Section 6.08. Continuing Disclosure. The City shall comply with and carry out all of the provisions of the Continuing Disclosure Certificate applicable to it. Notwithstanding any other provision of this Trust Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not constitute an Event of Default hereunder; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% of the aggregate amount of principal evidenced by Outstanding Certificates and upon being indemnified to its reasonable satisfaction, shall) or any Owner or Beneficial Owner of the Certificates may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.
Section 6.09. No Liability by the Corporation to the Owners. The Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of the other agreements and covenants required to be performed by it contained in the Lease Agreement, the 23 4160-4945-2900.4
Ground Lease or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.
Section 6.10. No Liability by the City to the Owners. Except for the payment when due of the Base Rental Payments and the performance of the other agreements and covenants required to be performed by it contained in the Lease Agreement, the Ground Lease or herein, the City shall not have any obligation or liability to the Owners with respect to the Trust Agreement or the preparation, execution, delivery or transfer of the Certificates or the disbursement of the Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.
Section 6.11. No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Corporation or the City of the other agreements and covenants required to be performed by them, respectively, contained in the Lease Agreement, the Ground Lease or herein.
Section 6.12. Further Assurances. Whenever and so often as requested to do so by the Trustee, the Insurer or any Owner, the Corporation and the City shall promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee, the Insurer and the Owners all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon them hereby or by the Assignment Agreement, the Ground Lease or the Lease Agreement.
24 4160-4945-2900.4
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Action on Default. If a Lease Default Event shall occur and be continuing, such Lease Default Event shall constitute an Event of Default hereunder. In each and every case during the continuance of an Event of Default, the Trustee (a) may, with the prior written consent of the Insurer, at the direction of the Owners of not less than a majority of the aggregate principal evidenced by Certificates then Outstanding, and (b) shall, upon being indemnified to its reasonable satisfaction, so long as the Insurer is not in default in its payment obligations under the Insurance Policy, at the direction of the Insurer, upon notice in writing to the City and the Corporation, exercise any of the remedies granted to the Corporation under the Lease Agreement and, in addition, with the written consent or at the written direction of the Insurer, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Trust Agreement or by the Certificates, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.02 hereof.
Section 7.02. Other Remedies of the Trustee. If an Event of Default shall have occurred and be continuing, the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any member, director, officer or employee thereof, and to compel the City or any such member, director, officer or employee to perform or carry out such Person’s duties under law and the agreements and covenants required to be performed by such Person contained herein;
(b) by suit in equity to enjoin any acts or things that are unlawful or violate the rights of the Trustee or the Owners; or
(c) by suit, action or proceeding in any court of competent jurisdiction, to require the City to account as if it were the trustee of an express trust.
Section 7.03. Non-Waiver. So long as the Insurer is not in default in its payment obligations under the Insurance Policy, the Trustee shall not waive any default or breach of duty or contract hereunder without the prior written consent of the Insurer. A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often the Trustee shall deem expedient. 25 4160-4945-2900.4
If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee, the Insurer or any Owner, then subject to any adverse determination, the Trustee, the Insurer, such Owner, the Corporation and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 7.05. Application of Amounts After Event of Default. If an Event of Default shall occur and be continuing, all payments received by the Trustee with respect to the rental of the Property as a result thereof, including any proceeds received in connection with the sale, assignment or sublease of the Corporation’s right, title and interest in the Ground Lease, and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Article VII of the Lease Agreement, shall be deposited into the Base Rental Payment Fund and as soon as practicable thereafter applied:
(a) to the payment of all amounts due the Trustee under Section 8.07 hereof; (b) to the payment of all amounts then due for interest evidenced by the Certificates, in respect of which, or for the benefit of which, money has been collected (other than Certificates that have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest evidenced by such Certificates due and payable;
(c) to the payment of all amounts then due for principal evidenced by the Certificates, in respect of which, or for the benefit of which, money has been collected (other than Certificates that have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal evidenced by such Certificates due and payable; and
(d) to the extent not included in clause (b) or clause (c) above, to the payment of all amounts then due hereunder to the Insurer.
Section 7.06. Trustee May Enforce Claims Without Possession of Certificates. All rights of action and claims under this Trust Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances 26 4160-4945-2900.4
of the Trustee, its agents and counsel, be for the ratable benefit of the Owners of the Certificates in respect of which such judgment has been recovered.
Section 7.07. Limitation on Suits. No Owner of any Certificate shall have any right to institute any proceeding, judicial or otherwise, with respect to this Trust Agreement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing Event of Default, (b) so long as the Insurer is not in default in its payment obligations under the Insurance Policy, such Owner shall have obtained the Insurer’s consent to such institution or appointment, (c) the Owners of not less than 25% of the aggregate amount of principal evidenced by Certificates then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder, (d) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (e) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and (f) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of a majority of the aggregate amount of principal evidenced by Certificates then Outstanding; it being understood and intended that no one or more Owners of Certificates shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of any other Owner of Certificates, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Trust Agreement, except in the manner herein provided and for the equal and ratable benefit of all the Owners of Certificates. 27 4160-4945-2900.4
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties and Liabilities of Trustee. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default that may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Trust Agreement.
The Trustee shall, during the existence of any Event of Default that has not been cured or waived, exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
Section 8.02. Qualifications; Removal and Resignation; Successors. (a) The Trustee initially a party hereto and any successor thereto shall at all times be a trust company, national banking association or bank having trust powers in good standing in or incorporated under the laws of the United States or any state thereof, that is (or if such trust company, national banking association or bank is a member of a bank holding company system, its parent bank holding company is) (i) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, (ii) a state-chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets, or (iii) otherwise approved by the Insurer in writing. If such trust company, national banking association or bank publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection the combined capital and surplus of such trust company, national banking association or bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
(b) The City may, by an instrument in writing, upon at least 30 days’ notice to the Trustee, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (i) requested to do so by the Insurer (as long as the Insurer is not in default in its payment obligations under the Insurance Policy) or by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority of the aggregate amount of principal evidenced by the Certificates at the time Outstanding (or their attorneys duly authorized in writing), or (ii) the Trustee shall cease to be eligible in accordance with subsection (a) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee.
(c) The Trustee may at any time resign by giving written notice of such resignation by first class mail, postage prepaid, to the City, the Corporation and the Insurer, and to the Owners at the respective addresses shown on the Registration Books. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of subsection (a) of this Section, the Trustee shall resign immediately in the manner and with the effect specified in this Section. 28 4160-4945-2900.4
(d) Upon removal or resignation of the Trustee, the City shall promptly appoint a successor Trustee by an instrument in writing, which appointment shall be subject to the prior written approval of the Insurer. Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee; provided, however, that any successor Trustee shall be qualified as provided in subsection (a) of this Section. If no qualified successor Trustee shall have been appointed and have accepted appointment within 45 days following notice of removal or notice of resignation as aforesaid, the removed or resigning Trustee or any Owner (on behalf of such Owner and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice, if any, as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Trust Agreement shall signify its acceptance of such appointment by executing and delivering to the City, the Corporation and its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the written request of the City, the Corporation or the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Trust Agreement and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the successor Trustee shall, within 15 days after such acceptance, mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to the Owners at the addresses shown on the Registration Books. (e) Any trust company, national banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, national banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, national banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such trust company, national banking association or bank shall be eligible under subsection (a) of this Section, shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
Section 8.03. Liabilities of the Trustee. (a) The recitals of facts herein shall be taken as statements of the City, and the Trustee shall not assume responsibility for the correctness of the same. The Trustee shall, however, be responsible for its representations contained in the Certificates.
(b) The Trustee makes no representations as to the validity or sufficiency of this Trust Agreement, the Lease Agreement or the Ground Lease, or of the assignment made to it by the Assignment Agreement, or in respect of the security afforded by this Trust Agreement, and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to (i) the delivery of the Certificates for value, (ii) the application of the proceeds thereof except to the extent that such proceeds are received by it in its capacity as Trustee, 29 4160-4945-2900.4
or (iii) the application of any moneys paid to the City or others in accordance with this Trust Agreement, except as to the application of any moneys paid to it in its capacity as Trustee. (c) The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. (d) No provision of this Trust Agreement or any other document related hereto shall require the Trustee to risk or advance its own funds.
(e) The Trustee may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care.
(f) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
(g) The immunities and protections extended to the Trustee also extend to its directors, officers, employees and agents.
(h) Before taking action under Article VII, under this Article or upon the direction of the Owners, the Trustee may require indemnity satisfactory to the Trustee be furnished to it to protect it against all fees and expenses, including those of its attorneys and advisors, and protect it against all liability it may incur.
(i) 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 Owners of not less than a majority in aggregate amount of principal evidenced by 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 Trust Agreement. (j) The Trustee may become the Owner of Certificates with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in aggregate amount of principal evidenced by the Certificates then Outstanding.
(k) The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Certificates.
(l) The Trustee shall not be liable for the failure to take any action required to be taken by it hereunder if and to the extent that the Trustee’s taking such action is prevented by reason of an act of God, terrorism, war, riot, strike, fire, flood, earthquake, epidemic or other, similar occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care.
30 4160-4945-2900.4
(m) The Trustee shall not be deemed to have knowledge of an Event of Default hereunder unless it has actual knowledge thereof.
(n) The permissive right of the Trustee to do things enumerated in this Trust Agreement shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.
(o) The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys that shall be released or withdrawn in accordance with the provisions hereof.
Section 8.04. Right to Rely on Documents and Opinions. (a) The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(b) Whenever in the administration of the duties imposed upon it by this Trust 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, may be deemed to be conclusively proved and established by a Written Certificate of the City, and such Written Certificate of the City shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Trust Agreement in reliance upon such Written Certificate of the City, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.
(c) The Trustee may consult with counsel, who may be counsel to the City or the Corporation, 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 and in accordance therewith.
Section 8.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with prudent corporate trust industry standards, in which accurate entries shall be made of all transactions made by it relating to the proceeds of the Certificates, the Base Rental Payments received by it and all funds and accounts established by it pursuant to this Trust Agreement. Such books of record and account shall be available for inspection by the City, the Corporation and the Insurer during regular business hours and upon reasonable notice and under reasonable circumstances as agreed to by the Trustee. The Trustee shall deliver to the City a monthly accounting of the funds and accounts it holds under this Trust Agreement; provided, however, that the Trustee shall not be obligated to deliver an accounting for any fund or account that (a) has a balance of zero, and (b) has not had any activity since the last reporting date.
Section 8.06. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Trust Agreement shall be retained in its possession and shall be subject during business hours and upon reasonable notice to the inspection of the City, the Corporation, the Owners and their agents and representatives duly authorized in writing. 31 4160-4945-2900.4
Section 8.07. Compensation and Indemnification. The City shall pay to the Trustee from time to time all reasonable compensation pursuant to a pre-approved fee letter for all services rendered under this Trust Agreement, and also all reasonable expenses, charges, legal and consulting fees pursuant to a pre-approved fee letter and other disbursements pursuant to a preapproved fee letter and those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Trust Agreement. The City shall, to the extent permitted by law, indemnify and save the Trustee harmless against any costs, claims, expenses, including fees and expenses of its counsel, and liabilities that it may incur in the exercise and performance of its powers and duties hereunder, including the enforcement of any remedies and the defense of any suit, and that are not due to its negligence or its willful misconduct. The duty of the City to indemnify the Trustee shall survive the resignation or removal of the Trustee and the termination and discharge of this Trust Agreement.
32 4160-4945-2900.4
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT
Section 9.01. Amendment or Supplement. (a) This Trust Agreement and the rights and obligations of the City, the Corporation, if any, the Owners and the Trustee hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto, which shall become binding when the prior written consents of the Insurer (so long as the Insurer is not in default in its payment obligations under the Insurance Policy) and the Owners of a majority of the aggregate amount of principal evidenced by the Certificates then Outstanding, exclusive of Certificates disqualified as provided in Section 9.02 hereof, are filed with the Trustee. No such amendment or supplement shall (i) extend the stated Principal Payment Date of any Certificate or reduce the rate of interest applicable to the interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby or reduce the amount of any Mandatory Sinking Account Payment or change the prepayment terms and provisions or the provisions regarding delivery of notice of prepayment without the prior written consent of the Owner of each Certificate so affected and the Insurer (so long as the Insurer is not in default in its payment obligations under the Insurance Policy), (ii) permit any pledge of, or the creation of any lien on, security interest in or charge or other encumbrance upon the assets pledged under this Trust Agreement prior to or on a parity with the pledge contained in, and the lien and security interest created by, this Trust Agreement or deprive the Owners of the pledge contained in, and the lien and security interest created by, this Trust Agreement, except as expressly provided in this Trust Agreement, without the consent of the Owners of all of the Certificates then Outstanding and the Insurer (so long as the Insurer is not in default in its payment obligations under the Insurance Policy), (iii) modify any of the rights or obligations of the Trustee without the prior written consent of the Trustee, or (iv) amend this Section without the prior written consent of the Owners of all Certificates then Outstanding and the Insurer (so long as the Insurer is not in default in its payment obligations under the Insurance Policy). (b) This Trust Agreement and the rights and obligations of the City, the Corporation, if any, the Owners and the Trustee hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto, which shall become binding upon execution, with the prior written consent of the Insurer (so long as the Insurer is not in default in its payment obligations under the Insurance Policy), but without the written consents of any Owners and only for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the City to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the City, or to surrender any right or power reserved herein to or conferred herein on the City;
(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder that the City may deem desirable or necessary and not inconsistent herewith;
33 4160-4945-2900.4
(iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest evidenced by the Certificates; or
(iv) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners.
The Trustee is not obligated to enter into any amendment or supplement that adversely affects the rights or obligations of the Trustee.
The Insurer shall be provided with a full original transcript of all proceedings relating to the amendment of or supplement to this Trust Agreement pursuant to this Section. (c) Promptly after the execution by the Corporation, the City and the Trustee of any amendment of or supplement to this Trust Agreement, the Trustee shall mail a notice, by first class mail postage prepaid, setting forth in general terms the substance of such amendment or supplement, to the Owners at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment or supplement.
Section 9.02. Disqualified Certificates. Certificates owned or held by or for the account of the City, but excluding Certificates held in any pension or retirement fund of the City, shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Certificates provided in this Article, and shall not be entitled to consent to or take any other action provided in this Article, and the Trustee may adopt appropriate regulations to require each Owner, before its consent provided for herein shall be deemed effective, to reveal if the Certificates as to which such consent is given are disqualified as provided in this Section.
Section 9.03. Endorsement or Replacement of Certificates After Amendment or Supplement. After the effective date of any action taken as hereinabove provided in this Article, the Trustee may determine that the Certificates may bear a notation by endorsement in form approved by the Trustee as to such action, and in that case upon demand of the Owner of any Outstanding Certificate and presentation of such Certificate for such purpose at the Principal Office of the Trustee a suitable notation as to such action shall be made on such Certificate. If the Trustee shall receive an Opinion of Counsel advising that new Certificates modified to conform to such action are necessary, modified Certificates shall be prepared, and in that case upon demand of the Owner of any Outstanding Certificates such new Certificates shall be exchanged at the Principal Office of the Trustee without cost to each Owner for Certificates then Outstanding upon surrender of such Outstanding Certificates.
Section 9.04. Amendment by Mutual Consent. Subject to the receipt of the prior written consent of the Insurer as provided in Section 9.01 hereof, the provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Certificates owned by such Owner, provided that due notation thereof is made on such Certificates. 34 4160-4945-2900.4
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Trust Agreement. (a) If there shall be paid (i) to the Owners of all Outstanding Certificates the principal, interest and premium, if any, evidenced thereby at the times and in the manner stipulated herein and therein, and (ii) all other amounts due hereunder and under the Lease Agreement, then the Owners shall cease to be entitled to the pledge of the assets provided for herein, and all agreements, covenants and other obligations of the Corporation and the City hereunder shall thereupon cease, terminate and become void and this Trust Agreement shall be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Corporation and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto that are not required for the payment of the principal, interest and premium, if any, evidenced by the Certificates.
(b) Subject to the provisions of subsection (a) of this Section, when any Certificate shall have been paid and if, at the time of such payment, each of the Corporation and the City shall have kept, performed and observed all of the covenants and promises in this Trust Agreement and the Lease Agreement required or contemplated to be kept, performed and observed by it or on its part on or prior to that time, then this Trust Agreement shall be considered to have been discharged in respect of such Certificate and such Certificate shall cease to be entitled to the pledge of the assets provided herein, and all agreements, covenants and other obligations of the Corporation and the City hereunder shall cease, terminate, become void and be completely discharged and satisfied as to such Certificate.
(c) Notwithstanding the discharge and satisfaction of this Trust Agreement or the discharge and satisfaction of this Trust Agreement in respect of any Certificate, those provisions of this Trust Agreement relating to the payment of the principal, interest and premium, if any, evidenced by Certificates, exchange and transfer of Certificates, replacement of mutilated, destroyed, lost or stolen Certificates, the safekeeping and cancellation of Certificates, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners of such Certificate, and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal, interest and premium, if any, evidenced by such Certificate, and to pay to the Owner of such Certificate the funds so held by the Trustee as and when such payment becomes due.
Section 10.02. Certificates Deemed To Have Been Paid. (a) If moneys shall have been set aside and held by the Trustee for the payment or prepayment of the principal evidenced by any Certificate and the payment of the interest evidenced thereby to the stated Principal Payment Date or prepayment date thereof, such Certificate shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01 hereof. Any Outstanding Certificate shall prior to its stated Principal Payment Date or the prepayment date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 hereof if (i) in case any of such Certificates is to be prepaid on any date prior to its stated Principal Payment Date, the City shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.03 hereof, notice of prepayment of such Certificate on 35 4160-4945-2900.4
said prepayment date, said notice to be given in accordance with Section 4.03 hereof, (ii) there shall have been deposited with the Trustee either (A) money in an amount that shall be sufficient, or (B) Defeasance Securities, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys that shall be sufficient to pay when due the interest evidenced by such Certificate to become due on and prior to its stated Principal Payment Date or the prepayment date thereof, as the case may be, and the principal and premium, if any, evidenced by such Certificate, and (iii) in the event such Certificate is not by its terms subject to prepayment within the next succeeding 60 days, the City shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the Owner of such Certificate that the deposit required by clause (ii) above has been made with the Trustee and that such Certificate is deemed to have been paid in accordance with this Section and stating stated Principal Payment Date or prepayment date upon which money is to be available for the payment of the principal and premium, if any, evidenced by such Certificate. (b) No Certificate shall be deemed to have been paid pursuant to clause (ii) of subsection (a) of this Section unless (i) all amounts currently due to the Insurer under the Insurance Policy shall have been paid in full, and (ii) the City shall have caused to be delivered to the City and the Trustee (A) an executed copy of a Verification Report with respect to such deemed payment, addressed to the City, the Insurer and the Trustee, in form and in substance acceptable to the City and the Insurer, (B) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification Report and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, in form and substance acceptable to the Insurer, and (C) a copy of an Opinion of Counsel, dated the date of such deemed payment and addressed to the City, the Insurer and the Trustee, in form and in substance acceptable to the City and the Insurer, to the effect that such Certificate has been paid within the meaning and with the effect expressed in this Trust Agreement, this Trust Agreement has been discharged in respect of such Certificate and all agreements, covenants and other obligations of the City and the Corporation hereunder as to such Certificate have ceased, terminated, become void and been completely discharged and satisfied. In the event a forward purchase agreement is to be employed in connection with the Defeasance Securities purchased to defease Certificates, such agreement shall be subject to the approval of the Insurer and shall be accompanied by such opinions of counsel as may be required by the Insurer. The Insurer shall be provided with final drafts of the above-referenced documentation not less than three Business Days prior to the funding of the escrow.
Section 10.03. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment and discharge of the principal, premium or interest evidenced by any of the Certificates that remain unclaimed for the earlier of (a) two years after the date when such principal, premium or interest has become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when such principal, premium or interest become payable, or (b) two months prior to the applicable statutory escheat period shall, at the Written Request of the City be repaid by the Trustee to the City as its absolute property free from trust, and the Trustee shall thereupon be released and 36 4160-4945-2900.4
discharged with respect thereto and the Owners shall look only to the City for the payment of the interest and principal evidenced by such Certificates.
37 4160-4945-2900.4
ARTICLE XI
INSURANCE POLICY PROVISIONS
Section 11.01. Insurer To Be Deemed Owner; Rights of the Insurer; Payments by the Insurer; Notices. (a) The provisions of this Article shall apply notwithstanding any other provision of this Trust Agreement to the contrary so long as the Insurer is not in default in its payment obligations under the Insurance Policy.
(b) The Insurer shall at all times be deemed the sole and exclusive Owner of the Outstanding Certificates for the purposes of all approvals, consents, waivers, institution of any action, and the direction of all remedies, including approval of or consent to any amendment of or supplement to this Trust Agreement that requires the consent or approval of the Owners of a majority of the aggregate principal evidenced by the Certificates then Outstanding; provided, however, that the Insurer shall not be deemed to be the sole and exclusive Owner of the Outstanding Certificates with respect to any amendment of or supplement to this Trust Agreement that seeks to amend or supplement this Trust Agreement for the purposes set forth in clauses (i), (ii) or (iv) of subsection (a) of Section 9.01 hereof, and, provided, further, that the Insurer shall not be deemed the sole and exclusive Owner of the Outstanding Certificates with respect to any amendment of or supplement to this Trust Agreement, and shall not have the right to direct or consent to City, Corporation, Trustee or Owner action as provided herein, if:
(i) the Insurer shall be in payment default under the Insurance Policy and such failure shall continue for three Business Days;
(ii) any material provision of the Insurance Policy shall be held to be invalid by a final, non-appealable order of a court of competent jurisdiction, or the validity or enforceability thereof shall be contested in writing by the Insurer; or (iii) a proceeding shall have been instituted in a court having jurisdiction in the premises seeking an order for relief, rehabilitation, reorganization, conservation, liquidation or dissolution in respect of the Insurer under Article 16 of the Insurance Law of the State of New York or any successor provision thereto and such proceeding is not terminated for a period of 90 consecutive days or such court enters an order granting the relief sought in such proceeding.
(c) To the extent that the Insurer makes payment of any interest or principal evidenced by a Certificate, it shall become the Owner of such portion of such Certificate and the right to receive payment of such interest or principal and shall be fully subrogated to all of the Owner’s rights thereunder in accordance with the terms of the Insurance Policy to the extent of such payment, including the Owner’s rights to payment thereof, which subrogation rights shall include the rights of any such Owner in connection with any Insolvency Proceeding. To evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Trustee shall note the Insurer’s rights as subrogee on the Registration Books upon receipt of proof from the Insurer as to payment of such interest to the Owner of the Certificate evidencing such interest, and (ii) in the case of subrogation as to claims for past due principal, the Trustee shall note the Insurer’s rights 38 4160-4945-2900.4
as subrogee on the Registration Books upon surrender of the Certificate evidencing such principal by the Owner thereof to the Trustee.
(d) In the event that the interest or principal evidenced by a Certificate shall be paid by the Insurer pursuant to the terms of the Insurance Policy, (i) such Certificate shall continue to be Outstanding under this Trust Agreement, (ii) the pledge of the amounts on deposit in the funds and accounts established hereunder and all covenants, agreements and other obligations of the City hereunder and under the Lease Agreement shall continue to exist, (iii) the Insurer shall be fully subrogated to all of the rights of such Owner in accordance with the terms and conditions of subsection (c) of this Section and the Insurance Policy, and (iv) neither this Trust Agreement nor the Lease Agreement shall be discharged unless and until all amounts due to the Insurer have been paid in full.
(e) If an Event of Default shall have occurred and be continuing, the Insurer may, regardless of whether a claim has been made under the Insurance Policy, at any time and at its sole option, pay to the Owners all or any portion of the interest or principal evidenced by the Certificates then due, prior to the stated Principal Payment Dates thereof; provided, however, that such payment by the Insurer shall not accelerate the City’s obligation to make Rental Payments under the Lease Agreement. The Trustee shall accept such payments on behalf of the Owners and the Insurer’s obligations under the Insurance Policy shall be discharged to the extent of such payments. (f) The Insurer shall be notified (i) by the City at least 30 days, or such lesser time as agreed by the Insurer, in advance of the execution of any amendment of or supplement to this Trust Agreement and of any amendment of the Lease Agreement or the Ground Lease in the event consent of the Owners is not required for such amendment or supplement, (ii) by the Trustee within two Insurance Business Days of the Trustee’s having knowledge of the occurrence of any Event of Default, and (iii) by the Trustee of any prepayment of Certificates, which notice shall include the principal evidenced by, and the CUSIP numbers of, such Certificates to be prepaid, at the same time that the Owners of the Certificates to be prepaid are notified. In addition, all notices, reports, certificates and opinions (i) to be delivered to or by the Trustee or to the Owners or available at the request of the Owners pursuant to this Trust Agreement, or (ii) to be delivered by the City pursuant to the Lease Agreement or the Assignment Agreement shall also be delivered to the Insurer.
(g) The Trustee shall also notify the Insurer immediately upon the resignation or removal of the Trustee or the appointment of a successor Trustee. (h) No contract shall be entered into or any action taken by which the rights of the Insurer or security for or sources of payment of the Certificates may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer. (i) Subject to and conditioned upon payment of any interest or principal evidenced by the Certificates by or on behalf of the Insurer, each Owner, by its purchase of Certificates, hereby assigns to the Insurer, but only to the extent of all payments made by the Insurer, all rights to the payment of interest or principal evidenced by the Certificates, including, without limitation, any amounts due to the Owners in respect of securities law violations arising from the offer and sale of the Certificates that are then due for payment. The Insurer may exercise any option, vote, right, 39 4160-4945-2900.4
power or the like with respect to Certificates to the extent it has made a payment of principal evidenced by Certificates pursuant to the Insurance Policy. The foregoing assignment is in addition to, and not in limitation of, rights of subrogation otherwise available to the Insurer in respect of such payments. The Trustee shall take such action and deliver such instruments as may be reasonably requested or required by the Insurer to effectuate the purpose or provisions of this subsection.
(j) The Insurer shall have the right to advance any payment required to be made by the City in order to prevent an Event of Default under this Trust Agreement and the Trustee shall be required to accept such advance. The City shall, upon demand, reimburse the Insurer for any such advance.
(k) The rights granted under this Trust Agreement, the Lease Agreement or the Ground Lease to the Insurer to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer’s contractual rights and shall not be construed or deemed to be taken for the benefit of or on behalf of the Owners, nor does such action evidence any position of the Insurer, positive or negative, as to whether Owner consent is required in addition to consent of the Insurer.
(l) The City hereby agrees, to the extent permitted by law, to pay or reimburse the Insurer any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in this Trust Agreement, the Lease Agreement, the Ground Lease or the Assignment Agreement, (ii) the pursuit of any remedies under this Trust Agreement, the Lease Agreement, the Ground Lease or the Assignment Agreement, or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, this Trust Agreement, the Lease Agreement, the Ground Lease or the Assignment Agreement, whether or not executed or completed, or (iv) any litigation or other dispute in connection with this Trust Agreement, the Lease Agreement, the Ground Lease or the Assignment Agreement, or the transactions contemplated hereby or thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of this Trust Agreement, the Lease Agreement, the Ground Lease or the Assignment Agreement. The failure of the City to pay such costs and expenses on a timely basis shall result in the accrual of interest on the unpaid amount at the Insurer Rate, compounded semi-annually, from the date that payment is first due to the Insurer until the date the Insurer is paid in full. (m) The Insurer shall be entitled to pay principal or interest evidenced by the Certificates that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are defined in the Insurance Policy) thereof in accordance with this Trust Agreement, whether or not the Insurer has received a Notice (as defined in the Insurance Policy) of Nonpayment or a claim upon the Insurance Policy.
(n) The Trustee shall promptly notify the Insurer or either of the following as to which it has actual knowledge: (i) the commencement of any proceeding by or against the City or the Corporation commenced under the United States Bankruptcy Code or any successor statute or any 40 4160-4945-2900.4
other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency Proceeding”), and (ii) the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer (a “Preference Claim” of any payment of interest or principal evidenced by the Certificates. Each Owner, by its purchase of Certificates, and the Trustee hereby agrees that the Insurer may at any time during the continuation of an Insolvency Proceeding direct all matters relating to such Insolvency Proceeding, including, without limitation, (i) all matters relating to any Insolvency Proceeding or Preference Claim, (ii) the direction of any appeal of any order relating to any Insolvency Proceeding or Preference Claim, (iii) the posting of any surety, supersedes or performance bond pending any such appeal, and (iv) to accept or reject any plan of adjustment. In addition, the Trustee, solely with respect to the Certificates, and each Owner delegate and assign to the Insurer, to the fullest extent permitted by law, the rights of the Trustee and each Owner in the conduct of any Insolvency Proceeding, including, without limitation, any rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceedings. (o) In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under this Trust Agreement would adversely affect the security for the Certificates or the rights of the Owners, the Trustee shall consider the effect of any such amendment, consent, waiver, action or inaction as if there were no Insurance Policy. (p) Any reorganization or liquidation plan with respect to the City must be acceptable to the Insurer. In the event of any such reorganization or liquidation, the Insurer shall have the right to vote on behalf of all Owners (so long as the Insurer is not in default in its payment obligations under the Insurance Policy).
(q) The City shall permit the Insurer to discuss the affairs, finances and accounts of the City or any information the Insurer may reasonably request regarding the security for the Certificates with appropriate officers of the City and shall use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the City on any Business Day upon reasonable prior notice.
(r) The obligations set forth in subsections (l) and (n) of this Section shall survive discharge or termination of this Trust Agreement and the Lease Agreement.
Section 11.02. Deposits to Policy Payments Account; Payments Under the Insurance Policy. (a) So long as the Insurance Policy shall be in full force and effect, the City and the Trustee hereby agree to comply with the provisions of this Section. (b) If, on the third Insurance Business Day prior to a Principal Payment Date, Mandatory Sinking Account Payment Date or Interest Payment Date there is not on deposit with the Trustee, after making all transfers and deposits required under the Trust Agreement, moneys sufficient to pay the interest or principal evidenced by the Certificates due on such Principal Payment Date, Mandatory Sinking Account Payment Date or Interest Payment Date, the Trustee shall give notice to the Insurer and to the Insurer’s Fiscal Agent (if any) by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Insurance Business Day. If, on the second Insurance Business Day prior to such Principal Payment Date, Mandatory Sinking Account Payment Date or Interest Payment Date, there continues to be a deficiency in the 41 4160-4945-2900.4
amount available to pay the interest or principal evidenced by the Certificates due on such Principal Payment Date, Mandatory Sinking Account Payment Date or Interest Payment Date, the Trustee shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer’s Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay the interest evidenced by the Certificates and the amount required to pay principal evidenced by the Certificates, confirmed in writing to the Insurer and the Insurer’s Fiscal Agent (if any) by 12:00 noon, New York City time, on such second Insurance Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy.
(c) The Trustee shall designate any portion of principal evidenced by Certificates paid by the Insurer, whether by virtue of Mandatory Sinking Account Payment, the stated Principal Payment Date or the Insurer’s election to pay said amounts prior to the stated Principal Payment Date pursuant to subsection (e) of Section 11.01 hereof, on its books as a reduction in the principal evidenced by Certificates registered to the then current Owners, whether DTC or its nominee or otherwise, and shall issue a replacement Certificate to the Insurer, registered in the name of [INSURER], evidencing principal in an amount equal to the principal so paid (without regard to Authorized Denominations); provided that the Trustee’s failure to so designate any payment or issue any replacement Certificate shall have no effect on the amount of principal or interest evidenced by any Certificate payable by the City or the subrogation rights of the Insurer. (d) The Trustee shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of the interest and principal evidenced by any Certificate. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Trustee.
Upon payment of a claim under the Insurance Policy, the Trustee shall establish a separate special purpose trust account for the benefit of Owners known as the “Policy Payments Account” and over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid under the Insurance Policy in trust on behalf of Owners and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Trustee to Owners in the same manner as payments of interest and principal evidenced by the Certificates are to be made with respect to the Certificates under the provisions hereof. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to make payments of interest and principal with other funds available to make such payments.
If, as a result of the City’s non-payment, when due, of all or a portion of a Base Rental Payment (other than a non-payment caused by an abatement of Rental Payments pursuant to Section 3.06 of the Lease Agreement), the Insurer has paid interest or principal evidenced by the Certificates pursuant to the Insurance Policy (i) the first of Base Rental Payments thereafter received from the City under the Lease Agreement, and (ii) the interest payable with respect to such delinquent Base Rental Payments, calculated at the Insurer Rate as provided in Section 3.04 of the Lease Agreement, shall be paid to the Insurer, as the Owner of the Certificates (or portions thereof) evidencing such delinquent Base Rental Payment in repayment of such payment by the Insurer until such payment is paid in full. If, as a result of the City’s non-payment of all or a portion 42 4160-4945-2900.4
of a Base Rental Payment (which non-payment is caused by an abatement of Rental Payments pursuant to Section 3.06 of the Lease Agreement), the Insurer has paid interest or principal evidenced by the Certificates pursuant to the Insurance Policy, the Insurer, as the Owner of the Certificates (or portions thereof) representing such abated Base Rental Payment, shall be entitled to receive, during the extension of the term of the Lease Agreement provided for in Section 2.02 of the Lease Agreement, any amounts paid in respect of such abated and unpaid Base Rental Payment pursuant to subsection (b) of Section 3.01 and Section 3.04 of the Lease Agreement. Any such payment by the City pursuant to this Section shall be applied first to the interest component of such delinquent Base Rental Payment due the Insurer and second to the principal components of such delinquent Base Rental Payment due the Insurer. (e) Funds held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in the Policy Payments Account following a Principal Payment Date, Mandatory Sinking Account Payment Date or Interest Payment Date shall promptly be remitted to the Insurer.
Section 11.03. Reporting Requirements. (a) The City shall provide to the Insurer (i) within 210 days after the end of each fiscal year of the City, a Written Certificate of the City certifying that the City is not aware of any Lease Default Event or of any default hereunder or under the Lease Agreement, (ii) within 210 days after the end of each fiscal year of the City, audited financial statements for such fiscal year, (iii) within 30 days after the approval thereof, each annual budget of the City, and (iv) from time to time, such other information, data or reports as the Insurer may reasonably request.
(b) The Trustee shall provide the Insurer with notice of any Event of Default or any default hereunder or under the Lease Agreement within five Business Days of obtaining knowledge thereof. The City shall provide the Insurer with notice of any Lease Default Event or default hereunder or under the Lease Agreement within five Business Days of obtaining knowledge thereof.
(c) The City shall provide the Insurer with prior notice of the advance refunding or prepayment of any of the Certificates, including the principal amount, maturities and CUSIP numbers thereof.
(d) The City shall provide the Insurer with notice of the resignation or removal of the Trustee or the Depository, and the appointment of, and acceptance of duties by, any successor thereto.
(e) Each of the City and the Trustee agrees that it will, if it has actual knowledge thereof, promptly notify the Insurer of (i) the commencement of any Insolvency Proceeding by or against the City, and (ii) the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal or interest evidenced by the Certificate.
(f) The Trustee shall, at the time any report, notice or correspondence is delivered to Owners of the Certificates pursuant to the provisions hereof, deliver a copy of such report, notice or correspondence to the Insurer.
43 4160-4945-2900.4
(g) The City shall provide the Insurer with all information furnished pursuant to the Continuing Disclosure Certificate simultaneously with the furnishing of such information. (h) The Trustee shall notify the Insurer of any failure of the City to provide notices, certificates and other information under this Trust Agreement or the Lease Agreement. 44 4160-4945-2900.4
ARTICLE XII
MISCELLANEOUS
Section 12.01. Benefits of Trust Agreement. Nothing contained herein, expressed or implied, is intended to give to any person other than the Trustee, the Corporation, the City, the Insurer and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the City or the Corporation shall be for the sole and exclusive benefit of the Trustee, the Corporation, the City, the Insurer and the Owners.
Section 12.02. Successor Deemed Included in all References to Predecessor.
Whenever the Trustee, the Corporation or the City, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Trustee, the Corporation or the City, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Trustee, the Corporation or the City, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 12.03. Execution of Documents by Owners. (a) Any declaration, request or other instrument that is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or such Owner’s attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept that it may deem sufficient. (b) The ownership of any Certificates and the amount, payment date, number and date of owning the same may be proved by the Registration Books. (c) Any declaration, request or other instrument in writing of the Owner of any Certificate shall bind all future Owners of such Certificate with respect to anything done or suffered to be done by the City or the Trustee in good faith and in accordance therewith.
Section 12.04. Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the City shall be individually or personally liable for the payment of any moneys, including without limitation, the interest or principal evidenced by the Certificates, but nothing contained herein shall relieve any member, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law, by the Lease Agreement or hereby.
Section 12.05. Acquisition of Certificates by City. All Certificates acquired by the City, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. 45 4160-4945-2900.4
Section 12.06. Content of Certificates. (a) Every Written Certificate of the City and every Written Certificate of the Corporation with respect to compliance with any agreement, condition, covenant or term contained herein shall include (i) a statement that the person making or giving such certificate has read such agreement, condition, covenant or term and the definitions herein relating thereto, (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based, (iii) a statement that, in the opinion of the signer, the signer has made or caused to be made such examination or investigation as is necessary to enable the signer to express an informed opinion as to whether or not such agreement, condition, covenant or term has been complied with, and (iv) a statement as to whether, in the opinion of the signer, such agreement, condition, covenant or term has been complied with.
(b) Any Written Certificate of the City and any Written Certificate of the Corporation may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the person making or giving such certificate knows that the Opinion of Counsel with respect to the matters upon which each person’s certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon information that is in the possession of the City or the Corporation upon a representation by an officer or officers of the City or the Corporation, as the case may be, unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which such counsel’s opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous.
Section 12.07. Funds and Accounts. (a) Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Certificates and the rights of the Owners. (b) The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Trust Agreement.
Section 12.08. Third-Party Beneficiary. The Insurer is a third-party beneficiary of this Trust Agreement.
Section 12.09. Partial Invalidity. If any agreement, condition, covenant or term required herein to be observed or performed by or on the part of the Corporation, the City or the Trustee is, to any extent, held to be invalid or unenforceable in any jurisdiction, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain among the parties as contained herein, the remainder of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Corporation, the City or the Trustee, or the application of such agreements, conditions, covenants or terms to Persons or circumstances other than those as to which such agreement, condition, covenant or term is held invalid or 46 4160-4945-2900.4
unenforceable, shall not be affected by such invalidity or unenforceability, and each remaining agreement, condition, covenant and term required herein to be observed or performed by or on the part of the Corporation, the City and the Trustee shall be valid and shall be enforced to the fullest extent permitted by law.
Section 12.10. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Redlands
P.O. Box 3005
Redlands, California 92373
Attention: Director of Management Services/Finance
Department
If to the Corporation: Redlands Public Improvement Corporation 300 East State Street, Suite 690
Redlands, California 92373
Attention: Chief Financial Officer
If to the Trustee: U.S. Bank Trust Company, National Association 633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust
If to the Insurer: [INSURER]
[___________]
[___________], [______] [______]
Attention: [___________]
Re: Insurance Policy No. [___________]
Telephone: [___________]
Email: [___________]
In each case in which the notice or other communication refers to an Event of Default or claim on the Insurance Policy, such notice or other communication shall be marked “URGENT MATERIAL ENCLOSED” and a copy shall also be sent to the attention of the General Counsel at the above address and at [_________].
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, and (d) if given by any other means, upon delivery at the address specified in this Section. 47 4160-4945-2900.4
Section 12.11. Electronic Signatures. Each of the parties hereto agrees that the transaction consisting of this Trust Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Trust Agreement using an electronic signature, it is signing, adopting, and accepting this Trust Agreement and that signing this Trust Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Trust Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Trust Agreement in a usable format.
Section 12.12. Governing Law. This Trust Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California.
Section 12.13. Execution in Counterparts. This Trust Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 4160-4945-2900.4
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above.
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, AS
TRUSTEE
By:_________________________________
Authorized Officer
REDLANDS PUBLIC IMPROVEMENT
CORPORATION
By:_________________________________
[________],
[________]
CITY OF REDLANDS
By:_________________________________
[________],
[________]
[Signature Page to Trust Agreement]
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EXHIBIT A
MASTER DEFINITIONS
B-1
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EXHIBIT B
FORM OF CERTIFICATE
No. R- ***$***
CITY OF REDLANDS
CERTIFICATE OF PARTICIPATION, SERIES 2026
(POLICE AND FIRE FACILITIES)
PAYMENT DATE INTEREST RATE DATED DATE CUSIP NO.
May 1, 20__ ______% _______, 2026 _______
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
THIS IS TO CERTIFY that the Registered Owner of this Certificate of Participation (the “Certificate”), as identified above, is the owner of a direct, fractional undivided interest in certain base rental payments (“Base Rental Payments”) payable under and pursuant to the Lease Agreement, dated as of [________] 1, 2026 (the “Lease Agreement”), by and between the City of Redlands (the “City”), a municipal corporation and general law city organized and existing under the laws of the State of California, as lessee, and the Redlands Public Improvement Corporation (the “Corporation”), a nonprofit public benefit corporation organized and existing the laws of the State of California, as lessor. Substantially all of the rights of the Corporation under the Lease Agreement, including the right to receive the Base Rental Payments, have been sold, assigned and transferred, irrevocably and absolutely, without recourse, by the Corporation to U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under the laws of the United States of America, as trustee (the “Trustee”), under the Trust Agreement, dated as of [________] 1, 2026 (the “Trust Agreement”), by and among the Trustee, the Corporation and the City. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement.
This Certificate is one of the duly authorized City of Redlands Certificates of Participation, Series 2026 (Police and Fire Facilities) (the “Certificates”), evidencing principal in the aggregate amount of $[PAR AMOUNT], executed pursuant to the terms of the Trust Agreement. The Certificates evidence direct, fractional undivided interests in Base Rental Payments payable under the Lease Agreement. The Certificates are being executed and delivered to finance a portion of the costs of the construction, installation and acquisition of certain capital improvements constituting a city police facility and related improvements and a city fire station and related improvements.
Reference is hereby made to the Trust Agreement and to any and all amendments thereof and supplements thereto for a description of the agreements, conditions, covenants and terms with respect to the Certificates, for the nature, extent and manner of enforcement of such agreements, conditions, covenants and terms, for the rights, duties and immunities of the Trustee, for the rights B-2
4160-4945-2900.4
and remedies of the registered owners of the Certificates with respect thereto and for the other agreements, conditions, covenants and terms upon which the Certificates are executed and delivered thereunder, to all of which provisions the Registered Owner by acceptance hereof, assents and agrees, and the provisions of the Trust Agreement are hereby incorporated into this Certificate as though fully set forth herein.
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the Trust Agreement and any right of prepayment as provided herein or therein, on the Payment Date set forth above, upon surrender of this Certificate at the Principal Office of the Trustee, the Principal Amount specified above, evidencing the Registered Owner’s interest in the Base Rental Payments designated as principal components coming due on the Payment Date, and to receive on May 1 and November 1 of each year, commencing on November 1, 2026 (the “Interest Payment Dates”), interest accrued thereon at the Interest Rate specified above, computed on the basis of a 360-day year consisting of twelve 30-day months, until said Principal Amount is paid in full, evidencing the Registered Owner’s interest in the Base Rental Payments designated as interest components coming due on each of said dates.
This Certificate shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after the fifteenth day of the month next preceding an Interest Payment Date, whether or not such day is a business day (each such date, a “Record Date”), and on or prior to the following Interest Payment Date, in which case this Certificate shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to October 15, 2026, in which case this Certificate shall evidence interest from the Dated Date specified above. Notwithstanding the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Certificates shall be in default, this Certificate shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for.
Except as otherwise provided in the Letter of Representations, payments of interest evidenced by the Certificates shall be made to the Owners thereof (as determined at the close of business on the Record Date next preceding the related Interest Payment Date) by check or draft of the Trustee mailed to the address of each such Owner as it appears on the Registration Books, or to such other address as may be furnished in writing to the Trustee by each such Owner. Except as otherwise provided in the Letter of Representations, payment of principal and prepayment premium, if any, evidenced by the Certificates, on their stated Principal Payment Dates or on prepayment in whole or in part prior thereto, shall be made only upon presentation and surrender of the Certificates at the Principal Office of the Trustee. All such amounts are payable in lawful money of the United States of America.
The Certificates are authorized to be executed and delivered in the form of fully registered certificates in denominations of $5,000 or any integral multiple thereof (“Authorized Denominations”).
This Certificate may be transferred or exchanged by the Registered Owner hereof, in person or by such Registered Owner’s attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement.
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The Certificates evidence and represent a fractional undivided interest in Base Rental Payments and enjoy the benefits of a security interest in the moneys held in the funds and accounts established pursuant to the Trust Agreement, subject to the provisions of the Trust Agreement permitting the disbursement thereof for or to the purposes and on the conditions and terms set forth therein.
The Certificates are subject to prepayment on the dates, at the prepayment prices and pursuant to the terms set forth in the Trust Agreement. Notice of prepayment of any Certificate or any portion thereof shall be given as provided in the Trust Agreement.
The Trust Agreement, and the rights and obligations of the Corporation, the City, the Trustee and the Owners may be amended or supplemented in the manner, to the extent, and upon the terms provided in the Trust Agreement.
The Trust Agreement contains provisions permitting the City to make provision for the payment of the principal, interest and premium, if any, evidenced by any of the Certificates so that such Certificates shall no longer be deemed to be Outstanding under the terms of the Trust Agreement.
Unless this Certificate is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
The Corporation and the City have certified that all acts, conditions and things required by the statutes of the State of California and by the Trust Agreement to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Certificate do exist, have happened and have been performed in regular and due time, form and manner as required by law, and that the Trustee is duly authorized to execute and deliver this Certificate.
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IN WITNESS WHEREOF, this Certificate has been executed by the manual signature of an authorized signatory of the Trustee as of the date set forth below.
Date: __________, 2026
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION,
AS TRUSTEE
By:
Authorized Officer
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STATEMENT OF INSURANCE
[To be updated.]
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ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto __________________________________, whose address and social security or other tax identifying number is ____________________, the within-mentioned Certificate and hereby irrevocably constitute(s) and appoint(s) ______________________________, attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature guarantee shall be made by a guarantor
institution participating in the Securities Transfer
Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.
Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within
Certificate in every particular without alteration or
enlargement or any change whatsoever.
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EXHIBIT C
FORM OF WRITTEN REQUEST FOR DISBURSEMENTS
FROM THE ACQUISITION FUND
WRITTEN REQUEST NO. _____
FOR DISBURSEMENTS FROM THE ACQUISITION FUND
The City of Redlands, a municipal corporation and general law city organized and existing under the laws of the State of California (the “City”), hereby states and certifies:
(a) that the undersigned is the duly [appointed/elected], qualified and acting __________ of the City, and, as such, is a duly designated “Authorized City Representative” as such term is defined in the Trust Agreement, dated as of [________] 1, 2026 (the “Trust Agreement”), by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Redlands Public Improvement Corporation (the “Corporation”) and the City, and is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that the Trustee is hereby requested to disburse from the Acquisition Fund, established pursuant to Section 3.04 of the Trust Agreement, to the payees set forth on Schedule 1 attached hereto and by this reference incorporated herein, the amount set forth on Schedule 1 opposite each such payee, for payment of such costs identified on said Schedule 1; (c) that each item of cost identified on Schedule 1 has been properly incurred and the amounts to be disbursed from the Acquisition Fund pursuant to this Written Request are for Acquisition Costs properly chargeable to the Acquisition Fund by the City or the Corporation, as the case may be, and no amounts to be disbursed pursuant to this Written Request have been the subject of a previous Written Request for disbursement from the Acquisition Fund; and (d) that an invoice for each item of cost identified on Schedule 1 is attached hereto.
Capitalized undefined terms used herein have the meanings ascribed thereto in the Trust Agreement.
Dated: _____________
CITY OF REDLANDS
By:
Name:
Title:
C-2
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SCHEDULE 1
ACQUISITION FUND DISBURSEMENTS
Payee Name and Address Purpose of Obligation Amount
D- 4160-4945-2900.4
EXHIBIT D
FORM OF WRITTEN CERTIFICATE OF THE CITY
REGARDING COMPLETION OF PROJECT
WRITTEN CERTIFICATE OF THE CITY
REGARDING COMPLETION OF PROJECT
The City of Redlands, a municipal corporation and general law city organized and existing under the laws of the State of California (the “City”), hereby states and certifies:
(a) that the undersigned is the duly [appointed/elected], qualified and acting __________ of the City, and, as such, is a duly designated “Authorized City Representative” as such term is defined in the Trust Agreement, dated as of [________] 1, 2026 (the “Trust Agreement”), by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Redlands Public Improvement Corporation (the “Corporation”) and the City, and is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that, pursuant to Section 3.04(c) of the Trust Agreement, the City hereby submits this Written Certificate to the Trustee; and
[(c) that the Project has been completed and all costs of the Project have been paid; and] [(c) that the Project has been substantially completed and that all remaining costs of the Project to be paid from the Acquisition Fund have been determined and that each item of cost identified on Schedule I has been retained; and]
(d) that the Trustee is directed, (i) if the amount remaining in the Acquisition Fund (less any such retention) is equal to or greater than $50,000, transfer the portion of such amount equal to the largest integral multiple of $5,000 that is not greater than such amount to the Prepayment Fund, to be applied to the prepayment of Certificates pursuant to Section 4.01(b) of the Trust Agreement, and (ii) after making the transfer, if any, required to be made pursuant to the preceding clause (i), transfer all of the amount remaining in the Acquisition Fund (less any such retention) to the Base Rental Payment Fund, to be applied to the payment of interest evidenced by the Certificates.
Capitalized undefined terms used herein have the meanings ascribed thereto in the Trust Agreement.
Dated: _____________
CITY OF REDLANDS
By:
Name:
Title:
D-2
4160-4945-2900.4
SCHEDULE 1
WRITTEN CERTIFICATE OF THE CITY REGARDING
COMPLETION OF PROJECT
Remaining Component of Project Retention Amount
4154-6159-4980.3
TO BE RECORDED AND WHEN
RECORDED RETURN TO:
Orrick, Herrington & Sutcliffe LLP
2050 Main Street, Suite 1100
Irvine, California 92614-8255
Attention: Donald S. Field, Esq.
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.
ASSIGNMENT AGREEMENT
by and between
REDLANDS PUBLIC IMPROVEMENT CORPORATION
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
AS TRUSTEE
Dated as of [_________] 1, 2026
4154-6159-4980.3
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”), dated as of [_________] 1, 2026, is by and between the REDLANDS PUBLIC IMPROVEMENT CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California (the “Corporation”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as Trustee (the “Trustee”).
W I T N E S S E T H:
WHEREAS, pursuant to the Ground Lease, dated as of the date hereof (the “Ground Lease”), by and between the City of Redlands (the “City”) and the Corporation, the City has leased to the Corporation certain real property owned by the City and the improvements thereon and the acquisition and installation of certain heating, ventilation and air conditioning systems (the “Property”); and
WHEREAS, the Property is more particularly described in Exhibit A hereto; and WHEREAS, pursuant to the Lease Agreement, dated as of the date hereof (the “Lease Agreement”), the Corporation has leased the Property back to the City; and WHEREAS, each of the Ground Lease and a memorandum of the Lease Agreement are being recorded with the San Bernardino County Recorder concurrently with the recordation therewith of this Assignment Agreement; and
WHEREAS, pursuant to the Lease Agreement, the City is obligated to make Base Rental Payments (as defined in the Lease Agreement) to the Corporation for the lease of the Property; and
WHEREAS, the Corporation desires to sell, assign and transfer, without recourse, its rights in the Ground Lease and the Lease Agreement, including its rights to receive the Base Rental Payments, to the Trustee for the benefit of the owners of the City of Redlands Certificates of Participation, Series 2026 (Police and Fire Facilities) (the “Certificates”) to be executed and delivered under the Trust Agreement, dated as of the date hereof (the “Trust Agreement”), by and among the Trustee, the Corporation and the City; and
WHEREAS, in consideration of such assignment and the execution of the Trust Agreement, the Trustee has agreed to execute and deliver the Certificates, each evidencing a direct, fractional undivided interest in the Base Rental Payments to be made by the City pursuant the Lease Agreement; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Assignment Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Assignment Agreement;
4154-6159-4980.3 2
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement.
Section 2. Assignment. The Corporation, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the owners of the Certificates, all of its right, title and interest in and to the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided, however, that the Corporation shall retain its rights under the Lease Agreement to indemnification and to payment or reimbursement of its reasonable costs and expenses. This assignment is absolute and is presently effective. All such right, title and interest so sold, assigned and transferred by the Corporation to the Trustee shall be administered by the Trustee in accordance with the provisions of the Trust Agreement, the Lease Agreement and the Ground Lease.
Section 3. Acceptance. The Trustee hereby accepts the foregoing sale, assignment and transfer, subject to the terms and provisions of the Trust Agreement, and agrees that all of the Base Rental Payments shall be applied and the right, title and interest so sold, assigned and transferred shall be exercised by the Trustee as provided in the Trust Agreement, the Lease Agreement and the Ground Lease.
Section 4. Conditions. Excepting only the sale, assignment and transfer to the Trustee of the Corporation’s right, title and interest in and to the Ground Lease and the Lease Agreement pursuant to Section 2 hereof, this Assignment Agreement shall impose no obligations whatsoever upon the Trustee beyond those expressly provided in the Trust Agreement, the Lease Agreement and the Ground Lease.
Section 5. Third-Party Beneficiary. The Insurer is a third-party beneficiary of this Assignment Agreement.
Section 6. Amendment. This Assignment Agreement shall not be amended, supplemented or otherwise modified without the prior written consent of the Insurer (so long as the Insurer is not in default in its payment obligations under the Insurance Policy).
Section 7. Further Assurances. The Corporation shall make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Assignment Agreement, and for the better assuring and confirming to the Trustee, for the benefit of the owners of the Certificates, the right, title and interest intended to be sold, assigned and transferred pursuant hereto.
Section 8. Rules of Construction. (a) The terms defined herein expressed in the singular shall, unless the context otherwise indicates, include the plural and vice versa. 4154-6159-4980.3 3
(b) The use herein of the masculine, feminine or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender, as appropriate.
(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions or novation of, that document.
(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Sections herein are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. (g) The words “hereof” (except when preceded by a specific Section reference), “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Assignment Agreement and not solely to the particular portion hereof in which any such word is used.
(h) Any reference to a Person, or a Person in a specified capacity, shall be construed to include such Person’s successors or such Person’s successors in such capacity, as the case may be.
Section 9. Governing Law. This Assignment Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California.
Section 10. Execution in Counterparts. This Assignment Agreement may be simultaneously executed in several counterparts, each of which shall be deemed to be an original and all of which shall constitute but one and the same instrument. [Remainder of page left intentionally blank.]
4154-6159-4980.3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above.
REDLANDS PUBLIC IMPROVEMENT
CORPORATION
By:
[_______],
[_______]
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, AS
TRUSTEE
By: ________________________________
Name: ______________________________
Title: _______________________________
[Signature Page to Assignment Agreement]
4154-6159-4980.3 A-1
EXHIBIT A
DESCRIPTION OF THE PROPERTY
City Police Facility
All that real property situated in San Bernardino County, State of California, described as follows, together with any improvements thereto:
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN BERNARDINO )
On _________________, before me, ______________________________, Notary Public, personally appeared _________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
__________________________________
[Seal]
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On _________________, before me, ______________________________, Notary Public, personally appeared ________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
__________________________________
[Seal]
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
Error! Unknown document property name.
$[_________]
CITY OF REDLANDS
CERTIFICATES OF PARTICIPATION, SERIES 2026
(POLICE AND FIRE FACILITIES)
PURCHASE AGREEMENT
[________], 2026
City of Redlands
35 Cajon Street, Suite 15B
Redlands, California 92374
Attention: Director of Management Services/Finance Department Redlands Public Improvement Corporation
35 Cajon Street, Suite 15B
Redlands, California 92373
Attention: Chief Financial Officer
Ladies and Gentlemen:
The undersigned, BofA Securities, Inc., as representative (the “Representative”), on behalf of itself and Stifel, Nicolaus & Company, Incorporated (collectively, the “Underwriters”), hereby offers to enter into this Purchase Agreement (the “Purchase Agreement”) with the Redlands Public Improvement Corporation (the “Corporation”) and the City of Redlands (the “City”) for the purchase by the Underwriters of $[______] aggregate principal amount of the City of Redlands Certificates of Participation, Series 2026 (Police and Fire Facilities) (the “Certificates”). Upon acceptance of this offer by the City and the Corporation, this Purchase Agreement will be binding upon the City, the Corporation and the Underwriters. The offer made hereby is subject to acceptance by the City and the Corporation (by delivery to the Representative of executed counterparts hereof by the City and the Corporation) at or before 11:59 p.m., California time, on the date hereof or at such later time and date as shall have been consented to by the Representative.
The City and the Corporation acknowledge and agree that: (i) the Underwriters are not acting as municipal advisors within the meaning of Section 15B of the Securities Exchange Act, as amended, (ii) the primary role of the Underwriters, as underwriters, is to purchase securities, for resale to investors, in an arm’s length commercial transaction between the City, the Corporation and the Underwriters and the Underwriters have financial and other interests that differ from those of the City and the Corporation; (iii) the Underwriters are acting solely as principals and are not acting as municipal advisors, financial advisors or fiduciaries to the City or the Corporation and have not assumed any advisory or fiduciary responsibility to the City or the Corporation with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the City or the Corporation on other matters); (iv) the only obligations the Underwriters have to the City and the Corporation with respect to the transaction 2 contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the City and the Corporation have consulted their own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent they have deemed appropriate. The City also acknowledges that it previously received from the Underwriters letters regarding the Municipal Securities Rulemaking Board (“MSRB”) Rule G-17 Disclosures, and that it has provided to the Underwriters an acknowledgement of such letters.
The Certificates are being executed and delivered pursuant to a Trust Agreement, dated as of [______] 1, 2026 (the “Trust Agreement”), by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Corporation and the City. Capitalized but undefined terms used herein shall have the meanings ascribed thereto in the Preliminary Official Statement (defined below).
The City and the Corporation will enter into a Ground Lease, dated as of [______] 1, 2026 (the “Ground Lease”), pursuant to which the City will lease to the Corporation certain real property located in the City and described in the Preliminary Official Statement and the Official Statement (defined below) (the “Leased Premises”).
The Certificates evidence and represent the direct, fractional undivided interests of the registered owners thereof in certain base rental payments (the “Lease Payments”) to be made by the City for the use of the Leased Premises to be leased from the Corporation pursuant to the Lease Agreement, dated as of [______] 1, 2026 (the “Lease Agreement”). Pursuant to the Assignment Agreement, dated as of [______] 1, 2026 (the “Assignment Agreement”), by and between the Corporation and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Corporation will assign to the Trustee, for the benefit of the owners, certain of its rights under the Lease Agreement, including all of its rights to receive the Lease Payments from the City under the Lease Agreement, and its right to exercise remedies under the Lease Agreement as may be necessary to enforce payment of the Lease Payments.
Section 1. Purchase and Purchase Price; Terms of Certificates. (a) Upon the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the City and the Corporation agree to cause the Trustee to execute and deliver to the Underwriters, and the Underwriters agree to purchase, all (but not less than all) of the Certificates at an aggregate purchase price of $[________] (representing the aggregate principal amount evidenced by the Certificates of $[________], [plus/less] [net] original issue [premium/discount] of $[__________], less an Underwriters’ discount of $[__________]).
(b) The Certificates shall be dated the date of their delivery. The Certificates shall have the principal payment dates, evidence interest at the rates per annum, and be subject to prepayment as provided in the Official Statement and as set forth in Exhibit C hereto. (c) The Certificates shall be substantially in the form described in, shall be executed and delivered under and pursuant to, and shall be payable and subject to prepayment as provided in, the Trust Agreement, substantially in the form previously submitted to the Underwriters, with only such changes therein as shall be mutually agreed upon by the Representative, the City and the Corporation.
3 (d) The proceeds of the Certificates will be used to (i) finance a portion of the costs of the construction, installation and acquisition of certain capital improvements constituting a city police facility and related improvements, a city fire station and related improvements, and capital equipment improvements at the City’s A. K. Smiley Public Library, (ii) fund capitalized interest evidenced by the Certificates, and (iii) pay the costs incurred in connection with the execution and delivery of the Certificates.
(e) The City and the Corporation hereby ratify, confirm and approve the use by the Underwriters, prior to the date hereof, of the Preliminary Official Statement, dated [______], 2026, relating to the Certificates (the “Preliminary Official Statement”), which Preliminary Official Statement the City deemed final and so certified as of its date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”), except for information permitted to be omitted therefrom by Rule 15c2-12. The City hereby agrees to deliver or cause to be delivered to the Underwriters, within seven business days after the date hereof and in any event not later than two business days prior to the Closing (defined herein), copies of the final Official Statement substantially in the form of the Preliminary Official Statement and with only such additions thereto, deletions therefrom and changes therein as the Representative shall approve (the “Official Statement”), (i) in “designated electronic format” (as defined in Rule G-32 of the Municipal Securities Rulemaking Board), and (ii) in printed form in such reasonable quantity as the Underwriters shall request. The City and the Corporation hereby approve of the use and distribution by the Underwriters of the Preliminary Official Statement and the Official Statement in connection with the offer and sale of the Certificates. The City will undertake, pursuant to the Trust Agreement and the Continuing Disclosure Certificate (defined herein), to provide certain annual financial information and notices of the occurrence of certain enumerated events. A description of such undertaking is set forth in the Official Statement. (f) The City and the Corporation hereby further authorize the Underwriters to use, in connection with the offer and sale of the Certificates, the Trust Agreement, the Lease Agreement, the Ground Lease, the Assignment Agreement and the Continuing Disclosure Certificate of the City, dated [______], 2026 (the “Continuing Disclosure Certificate” and, together with the Lease Agreement, the Ground Lease, the Assignment Agreement, the Trust Agreement, and the Certificates, the “Certificate Documents”), executed by the City.
Section 2. Public Offering of the Certificates. The Underwriters agree to make a bona fide initial public offering of all the Certificates at prices no higher than, or yields not lower than, those set forth on Exhibit C hereto. Subsequent to such initial public offering but subject to the provisions set forth in Section 3 below, the Underwriters reserve the right to lower such initial offering prices as the Underwriters deem necessary in connection with the marketing of the Certificates; provided, however, that the Underwriters shall not change the interest rates set forth in Exhibit C. Subject to the provisions set forth in Section 3 below, the Underwriters may offer and sell the Certificates to certain dealers (including dealers depositing the Certificates into investment trusts) and others at prices lower than the initial public offering price or prices set forth on Exhibit C hereto.
Section 3. Establishment of Issue Price. (a) The Representative, on behalf of the Underwriters, agrees to assist the City and the Corporation in establishing the issue price of the Certificates and shall execute and deliver to the City and the Corporation at Closing an “issue 4 price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit D, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the City and Special Counsel (as defined herein), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Certificates. All actions to be taken by the City and the Corporation under this section to establish the issue price of the Certificates may be taken on behalf of the City by the City’s municipal advisor, KNN Public Finance, LLC (the “Municipal Advisor”), and any notice or report to be provided to the City may be provided to the City’s Municipal Advisor.
(b) Except for the maturities set forth in Schedule A to Exhibit D attached hereto, the City represents that it will treat the first price at which 10% of each maturity of the Certificates (the “10% Test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% Test). If, as of the date hereof, the 10% Test has not been satisfied as to any maturity of the Certificates for which the City has elected to utilize the 10% Test, the Representative agrees to promptly report to the City the prices at which Certificates of that maturity or maturities have been sold by the Underwriters to the public. That reporting obligation shall continue until the earlier of the date upon which the 10% Test has been satisfied as to the Certificates of that maturity or maturities or the Closing. For purposes of this Section, if Certificates mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Certificates.
(c) The Representative confirms that the Underwriters have offered the Certificates to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule A to Exhibit D attached hereto, except as otherwise set forth therein. Schedule A to Exhibit D also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Certificates for which the 10% Test has not been satisfied and for which the City, the Corporation and the Representative agree that the restrictions set forth in the next sentence shall apply (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Certificates, the Underwriters will neither offer nor sell unsold Certificates of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the underwriters have sold at least 10% of that maturity of the Certificates to the public at a price that is no higher than the initial offering price to the public.
(d) The Representative confirms that:
(1) any agreement among underwriters, any selling group agreement and each third-party distribution agreement (to which the Representative is a party) relating to the initial sale of the Certificates to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the 5 selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(i) (A) to report the prices at which it sells to the public the unsold Certificates of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Certificates of that maturity allocated to it have been sold or it is notified by the Representative that the 10% test has been satisfied as to the Certificates of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Representative, and (B) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Representative and as set forth in the related pricing,
(ii) to promptly notify the Representative of any sales of Certificates that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Certificates to the public (each such term being used as defined below), and
(iii) to acknowledge that, unless otherwise advised by the underwriter, dealer or broker-dealer, the Representative shall assume that each order submitted by the underwriter, dealer or broker-dealer is a sale to the public. (2) any agreement among underwriters or selling group agreement relating to the initial sale of the Certificates to the public, together with the related pricing wires, contains or will contain language obligating each underwriter or dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Certificates to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Certificates of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Representative or such underwriter or dealer that the 10% test has been satisfied as to the Certificates of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Representative or such underwriter or dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Representative or the underwriter or the dealer and as set forth in the related pricing wires.
(e) The City and the Corporation acknowledge that, in making the representations set forth in this Section, the Representative will rely on (i) the agreement of each underwriter to comply with the requirements for establishing the issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Certificates to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an 6 underwriter or dealer who is a member of the selling group is a party to a third-party distribution agreement that was employed in connection with the initial sale of the Certificates to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates, as set forth in the third-party distribution agreement and the related pricing wires. The City and the Corporation further acknowledge that each underwriter shall be solely liable for its failure to comply with its agreement to adhere to the requirements for establishing issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates, and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing the issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates.
(f) The Underwriters acknowledge that sales of any Certificates to any person that is a related party to an underwriter participating in the initial sale of the Certificates to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party to an underwriter;
(2) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Certificates to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Certificates to the public);
(3) a purchaser of any of the Certificates is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (4) “sale date” means the date of execution of this Purchase Agreement by all parties.
7 Section 4. Closing; Certificates. At [_]:00 a.m. California Time, on [______], 2026, or at such other time or on such other date as shall have been mutually agreed upon by the parties hereto (the “Closing”), the City and the Corporation will, subject to the terms and conditions hereof, deliver or cause the Certificates to be delivered through the facilities of The Depository Trust Company (“DTC”), duly executed by the Trustee in accordance with the provisions of the Trust Agreement. Subject to the terms and conditions hereof, upon receipt of proof of such delivery through DTC, the Underwriters will pay the purchase price of the Certificates as set forth in Section 1 hereof in federal or other immediately available funds. The Certificates shall be delivered as aforesaid through the facilities of DTC or at such other place as the Representative, the City and the Corporation mutually agree upon. On the date of Closing, the City and the Corporation will deliver or cause to be delivered the other documents mentioned herein at the offices of Orrick, Herrington & Sutcliffe LLP (“Special Counsel”) in Irvine, California, or at such other place as shall have been mutually agreed upon by the Representative, the City and the Corporation.
The Certificates (bearing CUSIP numbers) shall be in fully registered form, initially registered in the name of Cede & Co., as nominee of DTC, and shall be subject to a book-entry system of registration and transfer as described in the Official Statement. The Certificates shall be made available to the Representative for purposes of inspection for a reasonable period prior to the date of Closing in New York, New York, or at such other place as shall have been mutually agreed upon by the City, the Corporation and the Representative.
Section 5. Covenants, Representations and Warranties of the City. The City hereby covenants, represents and warrants to the Underwriters that:
(a) The City is a general law city duly organized and validly existing under the constitution and laws of the State of California (the “State”). The City has all necessary power and authority and has taken all official actions necessary for the City Council of the City (the “City Council”) to adopt the resolution authorizing the execution and delivery of the Certificate Documents to which the City is a party and other matters pertaining thereto (the “City Resolution”), execute and deliver the Official Statement and to execute, deliver and perform its duties under this Purchase Agreement and each of the Certificate Documents to which it is a party, and this Purchase Agreement and each of the Certificate Documents to which the City is a party has been duly authorized, has or will be executed and delivered by the City and, assuming the due authorization, execution and delivery by the other respective parties thereto, when executed and delivered by the City will constitute legally valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally or principles of equity involving judicial discretion. (b) The City is not in material breach of, or default under, any applicable constitutional provision, law or administrative rule or regulation of the State or the United States of America material to the conduct of its governmental or financial functions or any applicable judgment or decree or any loan agreement, indenture, bond, certificate, note, resolution or other agreement or instrument to which the City is a party or to which the City or any of its properties is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any of the foregoing; and the authorization, execution and delivery of this Purchase Agreement, the Certificate Documents 8 to which the City is a party and the Certificates, and compliance with the provisions hereof and thereof, will not conflict with or constitute a material breach of or default under any constitutional provision, law, administrative rule or regulation, or any judgment, decree, license, permit, loan agreement, indenture, bond, certificate, note, resolution, agreement or other instrument to which the City (or any of its officers in their respective capacities as such) is subject or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument except as may be provided by the Certificates or the Certificate Documents.
(c) To the best knowledge of the City, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory entity having jurisdiction over the City required for the execution and delivery of this Purchase Agreement or the Certificate Documents to which the City is a party, or the execution and sale of the Certificates or the consummation by the City of the transactions contemplated herein, in the Official Statement or in the Certificate Documents, which has not been duly obtained or made on or prior to the date hereof. (d) Except as disclosed in the Preliminary Official Statement and Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental or public entity pending or, to the best knowledge of the City, threatened against the City which affects or seeks to prohibit, restrain or enjoin the execution or delivery of the Certificates or the Certificate Documents, or contesting the validity of this Purchase Agreement, the Certificates or any of the Certificate Documents or the powers of the City to enter into or perform its obligations under this Purchase Agreement or the Certificate Documents to which it is a party or the existence or powers of the City, or which, if determined adversely to the City, would (i) materially impair the City’s ability to meet its obligations under the Lease Agreement or materially and adversely affect the City’s financial condition, or (ii) adversely affect the exclusion of the interest evidenced by the Certificates from gross income for federal income tax purposes and the exemption of interest evidenced by the Certificates from State personal income taxation.
(e) The information contained in the Preliminary Official Statement, as of its date and as of the date hereof, and in the Official Statement, as of its date and at all times after the date of the Official Statement up to and including the Closing, was, is and will be true, correct and complete in all material respects and did not and does not, and at the Closing such information will not, contain any untrue statement of a material fact or omit to state any material fact which is necessary to make such statements and information therein, in light of the circumstances under which they were made, not misleading in any material respect (except this representation does not include information relating to DTC or its book-entry only system). If the information in the Official Statement is supplemented or amended, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended) at all times subsequent thereto up to and including the time of the Closing, the Official Statement as so supplemented or amended will be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preparation and 9 distribution of the Preliminary Official Statement and the Official Statement has been duly authorized by the City.
(f) The City agrees that, for a period of 25 days after the end of the “underwriting period” (as defined in Rule 15c2-12), if any event of which it has actual knowledge occurs as a result of which the information in the Official Statement as then in existence would include any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading, the City shall promptly prepare, or cooperate in the preparation of, an amendment or supplement to the Official Statement which will correct such statement or omission. The City shall advise the Representative promptly of any proposal to so amend or supplement the Official Statement and shall effect such amendment or supplement, at its expense, in a form and manner approved by the Representative, and furnish copies of such supplement or amendment to the Underwriters in such numbers as the Underwriters may reasonably request. The City shall promptly advise the Representative of the commencement of any action, suit, proceeding, inquiry or investigation seeking to prohibit, restrain or otherwise affect the use of the Official Statement in connection with the offering, sale or distribution of the Certificates. Unless the Representative otherwise advises the City that the end of the underwriting period shall be another specified date, the end of the underwriting period shall be the date of Closing.
(g) The proceeds from the sale to the Underwriters of the Certificates will be applied in the manner and for the purposes specified in the Trust Agreement. (h) Any certificate signed by any official of the City and delivered in connection with the transactions contemplated by the Official Statement and this Purchase Agreement shall be deemed to be a representation by the City to the Underwriters as to the statements made therein. (i) The City agrees to cooperate with the Underwriters in endeavoring to qualify the Certificates for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriters may reasonably request; provided, however, that the City will not be required to consent to service of process in any such jurisdiction or to qualify as a foreign corporation in connection with any such qualification in any jurisdiction and that the Underwriters shall be solely responsible for the cost of such qualification. (j) The City has complied with the Internal Revenue Code of 1986, as amended (the “Code”), with respect to the Certificates.
(k) The financial statements of, and other financial information regarding, the City contained in the Official Statement fairly present the financial position and results of the operations of the City as of the dates and for the periods therein set forth, and, to the best of the City’s knowledge, (i) the audited financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, and (ii) the other financial information has been determined on a basis substantially consistent with that of the City’s audited financial statements included in the Official Statement.
10 (l) Since June 30, 2025, no material adverse change has occurred in the financial condition, assets, properties or results of operation of the City, which is not described in the Preliminary Official Statement.
(m) Based on a review of its prior undertakings with respect to Rule 15c2-12, except as described in the Official Statement, in the five preceding years, the City has never failed to comply with any continuing disclosure obligation entered into pursuant to Rule 15c2-12. (n) Between the date hereof and the time of the Closing, the City shall not, without the prior written consent of the Representative, offer or issue in any material amount any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, except in the course of normal business operations of the City or except for such borrowings as may be described in or contemplated by the Official Statement. (o) The Leased Premises and the City’s use and enjoyment thereof is essential to City operations and the exceptions set forth in the title insurance policy for the Leased Premises insuring, subject only to Permitted Encumbrances, the fee interest of the City in the Leased Premises, the Corporation’s leasehold estate in the Leased Premises under the Ground Lease, and the City’s subleasehold estate in the Leased Premises under the Lease Agreement, do not materially impair the use of the Leased Premises, the existing facilities and the sites thereof for the purposes for which they are or may reasonably be expected to be held.
Section 6. Covenants, Representations and Warranties of the Corporation. The Corporation hereby covenants, represents and warrants to the Underwriters that:
(a) The Corporation is a nonprofit public benefit corporation duly organized and validly existing under the constitution and laws of the State. The Corporation has all necessary power and authority and has taken all official actions necessary for the Board of Trustees of the Corporation (the “Board of Trustees”) to adopt the resolution authorizing the execution and delivery of the Certificate Documents to which the Corporation is a party and other matters pertaining thereto (the “Corporation Resolution”), and to execute, deliver and perform its duties under this Purchase Agreement and each of the Certificate Documents to which it is a party, and this Purchase Agreement and each of the Certificate Documents to which the Corporation is a party has been duly authorized, has or will be executed and delivered by the Corporation and, assuming the due authorization, execution and delivery by the other respective parties thereto, when executed and delivered by the Corporation will constitute legally valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally or principles of equity involving judicial discretion.
(b) The Corporation is not in material breach of, or default under, any applicable constitutional provision, law or administrative rule or regulation of the State or the United States of America material to the conduct of its business or financial functions or any applicable judgment or decree or any loan agreement, indenture, bond, certificate, note, resolution or other agreement or instrument to which the Corporation is a party or to which the Corporation or any of its properties is otherwise subject, and no event has occurred and is continuing which, with the 11 passage of time or the giving of notice, or both, would constitute a default or an event of default under any of the foregoing; and the authorization, execution and delivery of this Purchase Agreement, the Certificate Documents to which the Corporation is a party and the Certificates, and compliance with the provisions hereof and thereof, will not conflict with or constitute a material breach of or default under any constitutional provision, law, administrative rule or regulation or under its articles of incorporation or bylaws, or any judgment, decree, license, permit, loan agreement, indenture, bond, certificate, note, resolution, agreement or other instrument to which the Corporation (or any of its officers in their respective capacities as such) is subject or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument except as may be provided by the Certificates or the Certificate Documents.
(c) To the best knowledge of the Corporation, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory entity having jurisdiction over the Corporation required for the execution and delivery of this Purchase Agreement or the Certificate Documents to which the Corporation is a party, or the execution and sale of the Certificates or the consummation by the Corporation of the transactions contemplated herein, in the Official Statement or in the Certificate Documents, which has not been duly obtained or made on or prior to the date hereof.
(d) Except as disclosed in the Preliminary Official Statement and Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental or public entity pending or, to the best knowledge of the Corporation, threatened against the Corporation which affects or seeks to prohibit, restrain or enjoin the execution or delivery of the Certificates or the Certificate Documents, or contesting the validity of this Purchase Agreement, the Certificates or any of the Certificate Documents or the powers of the Corporation to enter into or perform its obligations under this Purchase Agreement or the Certificate Documents to which it is a party or the existence or powers of the Corporation, or which, if determined adversely to the Corporation, would (i) materially impair the Corporation’s ability to meet its obligations under the Certificate Documents to which the Corporation is party or materially and adversely affect the Corporation’s financial condition, or (ii) adversely affect the exclusion of the interest evidenced by the Certificates from gross income for federal income tax purposes and the exemption of interest evidenced by the Certificates from State personal income taxation.
(e) The information concerning the Corporation contained in the Preliminary Official Statement, as of its date and as of the date hereof, and in the Official Statement, as of its date and at all times after the date of the Official Statement up to and including the Closing Date, relating to the Corporation, was, is and will be true, correct and complete in all material respects and did not and does not, and on the Closing Date such information concerning the Corporation will not, contain any untrue statement of a material fact or omit to state any material fact which is necessary to make such statements and information therein, in light of the circumstances under which they were made, not misleading in any material respect. If the information in the Official Statement is supplemented or amended, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended) at all times subsequent thereto up to and including 12 the time of the Closing, the information concerning the Corporation contained in the Official Statement as so supplemented or amended will be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preparation and distribution of the Preliminary Official Statement and the Official Statement has been duly authorized by the Corporation.
(f) Any certificate signed by any official of the Corporation and delivered in connection with the transactions contemplated by the Official Statement and this Purchase Agreement shall be deemed to be a representation by the Corporation to the Underwriters as to the statements made therein.
Section 7. Conditions to the Obligations of the Underwriters. (a) The obligation of the Underwriters to accept delivery of and pay for the Certificates on the date of Closing shall be subject, at the option of the Underwriters, to the accuracy in all material respects of the representations, warranties and agreements on the part of the City and the Corporation contained herein as of the date hereof and as of the date of Closing, to the accuracy in all material respects of the statements of the officers and other officials of the City, the Corporation and the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof or the Certificate Documents, and to the performance by the City, the Corporation and the Trustee of their respective obligations to be performed hereunder and under the Certificate Documents at or prior to the date of Closing, and to the following additional conditions:
(1) At the date of Closing, the Certificates, the Certificate Documents and the Official Statement shall have been duly authorized, executed and delivered by the respective parties thereto, in substantially the forms heretofore submitted to the Underwriters with only such changes as shall have been agreed to by the Representative, and said documents shall not have been amended, modified or supplemented, except as may have been agreed to by the Representative, and there shall have been taken in connection therewith, with the execution and delivery of the Certificates and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as Orrick Herrington & Sutcliffe LLP, Special Counsel, shall deem to be necessary and appropriate;
(2) The representations and warranties of the City and the Corporation contained in this Purchase Agreement shall be true, correct and complete in all material respects on the date hereof and on the date of Closing, as if made again on the date of Closing, and the Official Statement (as the same may be supplemented or amended with the written approval of the Representative) shall be true, correct and complete in all material respects and such information shall not contain any untrue statement of fact or omit to state any fact required to be stated therein or necessary to make the statements therein relating to the City, in the light of the circumstances under which such statements were made, not misleading;
(3) Between the date hereof and the Closing, the market price for the Certificates, or the market for or marketability or the ability of the Underwriters to enforce contracts for the sale of the Certificates at the initial offering prices set forth in the Official 13 Statement, shall not have been materially adversely affected, in the reasonable judgment of the Representative, by reason of any of the following:
(i) legislation enacted by the Congress of the United States, or by the legislature of the State, or introduced in the Congress or recommended for passage by the President of the United States (by press release, other form of notice or otherwise), or a decision rendered by a court of the United States or the State or by the United States Tax Court, or an order, ruling, regulation (final, temporary or proposed) or official statement issued or made:
(A) by or on behalf of the United States Treasury Department, or by or on behalf of the Internal Revenue Service or other federal or State authority, which would have the purpose or effect of changing, directly or indirectly, the federal income tax consequences of interest on obligations of the general character of the Certificates in the hands of the holders thereof or State tax consequences of interest on obligations of the general character of the Certificates in the hands of the holders thereof; or (B) by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction over the subject matter thereof, to the effect that the Certificates, or obligations of the general character of the Certificates, including any and all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Trust Agreement is not exempt from qualification under the Trust Indenture Act of 1939, as amended; (ii) there shall have occurred (i) any outbreak or escalation of hostilities affecting the United States, the declaration by the United States of a national emergency or war or engagement in or material escalation of major military hostilities by the United States or the occurrence of any other national or international emergency, or (ii) any other calamity, crisis or terrorism relating to the effective operation of the government or the financial community in the United States, or (iii) a downgrade of the sovereign debt rating of the United States by any major credit rating agency or payment default on United States Treasury obligations;
(iii) the declaration of a general banking moratorium by federal, New York or State authorities having jurisdiction, or the general suspension of trading on any national securities exchange or fixing of minimum or maximum prices for trading or maximum ranges for prices for securities on any national securities exchange, whether by virtue or a determination by that exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction;
(iv) the imposition by the New York Stock Exchange, other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Certificates, or obligations of the general character 14 of the Certificates, or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or a change to the net capital requirements of, the Underwriters; (v) an order, decree or injunction of any court of competent jurisdiction, or order, filing, regulation or official statement by the Securities and Exchange Commission, or any other governmental agency having jurisdiction over the subject matter thereof, issued or made to the effect that the execution and delivery, offering or sale of obligations of the general character of the Certificates, or the execution and delivery, offering or sale of the Certificates, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws, as amended and then in effect;
(vi) the withdrawal or downgrading, or any notice of intended withdrawal or downgrading, of any underlying rating or credit watch status or outlook of the City’s outstanding indebtedness by a national rating agency or the occurrence of any adverse change of a material nature of the financial condition, results of operation or properties of the City;
(vii) any event occurring, or information becoming known which, in the reasonable judgment of the Representative, makes untrue in any material adverse respect any statement or information set forth in the Official Statement, or has the effect that the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading and (a) the City or the Corporation refuse to permit the Official Statement to be supplemented or to supply such statement or information in a manner satisfactory to the Representative, or (b) the effect of the Official Statement, as so supplemented, in the judgment of the Representative, materially adversely affects the market price or marketability of the Certificates or the ability of the Underwriters to enforce contracts for the sale, at the contemplated offering prices, of the Certificates;
(viii) a material disruption in securities settlement, payment or clearance services or the marketability of the Certificates or the market price thereof, in the opinion of the Representative, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets; (ix) the purchase of and payment for the Certificates by the Underwriters, or the resale of the Certificates by the Underwriters, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; or
(x) any litigation shall be instituted or be pending on the date of Closing to restrain or enjoin the issuance, sale or delivery of the Certificates, or in any way contesting or affecting any authority for or the validity of the proceedings authorizing and approving the City Resolution, the Corporation Resolution, the 15 Certificates, the Certificate Documents or the existence or powers of the City or the Corporation with respect to their obligations under the Certificate Documents. (4) At or prior to the Closing, the Underwriters shall have received the following documents, in each case dated as of the date of Closing and satisfactory in form and substance to the Representative:
(i) the Official Statement and each Certificate Document, duly executed and delivered by the respective parties thereto, with such amendments, modifications or supplements as may have been agreed to by the Representative; (ii) the unqualified approving opinion of Special Counsel, substantially in the form attached as Appendix D to the Official Statement, relating to the Certificates, and addressed to the City, and a letter of Special Counsel, addressed to the Underwriters, to the effect that such opinion may be relied upon by the Underwriters to the same extent as if such opinion was addressed to them; (iii) the supplemental opinion of Special Counsel, addressed to the Underwriters, substantially to the effect that (A) the Certificates are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended, (B) assuming due authorization, execution and delivery by all of the parties thereto other than the City, this Purchase Agreement and the Continuing Disclosure Certificate have each been duly executed and delivered by, and constitute valid and binding agreements of the City, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, receivership, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities in the State (provided that no opinion need be rendered regarding the adequacy of the Continuing Disclosure Certificate for purposes of Rule 15c2-12), and (C) the statements contained in the Official Statement under the captions “THE CERTIFICATES” (excluding any and all information under the subheading “—Book-Entry Only System”), “SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES,” and “TAX
MATTERS” and in APPENDIX C – “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS,” excluding any material that may be treated as included under such captions by cross-reference or reference to other documents or sources, insofar as such statements expressly summarize certain provisions of the Certificates, the Ground Lease, the Lease Agreement, the Assignment Agreement, the Trust Agreement or certain matters addressed in Special Counsel’s final approving opinion, are accurate in all material respects;
(iv) an opinion of the City Attorney, as counsel to the City, in substantially the form of Exhibit A attached hereto, addressed to the City, the Underwriters and the Trustee, in form and substance satisfactory to Special Counsel and the Representative;
16 (v) an opinion of the City Attorney, as counsel to the Corporation, in substantially the form of Exhibit B attached hereto, addressed to the Corporation, the City, the Underwriters and the Trustee, in form and substance satisfactory to Special Counsel and the Representative;
(vi) an opinion of counsel to the Trustee, in substantially the form of Exhibit E attached hereto, addressed to the City and the Underwriters, in form and substance satisfactory to Special Counsel and the Representative; (vii) the letter of Orrick, Herrington & Sutcliffe LLP, as disclosure counsel to the City (“Disclosure Counsel”), in the form attached hereto as Exhibit F;
(viii) a certificate of the Trustee, signed by a duly authorized officer of the Trustee, to the effect that (A) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States, having the full power and being qualified to enter into and perform its duties under the Trust Agreement and the Assignment Agreement and to execute and deliver the Certificates to the Underwriters pursuant to the Trust Agreement, (B) when delivered to and paid for by the Underwriters on the date of Closing, the Certificates will have been duly executed and delivered by the Trustee, (C) the execution and delivery of the Trust Agreement and the Assignment Agreement, and compliance with the provisions on the Trustee’s part contained therein, will not conflict in any material respect with or constitute a breach of or default under any law, administrative regulation, judgment, decree, material agreement, or other material instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or blue sky laws or regulations), nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the lien created by the Trust Agreement under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Trust Agreement, and (D) there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental or public entity pending or, to the best knowledge of the Trustee, threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the execution and delivery of the Certificates, or in any way contesting or affecting the validity or enforceability of the Trust Agreement and the Assignment Agreement, or contesting the powers of the Trustee or its authority to enter into, adopt or perform its obligations under any of the foregoing to which it is a party, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Trust Agreement or the Assignment Agreement or the ability of the Trustee to perform its obligations thereunder; 17 (ix) a certificate of the City, signed by an authorized officer thereof, to the effect that the representations and warranties of the City contained in the Purchase Agreement and in the Certificate Documents to which it is a party are true and correct in all material respects as of the date of Closing as if made on the date of Closing and no event affecting the City has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the date of Closing the statements or information (except for statements and information regarding DTC contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information (except for statements and information regarding DTC) therein not misleading in any material respect;
(x) a certificate of the Corporation, signed by an authorized officer thereof, to the effect that the representations and warranties of the Corporation contained in the Purchase Agreement and in the Certificate Documents to which it is a party are true and correct in all material respects as of the date of Closing as if made on the date of Closing and no event affecting the Corporation has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the date of Closing the statements or information regarding the Corporation contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein regarding the Corporation not misleading in any material respect;
(xi) a tax certificate of the City relating to the Certificates in form and substance acceptable to Special Counsel;
(xii) a certified copy of the City Resolution authorizing the execution and delivery of the Certificate Documents to which the City is a party and other matters pertaining thereto;
(xiii) a certified copy of the Corporation Resolution authorizing the execution and delivery of the Certificate Documents to which the Corporation is a party and other matters pertaining thereto;
(xiv) a copy of the Certificate of Status issued by the Secretary of State of the State, a certified copy of the articles of incorporation of the Corporation, and a certified copy of the Bylaws of the Corporation, and a good standing entity status letter from the California Franchise Tax Board;
(xv) a certified copy of the general resolution of the Trustee authorizing the execution and delivery of the Certificate Documents to which the Trustee is a party;
(xvi) evidence that any ratings described in the Official Statement are in full force and effect as of the date of Closing;
18 (xvii) a copy of the Notices of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 8855 of the California Government Code;
(xviii) evidence of arrangements for the issuance of a binder for a CLTA or ALTA title insurance policy or policies (with western regional exceptions) providing the title insurance required by the Lease Agreement, in form and substance acceptable to the Representative;
(xix) evidence of the insurance policy or policies maintained by the City as required pursuant to Section 6.01 of the Lease Agreement; (xx) an opinion of Katten Muchin Rosenman LLP, as counsel to the Underwriters, addressed to the Underwriters in form reasonably satisfactory to the Underwriters; and
(xxi) such additional legal opinions, certificates, proceedings, instruments and other documents as the Representative or Special Counsel may reasonably request to evidence compliance by the Trustee, the Corporation and the City with legal requirements, the truth and accuracy, as of the Closing, of the representations of the Trustee, the Corporation and the City, and the due performance or satisfaction by the Trustee, the Corporation and the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Trustee, the Corporation and the City.
(b) If the City or the Corporation shall be unable to satisfy the conditions to the Underwriters’ obligations contained in this Purchase Agreement or if the Underwriters’ obligations shall be terminated for any reason permitted herein, all obligations of the Underwriters hereunder may be terminated by the Representative at, or at any time prior to, the date of Closing by written notice to the City and the Corporation and the Underwriters shall have no further obligations hereunder.
Section 8. Fees and Expenses. Except as provided in the following paragraph, the City shall pay all costs and expenses incurred in connection with or relating to the execution and sale of the Certificates, including but not limited to (a) the fees and expenses of the City’s Municipal Advisor, (b) the fees and expenses of Orrick, Herrington & Sutcliffe LLP, for services rendered as Special Counsel and as Disclosure Counsel, (c) the fees and expenses of counsel to the City and the Corporation, (d) all expenses and costs of the City and the Corporation incident to the performance of their obligations hereunder and in connection with the authorization, execution and sale of the Certificates, (e) the costs of printing, distributing and delivering the Preliminary Official Statement and the Official Statement and any supplement or amendment thereto, (f) the fees and expenses of the Trustee and its counsel, (g) rating agency fees for rating the Certificates and (h) the fees and expenses relating to title insurance.
The Underwriters shall pay (which may be included as an expense component of the Underwriters’ discount): any advertising expenses incurred in connection with the public offering of the Certificates, the fees of the California Debt and Investment Advisory Commission, CUSIP 19 Service Bureau fees, fees of the Municipal Securities Rulemaking Board, the fees and expenses of counsel to the Underwriters and, except as provided in the preceding paragraph, all other expenses incurred by the Underwriters in connection with the public offering and sale of the Certificates, including the fees and disbursements of its counsel.
The City acknowledges that it has had an opportunity, with such advisors as it may deem appropriate, if any, to review the fees and expenses being incurred as part of the execution and delivery of the Certificates.
Section 9. Notices. All notices, certificates and other communications provided for hereunder shall be in writing and, if to the City, mailed, certified, return receipt requested, or delivered to it, addressed to it at:
City of Redlands
35 Cajon Street, Suite 15B
Redlands, California 92374
Attention: Director of Management Services/Finance Department and if to the Corporation, mailed, certified, return receipt requested, or delivered to it, addressed to it at:
Redlands Public Improvement Corporation
35 Cajon Street, Suite 15B
Redlands, California 92373
Attention: Chief Financial Officer
and if to the Underwriters, mailed, certified, return receipt requested, or delivered to each thereof, addressed to the Representative at:
BofA Securities, Inc.
333 S. Hope Street, Suite 3820
Los Angeles, California 90071
Attention: Craig Dussinger
or such other address as shall be designated by any such party in a written notice to each of the other parties.
Section 10. Survival of Representations, Warranties and Agreements. All representations, warranties and agreements of the City and the Corporation in this Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriters and shall survive the delivery of the Certificates hereunder.
Section 11. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Purchase Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Purchase Agreement using an electronic signature, it is signing, adopting and accepting this Purchase Agreement and that signing this Purchase Agreement using an electronic signature is the legal equivalent of having placed the undersigned officer’s handwritten signature on this Purchase Agreement on paper. Each 20 party acknowledges that it is being provided with an electronic or paper copy of this Purchase Agreement in a usable format.
Section 12. Applicable Law. This Purchase Agreement shall be interpreted, governed and enforced in accordance with the laws of the State.
Section 13. Effectiveness. This Purchase Agreement shall become effective upon its execution by duly authorized officers of the Representative, the City and the Corporation and shall be valid and enforceable from and after the time of such execution. 21 Section 14. Counterparts. This Purchase 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 instrument.
BOFA SECURITIES, INC.
By:
Authorized Signatory
Approved and Agreed to: _______, 2026
CITY OF REDLANDS
By:
Name:
Title:
REDLANDS PUBLIC
IMPROVEMENT CORPORATION
By:
Name:
Title
A-1
EXHIBIT A
FORM OF OPINION
OF COUNSEL TO THE CITY
[________], 2026
City of Redlands
Redlands, California
U.S. Bank Trust Company, National Association
Los Angeles, California
BofA Securities, Inc.
as Representative of the Underwriters
Los Angeles, California
Re: City of Redlands
Certificates of Participation, Series 2026 (Police and Fire Facilities) Ladies and Gentlemen:
We have acted as counsel to the City of Redlands (the “City”), in connection with the delivery of $[_______] aggregate principal amount of City of Redlands Certificates of Participation, Series 2026 (Police and Fire Facilities) (the “Certificates”).
In connection with rendering this opinion, we have examined documents, obtained certificates and undertaken other actions as we have determined necessary to render this opinion.
We have examined the following documents: a Lease Agreement, dated as of [______] 1, 2026 (the “Lease Agreement”), by and between the City and the Redlands Public Improvement Corporation (the “Corporation”); a Ground Lease, dated as of [______] 1, 2026 (the “Ground Lease”), by and between the City and the Corporation; a Trust Agreement, dated as of [______] 1, 2026 (the “Trust Agreement”), by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Corporation and the City; a Continuing Disclosure Certificate, dated the date hereof (the “Continuing Disclosure Certificate”), executed by the City; a Purchase Agreement, dated [______], 2026 (the “Purchase Agreement”), by and among the City, the Corporation and BofA Securities, Inc., as representative (the “Representative”), on behalf of itself and Stifel, Nicolaus & Company, Incorporated (collectively, the “Underwriters”); a Resolution adopted by the City Council of the City on [________], 2026 (the “City Resolution”) relating to the Certificates; an Official Statement, dated [________], 2026 (the “Official Statement”), which describes, among other things, the Certificates and the City; the Certificates; and the certificates and certifications of the City, the Trustee, the Corporation and others as to certain factual matters and such other documents and matters to the extent we deemed necessary to render the opinions set forth herein. The Lease Agreement, Ground Lease, Trust Agreement, Continuing Disclosure Certificate, Purchase Agreement, and Official Statement are collectively referred to herein as the “Operative Documents.”
A-2
With your permission we have assumed, without undertaking to verify the same by independent investigation, the following: (a) the authenticity of original documents and the genuineness of all signatures (other than the City); (b) the conformity to the originals of all documents submitted to us as copies; (c) the truth, accuracy, and completeness of the information, representations, and warranties contained in these documents, certificates, records and papers we have reviewed; and (d) compliance with all covenants and agreements contained in such documents. Based on the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:
1. The City is a general law city validly existing under the Constitution and the laws of the State of California, with full legal right, power and authority to execute, deliver and perform the obligations under the Operative Documents to which it is a party and to participate in the transactions contemplated by the Official Statement;
2. The City Resolution was duly adopted at a meeting of the City Council, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting at the time of adoption, and the City Resolution is in full force, has not been modified, amended or rescinded;
3. To the best of our knowledge and upon reasonable investigation, there is no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending (in which service of process has been completed against the City) or threatened against the City, (a) in any way contesting or affecting the validity of the City Resolution, the Operative Documents or contesting the existence or powers of the City to enter into or perform its obligations under such agreements; (b) which would materially adversely affect the financial position of the City; (c) affecting, contesting or seeking to prohibit, restrain or enjoin the execution and delivery of any of the Certificates or the Operative Documents, or in any way contesting or affecting the validity of or security for the Certificates or the Operative Documents or the consummation of the transactions contemplated thereby or hereby; or (d) contesting the completeness or accuracy of the Official Statement, or a supplement or amendment thereto or asserting that the Official Statement contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and to the best of our knowledge there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in subparagraphs (a) through (d) of this Paragraph 3.
4. To the best of our knowledge and upon reasonable investigation, the execution, delivery and performance of Operative Documents do not and will not conflict with or constitute on the part of the City a breach of, or a default under any agreement, indenture, mortgage, lease or other instrument to which the City is subject or by which it is bound or court order or consent decree to which the City is subject;
5. The Operative Documents to which the City is a party have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other respective parties thereto, if any, such agreements constitute legal, valid and binding agreements of the City enforceable in accordance with the terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought, and by the limitations on legal remedies imposed against governmental entities in the State; and A-3
6. To the best of our knowledge and upon reasonable investigation, the City is not in breach of or default under any applicable law or administrative regulation of the State or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, which breach or default would materially adversely affect the City’s ability to enter into or perform its obligations under the Operative Documents and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a breach or default.
This letter is not to be used, circulated, quoted, or otherwise referred to for any purpose other than the offering of the Certificates and may not be relied upon other than by the addressees hereof without our express written permission.
The opinions set forth in this letter are limited only to those matters expressly set forth herein. This letter is not to be used, circulated, quote or otherwise referred to for any purpose other than the offering of the Certificate and may not be relied upon other than by the addressees hereof without our express written permission. This opinion letter speaks only as of the date set forth above. We disclaim any obligation to update this letter.
Respectfully submitted,
B-1
EXHIBIT B
FORM OF OPINION
OF COUNSEL TO THE CORPORATION
[________], 2026
Redlands Public Improvement Corporation
Redlands, California
City of Redlands
Redlands, California
U.S. Bank Trust Company, National Association
Los Angeles, California
BofA Securities, Inc.
as Representative of the Underwriters
Los Angeles, California
Re: City of Redlands
Certificates of Participation, Series 2026 (Police and Fire Facilities) Ladies and Gentlemen:
We have acted as counsel to the Redlands Public Improvement Corporation (the “Corporation”) in connection with the delivery of $[_________] aggregate principal amount of City of Redlands Certificates of Participation, Series 2026 (Police and Fire Facilities) (the “Certificates”).
In connection with rendering this opinion, we have examined documents, obtained certificates and undertaken other actions as we have determined necessary to render this opinion.
We have examined the following documents: a Resolution of the Board of Trustees of the Corporation, adopted on [________], 2026 (the “Resolution”) relating to the Certificates; the Ground Lease, dated as of [______] 1, 2026 (the “Ground Lease”), by and between the City of Redlands (the “City”) and the Corporation; the Lease Agreement, dated as of [______] 1, 2026 (the “Lease Agreement”), by and between the City and the Corporation; the Assignment Agreement, dated as of [______] 1, 2026 (the “Assignment Agreement”), by and between the Corporation and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); the Trust Agreement, dated as of [______] 1, 2026 (the “Trust Agreement”), by and among the City, the Corporation and Trustee; a Purchase Agreement, dated [______], 2026 (the “Purchase Agreement”), by and among the City, the Corporation and BofA Securities, Inc., as representative (the “Representative”), on behalf of itself and Stifel, Nicolaus & Company, Incorporated (collectively, the “Underwriters”); an Official Statement, dated [________], 2026 (the “Official Statement”), which describes, among other things, the Certificates and the Corporation; the Certificates; certificates and certifications of the City, the Trustee, the Corporation and others as B-2
to certain factual matters; and such other documents and matters to the extent we deemed necessary to render the opinions set forth herein.
With your permission we have assumed, without undertaking to verify the same by independent investigation, the following: (a) the authenticity of original documents and the genuineness of all signatures (other than the Corporation); (b) the conformity to the originals of all documents submitted to us as copies; (c) the truth, accuracy, and completeness of the information, representations, and warranties contained in these documents, certificates, records and papers we have reviewed; and (d) compliance with all covenants and agreements contained in such documents.
Based on the foregoing, we are of the opinion that:
1. The Corporation is a nonprofit public benefit corporation organized and existing under and by virtue of the laws and the Constitution of the State of California and has full legal power and lawful authority to execute and deliver and perform all obligations under the Ground Lease, the Lease Agreement, the Assignment Agreement, the Trust Agreement and the Purchase Agreement (the “Corporation Documents”) and to participate in the transactions contemplated by the Official Statement.
2. The Resolution has been duly adopted at a meeting of the governing body of the Corporation, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout and the Resolution is in full force and effect and has not been modified, amended or rescinded.
3. The Corporation has duly authorized, executed and delivered the Corporation Documents and, assuming due authorization, execution and delivery by the parties thereto other than the Corporation, the Corporation Documents constitute the legally valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought;
4. To the best of our knowledge and upon reasonable investigation, there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body, pending or, to the best of our knowledge after reasonable investigation, threatened: (a) which would materially adversely affect the financial position of the Corporation; (b) affecting, contesting or seeking to prohibit, restrain or enjoin the execution and delivery of any of the Certificates or the Corporation Documents, or in any way contesting or affecting the validity of or security for the Certificates or the Corporation Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the powers of the Corporation or its authority to execute and deliver the Corporation Documents or perform its obligations thereunder; or (c) contesting the completeness or accuracy of the Official Statement, or a supplement or amendment thereto or asserting that the Official Statement contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and to the best of our knowledge there is no basis for any action, suit, B-3
proceeding, inquiry or investigation of the nature described in subparagraphs (a) through (c) of this Paragraph 4.
5. To the best of our knowledge and upon reasonable investigation, the Corporation is not in material breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Corporation is a party or to which the Corporation or any of its property or assets is otherwise subject, and no event has occurred or is continuing which with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; and the execution and delivery of the Corporation Documents and compliance with the provisions thereof by the Corporation, will not result in a violation of, a breach of, or a default under the articles of incorporation or bylaws of the Corporation or any statute, indenture, mortgage, deed of trust, note agreement, or other agreement or instrument to which the Corporation is a party or by which it or any of its property is bound, or any order, rule, law or regulation of any court or other governmental body having jurisdiction of the Corporation.
This letter is not to be used, circulated, quoted, or otherwise referred to for any purpose other than the offering of the Certificates and may not be relied upon other than by the addressees hereof without our express written permission.
The opinions set forth in this letter are limited only to those matters expressly set forth herein. This letter is not to be used, circulated, quote or otherwise referred to for any purpose other than the offering of the Certificate and may not be relied upon other than by the addressees hereof without our express written permission. This opinion letter speaks only as of the date set forth above. We disclaim any obligation to update this letter.
Respectfully submitted,
C-1
EXHIBIT C
$[____________]
CITY OF REDLANDS
CERTIFICATES OF PARTICIPATION, SERIES 2026
(POLICE AND FIRE FACILITIES)
Maturity Date
(May 1,)
Principal
Amount
Interest
Rate Yield
$ % %
$__________ _____% Term Certificates due May 1, 20__ - Yield _____% $__________ _____% Term Certificates due May 1, 20__ - Yield _____% _____________________
C Yield to call at par on May 1, 20[__].
PREPAYMENT
Optional Prepayment. The Certificates maturing on or after May 1, 20__ are subject to optional prepayment prior to their respective stated Principal Payment Dates, on any date on or after May 1, 20__, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Base Rental Payments paid pursuant to the Lease Agreement from any source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Certificates to be prepaid, plus unpaid accrued interest evidenced thereby to the date fixed for prepayment, without premium.
Extraordinary Prepayment. The Certificates are subject to extraordinary prepayment prior to their stated Principal Payment Dates, on any date, in whole or in part, in Authorized Denominations, from and to the extent of any insurance proceeds or condemnation award in excess C-2
of $50,000 paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof received with respect to any of the Property, deposited by the Trustee in the Prepayment Fund pursuant to the Trust Agreement, at a prepayment price equal to the principal evidenced by the Certificates to be prepaid, plus unpaid accrued interest, if any, evidenced thereby to the date fixed for prepayment, without premium.
Mandatory Sinking Account Prepayment. The Certificates with a stated Principal Payment Date of May 1, 20__ are subject to prepayment prior to such stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on May 1 of the years and in the aggregate principal amounts as set forth in the table shown below, any such Mandatory Sinking Account Payments to be at a prepayment price equal to the principal evidenced by the Certificates to be prepaid, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium:
Prepayment Date
(May 1,)
Principal
To Be Prepaid
$
†
† Stated Principal Payment Date
If some but not all of the principal evidenced by the Certificates with a stated Principal Payment Date of May 1, 20__ is prepaid pursuant to the extraordinary prepayment provisions as described above, the principal evidenced by such Certificates to be prepaid pursuant to Mandatory Sinking Account Payments on any subsequent May 1 will be reduced by the aggregate principal evidenced by such Certificates so prepaid pursuant to the extraordinary prepayment provisions, such reduction to be allocated among prepayment dates in proportion to the amount by which the principal components of the Base Rental Payments evidenced by such Certificates payable on such prepayment dates are abated pursuant to the Lease Agreement as a result of the event that caused such Certificates to be prepaid pursuant to the extraordinary prepayment provisions, in amounts of Authorized Denominations.
If some but not all of the principal evidenced by the Certificates with a stated Principal Payment Date of May 1, 20__ is prepaid pursuant to the optional prepayment provisions as described above, the principal evidenced by such Certificates to be prepaid pursuant to Mandatory Sinking Account Payments on any subsequent May 1 will be reduced by the aggregate principal evidenced by such Certificates so prepaid pursuant to the optional prepayment provisions, such reduction to be allocated among prepayment dates in amounts of Authorized Denominations, as designated by the City.
The Certificates with a stated Principal Payment Date of May 1, 20__ are subject to prepayment prior to such stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on May 1 of the years and in the aggregate principal amounts as set forth in the table shown below, any such Mandatory Sinking Account Payments to be at a prepayment price equal C-3
to the principal evidenced by the Certificates to be prepaid, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium:
Prepayment Date
(May 1,)
Principal
To Be Prepaid
$
†
† Stated Principal Payment Date
If some but not all of the principal evidenced by the Certificates with a stated Principal Payment Date of May 1, 20__ is prepaid pursuant to the extraordinary prepayment provisions as described above, the principal evidenced by such Certificates to be prepaid pursuant to Mandatory Sinking Account Payments on any subsequent May 1 will be reduced by the aggregate principal evidenced by such Certificates so prepaid pursuant to the extraordinary prepayment provisions, such reduction to be allocated among prepayment dates in proportion to the amount by which the principal components of the Base Rental Payments evidenced by such Certificates payable on such prepayment dates are abated pursuant to the Lease Agreement as a result of the event that caused such Certificates to be prepaid pursuant to the extraordinary prepayment provisions, in amounts of Authorized Denominations.
If some but not all of the principal evidenced by the Certificates with a stated Principal Payment Date of May 1, 20__ is prepaid pursuant to the optional prepayment provisions as described above, the principal evidenced by such Certificates to be prepaid pursuant to Mandatory Sinking Account Payments on any subsequent May 1 will be reduced by the aggregate principal evidenced by such Certificates so prepaid pursuant to the optional prepayment provisions, such reduction to be allocated among prepayment dates in amounts of Authorized Denominations, as designated by the City.
D-1
EXHIBIT D
CERTIFICATE OF THE REPRESENTATIVE
The undersigned, on behalf of BofA Securities, Inc. (the “Representative”), on behalf of itself and Stifel, Nicolaus & Company, Incorporated (together, the “Underwriters”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned certificates (the “Certificates”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. [Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) The Underwriters offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Purchase Agreement, the Representative has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the agreement of each broker-dealer who is a party to the third-party distribution agreement, to comply with the requirements for establishing issue price for the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.]
3. Defined Terms.
(a) City means the City of Redlands.
(b) Corporation means the Redlands Public Improvement Corporation. (c) [General Rule Maturities means those Maturities of the Certificates listed in Schedule A hereto as the “General Rule Maturities.”]
(d) [Hold-the-Offering-Price Maturities means those Maturities of the Certificates listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.”] (e) [Holding Period with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date ([______], 2026), or (ii) the date on which the Underwriters have sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.] D-2
(f) Maturity means Certificates with the same credit and payment terms. Certificates with different maturity dates, or Certificates with the same maturity date but different stated interest rates, are treated as separate maturities.
(g) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a Related Party to an Underwriter.
(h) Related Party means an entity that shares with another entity (1) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (2) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (3) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).
(i) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Certificates. The Sale Date of the Certificates is [______], 2026. (j) Underwriter means (1) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the Public, and (2) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (1) of this paragraph to participate in the initial sale of the Certificates to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Certificates to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the City with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Certificates, and by Orrick, Herrington & Sutcliffe LLP in connection with rendering its opinion that the interest on the Certificates is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the City from time to time relating to the Certificates. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein. With respect to Certificates allotted to Underwriters (other than the Representative), information furnished in this certificate with regard to sales of Certificates is based on information provided to the Representative by such other Underwriters, and has not been independently verified by us; however, we have no reason to believe such information is untrue in any material respect.
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BOFA SECURITIES, INC.
By:
Name:
Title:
Dated: [________], 2026
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SCHEDULE A
SALE PRICES OF THE [GENERAL RULE MATURITIES AND
INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES] $[____________]
CITY OF REDLANDS
CERTIFICATES OF PARTICIPATION, SERIES 2026
(POLICE AND FIRE FACILITIES)
Maturity Date
(May 1,)
Principal
Amount
Interest
Rate Yield
$ % %
$__________ _____% Term Certificates due May 1, 20__ - Yield _____% $__________ _____% Term Certificates due May 1, 20__ - Yield _____% _____________________
C Yield to call at par on May 1, 20[__]
[* 10% Test satisfied]
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SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE TRUSTEE
[__________], 2026
City of Redlands
Redlands, California
BofA Securities, Inc.
as Representative of the Underwriters
Los Angeles, California
Re: City of Redlands
Certificates of Participation, Series 2026 (Police and Fire Facilities) Ladies and Gentlemen:
We have acted as counsel for U.S. Bank Trust Company, National Association, a national banking association (the “Trustee”), in connection with the Trust Agreement, dated as of [______] 1, 2026 (the “Trust Agreement”), by and among the Trustee, the Redlands Public Improvement Corporation and the City of Redlands, related to the above-referenced certificates of participation (the “Certificates”). We are generally familiar with the Articles of Association and the Bylaws of the Trustee and are also familiar with the corporate proceedings of the Trustee with regard to its authorization, execution and delivery of the Trust Agreement and the Assignment Agreement.
Capitalized terms used herein shall have the respective meanings ascribed to them in the Trust Agreement, except as otherwise defined herein. The Trust Agreement and the Assignment Agreement are referred to herein, together, as the “Trustee Documents.” We have examined such documents and have reviewed such questions of law as we have considered necessary and appropriate for purposes of this opinion. In such review, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with originals of all documents submitted to us as copies. Where our opinions expressed below are qualified as being limited “to our knowledge,” such words, as used herein, mean that prior to or during the course of this firm’s representation of the Trustee in connection with the specific transactions contemplated by the Trustee Documents, no contrary information came to the attention of the attorneys in our firm who have principally represented the Trustee in connection with the transactions contemplated by the Trustee Documents and the preparation of this opinion.
Where questions of fact material to our opinions expressed below were not established independently, we have relied upon statements of officers of the Trustee as contained in certificates of officers of the Trustee.
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Based upon the foregoing, we are of the opinion that:
1. The Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America and is authorized to exercise trust powers.
2. The Trustee has all requisite corporate power, authority and legal right to execute and deliver the Trustee Documents and the Certificates.
3. The Trustee has duly authorized, executed and delivered the Trustee Documents.
Assuming the due authorization, execution and delivery thereof by the other parties thereto, the Trustee Documents are the legal, valid and binding agreements of the Trustee, enforceable in accordance with their terms against the Trustee.
4. The Trustee has duly executed and delivered the Certificates in its capacity as trustee under the Trust Agreement.
5. To our knowledge, no authorization, approval, consent, or order of any governmental agency or regulatory authority having jurisdiction over the Trustee that has not been obtained by the Trustee is required for the authorization, execution, delivery and performance by the Trustee of the Trustee Documents and the Certificates.
6. The execution and delivery of the Trustee Documents and the Certificates by the Trustee and the performance of its duties as a trustee pursuant to the Trustee Documents and the Certificates will not violate or cause a breach of any statute of the United States or the State of California, or any rule or regulation of any governmental authority or regulatory body of the United States or the State of California.
The opinions set forth above are subject to the following qualifications and exceptions:
(a) the opinions are subject to the effect of any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws of general application affecting creditors’ rights; and
(b) the opinions are subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing, and other similar doctrines affecting the enforceability of agreements generally (regardless of whether considered in a proceeding in equity or at law).
Our opinions expressed above are limited to the laws of the State of California and the federal laws of the United States of America.
The foregoing opinions are being furnished to you solely for your benefit and may not be relied upon by, nor may copies be delivered to, any other person without our prior written consent; provided, however, copies of this letter may be included in the transcript of documents compiled with respect to the execution and delivery of the Certificates.
Very truly yours,
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EXHIBIT F
FORM OF OPINION
OF DISCLOSURE COUNSEL
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EXHIBIT A
MASTER DEFINITIONS
“Acquisition Costs” means all costs of acquiring, constructing and installing the Project, including:
(a) all costs that the Corporation or the City shall be required to pay to a seller or any other Person under the terms of any contract or contracts for the purchase of any portion of the Project;
(b) all costs that the Corporation or the City shall be required to pay a contractor or any other Person for the acquisition, construction and installation of any portion of the Project;
(c) obligations of the Corporation or the City incurred for services (including obligations payable to the Corporation or the City for actual out-of-pocket expenses of the Corporation or the City) in connection with the acquisition, construction and installation of the Project, including reimbursement to the Corporation or the City for all advances and payments made in connection with the Project prior to or after delivery of the Certificates; (d) the actual out-of-pocket costs of the Corporation or the City for test borings, surveys, estimates and preliminary investigations therefor, as well as for the performance of all other duties required by or consequent to the proper acquisition, construction and installation of the Project, including administrative expenses under the Lease Agreement and under the Trust Agreement relating to the acquisition, construction and installation of the Project;
(e) Costs of Issuance, to the extent amounts for the payment thereof are not available in the Costs of Issuance Fund; and
(f) any sums required to reimburse the Corporation or the City for advances made by the Corporation or the City for any of the above items or for any other costs incurred and for work done by the Corporation or the City that are properly chargeable to the Project.
“Acquisition Fund” means the fund by that name established and held by the Trustee pursuant to Section 3.04 of the Trust Agreement.
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Applicable Laws” means any applicable law, regulation, code, order, rule, judgment or consent agreement of any governmental, quasi-governmental or other public or quasi-public authority or regulatory body, including those relating to zoning, building, use and occupancy, fire safety, health, sanitation, air pollution, ecological matters, environmental protection, hazardous or toxic materials, substances or wastes, conservation, parking, architectural barriers to the handicapped, or restrictive covenants or other agreements affecting title to the Property.
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“Asbestos Containing Materials” means material in friable form containing more than 1% of the asbestiform varieties of (a) chrysotile (serpentine), (b) crocidolite (ricbeckite), (c) amosite (cummington-itegrinerite), (d) anthophyllite, (e) tremolite and (f) actinolite. “Assignment Agreement” means the Assignment Agreement, dated as of [_______] 1, 2026, by and between the Corporation and the Trustee, as originally executed and as it may from time to time be amended, supplemented or otherwise modified in accordance with the provisions thereof.
“Authorized City Representative” means the Mayor of the City and the City Manager, as delegated signing authority by the City Council, including anyone serving as the interim officer in such position, and such other Person designated as an Authorized Representative of the City in a Written Certificate of the City filed with the Trustee. “Authorized Corporation Representative” means the President of the Corporation, the Secretary of the Corporation, and the Treasurer of the Corporation, including anyone serving as the interim officer in such position, and such other officers of the Corporation as the President of the Corporation may designate to act on behalf of the Corporation under or with respect to the Trust Agreement.
“Authorized Denominations” means $5,000 or any integral multiple thereof. “Base Rental Deposit Date” means the 10th day next preceding each Interest Payment Date.
“Base Rental Payment Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.01 of the Trust Agreement. “Base Rental Payment Schedule” means the schedule of Base Rental Payments payable to the Corporation from the City pursuant to Section 3.01 of the Lease Agreement and attached as Exhibit C to the Lease Agreement.
“Base Rental Payments” means all amounts payable to the Corporation by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Owners” means those Persons for whom the Participants have caused the Depository to hold Book-Entry Certificates.
“Book-Entry Certificates” means the Certificates registered in the name of the nominee of DTC, or any successor securities depository for the Certificates, as the registered owner thereof pursuant to the terms and provisions of Section 2.08 of the Trust Agreement. “Business Day” means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city or cities in which the Principal Office of the Trustee is located are authorized or required by law to be closed, or (c) a day on which the New York Stock Exchange or the payment system of the Federal Reserve System is authorized or obligated by law or executive order to be closed.
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“Capitalized Interest Account” means the account by that name established and held by the Trustee pursuant to Section 5.02 of the Trust Agreement. “Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Certificates.
“Certificate Purchase Agreement” means the Certificate Purchase Agreement, dated [_______], 2026, by and between the Purchaser and the City relating to the Certificates. “Certificate Year” means each twelve-month period beginning on May 1 in each year and extending to the next succeeding April 30, both dates inclusive, except that the first Certificate Year shall begin on the Delivery Date and end on April 30, 20[__]. “Certificates” means the City of Redlands Certificates of Participation, Series 2026 (Police and Fire Facilities), executed and delivered by the Trustee pursuant to the Trust Agreement. “City” means the City of Redlands, a municipal corporation and general law city organized and existing under the laws of the State of California, and its successors. “Code” means the Internal Revenue Code of 1986.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the Delivery Date, executed by the City, as originally executed and as it may from time to time be amended, supplemented or otherwise modified in accordance with the provisions thereof. “Corporation” means the Redlands Public Improvement Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State of California, and its successors.
“Costs of Issuance” means all the costs of executing and delivering the Certificates, including all printing and document preparation expenses in connection with the Trust Agreement, the Lease Agreement, the Ground Lease, the Assignment Agreement, the Certificates and the preliminary official statement and final official statement pertaining to the Certificates, rating agency fees, title insurance fees, market study fees, legal fees and expenses of counsel with respect to the execution and delivery of the Certificates, the fees and expenses of the Trustee, including fees and expenses of its counsel, the fees and expenses of any municipal advisor to the City, any premium for municipal bond insurance, and other fees and expenses incurred in connection with the execution and delivery of the Certificates, to the extent such fees and expenses are approved by the City.
“Costs of Issuance Fund” means the fund by that name established and held by the Trustee pursuant to Section 3.03 of the Trust Agreement. “Defeasance Securities” means (a) non-callable direct obligations of the United States of America (“United States Treasury Obligations”), (b) evidences of ownership of proportionate interests in future interest and principal payments on United States Treasury Obligations held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying A-4
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United States Treasury Obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated, (c) subject to the prior written consent of the Insurer, pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively, or (d) subject to the prior written consent of the Insurer, securities eligible for “AAA” defeasance under then existing criteria of S&P, or any combination thereof. “Delivery Date” means [________], 2026.
“Depository” means the securities depository acting as Depository pursuant to Section 2.08 of the Trust Agreement.
“DTC” means The Depository Trust Company, New York, New York and its successors. “Environmental Regulations” means all laws and regulations, now or hereafter in effect, with respect to Hazardous Materials, including the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42 U.S.C. Section 9601, et seq.) (together with the regulations promulgated thereunder, “CERCLA”), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 6901, et seq.) (together with the regulations promulgated thereunder, “RCRA”), the Emergency Planning and Community Right-to-Know Act, as amended (42 U.S.C. Section 11001, et seq.) (together with the regulations promulgated thereunder, “Title III”), the Clean Water Act, as amended (33 U.S.C. Section 1321, et seq.) (together with the regulations promulgated thereunder, “CWA”), the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.) (together with the regulations promulgated thereunder, “CAA”) and the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601 et seq.) (together with the regulations promulgated thereunder, “TSCA”), and any state or local similar laws and regulations and any socalled local, state or federal “superfund” or “superlien” law. “Event of Default” means an event specified in Section 7.01 of the Trust Agreement described as constituting an Event of Default.
“Fair Rental Value” means, with respect to the Property, the annual fair rental value thereof, as set forth in Section 3.03 of the Lease Agreement. “Ground Lease” means the Ground Lease, dated as of [_______] 1, 2026, by and between the City and the Corporation, as originally executed and as it may from time to time be amended, supplemented or otherwise modified in accordance with the provisions thereof and of the Lease Agreement.
“Hazardous Materials” means flammable explosives, polychlorinated biphenyl compounds, heavy metals, chlorinated solvents, cyanide, radon, petroleum products, asbestos or any Asbestos Containing Materials, methane, radioactive materials, pollutants, hazardous materials, hazardous wastes, hazardous, toxic, or regulated substances or related materials, as defined in CERCLA, RCRA, CWA, CAA, TSCA and Title III, and the regulations promulgated pursuant thereto, and in all other Environmental Regulations applicable to the Corporation, the City, the Property or the business operations conducted by the Corporation or the City thereon. “Independent Insurance Consultant” means a nationally recognized independent actuary, insurance company or broker acceptable to the Insurer that has actuarial personnel A-5
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experienced in the area of insurance for which the City is to be self-insured, as may from time to time be designated by the City.
“Insolvency Proceeding” has the meaning ascribed to such term in Section 11.01(n) of the Trust Agreement.
“Insurance Business Day” means any day other than (a) a Saturday or Sunday, (b) any day on which the Principal Office of the Trustee or the principal office of the Insurer is closed, and (c) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the City of New York. “Insurance Policy” means the Municipal Bond Insurance Policy, and any endorsement thereto, issued by the Insurer guaranteeing the scheduled payment of the interest and principal evidenced by the Certificates when due, or any insurance policy substituted for said Municipal Bond Insurance Policy.
“Insurer” means [INSURER], a [_______] corporation, or any successor thereto or assignee thereof.
“Insurer Rate” means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank, N.A. at its principal office in the City of New York, New York, as its prime or base lending rate (the “Prime Rate”) (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank, N.A.) plus [____]%, and (ii) the then applicable highest rate of interest evidenced by the Certificates and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. Interest at the Insurer Rate on any amount owing to the Insurer shall be computed on the basis of the actual number of days elapsed in a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate, the Prime Rate shall be the prime rate or base lending rate of such other bank, banking association or trust company as the Insurer, in its sole and absolute discretion, shall designate. If the interest provisions of this paragraph shall result in an effective rate of interest which, for any period, exceeds the limit of the usury or any other laws applicable to the indebtedness created herein, then, to the extent permissible by law, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied as additional interest for any later periods of time when amounts are outstanding hereunder to the extent that interest otherwise due hereunder for such periods plus such additional interest would not exceed the limit of the usury or such other laws, and any excess shall be applied upon principal immediately upon receipt of such moneys by the Insurer with the same force and effect as if the City had specifically designated such extra sums to be so applied and the Insurer had agreed to accept such extra payment(s) as additional interest for such later periods. In no event shall any agreed-to or actual exaction as consideration for the indebtedness created herein exceed the limits imposed or provided by the law applicable to this transaction for the use or detention of money or for forbearance in seeking its collection.
“Insurer’s Fiscal Agent” means a fiscal agent appointed by the Insurer for purposes of, and in accordance with the terms contained in, the Insurance Policy.
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“Interest Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.02 of the Trust Agreement.
“Interest Payment Date” means May 1 and November 1 of each year commencing November 1, 2026.
“Lease Agreement” means the Lease Agreement, dated as of [_______] 1, 2026, by and between the City and the Corporation, as originally executed and as it may from time to time be amended, supplemented or otherwise modified in accordance with the provisions thereof. “Lease Default Event” means any failure or event specified in Section 7.01 of the Lease Agreement described as constituting a Lease Default Event. “Letter of Representations” means the letter of the City delivered to and accepted by the Depository on or prior to the delivery of the Certificates as Book-Entry Certificates setting forth the basis on which the Depository serves as depository for such Book-Entry Certificates, as originally executed or as it may be amended or supplemented or replaced by a letter to a substitute Depository.
“Mandatory Sinking Account Payment” means the principal evidenced by the Certificates required to be paid on each Mandatory Sinking Account Payment Date pursuant to Section 4.01 of the Trust Agreement.
“Mandatory Sinking Account Payment Date” means (a) for the Certificates with a stated Principal Payment Date of May 1, 20__, May 1, 20__ and through and including May 1, 20__, and (b) for the Certificates with a stated Principal Payment Date of May 1, 20__, May 1, 20__ and through and including May 1, 20__.
“Moody’s” means Moody’s Investors Service, Inc., its successors and assigns, and, if Moody’s Investors Service, Inc., shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the City.
“Net Proceeds” means any insurance proceeds or condemnation award in excess of $50,000 paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof. “Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.08 of the Trust Agreement. “Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the City. “Outstanding” means, with respect to the Certificates, as of any date, Certificates theretofore or thereupon being executed and delivered under the Trust Agreement, except (a) Certificates canceled by the Trustee or delivered to the Trustee for cancellation on or prior to such date, (b) Certificates in lieu of which other Certificates have been executed and delivered, or that have been paid without surrender thereof pursuant to Section 2.10 of the Trust Agreement, and (c) A-7
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Certificates paid or deemed to have been paid within the meaning of Section 10.02 of the Trust Agreement.
“Owner” means, with respect to a Certificate, the Person in whose name such Certificate is registered on the Registration Books.
“Participant” means any entity that is recognized as a participant by the Depository in the book-entry system of maintaining records with respect to Book-Entry Certificates. “Participating Underwriter” has the meaning ascribed to such term in the Continuing Disclosure Certificate.
“Permitted Encumbrances” means, with respect to the Property, as of any particular time, (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or that the City may, pursuant to provisions of Section 5.09 of the Lease Agreement, permit to remain unpaid, (b) the Assignment Agreement, (c) the Lease Agreement, (d) the Ground Lease, (e) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law as normally would exist with respect to properties similar to the Property for the purposes for which it was acquired or is held by the City, (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions that exist of record as of the Delivery Date that the City certifies in writing will not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Certificates by the Trust Agreement and the Assignment Agreement, and (g) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Delivery Date that the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Certificates by the Trust Agreement and the Assignment Agreement and to which the Corporation and the Insurer consents in writing.
“Permitted Investments” means the following:
(a) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), and obligations of any agency, department or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America (“Federal Securities”);
(b) any of the following direct or indirect obligations of the following agencies of the United States of America: (i) direct obligations of the Export-Import Bank; (ii) certificates of beneficial ownership issued by the Farmers Home Administration; (iii) participation certificates issued by the General Services Administration; (iv) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Federal Housing Administration; (v) project notes issued by the United States Department of Housing and Urban Development; and (vi) public housing notes and bonds guaranteed by the United States of America; A-8
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(c) interest-bearing demand deposit accounts, including interest bearing money market accounts, time deposits, trust funds, trust accounts, overnight bank deposits, interest bearing deposits, other deposit products, including those placed by a third party pursuant an agreement between the Trustee and the City (including certificates of deposit) in a federal or state chartered bank (including the Trustee and its affiliates) or a state licensed branch of a foreign bank or a state or federal association (as defined in Section 5102 of the California Financial Code), provided that (i) the unsecured short-term obligations of such commercial bank or savings and loan association shall be rated A1 or better by S&P, or (ii) such demand deposit accounts or time deposits shall be fully insured by the Federal Deposit Insurance Corporation;
(d) commercial paper rated in the highest short-term rating category by S&P, issued by corporations that are organized and operating within the United States of America, and that matures not more than 180 days following the date of investment therein; (e) bankers acceptances, consisting of bills of exchange or time drafts drawn on and accepted by a commercial bank whose short-term obligations are rated in the highest short-term rating category by S&P that mature not more than 270 days following the date of investment therein;
(f) obligations the interest on which is excludable from gross income pursuant to Section 103 of the Code and that are rated A or better by S&P; (g) obligations issued by any corporation organized and operating within the United States of America having assets in excess of $500,000,000, which obligations are rated A or better by S&P;
(h) money market mutual funds having a rating in the highest investment category granted thereby from S&P, including funds for which the Trustee and its affiliates receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise;
(i) investment agreements, including guaranteed investment contracts and forward delivery agreements with any nationally or state-chartered bank, financial institution, insurance company or other entity that is rated or guaranteed by an entity that is rated in one of the three highest rating categories (without regard to gradations or modifiers within such category), at the time of acquisition thereof, by at least one nationally recognized rating agency; provided, however, that, if an investment agreement is guaranteed by a third party, then such rating requirement shall apply to the guarantor only; and
(j) repurchase agreements with (i) any domestic bank, or domestic branch of a foreign bank, the long-term debt of which is rated at least “A-” or “A3,” respectively, by S&P and Moody’s; (ii) any broker-dealer with “retail customers” or a related affiliate thereof, which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A-” or “A3,” respectively, by S&P and Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors A-9
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Protection Corporation; or (iii) any other entity (or entity whose obligations are guaranteed by an affiliate or parent company) rated at least “A-” or “A3,” respectively, by S&P and Moody’s, provided that:
(1) the market value of the collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody’s to maintain an “A-” or “A3” rating, respectively, in a respective “A-” or “A3” rated structured financing (with a market value approach) by S&P and Moody’s;
(2) the Trustee or a third party acting solely as agent therefor (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books); (3) the repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);
(4) all other requirements of S&P and Moody’s in respect of repurchase agreements shall be met; and
(5) the repurchase agreement shall provide that if during its term the provider’s rating by either S&P or Moody’s is withdrawn or suspended or falls below “A-” or “A3” respectively, the provider must immediately notify the City and Trustee and the provider must, at the direction of the City or the Trustee, within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the City or Trustee.
“Persons” means an individual, corporation, firm, association, partnership, limited liability company, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Policy Payments Account” means the account by that name established and held by the Trustee pursuant to subsection (d) of Section 11.02 of the Trust Agreement. “Preference Claim” has the meaning ascribed to such term in Section 11.01(n) of the Trust Agreement.
“Prepayment Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.02 of the Trust Agreement.
“Principal Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.02 of the Trust Agreement.
“Principal Office” means the Trustee’s principal corporate trust office in St. Paul, Minnesota, or any other office designated by the Trustee.
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“Principal Payment Date” means, with respect to a Certificate, the date on which the principal evidenced by such Certificate is scheduled, as of the date of execution and delivery of such Certificate, to become due and payable.
“Project” consists of the construction, installation and acquisition of certain capital improvements constituting a city police facility and related improvements and a city fire station and related improvements, the acquisition and installation of certain heating, ventilation and air conditioning systems and any other capital expenditure project deemed necessary by the City. “Property” means the real property described in Exhibit B to the Lease Agreement and any improvements thereto.
“Purchaser” means BofA Securities, Inc. and Stifel, Nicolaus & Company, Incorporated, as co-underwriters and purchasers of the Certificates pursuant to the Certificate Purchase Agreement.
“Rebate Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.05 of the Trust Agreement.
“Rebate Requirement” has the meaning ascribed to such term in the Tax Certificate. “Record Date” means, with respect to any Interest Payment Date, the fifteenth day of the calendar month immediately preceding such Interest Payment Date, whether or not such day is a Business Day.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Certificates pursuant to Section 2.06 of the Trust Agreement.
“Release” means to pump, spill, leak, dispose of, empty, discharge or release. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the period from the Delivery Date through [June 30, 2026] and, thereafter, the twelve-month period commencing on July 1 of each year during the term of the Lease Agreement.
“S&P” means S&P Global Ratings, a business unit of Standard and Poor’s Financial Services, LLC, its successors and assigns, and, if S&P Global Ratings shall for any reason no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the City. “Scheduled Termination Date” means May 1, 20__.
“Tax Certificate” means the Tax Certificate executed by the City at the time of execution and delivery of the Certificates relating to the requirements of Section 148 of the Code, as A-11
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originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Trust Agreement” means the Trust Agreement, dated as of [_______] 1, 2026, by and among the Trustee, the Corporation and the City, as originally executed and as it may from time to time be amended, supplemented or otherwise modified in accordance with the provisions thereof.
“Trustee” means U.S. Bank Trust Company, National Association, as trustee under the Trust Agreement, or any successor thereto as Trustee under the Trust Agreement substituted in its place as provided in the Trust Agreement.
“Verification Report” means, with respect to the deemed payment of Certificates pursuant to clause (ii) of subsection (a) of Section 10.02 of the Trust Agreement, a report of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Defeasance Securities and cash, if any, deposited in connection with such deemed payment satisfy the requirements of clause (ii) of subsection (a) of Section 10.02 of the Trust Agreement. “Written Certificate of the Corporation” means a written certificate signed in the name of the Corporation by an Authorized Corporation Representative. Any such certificate may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Certificate of the City” or “Written Request of the City” means, respectively, a written certificate or written request signed in the name of the City by an Authorized City Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.