Payments does not constitute an indebtedness of the City, the State of California, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions of the Trust Agreement may be amended by the parties thereto with the written consent of the holders of a majority in aggregate principal amount of the Certificates then outstanding, and may be amended without such consent under certain circumstances but in no event such that the interests of the holders of the Certificates are adversely 04-06-84 7394P/2168/05 EXHIBIT A-2 affected, provided that no such amendment shall impair the right of any holder to receive in any case such holder' s proportionate share of any Base Rental Payment in accordance da with such holder' s Certificate. This Certificate is transferable by the owner hereof, in GO person or by his attorney duly authorized in writing , at said office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement and upon surrender and cancellation of this Certificate. Upon such transfer a new Certificate or Certificates without coupons, of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferree in exchange herefor. The City, the Corporation and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, whether or not this Certificate shall be overdue, and the City, the Corporation and the Trustee shall not be affected by any notice to the contrary. The Certificates are deliverable as fully registered Certificates in the denomination of $5, 000 or any authorized integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Trust Agreement, Certificates may be exchanged for a like aggregate principal amount of fully registered Certificates of other authorized denominations. The Certificates maturing on or before April 1, 1994, are not subject to optional redemption prior to maturity. The Certificates maturing on or after April 1, 1995 are subject to optional redemption prior to maturity on or after April 1, 1994, at the option of the City, as a whole on any interest payment date, from amounts deposited with the Trustee by the City in furtherance of the exercise of the City' s option to purchase the Project in accordance with Section 26 of the Lease Agreement, or as a whole or in part (but not in a total redemption amount of less than $50, 000) , on any interest payment date, from any available source of funds therefor, by lot in inverse order of maturity (if less than all of the outstanding Certificates of any maturity are called for redemption, such Certificates to be so redeemed shall be selected by the Trustee by lot) , at the following prices expressed as percentages of the principal amount to be redeemed plus accrued interest to the redemption date: 04-06-84 7394P/2168/05 EXHIBIT A-3 Period of Redemption (both dates inclusive) Redemption Price April 1, 1994 and October 1, 1994 102 . 0% qT April 1, 1995 and October 1, 1995 101. 5% cc April 1, 1996 and October 1, 1996 101 . 0% April 1, 1997 and October 1, 1997 100. 5% April 1, 1998 and thereafter 100.0% The Certificates are subject to mandatory redemption prior to maturity on any date, at par plus accrued interest, if any, to the date of redemption without premium, (i ) from the Net Proceeds deposited by the Trustee in the Insurance and Condemnation Fund, pursuant to Section 4. 05 of the Trust Agreement, or (ii ) in the event of termination of the Lease Agreement pursuant to Section 21 thereof and the deposit by the Corporation or the Trustee of the proceeds of the sale of the Project in the Certificate Fund. The Certificates maturing on April 1, 2006 (the "Term Certificates" ) are subject to mandatory redemption prior to maturity in part from sinking fund installments made by the Trustee from the Certificate Fund on April 1, 1999, and on each October 1 and April 1 thereafter to and including April 1, 2006, in an amount sufficient to redeem the following principal amount of Term Certificates at a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to the redemption date without premium: Year Principal April 1 Amount 1999 $ 670, 000 2000 735, 000 2001 800, 000 2002 875, 000 2003 960, 000 2004 1, 050, 000 2005 1, 150, 000 2006 (maturity) 1,255, 000 This Certificate shall not be entitled to any benefit under the Trust Agreement or become valid for any purpose until the certificate of authentication and registration hereon endorsed shall have been signed by the Trustee. The Trustee has no obligation to the Certificate Holders other than to make payment of principal or interest pertaining to the Certificates. The Trustee' s sole obligation is to administer, for the benefit of the City, Corporation and Certificate Holders the various funds created under the Trust Agreement. 04-06-84 7394P/2168/05 EXHIBIT A-4 IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all things, conditions and acts required by the Constitution and the statutes of the State of California and the Trust Agreement to exist, to have happened and to have been performed precedent to and in the execution and the delivery of this Certificate, do exist, have happened and have been performed in due time, form and manner, as required by law. For the purpose of this P7 Certificate the Trustee has relied upon the opinion of counsel. IN WITNESS WHEREOF, this Certificate has been executed and delivered by First Interstate Bank of California, as Trustee, acting pursuant to the Assignment and Trust Agreement. DATE OF REGISTRATION: FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee By Authorized Officer 04-06-84 7394P/2168/05 EXHIBIT A-5 (Form of Assignment to Appear on Certificates) For value received the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Registered Certificate and hereby firrevocably constitute( s) and appoint(s) attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: The signature(s) on this Certificate must correspond with the name(s) as written on the face of the within Registered Certificate in every particular, without alteration or enlargement or any change whatsoever. For Redemption or Transfer, a Tax Identification No. is required. The undersigned declares under penalty of perjury that the undersigned' s Tax Identification No . is 04-06-84 7394P/2168/05 EXHIBIT A-6 will EXHIBIT B ft? go C® PAYMENT REQUEST FORM PERTAINING TO PAYMENT OF FACILITIES COSTS PURSUANT TO CONSTRUCTION CONTRACT OR PURCHASE ORDER The Trustee is hereby requested to pay from the appropriate Account in the Construction Fund hereafter designated established by the Trust Agreement dated as of April 1, 1984, by and among the Trustee, the City and Corporation, to the person or corporation designated below as payee, the sum set forth below such designation, in payment of the Facilities Costs described below and as shown on the accompanying progress payment statement or invoice. The amount shown below is due and payable under a purchase order or construction contract with respect to the item of Facilities Cost described below which purchase order or construction contract is on file in the office of the City and has not formed the basis of any prior request for payment. Payee: Address : Amount: Description of Item of Facilities Cost: Account to be credited: Municipal Cogeneration Facility Account: Sunrise Cogeneration Facility Account: Police Facility Account: Dated: , 19 I hereby certify that I am an authorized City Representative as defined in the Lease Agreement dated April 1, 1984, by and between Corporation and the City. No. City of Palm Springs, California Title: (Attach duplicate original of Payee' s statement) 04-06-84 7394P/2168/05 EXHIBIT B EXHIBIT C C\� CD PAYMENT REQUEST FORM co PERTAINING TO PAYMENT OF FACILITIES COSTS OTHER THAN THOSE PURSUANT TO CONSTRUCTION CONTRACT OR PURCHASE ORDER The Trustee is hereby requested to pay from the appropriate Account in the Construction Fund established by the Trust Agreement dated as of April 1, 1984, by and among the Trustee, the City and Corporation, to the person or corporation designated below as payee, the sum set forth below such designation, in payment of the Facilities Costs described below and as shown on the accompanying invoice. The amount shown below is due and payable and constitutes a Facilities Cost as defined in the Lease Agreement dated April 1, 1984, by and between the City and Corporation and has not formed the basis of any prior request for payment. Payee: Address: Amount: Description of Item or Facilities Cost: Account to be credited: Municipal Cogeneration Facility Account: Sunrise Cogeneration Facility Account: Police Facility Account: Dated: 19 I hereby certify that I am an authorized City Representative as defined in the Lease Agreement dated April 1, 1984 by and between Corporation and the City. No. City of Palm Springs, California Title: (Attach duplicate original of Payee' s statement) 04-06-84 7394P/2168/05 EXHIBIT C EXHIBIT D N PROPERTY DESCRIPTION t. CG OD SUNRISE PLAZA COGENERATION The Northerly 200.00 feet of the South % of the Westerly 200.00 feet of Lot 26 in Section 13, Township 4 South, Range 4 East, San Bernardino Base and Meridian, in the City of Palm Springs, County of Riverside, State of California. MUNICIPAL COMPLEX COGENERATION That portion of Lot 16 in Section 13, Township 4 South, Range 4 East, San Bernardino Base and Meridian, as shown on Map of Palm Valley Colony Lands, according to Map thereof recorded in Book 14, Page 652 of Maps, Records of San Diego County, California, being in the City of Palm Springs, County of Riverside, State of California, described as follows: Commencing at the East -, corner of said Section 13; thence North 0°05'24" East, along the East line of said Section 13, a distance of 574.67 feet; thence North 89°54' 36" West, a distance of 44.00 feet to the true point of beginning; thence North 0°05'24" East, a distance of 184.33 feet; thence North 89°54'36" West, a distance of 150.00 feet; thence South 0°05' 24" West, a distance of 184. 33 feet; thence South 89°54' 36" East, a distance of 150.00 feet to the true point of beginning. POLICE FACILITY That portion of Parcel 2 as shown on Parcel Map No. 15576, according to Map thereof recorded in Book 81 , pages 27 and 38 of Parcel Maps , Records of Riverside County, California, laying Northerly of a line that is parallel with and 350.00 feet Southerly of the center line of Tahquitz-McCallum Way as said center line as shown on said Parcel Map No. 15576. 04-06-84 7209P/2168/05 EXHIBIT D