HomeMy WebLinkAboutHuntington Beach Public Facilities Corporation - PFC - Relat CERTIFICATE OF AUTHORIZED OFFICERS
Name of (Huntington Beach, Public Facilities
Obligor/Issuer CITY OF HUNTINGTON BEACH Corp. LHD Mtg. Bonds 9/1/7�)
Address 2000 Main Street, Huntington Beach, Ca. 92648
To: B a n k o f A m e r i c a
Natiaoal Tint and Swnngs Association
Oxporate Ziust Division
555 South Flower Street, Sth Floor
Los Angeles, CA 90071
I, the undersigne Connie Brockway, Ci_ Clerk of the City of
Huntington Beach hereby certi that, pursuant to resolution
duly adopted by the Huntin n Beach CityCo cil ,
those officers named upon the of this 'ficate have been duly
authorized, are now acting and if' to sign written instructions,
consents, certificates or other , etc., on behalf of this
mmicipality/ocapany, that the spec' ignatures appearing opposite the names
and titles are the genuine signs of officers and that said
resolutions electing/authorizing ese offi are now in full force and
effect. You are further autho zed to reoogiu these signatures until you
receive our written ins ns to the contrary.
(Print) (Signature) y� "
Grace Winchell Mayor, will sign
Michael T. Uberuaga City der, will S,14� peA
Ray Silver Asst. City Manager, will sign
Donald Watson Treasurer, will sign ,�.G ���
Finance Director, will sign _
Connie Brockway City Clerk , will si
9n
Robert J. -Franz Pe uty City Adnmstr. , will sign
, will sign
Certified on , 19 2L. (SEAL)
I, the undersigned City Clerk of Huntington Beach,
California, hereby certify that the specimen signatures
appearing opposite the names and titles are the
genuine signatures of such officers.
Name.
Titleir
rztnla/doc
06/90
CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY
CITY CLERK
July 16, 1993
Kathryn M. Valdivia
Assistant Vice President
Bank of America
Corporate Trust 8510
5th Floor
Los Angeles, CA 90071
Dear Ms. Valdivia:
Pursuant to our telephone conversation of July 15, 1993, I am returning the certification
appropriately reworded.
In order to certify the document as originally worded it would be necessary that the
Council adopt a new resolution specifying the individuals who now occupy each of these
positions.
If you decide a resolution is required, please notify me by letter and I will transmit a
request to the City Attorney and to the Finance Director that such resolution be prepared
for Council adoption.
Sincerely,
Saka�
Connie Brockway, CMC
City Clerk
CB:ln
1273I
Tole phon e:714536-5227)
Bank of America
Corporate Trust Administration
June 17, 1993 _ a.__.....»
City of Huntington Beach
2000 Main Street
Huntington Beach, Ca 92648
Attn: Dan Villella
Director of Finance
0
RE: Huntington Beach 1970 Park Bonds 78209
Huntington Beach Assessment Dist. #88-1 79903 rC—
Huntington Beach Comm. Fac Dist. 1990-1 Spec. Tax Bonds 79967 Wale
Huntington Beach Parking Authority, 1968 g. Bonds
Bonds 77972
Huntington Beach, Public Fad-Corp. LHD Mtg. Bonds 9-1-72 78269
Huntington Beach, Public Fac Corp., Escrow 79767
Dear Mr. Villella:
Enclosed is a copy of our Certificate of Authority of
Officers. In order to insure that the Trustee/Fiscal
Agent/Paying Agent takes directions from authorized
officers, please complete the Certificate and return to us
within 15 days after your receipt of this letter. If there
has been no change from the current list (copy enclosed) ,
please indicate "no change" on the Certificate, date and
sign it, and return it to us.
If you have any questions, please call.
Sincerely,
Kathy Valdivia
Assistant Vice President
KV:jn
Tel: (213) 228-4146
Enclosure
i
NP51\LETTERS\CERTAU.KV[23]
Bank of America National Trust and Savings Association
555 South Flower Street Los Angeles,California 90071 213/228.4146
_ t 7
HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION
and
CITY OF HUNTINGTON BEACH
Dated as of September 1, 1972
Recorded in the Office of the County Recorder of Orange County on
____________________1 1972, as Document No. ________ in Book ________,
Page ....... of Official Records of Orange County
a��
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
LEASE AND SUBLEASE
THIS LEASE AND SUBLEASE, dated as of September 1, 1972, by and between HUNTINGTON
BEACH PUBLIC FACILITIES CORPORATION, hereinafter referred to as the "Corporation", and the
CITY OF HUNTINGTON BEACH, a municipal corporation duly organized and existing by virtue of a
charter adopted pursuant to the Constitution of the State of California in the State of California,hereinafter
referred to as the "City",
WITNESSETH:
WHEREAS,the City is the owner of certain real property in the County of Orange, more particularly
described in Exhibit A attached hereto and made a part hereof (hereinafter referred to as the "Site");
and
WHEREAS, the City has caused to be prepared and has approved plans and specifications for
the construction of a library building and related facilities to such building, all to be constructed on the
Site (each of such buildings and related facilities being hereinafter referred to collectively as the
"Facilities"); and
WHEREAS, the Corporation intends to construct the Facilities, and to finance such construction by
the issuance and sale of its leasehold mortgage bonds;
NOW, THEREFORE in consideration of the payment of rental and the performance of the mutual
promises and agreements herein contained at the time and in the manner specified, the parties hereto
agree as follows:
Section 1. Ground Lease
For and in consideration of the sum of $ advance rental, receipt of which is hereby
acknowledged, the City hereby leases the Site to the Corporation for a term commencing on the date of
r execution hereof and ending one week after the end of the tern of the sublease to the City set forth in
Section 4 hereof,unless earlier ended as hereinafter provided (except in the case of a default by the City as
specified in Section 13 hereof).
At the end of the term of this Ground Lease or upon any earlier termination thereof, or upon the
payment or provision therefor of all sums due under any security instruments filed with the City
pursuant to Section 15 hereof, the Project and any other assets of the Corporation relating thereto and
then remaining, shall be distributed to the City. The City agrees that in such event it will accept such
distribution of assets. The City may require the discharge of any security instruments of the Corporation
filed pursuant to Section 15 hereof at any time if the City provides the Corporation with the necessary
funds therefor, subject however, to the terms of such security instruments.
Section 2. Construction of Facilities
The City shall forthwith upon execution hereof deliver to the Corporation possession of the Site
and said plans and specifications. The Corporation,unless it has heretofore done so,shall proceed diligently
to let a contract_ or contracts for the construction of the Facilities by a contractor or contractors licensed
under the laws of the State of California, all work, construction and materials to be in accordance with
1 said plans and specifications. The Corporation shall let such contract or contracts by open competitive
bidding, the procedure therefor being in accordance with the general laws relating to the bidding on
1
contracts for public works. Construction of the Facilities shall be completed within two and one half years
of the date of execution hereof; provided, however,that with the consent of the City such completion date
may be extended by not to exceed one additional year; and provided further that such completion date
shall be extended for whatever further period (but in no event to a date later than three years from the date
of execution hereof), that the Corporation (or any contractor or contractors employed by the
Corporation) is delayed by: (1) acts or omissions of the City or of any employee or agent of the City
acting in the course and scope of his employment, including changes ordered in the work; or (2) any
act of God which the Corporation could not reasonably have foreseen and provided for; or (3) any
strikes, boycotts, or like obstructive actions by employee or labor organizations which are beyond the
control of the Corporation and which the Corporation cannot overcome with reasonable effort and
could not reasonably have foreseen and provided for; or (4) any war or declaration of a state of
national emergency; or (5) the imposition by government action or authority of restrictions upon
the procurement of labor or materials necessary for completion.
If upon the date of execution of this Lease and Sublease there is any litigation pending relating
to the validity of this Lease and Sublease, or the financing of the Facilities, or if any such litigation is
commenced prior to the letting of any contract for the construction of the Facilities,the Corporation shall
have no obligation to let such construction contract until such litigation is finally terminated favorably to
the validity of this Lease and Sublease or the proposed financing. In the event that such litigation
remains pending for more than six (6) months, the Corporation may, if no bonds of the Corporation
are outstanding,terminate this Lease and Sublease by delivering written notice of such termination to the
City and surrendering the Site to the City. Thereafter both the Corporation and the City shall be relieved
of all obligations under this Lease and Sublease.
Section 3. Plans, Specifications and Architect
The City has entered into an agreement with Richard and Dion Neutra, Architects and Associates
(hereinafter referred to as the "Architects") for architectural services in connection with the Facilities
including preparation of the plans and specifications above referred to.
The Corporation shall use said plans and specifications and the services of the Architects in the
performance of the work of constructing the Facilities covered by agreement, including, without limita-
tion, the Architect's supervision services. The Corporation shall pay the Architects for their services.
The City shall provide all inspection services and testing of materials required for said construction
including consultants, as necessary.
Section 4. Sublease to City—Maximum Term
The Corporation hereby subleases to the City and the City hereby accepts and rents from the
Corporation the Site as improved by the construction of the Facilities. The term of sublease shall
commence when the Facilities are substantially completed and available for occupancy and written
notice thereof has been served on the City, but in no event later than five years from the date of
execution hereof plus any extension of completion date provided under Section 2 hereof. The term of
the sublease to the City shall end on the earlier of (i) thirty (30) years after commencement of said
term of sublease or (ii) upon the payment of all principal, interest and premiums, if any, or other sums
so that any and all security devices and instruments filed with the City pursuant to Section 15 hereof
have been discharged.
Section 5. Rental
For the period commencing on the date on which the City shall be served with written notice that
the Facilities have been substantially completed and are ready for occupancy and the City has accepted
said Facilities, the City agrees to pay for the use of the premises during each fiscal year rent at the rate
of $---------------- per year ("base rent"). In the event that the liability of the City for rent at said annual
• rate does not commence on the first day of the City's fiscal year (July 1), the rent to be paid for the
remaining portion of the fiscal year in which such liability commences shall be prorated and shall be
paid within thirty days following commencement of such liability, but in no event later than the next
2
succeeding June 30. During the remainder of the term of the sublease to the City said rental shall be
paid on or before July 31 in each fiscal year for the use of the premises during said fiscal year. In addition,
and as part of the rent, during the term of the sublease to the City, the City agrees to pay an amount
equivalent to the following:
(1) all taxes and assessments of any nature whatsoever, including, but not limited to, excise
taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes,
if any, levied upon the Site or upon the Facilities or upon the Corporation's interest therein, or
upon the rental income derived therefrom, except State and Federal income taxes; and
a
(2) insurance premiums (as hereinafter provided); and
(3) all administrative costs of the Corporation, including, without limiting the generality of the
foregoing, wages, expenses, compensation and indemnification of the Trustee under the indenture
referred to in Section 15 hereof, fees and charges of auditors, accountants, architects, engineers
and attorneys, and all other necessary administrative costs of the Corporation or charges required
to be paid by the Corporation in order to comply with the terms of the bonds or said indenture and
to defend the Corporation and its members and directors; and
(4) all costs and expenses which the Corporation may incur in consequence of or because of
any default by the City under this Lease and Sublease, including reasonable attorneys' fees and
costs of suit or action at law to enforce the terms and conditions of this Lease and Sublease,
+ said payments to be made within sixty (60) days after the City has been furnished receipted bills or
cancelled checks showing payment by the Corporation. In the event this Lease and Sublease expires or
is terminated, or in the event the Facilities become untenantable, such taxes and special assessments
(except taxes and special assessments on land or on an interest in land) and insurance premiums shall
be prorated as herein provided and any unused portions shall be refunded to the City. Insurance
premiums shall be prorated upon the basis of the period of time for which each such premium is
paid. Taxes and ad valorem special assessments shall be prorated upon the basis of the fiscal year
for which they were levied. Specific lien assessments shall be prorated upon the basis of the period of
time that bonds would run in the event the property were in private ownership and the assessments
had not been paid in cash.
There shall be credited against the base rent and additional rent due hereunder any amount of
money available for such credit pursuant to the terms of any security instruments filed with the City
pursuant to Section 15 hereof.
The City hereby covenants to take such action as may be necessary to include and maintain all
rental payments due hereunder in each fiscal year in its budget for such fiscal year, and further covenants
to make the necessary appropriations for all such rental payments. Such covenants shall be deemed
and construed to impose ministerial duties by law and it shall be the duty of each and every public
official of the City to take such action and do such things as are required by law in the performance
of such duty to enable the City to carry out and perform said covenants.
Any installment of rent accruing under this Section which shall not be paid when due shall bear
interest at the rate of 7% per annum from the date when the same is due hereunder until the same
shall be paid. Notwithstanding any dispute between the Corporation and the City hereunder, the City
shall make all rental payments when due and shall not withhold any rental payments pending the final
resolution of such dispute. In the event of a determination that the City was not liable for said rental
payments or any portion thereof, said payments or excess of payments as the case may be shall be credited
against subsequent rental payments due hereunder.
The sublease provided for herein shall be deemed and construed to be a "net-net" sublease, and
the City agrees that the rents provided for herein shall be an absolute net return to the Corporation, free
and clear of any expenses, charges or set-offs whatsoever.
3
Section 6. Insurance
The Corporation shall, during the term of this Lease and Sublease, secure a policy or policies of
insurance, from reputable insurance companies, against loss or damage to the Facilities, resulting from
fire, lightning, vandalism, malicious mischief, and such perils ordinarily defined as "extended coverage"
and such other perils as the Corporation and the City may agree should be insured against on forms and
in amounts satisfactory to each. The City shall be named as an additional insured under such policies of
insurance. Nothing herein shall be construed to require the Corporation to carry insurance with respect
to equipment or fixtures not provided by the Corporation pursuant to said plans and specifications.
During the term of this Lease and Sublease the Corporation shall provide and keep in force public
liability and property damage policies protecting both the Corporation and the City on forms and in
amounts satisfactory to each.
The Corporation may also carry such other insurance as is required by the indenture or other security
instrument referred to in Section 15 hereof.
All premiums and charges for the aforesaid insurance shall be paid by the City in accordance with
the provisions of Section 5, provided that the City's obligation in any fiscal year to make such payment
shall be limited to payment for insurance applicable to said fiscal year.
Section 7. Changes in Plans and Specifications
No changes shall be made in the plans and specifications as approved by the City unless such
changes are approved in writing by the City and the Corporation. Such joint approval shall be made
under such procedure as both parties shall establish and shall not change the rental payments as herein
provided unless a supplemental agreement is entered into providing for such a change.
Section 8. Changes after Completion
The City shall not make any changes or alterations in the Facilities and shall not make any additions
thereto except with the written consent of the Corporation and upon such terms as may then be agreed
upon. This shall not prevent the City, without obtaining the Corporation's consent, from temporarily
affixing personal property to the Facilities, provided the City shall repair any damage thereto when such
property is removed.
Section 9. Title to Property
Title to the Site shall remain in the City, subject to the terms and conditions of this Lease and Sub-
lease. Title to the Facilities, all structural additions thereto, and all fixtures, equipment and apparatus
placed therein by the Corporation shall remain in the Corporation during the term of this Lease and
Sublease and shall vest in the City at the end of the term of the Lease. Title to all personal property
and fixtures placed in the Facilities by the City shall remain in the City.
Section 10. Utilities Management, Operation and Maintenance
The City shall furnish, or cause to be furnished, to the extent permitted by law, in conjunction with
its right hereunder to occupy and use the Facilities, the source of all sewer, water, power, gas, telephone
and other utility services to the point of connection thereof as shown by said plans and specifications.
As long as the City is in possession of the Facilities it shall keep them free and clear of all liens,
charges and encumbrances (except any arising through the Corporation) and shall maintain the same in
good repair and working order and shall have the responsibility for all management, operation,
maintenance and repair of the Facilities, including without limitation, security service, janitor service,
groundskeeping, power, gas, telephone, light, heating, air conditioning, water and all other untility
services. The City in its discretion may discharge such responsibility by: (1) using its own employees,
4
or, (2) contracting for services; or (3) subleasing all or part of the Facilities; or (4) any combination
of said methods. No such contract or sublease shall place a greater burden on the Corporation than
provided herein, nor infringe rights granted to or retained by the Corporation hereunder, nor violate
or in any way impair the Corporation's obligations under the indenture or other instrument, if any, securing
or declaring the terms of any debt or borrowings by the Corporation, all or substantially all of the
proceeds of which are to be used to finance the Facilities. The Corporation does not agree to provide
anything more than the Facilities as herein defined.
Section 11. Damage by Fire, Earthquake, Etc.
It is expressly understood and agreed that the rental hereunder shall become due only in considera-
tion of the right to occupy and use the Facilities and, except as herein provided, it is the responsibility
of the Corporation to provide such right at all times during the period for which the rental involved is paid.
In the event of destruction or damage of the Facilities by fire or earthquake or other casualty
or event so that they become wholly or partly unusable the Corporation at its option may do either
of the following:
(1) Rebuild and repair the Facilities so that they shall be restored to use, in which case this
Lease and Sublease shall remain in full force and effect; or
(2) Declare this Lease and Sublease terminated and use the money collected from insurance
against destruction of or damage to the Facilities to the extent necessary to retire any outstanding
securities or any debts or liabilities which the Corporation may have; provided, however, that if the
Facilities can be repaired or rebuilt, and if the Corporation shall have sufficient funds from the
proceeds of insurance or otherwise, for the necessary repairing or rebuilding, the Corporation shall
not proceed under this option without the City's consent.
During such time as the Facilities are unusable rent shall cease and no further rental payments
shall accrue until the Facilities are again ready for occupancy and rental payments already made,
if any, shall be equitably adjusted. In the event of partial damage or destruction, rental payments,
including whose already made, if any, shall be abated or adjusted in a manner so as to reflect the fair
rental value of the usable portion of the Facilities remaining.
Section 12. Condemnation
In the event the Site and the Facilities, or so much thereof as to render the same unusable for
the purposes intended, shall be permanently taken under the power of eminent domain or sold to any
governmental agency threatening to exercise such power, the City shall receive that portion of the
condemnation award or sale proceeds attributable to the taking or sale of the Site, the Corporation shall
receive that portion of the condemnation award or sale proceeds attributable to the taking or sale of the
Facilities, and this Lease and Sublease shall terminate as of the date title to the Site and the Facilities
passes to the agency exercising the power of eminent domain or purchasing such Site and Facilities;
provided that rent shall be abated in the same manner provided in the last paragraph of Section 11 hereof
from and after the date the agency exercising or threatening to exercise such power takes possession of the
Site and Facilities.
In the event the Site and the Facilities, or a portion thereof, shall be temporarily taken under the
power of eminent domain, the City shall receive that portion of the condemnation award attributable
to the taking of the Site,the Corporation shall receive that portion of the condemnation award attributable
to the taking of the Facilities, and this Lease and Sublease shall not terminate; provided that rent shall
be abated in the same manner provided in the last paragraph of Section 11 hereof during the period the
agency exercising the power of eminent domain is in possession of the Site and the Facilities, or a portion
thereof.
In the event that less than all of the Site and the Facilities shall be taken under the power of
eminent domain or sold to any governmental agency threatening to exercise such power and the remainder
5
is usable for the purposes intended, this Lease and Sublease shall not terminate, but rental payments
shall be partially abated or adjusted in the same manner provided in the last paragraph of Section 11
hereof, such partial abatement or adjustment to be effective from and after the date the agency exer-
cising or threatening to exercise the power of eminent domain takes possession of the Site and the
Facilities. If the condemnation award is or sale proceeds are sufficient to repair and rebuild the
Facilities and the City gives its consent, the Corporation shall receive the entire condemnation award
or sale proceeds, and shall repair and rebuild the Facilities in such manner as the City may direct. Any
balance of the condemnation award or sale proceeds remaining after the Facilities have been repaired
and rebuilt shall first be used to pay the City an amount not exceeding that portion of the condemnation
award or sale proceeds attributable to the Site, and any remaining balance shall be retained by the
Corporation. If the condemnation award is or sale proceeds are insufficient to repair and rebuild the
Facilities or if the City refuses to give its consent, the City shall receive that portion of the condemnation
award or sale proceeds attributable to the taking or sale of the Site and the Corporation shall receive
that portion of the condemnation award or sale proceeds attributable to the taking or sale of the Facilities.
The proceeds of any condemnation award or sale received or retained by the Corporation shall
be used to pay amounts due under any security instruments executed by the Corporation pursuant
to Section 15 hereof.
Section 13. Default by City
If (a) the City shall fail to pay any rental payable hereunder within fifteen (15) days from the date
such rental is payable, or (b) the City shall fail to keep any other terms, covenants or conditions herein
for a period of twenty-five (25) days after written notice thereof from the Corporation to the City or (c)
the City shall abandon or vacate the premises, or (d) the City's interest in this Lease and Sublease or any
part thereof shall be assigned or transferred without the written consent of the Corporation, either
voluntarily or by operation of law, then in any of such events the City shall be deemed to be in default
hereunder.
If the City should, after notice, fail to remedy any default with all reasonable dispatch,not exceeding
thirty (30) days, then the Corporation shall have the right, at its option, without any further demand or
notice (i) to terminate the sublease without terminating the Ground Lease and to re-enter the premises
and eject all parties in possession therefrom, or (ii )to re-enter the premises and eject all parties there-
from, and without terminating the sublease relet the premises, or any part thereof, as the agent and for
the account of the City, upon such terms and conditions as the Corporation may deem advisable, in
which event the rents received on such reletting shall be applied first to the expenses of reletting and
collection, including necessary renovation and alteration of the premises, reasonable attorneys' fees,
and any real estate commissions actually paid, and thereafter toward payment of all sums due or to
become due to the Corporation hereunder, and if a sufficient sum shall not be thus realized to pay such
sums and other charges, the City shall pay the Corporation any deficiency. The foregoing remedies of
the Corporation are in addition to and not exclusive of any other remedy of the Corporation, including,
but not limited to, the right to recover rent as it becomes due pursuant to Section 5 hereof, without
terminating this Lease and Sublease or the City's right to possession of the facilities. Any such re-entry
shall be allowed by the City without let or hindrance, and the Corporation shall not be liable in damages
for any such re-entry or be guilty of trespass.
The Corporation and the City consider the foregoing remedies to be essential to the validity of
this Lease and Sublease, and intend that by virtue of Section 1952.6 of the Civil Code the provisions of
Sections 1951 to 1952.2, inclusive, of said code shall not be applicable to this Lease and Sublease.
Section 14. Arbitration
All controversies arising out of the interpretation or application of this Lease and Sublease or the
refusal of either party to perform the whole or any part thereof may, if both parties then elect, be settled
6
by arbitration in accordance with the provisions of this Section. In such event, the controversy shall be
submitted to one arbitrator agreeable to both parties or to a board of three (3) arbitrators which shall be
appointed, one by the Corporation, one by the City, and the third by the first two (2) appointees. The
party desiring arbitration shall notify the other party by a written notice stating the following: (1) that it
desires arbitration; (2) the controversy to be arbitrated; (3) that it has appointed its nominee; and
(4) that it requests the other party to appoint its nominee. If the other party accedes to arbitration,
it shall, within thirty (30) days from the receipt of said notice, so notify the noticing party and appoint
its nominee. If both cannot agree on one arbitrator, then, within fifteen (15) days after the last
party has appointed its nominee, the two (2) nominees shall appoint the third. The arbitrator or
` arbitrators shall be disinterested (that is, without limiting the generality of the term "disinterested",
shall not be an officer, or employee of, or have contractual or other relations with either party). The
arbitrator or arbitration board shall hold at least one hearing and at least 10 days before said hearing
shall give each party written notice thereof. The arbitration shall be restricted to matters that are
stated in the notice requesting arbitration. The arbitrator or arbitration board shall have no authority
to add to or subtract from this Lease and Sublease. Each party shall be given an opportunity to be
heard and to present evidence. Upon conclusion of the hearing or hearings the arbitrator or arbitration
board shall reduce their findings of fact, conclusions of law and award to writing, and shall sign the
same and deliver one signed copy thereof to each party. Such award shall be final and binding upon
both parties. If there is an arbitration board, a majority finding shall govern if the arbitrators' determina-
tion is not unanimous. The City shall pay all expenses of the arbitration proceedings. The award
or decision of the arbitrator or arbitrators may be entered as a judgment in any court having jurisdiction
so to do. Except as otherwise provided herein, such arbitration shall be conducted in accordance with the
rules of the American Arbitration Association then in force.
Section 15. Mortgage of Leasehold
Except as otherwise provided herein, the Corporation shall not assign or transfer the performance of
its duties and obligations hereunder without the consent of the City.
The Corporation shall finance the construction of the Facilities by the sale and issuance of its
leasehold mortgage bonds to the extent permitted by law.
The Corporation may, without the consent of the City, give, assign, transfer, mortgage, hypothecate
or encumber the Corporation's interest under this Lease and Sublease (including the right to receive
rental payments) to any bona fide lender or lenders (including purchasers or holders of notes, bonds or
other obligations of the Corporation) on the security of the leasehold estate, and the Corporation may
execute any and all instruments necessary therefor, including, without limitation, instruments providing
for the paying of rent directly to a trustee for such lender or lenders. Any such lender or lenders may
be granted the right, prior to termination of this Lease and Sublease:
(a) To do any act or thing required of the Corporation in order to prevent a forfeiture of the
Corporation's rights hereunder, and all such acts or things so done shall be as effective to prevent a
forfeiture of the Corporation's rights hereunder as if done by the Corporation;
(b) To realize on the security of the leasehold estate and to acquire and succeed to the
interest of the Corporation hereunder by foreclosure or by a deed or assignment in lieu of fore-
closure, and thereafter at such lender's option to convey or assign the interest in or title to said
leasehold estate to any other person subject to all the terms, conditions and covenants of this Lease
and Sublease.
Two copies of all security instruments shall be filed with the City two (2) weeks prior to the effective
' date thereof, and the Corporation shall give the City prior written notice of any changes or amend-
ments thereto.
Section 16. Default by the Corporation
If a) the Corporation shall fail to construct the Facilities in accordance with the provisions of this
Lease and Sublease, or b) the Corporation shall fail to keep any other terms, covenants or conditions
herein for a period of twenty five (25) days after written notice thereof from the City to the Corporation,
or c) the Corporation's interest in this Lease and Sublease or any part thereof shall be assigned or
transferred without the written consent of the City, except as permitted under Section 15 hereof either
voluntarily or by operation of law, then in any of such events the Corporation shall be deemed to be
in default hereunder.
If the Corporation should, after notice, fail to remedy any default with all reasonable dispatch, not
exceeding thirty (30) days, then the City shall have the right, at its option, to terminate this Lease and
Sublease by delivering written notice of such termination to the Corporation, and thereafter the City shall
be relieved of all obligations hereunder.
Section 17. Access to Premises
The Corporation and its designees shall have the right to enter the premises during reasonable
business hours (and in emergencies at all times) (i) to inspect the same and (ii) for purposes connected
with the Corporation's rights or obligations hereunder.
Section 18. Notices
Any notices or filings required to be given or made under this Lease and Sublease shall be served or
made in the following manner: upon the City by serving the City Clerk personally or by registered mail
addressed to the City Clerk, City of Huntington Beach, City Hall, Huntington Beach, California, or such
other place as may hereafter be designated in writing by the City, and upon the Corporation by registered
mail addressed to the Corporation at such place as the Corporation shall hereafter designate in writing.
Section 19. Judgments
The City shall pay all judgments (including costs of suit and attorney fees) rendered against any
director, officer or member of the Corporation arising out of a claim by any person, firm or corporation
alleging liability against such director, officer or member for actions or omissions to act, provided such
actions or omissions to act occurred within the scope of his duties as a director, officer or member of the
Corporation; however, the City shall not be liable to pay additional sums on account of judgments
rendered against any director, officer or member for acts or omissions constituting bad faith, wilful mis-
feasance, gross negligence or reckless disregard for duties.
Section 20. Section Headings, Severability
The paragraph headings contained herein are for convenience and reference and are not intended
to define or limit the scope of any provision of this Lease and Sublease.
If any section, subsection, sentence, clause or phrase of this Lease and Sublease, or the application
thereof to either party or any other person or circumstance (except the provisions of Section 13 hereof
relating to remedies of the Corporation in the event of default by the City), is for any reason held invalid,
it shall be deemed severable and the validity of the remainder of the Lease and Sublease or the application
of such provision to the other party or to any person or circumstance shall not be affected thereby.
8
IN WITNESS WHEREOF, the Corporation has caused this Lease and Sublease to be executed by its
duly authorized officers and the City has caused this Lease and Sublease to be executed by the Mayor of
said City and attested by the City Clerk thereof, as of the day and year first above written.
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
By
President
By
Secretary
(Seal)
CITY OF HUNTINGTON BEACH
Attest: By �'►✓
MayopRO TEM
City Clerk
(Seal)
Approved as to Form:
City Attorney of the
City of Huntington Beach
9
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE
On this -------- day of ................. 1972, before me, the undersigned, a Notary Public in and for said
State, personally appeared ............................... known to me to be the Mayor, and ..............................I
known to me to be the City Clerk, of the City of Huntington Beach, California, one of the corporations
that executed the within instrument, known to me to be the persons who executed the within instrument
on behalf of such corporation, and acknowledged to me that such corporation executed the within
instrument pursuant to a resolution of its City Council.
WITNESS my hand and official seal.
(SEAL)
Notary Public in and for the
State of California
STATE OF CALIFORNIA
SS.
COUNTY OF ORANGE
On this ........ day of ................. 1972, before me, the undersigned, a Notary Public in and for said
State, personally appeared LARRY L. CURRAN, known to me to be the President, and DARRELL E. WARD,
known to me to be the Secretary, of the HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION, One Of
the corporations that executed the within instrument, known to me to be the persons who executed the
within instrument on behalf of such corporation, and acknowledged to me that such corporation executed
the within instrument pursuant to a resolution of its board of directors.
WITNESS my hand and official seal.
(SEAL)
Notary Public in and for the
State of California
10
EXHIBrr A
That portion of the South-half (S1/2) of the Southwest one quarter (SW1/4) of Section 26, Township
5 South, Range 11 West, San Bernardino Base and Meridian in the City of Huntington Beach, County
of Orange, State of California, as shown on a map recorded in Book 51, Page 13 of Miscellaneous Maps,
in the office of the County Recorder of said County described as follows:
Beginning at the Southwest corner of said section 16 thence North 89' 20' 21" East 50.00 feet
along southline of said Section 26 to a point on a line parallel with and 50.00 feet easterly, measured
* at right angles, from the west line of said Southwest one-quarter (SWl/4); thence North 0° 50' 12"
West 30.00 feet along said line to the TRUE POINT OF BEGINNING; Thence continuing along
said line North 00 50' 12" West 1290.57 feet to a point on the North line of the South one-half
(S1/2) of said Southwest one-quarter (SW1/4); thence North 891 21' 27" East 610.00 feet along
said line to a point on the East line of the West 20 acres of said South one-half (Sl/a); thence
South 0° 50' 04" East 673.85 feet along said east line of the West 20 acres to a point; thence North
89' 09' 55"East 23.57 Feet to a point on a tangent curve concave to the Southwest having a radius
of 420.00 feet; thence southeasterly along said curve through a central angle of 401 40' 27" an
arc distance of 298.16 feet to a point on a tangent curve concave to the southwest having a radius
of 160.00 feet; thence southeasterly along said curve through a central angle of 49' 30' 00" an
arc distance of 138.23 feet to a point on a tangent line; thence South 01 39' 38" East 437.00 feet
to a point on a line parallel with and 10.00 feet southerly measured at right angles from the south
` line of said Section 26; thence South 89' 20' 22" West 342.50 feet along said line to a point;
thence North 37' 08' 10" West 53.11 feet to a point on a line parallel with and 30.00 feet North
measured at right angles from south line of said Section 26; thence South 89' 20' 22" West 587.71
feet along said line to the TRUE POINT OF BEGINNING.
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[CONFORMED COPY] .
i
HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION
and
CITY OF HUNTINGTON BEACH
Y
Dated as of fanuary 15, 1972
•
Recorded in the Office of the County Recorder of Orange County on
February 11, 1972, as Document No. %21 in Book 9998.,
Page 745, of Official Records of Orange County
i
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HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
LEASE AND SUBLEASE .
THIS LEASE AND SUBLEASE, dated as of January 15, 1972, by and between HUNTINGTON
BEACH PUBLIC FACILITIES CORPORATION, hereinafter referred to as the "Corporation', and the
CITY OF HUNTINGTON BEACH, a municipal corporation duly organized and existing by virtue of a
charter adopted pursuant to the Constitution of the State of California in the State of California, hereinafter
referred to as the "City",
WITNESSETH:
WHEREAS,the City is the owner of certain real property in the County of Orange, more particularly
described in Exhibit A attached hereto and made a part hereof (hereinafter referred to as the "Site");
and
WHEREAS, the City has caused to be prepared and -has approved plans and specifications for
the construction of a city hall, police building and related facilities to each of such buildings, all to
be constructed on the Site (each of such buildings and related facilities being hereinafter referred to
collectively as the "Facilities"); and
WHEREAS, the Corporation intends to construct the Facilities, and to finance such construction by
the issuance and sale of its leasehold mortgage bonds;
NOW, THEREFORE in consideration of the payment of rental and the performance of the mutual
promises and agreements herein contained at the time and in the manner specified, the parties hereto
agree as follows:
Section 1. Ground Lease
For and in consideration of the sum of $350,000 advance rental, receipt of which is hereby
acknowledged, the City hereby leases the Site to the Corporation for a term commencing on the date of
execution hereof and ending one week after the end of the term of the sublease to the City set forth in
Section 4 hereof,unless earlier ended as hereinafter provided (except in the case of a default by the City as
specified in Section 13 hereof).
At the end of the term of this Ground Lease or upon any earlier termination thereof, or upon the
payment or provision therefor of all sums due under any security instruments filed with the City
pursuant to Section 15 hereof, the Project and any other assets of the Corporation relating thereto and
then remaining, shall be distributed to the City. The City agrees that in such event it will accept such
distribution of assets. The City may require the discharge of any security instruments of the Corporation
' filed pursuant to Section 15 hereof at any time if the City provides the Corporation with the necessary
funds therefor, subject however, to the terms of such security instruments.
Section 2. Construction of Facilities
The City shall forthwith upon execution hereof deliver to the Corporation possession of the Site
and said plans and specifications. The Corporation,unless it has heretofore done so,shall proceed diligently
to let a contract or contracts for the construction of the Facilities by a contractor or contractors licensed
under the laws of the State of California, all work, construction and materials to be in accordance with
said plans and specifications. The Corporation shall let such contract or contracts by open competitive
bidding, the procedure therefor being in accordance with the general laws relating to the bidding on
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contracts for public works. Construction of the Facilities shall be completed within two and one half years
of the date of execution hereof; provided, however, that with the consent of the City such completion date
may be extended by not to exceed one additional year; and provided further that such completion date
shall be extended for whatever further period (but in no event to a date later than three years from the date
of execution hereof), that the Corporation (or any contractor or contractors employed by the
Corporation) is delayed by: (1) acts or omissions of the City or of any employee or agent of the City
acting in the course and scope of his employment, including changes ordered in the work; or (2) any
act of God which the Corporation could not reasonably have foreseen and provided for; or (3) any
strikes, boycotts, or like obstructive actions by employee or labor organizations which are beyond the
control of the Corporation and which the Corporation cannot overcome with reasonable effort and
could not reasonably have foreseen and provided for; or (4) any war or declaration of a state of
national emergency; or (5) the imposition by government action or authority of restrictions upon
the procurement of labor or materials necessary for completion.
If upon the date of execution of this Lease and Sublease there is any litigation pending relating
to the validity of this Lease and Sublease, or the financing of the Facilities, or if any such litigation is
commenced prior to the letting of any contract for the construction of the Facilities,the Corporation shall
have no obligation to let such construction contract until such litigation is finally terminated favorably to
the validity of this Lease and Sublease or the proposed financing. In the event that such litigation
remains pending for more than six (6) months, the Corporation may, if no bonds of the Corporation
are outstanding,terminate this Lease and Sublease by delivering written notice of such termination to the
City and surrendering the Site to the City. Thereafter both the Corporation and the City shall be relieved
of all obligations under this Lease and Sublease.
Section 3. Plans, Specifications and Architect
The City has entered into agreements with Kurt Meyer & Associates, Honnold, Reibsamen & Rex
(hereinafter referred to as the "Architects") for architectural services in connection with the Facilities
including preparation of the plans and specifications above referred to.
The Corporation shall use said plans and specifications and the services of the Architects in the
performance of the work of constructing the Facilities covered by agreement, including, without limita-
tion, the Architect's supervision services. The Corporation shall pay the Architects for their services.
The City shall provide all inspection services and testing of materials required for said construction
including consultants, as necessary.
Section 4. Sublease to City—Maximum Term
The Corporation hereby subleases to the City and the City hereby accepts and rents from the
Corporation the Site as improved by the construction of the Facilities. The term of sublease shall
commence when the Facilities are substantially completed and available for occupancy and written
notice thereof has been served on the City, but in no event later than five years from the date of
execution hereof plus any extension of completion date provided under Section 2 hereof. The term of
the sublease to the City shall end on the earlier of (i) thirty (30) years after commencement of said
term of sublease or (ii) upon the payment of all principal, interest and premiums, if any, or other sums
so that any and all security devices and instruments filed with the City pursuant to Section 15 hereof
have been discharged.
Section 5. Rental
For the period commencing on the date on which the City shall be served with written notice that
the Facilities have been substantially completed and are ready for occupancy and the City has accepted
said Facilities, the City agrees to pay for the use of the premises during each fiscal year rent at the rate
of $854,900 per year ("base rent"). In the event that the liability of the City for rent at said annual
rate does not commence on the first day of the City's fiscal year'(July 1), the rent to be paid for the
remaining portion of the fiscal year in which such liability commences shall be prorated and shall be
paid within thirty days following commencement of such liability, but in no event later than the next
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succeeding June 30. During the remainder of the term of the sublease to the City said rental shall be
paid on or before July 31 in each fiscal year for the use of the premises during said fiscal year. In addition,
and as part of the rent, during the term of the sublease to the City, the City agrees to pay an amount
equivalent to the following:
(1) all taxes and assessments of any nature whatsoever, including, but not limited to, excise
taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes,
if any, levied upon the Site or upon the Facilities or upon the Corporation's interest therein, or
upon the rental income derived therefrom, except State and Federal income taxes; and
(2) insurance premiums (as hereinafter provided); and
(3) all administrative costs of the Corporation, including, without limiting the generality of the
foregoing, wages, expenses, compensation and indemnification of the Trustee under the indenture
referred to in Section 15 hereof, fees and charges of auditors, accountants, architects, engineers
and attorneys, and all other necessary administrative costs of the Corporation or charges required
to be paid by the Corporation in order to comply with the terms of the bonds or said indenture and
to defend the Corporation and its members and directors; and
(4) all costs and expenses which the Corporation may incur in consequence of or because of
any default by the City under this Lease and Sublease, including reasonable attorneys' fees and
costs of suit or action at law to enforce the terms and conditions of this Lease and Sublease,
said payments to be made within sixty (60) days after the City has been furnished receipted bills or
cancelled checks showing payment by the Corporation. In the event this Lease and Sublease expires or
is terminated, or in the event the Facilities become untenantable, such taxes and special assessments
(except taxes and special assessments on land or on an interest in land) and insurance premiums shall
be prorated as herein provided and any unused portions shall be refunded to the City. Insurance
premiums shall be prorated upon the basis of the period of time for which each such premium is
paid. Taxes and ad valorem special assessments shall be prorated upon the basis of the fiscal year
for which they were levied. Specific lien assessments shall be prorated upon the basis of the period of
time that bonds would run in the event the property were in private ownership and the assessments
had not been paid in cash.
There shall be credited against the base rent and additional rent due hereunder any amount of
money available for such credit pursuant to the terms of any security instruments filed with the City
pursuant to Section 15 hereof.
The City hereby covenants to take such action as may be necessary to include and maintain all
rental payments due hereunder in each fiscal year in its budget for such fiscal year, and further covenants
to make the necessary appropriations for all such rental payments. Such covenants shall be deemed
and construed to impose ministerial duties by law and it shall be the duty of each and every public
official of the City to take such action and do such things as are required by law in the performance
of such duty to enable the City to carry out and perform said covenants.
Any installment of rent accruing under this Section which shall not be paid when due shall bear
interest at the rate of 7% per annum from the date when the same is due hereunder until the same
shall be paid. Notwithstanding any dispute between the Corporation and the City hereunder, the City
shall make all rental payments when due and shall not withhold any rental payments pending the final
resolution of such dispute. In the event of a determination that the City was not liable for said rental
payments or any portion thereof, said payments or excess of payments as the case may be shall be credited
against subsequent rental payments due hereunder.
The sublease provided for herein shall be deemed and construed to be a "net-net" sublease, and
the City agrees that the rents provided for herein shall be an absolute net return to the Corporation, free
and clear of any expenses, charges or set-offs whatsoever.
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Section 6. Insurance
The Corporation shall, during the term of this Lease and Sublease, secure a policy or policies of
insurance, from reputable insurance companies, against loss or damage to the Facilities, resulting from
fire, lightning, vandalism, malicious mischief, and such perils ordinarily defined as "extended coverage"
and such other perils as the Corporation and the City may agree should be insured against on forms and
in amounts satisfactory to each. The City shall be named as an additional insured under such policies of
insurance. Nothing herein shall be construed to require the Corporation to carry insurance with respect
to equipment or fixtures not provided by the Corporation pursuant to said plans and specifications.
During the term of this Lease and Sublease the Corporation shall provide and keep in force public
liability and property damage policies protecting both the Corporation and the City on forms and in
amounts satisfactory to each.
The Corporation may also carry such other insurance as is required by the indenture or other security
instrument referred to in Section 15 hereof.
All premiums and charges for the aforesaid insurance shall be paid by the City in accordance with
the provisions of Section 5, provided that the City's obligation in any fiscal year to make such payment
shall be limited to payment for insurance applicable to said fiscal year.
Section 7. Changes in Plans and Specifications
No changes shall be made in the plans and specifications as approved by the City unless such
changes are approved in writing by the City and the Corporation. Such joint approval shall be made
under such procedure as both parties shall establish and shall not change the rental payments as herein
provided unless a supplemental agreement is entered into providing for such a change.
Section 8. Changes after Completion
The City shall riot make any changes or alterations in the Facilities and shall not make any additions
thereto except with the written consent of the Corporation and upon such terms as may then be agreed
upon. This shall not prevent the City, without obtaining the Corporation's consent, from temporarily
affixing personal property to the Facilities, provided the City shall repair any damage thereto when such
property is removed.
Section 9. Title to Property
Title to the Site shall remain in the City, subject to the terms and conditions of this Lease and Sub-
lease. Title to the Facilities, all structural additions thereto, and all fixtures, equipment and apparatus
placed therein by the Corporation shall remain in the Corporation during the term of this Lease and
Sublease and shall vest in the City at the end of the term of the Lease. Title to all personal property
and fixtures placed in the Facilities by the City shall remain in the City.
Section 10. Utilities Management, Operation and Maintenance
The City shall furnish, or cause to be furnished, to the extent permitted by law, in conjunction with
its right hereunder to occupy and use the Facilities, the source of all sewer, water, power, gas, telephone
and other utility services to the point of connection thereof as shown by said plans and specifications.
As long as the City is in possession of the Facilities it shall keep them free and clear of all'liens,
charges and encumbrances (except any arising through the Corporation) and shall maintain the same in
good repair and working order and shall have the responsibility for all management, operation,
maintenance and repair of the Facilities, including without limitation, security service, janitor service,
groundskeeping, power, gas, telephone, light, heating, air conditioning, water and all other untility
services. The City in its discretion may discharge such responsibility by: (1) using its own employees,
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or, (2) contracting for services; or (3) subleasing all or part of the Facilities; or (4) any combination
of said methods. No such contract or sublease shall place a greater burden on the Corporation than
provided herein, nor infringe rights granted to or retained by the Corporation hereunder, nor violate
or in any way impair the Corporation's obligations under the indenture or other instrument, if any, securing
or declaring the terms of any debt or borrowings by the Corporation, all or substantially all of the
proceeds of which are to be used to finance the Facilities. The Corporation does not agree to provide
anything more than the Facilities as herein defined.
Section 11. Damage by Fire, Earthquake, Etc.
It is expressly understood and agreed that the rental hereunder shall become due only in considera-
tion of the right to occupy and use the Facilities and, except as herein provided, it is the responsibility
of the Corporation to provide such right at all times during the period for which the rental involved is paid.
In the event of destruction or damage of the Facilities by fire or earthquake or other casualty
or event so that they become wholly or partly unusable the Corporation at its option may do either
of the following:
(1) Rebuild and repair the Facilities so that they shall be restored to use, in which case this
Lease and Sublease shall remain in full force and effect; or
(2) Declare this Lease and Sublease terminated and use the money collected from insurance
against destruction of or damage to the Facilities to the extent necessary to retire any outstanding
securities or any debts or liabilities which the Corporation may have; provided, however, that if the
Facilities can be repaired or rebuilt, and if the Corporation shall have sufficient funds from the
proceeds of insurance or otherwise, for the necessary repairing or rebuilding, the Corporation shall
not proceed under this option without the City's consent.
During such time as the Facilities are unusable rent shall cease and no further rental payments
j shall accrue until the Facilities are again ready for occupancy and rental payments already made,
if any, shall be equitably adjusted. In the event of partial damage or destruction, rental payments,
including whose already made, if any, shall be abated or adjusted in a manner so as to reflect the fair
rental value of the usable portion of the Facilities remaining.
Section 12. Condemnation
In the event the Site and the Facilities, or so much thereof as to render the same unusable for
the purposes intended, shall be permanently taken under the power of eminent domain or sold to any
governmental agency threatening to exercise such power, the City shall receive that portion of the
condemnation award or sale proceeds attributable to the taking or sale of the Site, the Corporation shall
receive that portion of the condemnation award or sale proceeds attributable to the taking or sale of the
Facilities, and this Lease and Sublease shall terminate as of the date title to the Site and the Facilities
passes to the agency exercising the power of eminent domain or purchasing such Site and Facilities;
provided that rent shall be abated in the same manner provided in the last paragraph of Section 11 hereof
from and after the date the agency exercising or threatening to exercise such power takes possession of the
Site and Facilities.
In the event the Site and the Facilities, or a portion thereof, shall be temporarily taken under the
power of eminent domain, the City shall receive that portion of the condemnation award attributable
to the taking of the Site,the Corporation shall receive that portion of the condemnation award attributable
to the taking of the Facilities, and this Lease and Sublease shall not terminate; provided that rent shall
be abated in the same manner provided in the last paragraph of Section 11 hereof during the period the
agency exercising the power of eminent domain is in possession of the Site and the Facilities, or a portion
thereof.
In the event that less than all of the Site and the Facilities shall be taken under the power of
eminent domain or sold to any governmental agency threatening to exercise such power and the remainder
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is usable for the purposes intended, this Lease and Sublease shall not terminate, but rental payments
shall be partially abated or adjusted in the same manner provided in the last paragraph of Section 11
hereof, such partial abatement or adjustment to be effective from and after the date the agency exer-
cising or threatening to exercise the power of eminent domain takes possession of the Site and the
Facilities. If the condemnation award is or sale proceeds are sufficient to repair and rebuild the
Facilities and the City gives its consent, the Corporation shall receive the entire condemnation award
or sale proceeds, and shall repair and rebuild the Facilities in such manner as the City may direct. Any
balance of the condemnation award or sale proceeds remaining after the Facilities have been repaired
and rebuilt shall first be used to pay the City an amount not exceeding that portion of the condemnation
award or sale proceeds attributable to the Site, and any remaining balance shall be retained by the
Corporation. If the condemnation award is or sale proceeds are insufficient to repair and rebuild the
Facilities or if the City refuses to give its consent, the City shall receive that portion of the condemnation
award or sale proceeds attributable to the taking or sale of the Site and the Corporation shall receive
that portion of the condemnation award or sale proceeds attributable to the taking or sale of the Facilities.
The proceeds of any condemnation award or sale received or retained by the Corporation shall
be used to pay amounts due under any security instruments executed by the Corporation pursuant
to Section 15 hereof.
Section 13. Default by City
If (a) the City shall fail to pay any rental payable hereunder within fifteen (15) days from the date
such rental is payable, or (b) the City shall fail to keep any other terms, covenants or conditions herein
for a period of twenty-five (25) days after written notice thereof from the Corporation to the City or (c)
the City shall abandon or vacate the premises, or (d) the City's interest in this Lease and Sublease or any
part thereof shall be assigned or transferred without the written consent of the Corporation, either
voluntarily or by operation of law, then in any'of such events the City shall be deemed to be in default
hereunder.
If the Cityshould, after notice, fail to remedy an default with all reasonable dispatch, not exceeding
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thirty (30) days, then the Corporation shall have the right, at its option, without any further demand or
notice (i) to terminate the sublease without terminating the Ground Lease and to re-enter the premises
and eject all parties in possession therefrom, or (ii )to re-enter the premises and eject all parties there-
from, and without terminating the sublease relet the premises, or any part thereof, as the agent and for
the account of the City, upon such terms and conditions as the Corporation may deem advisable, in
which event the rents received on such reletting shall be applied first to the expenses of reletting and
collection, including necessary renovation and alteration of the premises, reasonable attorneys' fees,
and any real estate commissions actually paid, and thereafter toward payment of all sums due or to
li become due to the Corporation hereunder, and if a sufficient sum shall not be thus realized to pay such
sums and other charges, the City shall pay the Corporation any deficiency. The foregoing remedies of
the Corporation are in addition to and not exclusive of any other remedy of the Corporation, including,
but not limited to, the right to recover rent as it becomes due pursuant to Section 5 hereof, without
terminating this Lease and Sublease or the City's right to possession of the facilities. Any such re-entry
shall be allowed by the City without.let or hindrance, and the Corporation shall not be liable in damages
for any such re-entry or be guilty of trespass.
The Corporation and the City consider the foregoing remedies to be essential to the validity of
this Lease and Sublease, and intend that by virtue of Section 1952.6 of the Civil Code the provisions of
Sections 1951 to 1952.2, inclusive, of said code shall not be applicable to this Lease and Sublease.
Section 14. Arbitration
All controversies arising out of the interpretation or application of this Lease and Sublease or the
refusal of either party to perform the whole or any part thereof may, if both parties then elect, be settled
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by arbitration in accordance with the provisions of this Section. In such event, the controversy shall be
submitted to one arbitrator agreeable to both parties or to a board of three (3) arbitrators which shall be
appointed, one by the Corporation, one by the City, and the third by the first two (2) appointces. The:
j party desiring arbitration shall notify the other party by a written notice stating the following: (1) that it
desires arbitration; (2) the controversy to be arbitrated; (3) that it has appointed its nominee; and
(4) that it requests the other party to appoint its nominee. If the other party accedes to arbitration,
it shall, within thirty (30) days from the receipt of said notice, so notify the noticing party and appoint
! its nominee. If both cannot agree on one arbitrator, then, within fifteen (15) days after the last
party has appointed its nominee, the two (2) nominees shall appoint the third. The arbitrator or
j arbitrators shall be disinterested (that is, without limiting the generality of the term "disinterested",
shall not be an officer, or employee of, or have contractual or other relations with either party). The
arbitrator or arbitration board shall hold at least one hearing and at least 10 days before said hearing
shall give each party written notice thereof. The arbitration shall be restricted to matters that are
stated in the notice requesting arbitration. The arbitrator or arbitration board shall have no authority
to add to or subtract from this Lease and Sublease. Each party shall be given an opportunity to be
heard and to present evidence. Upon conclusion of the hearing or hearings the arbitrator or arbitration
board shall reduce their findings of fact, conclusions of law and award to writing, and shall sign the
same and deliver one signed copy thereof to each party. Such award shall be final and binding upon
both parties. If there is an arbitration board, a majority finding shall govern if the arbitrators' determina-
tion is not unanimous. The City shall pay all expenses of the arbitration proceedings. The award
or decision of the arbitrator or arbitrators may be entered as a judgment in any court having jurisdiction
so to do. Except as otherwise provided herein, such arbitration shall be conducted in accordance with the
rules of the American Arbitration Association then in force.
Section 15. Mortgage of Leasehold
Except as otherwise provided herein, the Corporation shall not assign or transfer the performance of
its duties and obligations hereunder without the consent of the City.
The Corporation shall finance the construction of the Facilities by the sale and issuance of its
leasehold mortgage bonds to the extent permitted by law.
The Corporation may, without the consent of the City, give, assign, transfer, mortgage, hypothecate
or encumber the Corporation's interest under this Lease and Sublease (including the right to receive
rental payments) to any bona fide lender or lenders (including purchasers or holders of notes, bonds or
other obligations of the Corporation) on the security of the leasehold estate, and the Corporation may
execute any and all instruments necessary therefor, including, without limitation, instruments providing
for the paying of rent directly to a trustee for such lender or lenders. Any such lender or lenders may
be granted the right, prior to termination of this Lease and Sublease:
(a) To do any act or thing required of the Corporation in order to prevent a forfeiture of the
Corporation's rights hereunder, and all such acts or things so done shall be as effective to prevent a
forfeiture of the Corporation's rights hereunder as if done by the Corporation;
(b) To realize on the security of the leasehold estate and to acquire and succeed to the
interest of the Corporation hereunder by foreclosure or by a deed or assignment in lieu of fore-
closure, and thereafter at such lender's option to convey or assign the interest in or title to said
leasehold estate to any other person subject to all the terms, conditions and covenants of this Lease
and Sublease.
Two copies of all security instruments shall be filed with the City two (2) weeks prior to the effective
date thereof, and the Corporation shall give the.City prior written notice of any changes or amend-
ments thereto.
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Section 16. Default by the Corporation
If a) the Corporation shall fail to construct the Facilities in accordance with the provisions of this
Lease and Sublease, or b) the Corporation shall fail to keep any other terms, covenants or conditions
herein for a period of twenty five (25) days after written notice thereof from the City to the Corporation,
or c) the Corporation's interest in this Lease and Sublease or any part thereof shall be assigned or
j transferred without the written consent of the City, except as permitted under Section 15 hereof either
voluntarily or by operation of law, then in any of such events the Corporation shall be deemed to be
in default hereunder.
If the Corporation should, after notice, fail to remedy any default with all reasonable dispatch, not
exceeding thirty (30) days, then the City shall have the right, at its option, to terminate this Lease and
Sublease by delivering written notice of such termination to the Corporation, and thereafter the City shall
be relieved of all obligations hereunder.
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Section 17. Access to Premises
The Corporation and its designees shall have the right to enter the premises during reasonable
business hours (and in emergencies at all times) (i) to inspect the same and (ii) for purposes connected
with the Corporation's rights or obligations hereunder.
Section 18. Notices
Any notices or filings required to be given or made under this Lease and Sublease shall be served or
made in the following manner: upon the City by serving the City Clerk personally or by registered mail
addressed to the City Clerk, City of Huntington Beach, City Hall, Huntington Beach, California, or such
other place as may hereafter be designated in writing by the.City, and upon the Corporation by registered
mail addressed to the Corporation at such place as the Corporation shall hereafter designate in writing.
Section 19. Judgments
The City shall pay all judgments (including costs *of suit and attorney fees) rendered against any
director, officer or member of the Corporation arising out of a claim by any person, firm or corporation
alleging liability against such director, officer or member for actions or omissions to act, provided such
actions or omissions to act occurred within the scope of his duties as a director, officer or member of the
Corporation; however, the City shall not be liable to pay additional sums on account of judgments
rendered against any director, officer or member for acts or omissions constituting bad faith, wilful mis-
feasance, gross negligence or reckless disregard for duties.
Section 20. Section Headings, Severability
The paragraph headings contained herein are for convenience and reference and are not intended
to define or limit the scope of any provision of this Lease and Sublease.
If any section, subsection, sentence, clause or phrase of this Lease and Sublease, or the application
thereof to either party or any other person or circumstance (except the provisions of Section 13 hereof
relating to remedies of the Corporation in the event of default by the City), is for any reason held invalid,
it shall be deemed severable and the validity of the remainder of the Lease and Sublease or the application
of such provision to the other party or to any person or circumstance shall not be affected thereby.
8
IN WITNESS WHEREOF, the Corporation has caused this Lease and Sublease to be executed by its
duly authorized officers and the City has caused this Lease and Sublease to be executed by the Mayor of
said City and attested by the City Clerk thereof, as of the day and year first above written.
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
By LARRY L. CURRAN
President
By DARRELL E. WARD
Secretary
(Seal)
CITY OF HUNT INGTON BEACH
Attest: By GEORGE C. McCRACKEN
Mayor
PAUL C. JONES
City Clerk
(Seal)
Approved as to Form:
DON P. BONFA
City Attorney of the
City of Huntington Beach
9
a q
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE j
On this l4th day of January, 1972, before me, the undersigned, a Notary Public in and for said
State, personally appeared GEORGE C. MCCRACKEN, known to me to be the Mayor, and PAUL C. JONES,
known to me to be the City Clerk, of the City of Huntington Beach, California, one of the corporations
that executed the within instrument, known to me to be the persons who executed the within instrument
on behalf of such corporation, and acknowledged to me that such corporation executed the within
instrument pursuant to a resolution of its City Council.
WITNESS my hand and official seal.
(SEAL) FLOYD G. BELSITO
OFFICIAL SEAL
FLOYD G. SELSITO Notary Public in and for the
NOTARY PUBLIC-CALIFORNIA
PRINCIPAL OFFICE IN State of California
ORANGE COUNTY
My Commission Expires March 10, 1974
STATE OF CALIFORNIA
SS.
COUNTY OF ORANGE
On this 13th day of January, 1972, before me, the undersigned, a Notary Public in and for said
State, personally appeared LARRY L. CURRAN, known to me to be the President, and DARRELL E. WARD,
known to me to be the Secretary, of the HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION, one of
the corporations that executed the within instrument, known to me to be the persons who executed the
within instrument on behalf of such corporation, and acknowledged to me that such corporation executed
the within instrument pursuant to a resolution of its board of directors.
WITNESS my hand and official seal.
(SEAL) FLOYD G. BELSITO
OFFICIAL SEAL
FLOYD O Notary Public in and for the
NOTARY PUBLIC
-CALIFORNIA CALIF
PRINCIPAL OFFICE IN State of California
ORANGE COUNTY
My Commission Expires March 10, 1974
4
10
EXHIBIT A
That portion of the southwest one-quarter of Section 2 Township 6 South, Range 11 West, San
Bernardino Base and Meridian, in the City of Huntington Beach, County of Orange, State of California,
described as follows:
Beginning at the centerline intersection of Main Street, 120.00 feet in width as now laid out, with
the centerline of Seventeenth Street, 70.06 feet in width as now laid out, as shown on a map of
Tract No. 12 recorded in Book 9 Page 13 of Miscellaneous Maps, Records of said County; thence
north 206.14 feet along the centerline of said Main Street to a point; thence east 60.00 feet to
a point on the east line of said Main Street, said point being the true point of beginning; thence
north 1158.31 feet along said east line to a point on a tangent curve, concave to the southeast
having a radius of 32.00 feet; thence northeasterly along said curve thru a central angle of
900 00' 00" an arc distance of 50.27 feet to a point on a tangent line, said line being the northline
of said Tract No. 12, said line also being the southline of Mansion Avenue as described in a deed
recorded in Book 294 Page 390 of Deeds, Records of said County; thence east 503.30 feet along
said line to an angle point in the line; thence south 48° 41' east 439.84 feet along said northline
of Tract No. 12 and said southline of Mansion Avenue to a point on the northwesterly line of the
before mentioned Seventeenth Street; thence south 411 19' west 1226.32 feet along said north-
westerly line to a point on a tangent curve concave to the northeast having a radius of 32.00 feet;
thence westerly along said curve thru a central angle of 138° 41' 00" an are distance of 77.46
feet to the true point of beginning.
11
1 � I
l
r
1
HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION
and
CITY OF HUNTINGTON BEACH
➢ated as of September 1, 1972
Recorded in the Office of the County Recorder of Orange County on
--------------------1 1972 as Document No. ........ in Book .........
Page ....... of Official Records of Orange County
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
LEASE AND SUBLEASE
THIS LEASE AND SUBLEASE, dated as of September 1, 1972, by and between HUNTINGTON
BEACH PUBLIC FACILITIES CORPORATION, hereinafter referred to as the "Corporation", and the
CITY OF HUNTINGTON BEACH, a municipal corporation duly organized and existing by virtue of a
charter adopted pursuant to the Constitution of the State of California in the State of California,hereinafter
referred to as the "City",
WITNESSETH:
WHEREAS,the City is the owner of certain real property in the County of Orange, more particularly
described in Exhibit A attached hereto and made a part hereof (hereinafter referred to as the "Site");
and
WHEREAS, the City has caused to be prepared and has approved plans and specifications for
the construction of a library building and related facilities to such building, all to be constructed on the
Site (each of such buildings and related facilities being hereinafter referred to collectively as the
"Facilities"); and
p WHEREAS, the Corporation intends to construct the Facilities, and to finance such construction by
the issuance and sale of its leasehold mortgage bonds;
NOW, THEREFORE in consideration of the payment of rental and the performance of the mutual
promises and agreements herein contained at the time and in the manner specified, the parties hereto
agree as follows:
Section 1. Ground Lease
For and in consideration of the sum of $40(5.,od0 advance rental, receipt of which is hereby
acknowledged, the City hereby leases the Site to the Corporation for a term commencing on the date of
execution hereof and ending one week after the end of the term of the sublease to the City set forth in
Section 4 hereof,unless earlier ended as hereinafter provided (except in the case of a default by the City as
specified in Section 13 hereof).
At the end of the term of this Ground Lease or upon any earlier termination thereof, or upon the
payment or provision therefor of all sums due under any security instruments filed with the City
pursuant to Section 15 hereof, the Project and any other assets of the Corporation relating thereto and
then remaining, shall be distributed to the City. The City agrees that in such event it will accept such
distribution of assets. The City may require the discharge of any security instruments of the Corporation
filed pursuant to Section 15 hereof at any time if the City provides the Corporation with the necessary
funds therefor, subject however, to the terms of such security instruments.
Section 2. Construction of Facilities
The City shall forthwith upon execution hereof deliver to the Corporation possession of the Site
and said plans and specifications. The Corporation,unless it has heretofore done so,shall proceed diligently
" to let a contract or contracts for the construction of the Facilities by a contractor or contractors licensed
under the laws of the State of California, all work, construction and materials to be in accordance with
said plans and specifications. The Corporation shall let such contract or contracts by open competitive
bidding, the procedure therefor being in accordance with the general laws relating to the bidding on
1
contracts for public works. Construction of the Facilities shall be completed within two and one half years
of the date of execution hereof; provided, however, that with the consent of the City such completion date
may be extended by not to exceed one additional year; and provided further that such completion date
shall be extended for whatever further period (but in no event to it date later than three years from the date
of execution hereof), that the Corporation (or any contractor or contractors employed by the
Corporation) is delayed by: (1) acts or omissions of the City or of any employee or agent of the City
acting in the course and scope of his employment, including changes ordered in the work; or (2) any
act of God which the Corporation could not reasonably have foreseen and provided for; or (3) any
strikes, boycotts, or like obstructive actions by employee or labor organizations which are beyond the
control of the Corporation and which the Corporation cannot overcome with reasonable effort and
could not reasonably have foreseen and provided for; or (4) any war or declaration of a state of
national emergency; or (5) the imposition by government action or authority of restrictions upon
the procurement of labor or materials necessary for completion.
If upon the date of execution of this Lease and Sublease there is any litigation pending relating
to the validity of this Lease and Sublease, or the financing of the Facilities, or if any such litigation is
commenced prior to the letting of any contract for the construction of the Facilities, the Corporation shall
have no obligation to let such construction contract until such litigation is finally terminated favorably to
the validity of this Lease and Sublease or the proposed financing. In the event that such litigation
remains pending for more than six (6) months, the Corporation may, if no bonds of the Corporation
` are outstanding,terminate this Lease and Sublease by delivering written notice of such termination to the
City and surrendering the Site to the City. Thereafter both the Corporation and the City shall be relieved
of all obligations under this Lease and Sublease.
Section 3. Plans, Specifications and Architect
The City has entercd into an agreement with Richard and Dion Neutra, Architects and Associates
(hereinafter referred to as the "Architects") for architectural services in connection with the Facilities
including preparation of the plans and specifications above referred to.
The Corporation shall use said plans and specifications and the services of the Architects in the
performance of the work of constructing the Facilities covered by agreement, including, without limita-
tion, the Architect's supervision services. The Corporation shall pay the Architects for their services.
The City shall provide all inspection services and testing of materials required for said construction
including consultants, as necessary.
Section 4. Sublease to City—Maximum Term
The Corporation hereby subleases to the City and the City hereby accepts and rents from the
Corporation the Site as improved by the construction of the Facilities. The term of sublease shall
commence when the Facilities are substantially completed and available for occupancy and written
notice thereof has been served on the City, but in no event later than five years from the date of
execution hereof plus any extension of completion date provided under Section 2 hereof. The term of
the sublease to the City shall end on the earlier of (i) thirty (30) years after commencement of said
term of sublease or (ii) upon the payment of all principal, interest and premiums, if any, or other sums
so that any and all security devices and instruments filed with the City pursuant to Section 15 hereof
have been discharged.
Section 5. Rental
For the period commencing on the date on which the City shall be served with written notice that
the Facilities have been substantially completed and are ready for occupancy and the City has accepted
said Facilities, the City agrees to pay for the use of the premises during each fiscal year rent at the rate
of $399,000 per year ("base rent"). In the event that the liability of the City for rent at said annual
rate does not commence on the first day of the City's fiscal year (July 1), the rent to be paid for the
remaining portion of the fiscal year in which such liability commences shall be prorated and shall be
paid within thirty days following commencement of such liability, but in no event later than the next
2
succeeding June 30. During the remainder of the term of the sublease to the City said rental shall be
paid on or before July 31 in each fiscal year for the use of the premises during said fiscal year. In addition,
and as part of the rent, during the term of the sublease to the City, the City agrees to pay an amount
equivalent to the following:
(1) all taxes and assessments of any nature whatsoever, including, but not limited to, excise
taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes,
if any, levied upon the Site or upon the Facilities or upon the Corporation's interest therein, or
upon the rental income derived therefrom, except State and Federal income taxes; and
(2) insurance premiums (as hereinafter provided); and
(3) all administrative costs of the Corporation, including, without limiting the generality of the
foregoing, wages, expenses, compensation and indemnification of the Trustee under the indenture
referred to in Section 15 hereof, fees and charges of auditors, accountants, architects, engineers
and attorneys, and all other necessary administrative costs of the Corporation or charges required
to be paid by the Corporation in order to comply with the terms of the bonds or said indenture and
to defend the Corporation and its members and directors; and
(4) all costs and expenses which the Corporation may incur in consequence of or because of
any default by the City under this Lease and Sublease, including reasonable attorneys' fees and
costs of suit or action at law to enforce the terms and conditions of this Lease and Sublease,
said payments to be made within sixty (60) days after the City has been furnished receipted bills or
cancelled checks showing payment by the Corporation. In the event this Lease and Sublease expires or
is terminated, or in the event the Facilities become untenantable, such taxes and special assessments
(except taxes and special assessments on land or on an interest in land) and insurance premiums shall
be prorated as herein provided and any unused portions shall be refunded to the City. Insurance
premiums shall be prorated upon the basis of the period of time for which each such premium is
paid. Taxes and ad valorem special assessments shall be prorated upon the basis of the fiscal year
for which they were levied. Specific lien assessments shall be prorated upon the basis of the period of
time that bonds would run in the event the property were in private ownership and the assessments
had not been paid in cash.
There shall be credited against the base rent and additional rent due hereunder any amount of
money available for such credit pursuant to the terms of any security instruments filed with the City
pursuant to Section 15 hereof.
The City hereby covenants to take such action as may be necessary to include and maintain all
rental payments due hereunder in each fiscal year in its budget for such fiscal year, and further covenants
to make the necessary appropriations for all such rental payments. Such covenants shall be deemed
and construed to impose ministerial duties by law and it shall be the duty of each and every public
official of the City to take such action and do such things as are required by law in the performance
of such duty to enable the City to carry out and perform said covenants.
Any installment of rent accruing under this Section which shall not be paid when due shall bear
interest at the rate of 7% per annum from ,the date when the same is due hereunder until the same
shall be paid. Notwithstanding any dispute between the Corporation and the City hereunder, the City
shall make all rental payments when due and shall not withhold any rental payments pending the final
resolution of such dispute. In the event of a determination that the City was not liable for said rental
payments or any portion thereof, said payments or excess of payments as the case may be shall be credited
against subsequent rental payments due hereunder.
The sublease provided for herein shall be deemed and construed to be a "net-net" sublease, and
the City agrees that the rents provided for herein shall be an absolute net return to the Corporation, free
and clear of any expenses,charges or set-offs whatsoever.
3
Section 6. Insurance
The Corporation shall, during the term of this Lease and Sublease, secure a policy or policies of
insurance, from reputable insurance companies, against loss or damage to the Facilities, resulting from
fire, lightning, vandalism, malicious mischief, and such perils ordinarily defined as "extended coverage"
and such other perils as the Corporation and the City may agree should be insured against on forms and
in amounts satisfactory to each. The City shall be named as an additional insured under such policies of
insurance. Nothing herein shall be construed to require the Corporation to carry insurance with respect
to equipment or fixtures not provided by the Corporation pursuant to said plans and specifications.
During the term of this Lease and Sublease the Corporation shall provide and keep in force public
liability and property damage policies protecting both the Corporation and the City on forms and in
amounts satisfactory to each.
The Corporation may also carry such other insurance as is required by the indenture or other security
instrument referred to in Section 15 hereof.
All premiums and charges for the aforesaid insurance shall be paid by the City in accordance with
the provisions of Section 5, provided that the City's obligation in any fiscal year to make such payment
shall be limited to payment for insurance applicable to said fiscal year.
Section 7. Changes in Plans and Specifications
No changes shall be made in the plans and specifications as approved by the City unless such
changes are approved in writing by the City and the Corporation. Such joint approval shall be made
under such procedure as both parties shall establish and shall not change the rental payments as herein
provided unless a supplemental agreement is entered into providing for such a change.
Section 8. Changes after Completion
The City shall not make any changes or alterations in the Facilities and shall not make any additions
thereto except with the written consent of the Corporation and upon such terms as may then be agreed
upon. This shall not prevent the City, without obtaining the Corporation's consent, from temporarily
affixing personal property to the Facilities, provided the City shall repair any damage thereto when such
property is removed.
Section 9. Title to Property
Title to the Site shall remain in the City, subject to the terms and conditions of this Lease and Sub-
lease. Title to the Facilities, all structural additions thereto, and all fixtures, equipment and apparatus
placed therein by the Corporation shall remain in the Corporation during the term of this Lease and
Sublease and shall vest in the City at the end of the term of the Lease. Title to all personal property
and fixtures placed in the Facilities by the City shall remain in the City.
Section 10. Utilities Management, Operation and Maintenance
The City shall furnish, or cause to be furnished, to the extent permitted by law, in conjunction with
its right hereunder to occupy and use the Facilities, the source of all sewer, water, power, gas, telephone
and other utility services to the point of connection thereof as shown by said plans and specifications.
As long as the City is in possession of the Facilities it shall keep them free and clear of all liens,
charges and encumbrances (except any arising through the Corporation) and shall maintain the same in
good repair and working order and shall have the responsibility for all management, operation,
maintenance and repair of the Facilities, including without limitation, security service, janitor service,
groundskeeping, power, gas, telephone, light, heating, air conditioning, water and all other untility
services. The City in,its discretion may discharge such responsibility by: (1) using its own employees,
4
or, (2) contracting for services; or (3) subleasing all or part of the Facilities; or (4) any combination
of said methods. No such contract or sublease shall place a greater burden on the Corporation than
provided herein, nor infringe rights granted to or retained by the Corporation hereunder, nor violate
or in any way impair the Corporation's obligations under the indenture or other instrument, if any, securing
or declaring the terms of any debt or borrowings by the Corporation, all or substantially all of the
proceeds of which are to be used to finance the Facilities. The Corporation does not agree to provide
anything more than the Facilities as herein defined.
Section 11. Damage by Fire, Earthquake, Etc.
It is expressly understood and agreed that the rental hereunder shall become due only in considera-
tion of the right to occupy and use the Facilities and, except as herein provided, it is the responsibility
of the Corporation to provide such right at all times during the period for which the rental involved is paid.
In the event of destruction or damage of the Facilities by fire or earthquake or other casualty
or event so that they become wholly or partly unusable the Corporation at its option may do either
of the following:
(1) Rebuild and repair the Facilities so that they shall be restored to use, in which case this
Lease and Sublease shall remain in full force and effect; or
(2) Declare this Lease and Sublease terminated and use the money collected from insurance
against destruction of or damage to the Facilities to the extent necessary to retire any outstanding
securities or any debts or liabilities which the Corporation may have; provided, however, that if the
Facilities can be repaired or rebuilt, and if the Corporation shall have sufficient funds from the
proceeds of insurance or otherwise, for the necessary repairing or rebuilding, the Corporation shall
not proceed under this option without the City's consent.
During such time as the Facilities are unusable rent shall cease and no further rental payments
shall accrue until the Facilities are again ready for occupancy and rental payments already made,
if any, shall be equitably adjusted. In the event of partial damage or destruction, rental payments,
including whose already made, if any, shall be abated or adjusted in a manner so as to reflect the fair
rental value of the usable portion of the Facilities remaining.
Section 12. Condemnation
In the event the Site and the Facilities, or so much thereof as to render the same unusable for
the purposes intended, shall be permanently taken under the power of eminent domain or sold to any
governmental agency threatening to exercise such power, the City shall receive that portion of the
condemnation award or sale proceeds attributable to the taking or sale of the Site, the Corporation shall
receive that portion of the condemnation award or sale proceeds attributable to the taking or sale of the
Facilities, and this Lease and Sublease shall terminate as of the date title to the Site and the Facilities
passes to the agency exercising the power of eminent domain or purchasing such Site and Facilities;
provided that rent shall be abated in the same manner provided in the last paragraph of Section I 1 hereof
from and after the date the agency exercising or threatening to exercise such power takes possession of the
Site and Facilities.
In the event the Site and the Facilities, or a portion thereof, shall be temporarily taken under the
power of eminent domain, the City shall receive that portion of the condemnation award attributable
to the taking of the Site,the Corporation shall receive that portion of the condemnation award attributable
to the taking of the Facilities, and this Lease and Sublease shall not terminate; provided that rent shall
be abated in the same manner provided in the last paragraph of Section 11 hereof during the period the
agency exercising the power of eminent domain is in possession of the Site and the Facilities, or a portion
thereof.
In the event that less than all of the Site and the Facilities shall be taken under the power of
eminent domain or sold to any governmental agency threatening to exercise such power and the remainder
5
is usable for the purposes intended, this Lease and Sublease shall not terminate, but rental payments
shall be partially abated or adjusted in the same manner provided in the last paragraph of Section 11
hereof, such partial abatement or adjustment to be effective from and after the date the agency exer-
cising or threatening to exercise the power of eminent domain takes possession of the Site and the
Facilities. If the condemnation award is or sale proceeds are sufficient to repair and rebuild the
Facilities and the City gives its consent, the Corporation shall receive the entire condemnation award
or sale proceeds, and shall repair and rebuild the Facilities in such manner as the City may direct. Any
balance of the condemnation award or sale proceeds remaining after the Facilities have been repaired
and rebuilt shall first be used to pay the City an amount not exceeding that portion of the condemnation
award or sale proceeds attributable to the Site, and any remaining balance shall be retained by the
Corporation. If the condemnation award is or sale proceeds are insufficient to repair and rebuild the
Facilities or if the City refuses to give its consent, the City shall receive that portion of the condemnation
award or sale proceeds attributable to the taking or sale of the Site and the Corporation shall receive
that portion of the condemnation award or sale proceeds attributable to the taking or sale of the Facilities.
The proceeds of any condemnation award or sale received or retained by the Corporation shall
be used to pay amounts due under any security instruments executed by the Corporation pursuant
to Section 15 hereof.
Section 13. Default by City
If (a) the City shall fail to pay any rental payable hereunder within fifteen (15) days from the date
such rental is payable, or (b) the City shall fail to keep any other terms, covenants or conditions herein
for a period of twenty-five (25) days after written notice thereof from the Corporation to the City or (c)
the City shall abandon or vacate the premises, or (d) the City's interest in this Lease and Sublease or any
part thereof shall be assigned or transferred without the written consent of the Corporation, either
voluntarily or by operation of law, then in any of such events the City shall be deemed to be in default
hereunder.
If the City should, after notice, fail to remedy any default with all reasonable dispatch, not exceeding
thirty (30) days, then the Corporation shall have the right, at its option, without any further demand or
notice (i) to terminate the sublease without terminating the Ground Lease and to re-enter the premises
and eject all parties in possession therefrom, or (ii )to re-enter the premises and eject all parties there-
from, and without terminating the sublease relet the premises, or any part thereof, as the agent and for
the account of the City, upon such terms and conditions as the Corporation may deem advisable, in
which event the rents received on such reletting shall be applied first to the expenses of reletting and
collection, including necessary renovation and alteration of the premises, reasonable attorneys' fees,
and any real estate commissions actually paid, and thereafter toward payment of all sums due or to
become due to the Corporation hereunder, and if a sufficient sum shall not be thus realized to pay such
sums and other charges, the City shall pay the Corporation any deficiency. The foregoing remedies of
the Corporation are in addition to and not exclusive of any other remedy of the Corporation, including,
but not limited to, the right to recover rent as it becomes due pursuant to Section 5 hereof, without
terminating this Lease and Sublease or the City's right to possession of the facilities. Any such re-entry
shall be allowed by the City without let or hindrance, and the Corporation shall not be liable in damages
for any such re-entry or be guilty of trespass.
The Corporation and the City consider the foregoing remedies to be essential to the validity of
this Lease and Sublease, and intend that by virtue of Section 1952.6 of the Civil Code the provisions of
Sections 1951 to 1952.2, inclusive, of said code shall not be applicable to this Lease and Sublease.
Section 14. Arbitration
All controversies arising out of the interpretation or application of this Lease and Sublease or the
refusal of either party to perform the whole or any part thereof may, if both parties then elect, be settled
6
by arbitration in accordance with the provisions of this Section. In such event, the controversy shall be
submitted to one arbitrator agreeable to both parties or to a board of three (3) arbitrators which shall be
appointed, one by the Corporation, one by the City, and the third by the first two (2) appointees. The
party desiring arbitration shall notify the other party by a written notice stating the following: (1) that it
desires arbitration; (2) the controversy to be arbitrated; (3) that it has appointed its nominee; and
(4) that it requests the other party to appoint its nominee. If the other party accedes to arbitration,
it shall, within thirty (30) days from the receipt of said notice, so notify the noticing party and appoint
its nominee. If both cannot agree on one arbitrator, then, within fifteen (15) days after the last
party has appointed its nominee, the two (2) nominees shall appoint the third. The arbitrator or
arbitrators shall be disinterested (that is, without limiting the generality of the term "disinterested",
shall not be an officer, or employee of, or have contractual or other relations with either party). The
arbitrator or arbitration board shall hold at least one hearing and at least 10 days before said hearing
shall give each party written notice thereof. The arbitration shall be restricted to matters that are
stated in the notice requesting arbitration. The arbitrator or arbitration board shall have no authority
to add to or subtract from this Lease and Sublease. Each party shall be given an opportunity to be
heard and to present evidence. Upon conclusion of the hearing or hearings the arbitrator or arbitration
board shall reduce their findings of fact, conclusions of law and award to writing, and shall sign the
same and deliver one signed copy thereof to each party. Such award shall be final and binding upon
both parties. If there is an arbitration board, a majority finding shall govern if the arbitrators' determina-
tion is not unanimous. The City shall pay all expenses of the arbitration proceedings. The award
or decision of the arbitrator or arbitrators may be entered as a judgment in any court having jurisdiction
so to do. Except as otherwise provided herein, such arbitration shall be conducted in accordance with the
rules of the American Arbitration Association then in force.
Section 15. Mortgage of Leasehold
Except as otherwise provided herein, the Corporation shall not assign or transfer the performance of
its duties and obligations hereunder without the consent of the City.
The Corporation shall finance the construction of the Facilities by the sale and issuance of its
leasehold mortgage bonds to the extent permitted by law.
The Corporation may, without the consent of the City, give, assign, transfer, mortgage, hypothecate
or encumber the Corporation's interest under this Lease and Sublease (including the right to receive
rental payments) to any bona fide lender or lenders (including purchasers or holders of notes, bonds or
other obligations of the Corporation) on the security of the leasehold estate, and the Corporation may
execute any and all instruments necessary therefor, including, without limitation, instruments providing
for the paying of rent directly to a trustee for such lender or lenders. Any such lender or lenders may
be granted the right, prior to termination of this Lease and Sublease:
(a) To do any act or thing required of the Corporation in order to prevent a forfeiture of the
Corporation's rights hereunder, and all such acts or things so done shall be as effective to prevent a
forfeiture of the Corporation's rights hereunder as if done by the Corporation;
(b) To realize on the security of the leasehold estate and to acquire and succeed to the
interest of the Corporation hereunder by foreclosure or by a deed or assignment in lieu of fore-
closure, and thereafter at such lender's option to convey or assign the interest in or title to said
leasehold estate to any other person subject to all the terms, conditions and covenants of this Lease
and Sublease.
Two copies of all security instruments shall be filed with the City two (2) weeks prior to the effective
date thereof, and the Corporation shall give the City prior written notice of any changes or amend-
ments thereto.
7
Section 16. Default by the Corporation
If a) the Corporation shall fail to construct the Facilities in accordance with the provisions of this
Lease and Sublease, or b) the Corporation shall fail to keep any other terms, covenants or conditions
herein for a period of twenty five (25) days after written notice thereof from the City to the Corporation,
or c) the Corporation's interest in this Lease and Sublease or any part thereof shall be assigned or
transferred without the written consent of the City, except as permitted under Section 15 hereof either
voluntarily or by operation of law, then in any of such events the Corporation shall be deemed to be
in default hereunder.
If the Corporation should, after notice, fail to remedy any default with all reasonable dispatch, not
exceeding thirty (30) days, then the City shall have the right, at its option, to terminate this Lease and
Sublease by delivering written notice of such termination to the Corporation, and thereafter the City shall
be relieved of all obligations hereunder.
Section 17. Access to Premises
The Corporation and its designees shall have the right to enter the premises during reasonable
business hours (and in emergencies at all times) (i) to inspect the same and (ii) for purposes connected
with the Corporation's rights or obligations hereunder.
Section 18. Notices
Any notices or filings required to be given or made under this Lease and Sublease shall be served or
made in the following manner: upon the City by serving the City Clerk personally or by registered mail
addressed to the City Clerk, City of Huntington Beach, City Hall, Huntington Beach, California, or such
other place as may hereafter be designated in writing by the City, and upon the Corporation by registered
mail addressed to the Corporation at such place as the Corporation shall hereafter designate in writing.
Section 19. Judgments
The City shall pay all judgments (including costs of suit and attorney fees) rendered against any
director, officer or member of the Corporation arising out of a claim by any person, firm or corporation
alleging liability against such director, officer or member for actions or omissions to act, provided such
actions or omissions to act occurred within the scope of his duties as a director, officer or member of the
Corporation; however, the City shall not be liable to pay additional sums on account of judgments
rendered against any director, officer or member for acts or omissions constituting bad faith, wilful mis-
feasance, gross negligence or reckless disregard for duties.
Section 20. Section Headings, Severability
The paragraph headings contained herein are for convenience and reference and are not intended
to define or limit the scope of any provision of this Lease and Sublease.
If any section, subsection, sentence, clause or phrase of this Lease and Sublease, or the application
thereof to either party or any other person or circumstance (except the provisions of Section 13 hereof
relating to remedies of the Corporation in the event of default by the City), is for any reason held invalid,
it shall be deemed severable and the validity of the remainder of the Lease and Sublease or the application
of such provision to the other party or to any person or circumstance shall not be affected thereby.
8
IN WITNESS WHEREOF, the Corporation has caused this Lease and Sublease to be executed by its
duly authorized officers and the City has caused this Lease and Sublease to be executed by the Mayor of
said City and attested by the City Clerk thereof, as of the day and year first above written.
HUNTINGTON BEACH PUBLIC FACILI CORPORATION
B
Presiden
BY
ecretary
(Seal)
CITY OF HUNTINGTON BEACH
Attest: ByC �� ..
O�� l ayor
Ci Jerk
(Seal)
Appro o Form:
City Attorney of the
City of Huntington Beac
9
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE
On this& day o ;y1972, before me, the undersigned, a Notary Pu m and or said
State, personally appeared �� .-�known to me to be the Mayor, and
known to me to be the City Clerk, of the City of Huntington Beach, California, one of the co*rations
rations
that executed the within instrument, known to me to be the persons who executed the within instrument
on behalf of such corporation, and acknowledged to me that such corporation executed the within
instrument pursuant to a resolution of its City Council.
WITNESS my hand and official seal.
(SEAL)
OFFICIAL SEAL
ERNESTINA DiFABIO Notary Public in and for the
m NOTARN'PUBLIC-CALIFORNIA State of California
ORANGE COUNTY
MyCommissionExpiresJune25,1913
P. 0. Box 190, Huntington Beach, Calif.92648
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE
On this _A... day of/�!G�'�1, 1972, before me, the undersigned, a Notary Public in and for said
State, personally appeared LARRY L. CURRAN, known to me to be the President, and DARRELL E. WARD,
known to me to be the Secretary, of the HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION, one of
the corporations that executed the within instrument, known to me to be the persons who executed the
within instrument on behalf of such corporation, and acknowledged to me that such corporation executed
the within instrument pursuant to a resolution of its board of directors.
WrrNEss my hand and official seal.
(SEAL)
aaraa•. +arras////a■r/r■a//aaa■/rra///! `
OFFICIAL SEAL Notary Public in and for the
FLOYD G. BELSITO State of California
NOTARY PUBLIC •— CALIFORNIA r
PRINCIPAL OFFICF IN
ORANGE COUNTY
Myj C@Fdp iggi�Expires A4sr.10, 1974
10
EXHIBIT A
That portion of the South-half (Sl/a) of the Southwest one quarter (SW1/a) of Section 26, Township
5 South,Range 11 West,and that portion of the Northwest quarter of the Northwest quarter of Section 35,
Township 5 South, Range 11 West, partly in the Rancho Las Bolsas and partly in the Rancho La Bolsa
Chica, County of Orange, State of California, as shown on a map recorded in Book 51, Page 13 of
Miscellaneous Maps, in the office of the County Recorder of said County described as follows:
.r"
Beginning at the Southwest corner of said section 26 thence North 89' 20' 21" East 50.00 feet
along southline of said Section 26 to a point on a line parallel with and 50.00 feet asterly, measured
at right angles, from the west line of said Southwest one-quarter (SWV4); thenc North 00 50' 12"
West 30.00 feet along said line to the TRUE POINT OF BEGINNING; Thence continuing along
said line North 0° 50' 12" West 1290.57 feet to a point on the North line of the South one-half
(Slh) of said Southwest one-quarter (SW1/a); thence North 89' 21' 27" East 610.00 feet along
said line to a point on the East line of the West 20 acres of said South one-half (Slh); thence
South 01 50' 04" East 673.85 feet along said east line of the West 20 acres to a point; thence North
891 09' 55" East 23.57 Feet to a point on a tangent curve concave to the Southwest having a radius
of 420.00 feet; thence southeasterly along said curve through a central angle of 40' 40' 27" an
arc distance of 298.16 feet to a point on a tangent curve concave to the southwest having a radius
of 160.00 feet; thence southeasterly along said curve through a central angle of 490 30' 00" an
arc distance of 138.23 feet to a point on a tangent line; thence South 0° 39' 38" East 437.00 feet
to a point on a line parallel with and 10.00 feet southerly measured at right angles from the south
line of said Section 26; thence South 89' 20' 22" West 342.50 feet along said line to a point;
thence North 37' 08' 10" West 53.11 feet to a point on a line parallel with and 30.00 feet North
measured at right angles from south line of said Section 26; thence South 891 20' 22" West 587.71
feet along said line to the TRUE POINT OF BEGINNING.
11
Huntington Beach
Public F ' 'ties'Corporation
to
'z BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
TRUSTEE
LOS ANGELES, CALIFORNIA
i
10jaftrr at z'n" j e ttnd
rr at (7mot
Dated as of September 1, 1972
$5,000,000
� a
Huntington Beach
Public Fac' 'ties Corporation
LEASEHOLD MORTGAGE BONDS
s� SECOND ISSUE
Dated September 1, 1972
Recorded in the Office of the County Recorder
of Orange County on ............................... 1972 as
Document No. ........, Book ......... page ......,
�- of Official Records of Orange County.
011
h
r TABLE OF CONTENTS
Page
Parties...........................................................................................................------------. 1
Recitals..........................................................................................._.................-------- 1
ClauseFirst............................................................................................................. 3
ClauseSecond............................................................................. ....................... 3
ClauseThird................................................................................................------------ 3 .
ClauseFourth.......................................................................................................... 3
ARTICLE I
Definitions
Section
s 101 Definitions................................................................................................... 4
• 102 Inclusiveness of Certain Terms..............._.............................................. 6
103 References to Indenture........................................................................._. 6
ARTICLE II
Form, Authentication, Delivery and Registration of Bonds
201 Bonds Issued Only in Accordance with Indenture.......................... 6
202 Form of Bonds and Security........._....................................................... 6
203 Details of Bonds.....................................................
204 Authentication of Bonds.......................................................................... 9
205 Registration of Bonds.............................................................................. 9
206 Payments to Registered Owners of Bonds........................................ 11
207 Filing of Closing Documents and Delivery of Bonds.................... 11
208 Disposition of Bond Proceeds...................................................... ......... 12
209 Mutilated, Destroyed, Lost or Stolen Bonds............................ ....... 12
ARTICLE THREE
Redemption of Bonds Prior to Maturity
r
301 Redemption Dates...................................................................................... 13
' 302 Method of Redemption...............................
303 Notice of Redemption........................._.................................................. 14
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Section Page
304 Cessation of Interest Upon Redemption............................................. 15
305 Bonds No Longer Outstanding............................................................. 16
ARTICLE IV
Custody and Application of Proceeds of Bonds
401 Disposition of Moneys in the Construction Fund............................ 16
402 Payments Made from Construction Fund.......................................... 18
403 Procedure of Making Payments from Construction Fund............. 18
404 Retention of Records of Transactions................................................ 20
405 Audit of the Construction Fund.......................................................... 20
406 Completion Certificate and Transfer of Moneys............................... 20
ARTICLE V
Rental Revenues and Application Thereof
501 Establishment of Special Trust Funds................................................ 21
502 Rental Revenue Fund and Application................................................ 21
503 Debt Service Fund.................................................................................... 22
504 Bond Redemption Fund............................................................................ 22
505 Administrative Expense Fund................................................................ .23
506 Reserve Fund...................................................................................•.......... 24
507 Unclaimed Moneys for Payment of Bonds and Interest............... 24
508 Disposition of Redeemed Bonds and Coupons.................................. 25
509 Pledge of all Rental Revenue and Moneys....................................... 25
ARTICLE VI
Security for Deposits and Investment of Funds
601 Moneys Deposited to be Held in Trust..............................._............. 25
602 Security for Deposits...........................»................................................... 26
603 Investment of Funds........................_.................................................... 26
604 Investments and Income as Part of Funds; Liquidation.............. 26
111
Section Page
ARTICLE VII
Covenants
701 Covenants and the Duration Thereof................................................ 27
Covenant 1 Prompt Payment............................................................. 28
Covenant 2 To Construct.................................................................... 28
Covenant 3 To Discharge All Lawful Claims............................... 29
Covenant 4 Use of Rental Revenue for Proper Purpose.......... 29
Covenant 5 Protection of Funds....................................................... 29
Covenant 6 Records and Audit.......................................................... 29
Covenant 7 Maintenance of Properties............................................ 30
Covenant8 Against Debt-------------------------------------------------------------------- 30
Covenant 9 Against Liens and Encumbrances.............................. 31
Covenant 10 To Maintain Insurance................................................. 32
Covenant 11 Performance...................................................................... 35
Covenant 12 To Maintain Corporate Existence.............................. 35
Covenant 13 Not to Distribute Profits.............................................. 35
Covenant 14 Disposition of Condemnation Award........................ 35
Covenant 15 To File Claims................................................................. 36
Covenant 16 To Maintain Paying Agents........................................ 36
Covenant17 Arbitrage............................................................................ 36
ARTICLE VIII
Remedies of Trustee and Bondholders
801 Events of Default...................................................................._.._ 37
802 Action Upon Default.............................................. 38
803 Application of Moneys Upon Default.................................................. 40
804 Discontinuance of Any Proceeding....................._............................... 42
805 Action of Trustee Directed by Majority of Bondholders.............. 42
.., 806 Notice to Trustee Before Legal Action.............................................. 42
807 Action by Trustee on Behalf of Bondholders................................... 43
808 Remedies Cumulative.........................................................._..............--... 43
809 No Waiver of Default.....................»......._................ ..................... 43
810 Notification of Default............................................_....................... 44
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Section Page
ARTICLE IX
Concerning the Trustee
901 Acceptance of Trusts by Trustee............................._.......................... 44
902 Absence of Responsibility of Trustee.................................................. 45
903 Trustee not Responsible for Actions of Corporation...................... 45
904 Compensation of Trustee....................................................................... 45
905 Trustee's Right to Own and Deal in Bonds..................................... 45
906 Duties and Responsibilities of Trustee................................._............. 46
907 Certain Rights of Trustee....................................................................... 47
908 Right of Trustee to Rely on Certificates....._..._............................... 47
• 909 Eligibility for Appointment as Trustee....................._........................ 48
910 Resignation and Removal; Appointment of Successor Trustee.... 48
911 Acceptance of Appointment by Successor Trustee.......................... 50
912 Merger or Consolidation of Trustee.............................._._................. 50
913 Requirements as to Trustee's Records....................._......................... 51
' ARTICLE X
Execution of Instruments by Bondholders
and Proofs of Ownership of Bonds
1001 Method of Execution of Instruments by Bondholders................... 51
ARTICLE XI
Supplemental Indentures
1101 Without Consent of Bondholders.......................................................... 52
1102 With Consent of Bondholders..........................._.........._....................... 52
1103 Approval by Counsel.......................................................................... 54
1104 Approval by Corporation and Bondholders..._.................._............. 54
ARTICLE XII
Defeasance
1201 Payment of Bonds and Discharge of Indenture.............................. 55
1202 Bonds, Coupons and Redemption Price Deemed to be Repaid........ 55
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Section Page
ARTICLE XIII
Miscellaneous Provisions
1301 Successor to Corporation...»...........»._.......»....»........».».....».................. 56
1302 Notice...................................»..............»..».»...»..................»....................... 56
1303 Indenture for Sole Benefit of Parties and Bondholders................. 56
1304 Severability.......................................»......»................................................. 57
1305 Waiver of Personal Liability............................................................ 57
1306 Subordination of Indenture........................................................................ 58
1307 Validity of Multiple Copies........................................................................ 58
1308 Headings------------------------------ -------------------------------------------------------------------------- 58
Execution...._............».._»....................»...»»..............».. .....»........................... 58
Formof Bond......»»......».................».».»».»...».....»»..........»».......»................... 63
Form of Interest Coupon.................»...»-....»..»..»».........»........................... 67
Form of Registration.......................».»»....».........».....»».»»»...».»»..».. .......... 68
Form of Registered Bond.. -»...».....».»..»..»..-•---»._.....».................................. 69
Form of Trustee's Authentication Certificate................._.....»»................... 74
This table of contents is presented for convenience and reference
only and is not to be deemed a part of this Indenture.
i
This Mortgage is, among other things a Mortgage of Chattels
THIS INDENTURE OF MORTGAGE AND DEED OF TRUST,
dated as of the first day of September, 1972, by and between
HUNTINGTON BEACH PUBLIC FACILITIES ColtpoRAmoN, a corporation
duly organized and existing as a non-profit corporation under and by
virtue of the laws of the State of California, and BANK of AMEmCA
NATIONAL TRUST AND SAVINGS ASSoCIATIox, a national banking associa-
tion duly organized and existing under the laws of the United States of
America and having a principal office in the City of Los Angeles,
California, which is authorized under such laws to exercise corporate
trust powers, as Trustee,
WITNESSETH:
WHEREAS, pursuant to a certain Lease entitled "Huntington Beach
Public Facilities Corporation Lease and Sublease" the Corporation has
leased from the City for the term stated therein, certain real property
owned by the City and described in Clause First of the granting clauses
of this Indenture; and
WHEREAS, pursuant to the provisions of the Lease, the Corporation
has agreed to construct certain buildings and related facilities including
a library building and .related facilities to such building (the "Facili-
ties") in accordance with the plans and specifications referred to in the
Lease; and
WHEREAS, the Corporation has subleased to the City said real
property, as improved by the construction of the Facilities, for the term
set forth in the Lease; and
WHEREAS, the Corporation has determined to provide under this
Indenture for the issuance of its Leasehold Mortgage Bonds, for the
purpose of providing funds to pay the costs of acquisition, construction
and development of the Facilities; and
WHrmEAs, the Articles of Incorporation of the Corporation provide
that it is organized as a nonprofit corporation, and that no gains, profits
or dividends shall be distributed to any of its members, and no part of
the net earnings, funds or assets of the Corporation shall inure to the
benefit of any member, private shareholder or individual or any other
person, firm or corporation excepting only the City, and that the
property of the Corporation is irrevocably dedicated to charitable
I
purposes; and that upon the dissolution, liquidation or winding up
of the Corporation, the assets of the Corporation remaining after
payment of or provision for all debts and obligations of the Corpora-
tion shall be distributed to the City; and
WHEREAS, the Corporation has determined that the Bonds shall be
secured by this Indenture and has ascertained and determined that the
provisions herein contained for protecting and enforcing the rights and
remedies of the Holders of such Bonds are reasonable, proper and in
accordance with law, that this Indenture is necessary to the perform-
ance of its duties and the execution of its powers under law, and does
deem and determine all of the provisions herein contained to be reason-
able and proper for the security of the Holders of such Bonds; and
WHEREAS, the execution and delivery of this Indenture have been
duly authorized by resolution of the Board of Directors of the Corpora-
tion; and
WHEREAS, all acts and things required by law and by the Articles of
Incorporation and By-Laws of the Corporation necessary to make this
Indenture a valid and binding trust instrument for the security of all
Bonds duly issued hereunder, have been done and performed and the
execution and delivery of this Indenture have been in all respects duly
authorized; and
WHEREAS, the Trustee has .accepted the trust created and estab-
lished by this Indenture and in evidence thereof has joined in the
execution hereof;
Now THEREFoRE, THIS INDENTURE WITNESSETH, that in considera-
tion of the premises, of the acceptance by the Trustee of the trust
hereby created, and of the purchase and acceptance of the Bonds
by the Holders thereof, and of the sum of one dollar paid to the
Corporation by the Trustee at or before the delivery hereof, the receipt
of which is hereby acknowledged, and for'the purpose of fixing and
declaring the terms and conditions upon which the Bonds are to be
issued, authenticated, delivered, secured and accepted by all persons
who shall f rom time to time be or become Holders thereof, and in
order to secure the payment of all the Bonds at any time issued and
outstanding hereunder and the interest thereon according to their
tenor, purport and effect, and in order to secure the performance and
2
1
a
1
observance of all of the covenants, agreements and conditions therein
and herein contained, the Corporation by these presents does grant,
bargain, sell, release, convey, assign, transfer, mortgage and confirm
unto the Trustee the following property, rights and privileges (which
collectively are hereinafter called "the Trust Estate"), to wit:
CLAUSE FIRST
The leasehold estate of the Corporation created under the Lease,
by which Lease, among other things, the City demised to the Corpora-
tion for the term of years set forth therein,and on the terms,conditions
and provisions set forth therein, the premises described in Exhibit A
attached hereto and made a part hereof.
CLAUSE SECOND
Also, all right, title and interest of the Corporation, under the
Lease or otherwise, in and to all buildings, structures and improve-
ments now located or hereafter to be erected in, under or upon the
premises demised by the Lease.
CLAUSE THIRD
Also, all property which is by the express provisions of this Inden-
ture, required to be subjected to the lien hereof; and any additional
property that may from time to time, by delivery or by writing of any
kind, be subjected to the lien hereof by the Corporation or by anyone in
its behalf, and the Trustee is hereby authorized to receive the same at
any time as additional security hereunder.
CLAUSE FOURTH
Also, all the rents, issues, profits, revenues and other income or
proceeds or receipts of the Trust Estate, which rents, issues, profits,
revenues, income and other proceeds or receipts are hereby expressly
assigned, with the right to take and collect said rents, issues, profits,
revenues, income and proceeds and receipts.
To have and to hold the Trust Estate unto the Trustee and its
successors and assigns forever.
3
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• Subject, however, with respect to all of the foregoing clauses, to
such permitted encumbrances under this Indenture as may be superior
(by operation of law or otherwise) to the lien hereof.
But in trust, nevertheless, with power of sale, for the equal and
proportionate benefit of the Holders from time to time, of all the Bonds
(and their pertinent coupons) authenticated hereunder and issued by
the Corporation and outstanding without any priority of any one Bond
or coupon over any other.
And upon the trusts, and subject to the covenants and conditions
hereinafter set forth.
ARTICLE I
DEFINITIONS
Section 101. Definitions. The following words and terms, unless
a different meaning clearly appears from the context, shall have the
following meanings in this Indenture:
"Bond" or "Bonds" shall mean any Bond or Bonds authenticated
and delivered under and pursuant to the provisions of this Indenture.
"Bondholder" or "Holder", or any similar term when used with
reference to a Bond or Bonds, shall mean the bearer or owner of any
outstanding Bond or Bonds.
"Bond Counsel"shall mean the firm of O'Melveny&Myers or other
nationally recognized bond counsel of favorable reputation.
"Bond Registrar" shall mean the Trustee.
"City" shall mean the City of Huntington Beach.
"Consulting Architect" shall mean the architect or architects, or
firm or firms of architects, having a favorable repute for skill and
experience as consulting architects, or an engineer or engineers, or
firm or firms of engineers, each having a favorable repute for skill
and experience as consulting engineers, at the time retained by the
Corporation or by the City on behalf of the Corporation to perform
the acts and carry out the duties provided for such Consulting Archi-
tects in this Indenture.
"Corporation" shall mean the Huntington Beach Public Facilities
Corporation.
4
i
"Cost of the Project" shall mean the cost of the acquisition, con-
struction, development, and financing of the Project to and including
the date of completion, and shall include, without limitation, the cost
of acquisition of any land or interest therein required therefor, the
cost of any taxes or assessments paid or to be paid to any local govern-
mental body, the cost of any indemnity and surety bonds and premiums
on title insurance and insurance during construction, the administrative
expenses of the Corporation, including, without limitation, compensa-
tion of employees of the Corporation and consultants engaged in super-
vision, inspection or testing of materials, legal fees, any fees or ex-
penses of the Trustee during construction, the cost of issuance of the
Bonds by the Corporation and commissions, financing charges and
fees and expenses of attorneys, accountants, financial advisers and con-
sultants, the cost of audits, the cost of engineering, architectural
services, plans, specifications and surveys, estimates of cost, the re-
imbursement of all moneys, if any, advanced by the City or any other
public agency, instrumentality, commission or officer, from public funds
for the payment of any item or items of cost of the Project, and such
other costs and expenses, whether or not specified herein, as may be
necessary or incidental to the acquisition, construction, development
and financing of the Project, and the placing of the same in operation.
1 "Fiscal Pear" shall mean the fiscal year as established from time
to time by the City, being as of the date of this Indenture, the period
from July 1 to and including the following June 30.
"Lease" shall mean the Huntington Beach Public Facilities Corpo-
ration Lease and Sublease.
"Paying Agent" shall mean such paying agent as may from time
to time be designated by the Corporation.
"Project" shall mean the acquisition, construction and development
of the facilities described in the recitals hereof,as required by the Lease.
"Rental Revenue" shall mean all rent received by the Trustee
under the Lease and this Indenture from the rental of the Project, all
damage payments received from the City that are not a part of the"Cost
of the Project", all damage payments received from any contractor in
connection with the Project to the extent that such damage payments
are attributable to delay in completion and all proceeds of rental
interruption insurance policies, if any, carried with respect to the
Project pursuant to the Lease or in accordance with this Indenture.
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II
"Trustee" shall mean Bank of America,National Trust and Savings
Association,its successor or successors and any other corporation which
may hereafter be substituted in its place as Trustee under this Inden-
ture.
Section 102. Inclusiveness of Certain Terms. Words of the mas-
culine gender shall be deemed and construed to include correlative
words of the feminine and neuter genders. Unless the context shall
otherwise indicate, the words "Bonds", "coupon", "owner", "Holder"
and "person" shall include the plural as well as the singular number,
and the word "person" shall include corporations and associations,
including public bodies, as well as natural persons.
Section 103. References to Indenture. The terms "hereby",
"hereof", "hereto', "herein", "hereunder", and any similar terms, as
used in this Indenture, refer to this Indenture, and unless the context
shall otherwise indicate, the term "Indenture" shall mean this Inden-
ture together with any Indenture supplemental hereto.
ARTICLE H
FORM, AUTHENTICATION, DELIVERY AND
REGFISTRATION OF BONDS
Section 201. Bonds Issued and in Accordance with Indenture. No
Bonds may be issued under the provisions of this Indenture except
in accordance with the provisions of this Article.
Section 202. Form of Bonds and Security. All Bonds shall be
initially issued in coupon form payable to bearer and registrable as to
principal alone (hereinafter referred to as "coupon Bonds"), exchange-
able for bonds in fully registered form without coupons (hereinafter
referred to as "fully registered Bonds" or "registered Bonds"). All
coupon Bonds shall be issued in the denomination of $5,000 each. All .
fully registered Bonds shall be issued in the denomination of$5,000 each,
or any multiple thereof. The coupon Bonds and the coupons to be
attached thereto shall be substantially in the form set forth in Exhibit B,
attached hereto and by this reference incorporated herein; the form of
fully registered Bonds without coupons shall be substantially in the
form set forth in Exhibit C, attached hereto, and by this reference in-
eorporated herein; and the Trustee's certificate of authentication to be
endorsed on all Bonds and the form of assignment on all Bonds shall
be substantially in the form .set forth in Exhibit D, attached hereto,
and by this reference incorporated herein; provided, however, that
. b
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I
such modifications, insertions, omissions and changes as are required
or permitted by this Indenture or any supplemental indenture hereafter
entered into under the provisions of this Indenture may be made; and
i provided, further that any or all of said Bonds may have endorsed
thereon such legends or text as may be necessaiT or appropriate to
conform to the rules and regulations of any governmental authority
or any usage or requirement of law with respect thereto.
This Indenture shall he a continuing lien to secure the full pay-
ment of the principal, interest and redemption price on the Bonds
executed, authenticated and delivered pursuant to the terms hereof,
without priority as to the security afforded by this Indenture of any
Bond over anv other Bond by reason of date of issue, date of maturity,
date of delivery or any other characteristics whatsoever. The Bonds
shall be direct obligations of the Corporation, and the frill faith and
credit of the Corporation are hereby pledged for the payment of such
principal, interest and redemption price.
Section `03. Details of Bonds. 'There shall be authenticated and
delivered under and secured by this Indenture, for the purpose of
paying the Cost of the Project, Bonds in the aggregate principal
amount of $5,000,000. The Bonds thus to be authenticated and de-
livered shall be designated "Huntington Beach Public Facilities Corpo-
ration, Leasehold Mortgage Bonds, Second Issue", shall be numbered in
such reasonable manner as the Trustee in its discretion shall determine,
shall hear interest payable semi-annually on the first day of Svptehhlber
and the -first day of March in each year at the rates per anntun and shall
mature serially on September 1, in the years and aihhounts as follows:
Interest Interest
Year Amount Rate Year Amount Rate
1975 $105,000 7 7/0 1987 $2101000 51/e %
1976 1101000 7 1988 230,000 51/2
1977 120,000 7 1989 240,000 5.60
1978 130,000 7 1990 260,000 5.60
1979 135,000 7 1991 270,000 5.60
1980 140,000 7 1992 290,000 5.70
1981. 150,000 7 1993 305,000 53/4
1982 160,000 7 . 1994 3201000 53/4
1983 170,000 7 1995 340,000 53/4
1984 180,000 5.90 1996 36000 5
1985 190,000 5.40 1997 385,000 5
1986 200,000 51/2
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All coupon Bonds issued under this Indenture and all fully
registered Bonds delivered pursuant to Section 202 'are to be dated
September 1, 1972. Thereafter, fully registered Bonds shall be dated
and shall bear interest as hereinafter provided: (i) if such fully
registered Bonds are issued on a date which is between interest pay-
ment dates, such Bonds shall bear interest from, and shall be dated
as of the interest payment date next preceding the date on which
the same shall be authenticated by the Trustee; or (H) if the date
of authentication shall be an interest payment date, such Bonds shall
bear interest from and shall be dated as of such interest payment
date; or (iii) if such Bonds are authenticated and delivered upon
transfer of or in exchange or substitution for a Bond or Bonds on
which interest is in default, such Bonds shall bear interest from and
shall be dated as of the date from which interest is payable on such
Bond or Bonds; or (iv) if such date of authentication shall be a
date prior to the first interest payment date, such Bonds shall bear
interest from and shall be dated as of the commencement of the first
interest period.
In case any officer of the Corporation whose signature, or a fac-
simile thereof, shall appear on any Bonds or coupons shall cease to be
such officer before the delivery of such Bonds, such signature, or fac-
simile thereof, shall nevertheless be valid and legally sufficient for all
purposes as fully and to the same extent as if he had remained in office
until the delivery of such Bonds.
Any Bonds or coupons may be signed by, or bear the facsimile
signature of, such officers of the Corporation who at the actual time of
the execution of such Bonds or coupons shall be the proper officers to
execute such Bonds or coupons, although at the date of issuance stated
in such Bonds such officers did not then hold such offices.
The principal of, interest and any premium on the Bonds shall
be payable in lawful money of the United States of America.
The principal of, interest on, and any premium upon the redemp-
tion thereof on all fully registered Bonds shall be payable at the corpo-
rate agency division of the Trustee in Los Angeles, California and on
all coupon Bonds shall be payable at the corporate agency division of
the'Trustee or the principal office of any Paying Agent or Agents at the
option of the holder thereof. Payment of interest on coupon Bonds rep-
resented by coupons shall be made only upon presentation and sur-
render of the coupons representing such interest as the same respee-
tively fall due. Payment of the interest on each fully rei istered Bond
without coupons shall be inade on each interest payment date to, or upon
the order of, the person appearing as the registered owner thereof, at
the close of business on the 15th day preceding the interest payment
date, on the registration books, kept by the Bond Registrar, hereinafter
provided for, by check or draft mailed to such registered owner at his
address as it appears on such registration books. Payment of the prin-
cipal of all coupon bonds and of all fully registered bonds shall be made
only upon the presentation and surrender of such Bonds as the same
shall become due and payable.
Section 204. Authentication of Bonds. Only such of the Bonds
as shall have endorsed thereon a certificate of authentication sub-
stantially in the form set forth in Exhibit D, duly executed by the
Trustee, shall be entitled to any rights, benefits, or security under
this Indenture. No Bonds, and no coupon appertaining to any Bond,
shall be valid or obligatory for any purpose unless and until such
certificate of authentication shall have been duly executed by the
Trustee, and such certificate of the Trustee upon any such Bond shall
be conclusive and the only evidence that such Bond has been duly
authenticated and delivered under this Indenture. The Trustee's cer-
tificate of authentication on any Bond shall be deemed to have been
duly executed if signed by an authorized officer of the Trustee, but
it shall not be necessary that the same officer sign the certificate of
authentication on all of the Bonds that may be issued hereunder at
any one time. Before authenticating or delivering any Bonds with
coupons the Trustee shall detach and cancel all matured coupons, if
any, appertaining thereto; representing interest theretofore paid. Such
cancelled coupons may at any time be destroyed in the manner provided
in this Indenture.
Section 205. Registration of Bonds. Title to any coupon Bond,
unless such Bond is registered as to principal in the inanner herein-
after provided, and to any interest coupon, shall pass by delivery in
the same manner as a ne;otiable instrument payable to bearer. At the
option of the bearer, any coupon Bond may be registered as to principal
on books for the registration and transfer of Bonds, kept by the Bond
Registrar, upon presentation thereof to the Bond Registrar, which
shall make notation of such registration thereon. Any coupon Bond
registered as to principal may thereafter be transferred only upon an
assignment duly executed by the registered owner or his attorney,
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substantially in the form set forth in Exhibit D, such transfer to
be made on such books and endorsed on the Bond by the Bond
Registrar. Such transfer may be to bearer and thereby transferability
by delivery shall be restored, subject, however, to successive registra-
tions and transfers as before. Registration of any coupon Bond as to
principal, however, shall not affect the negotiability by delivery of the
coupons pertaining to such Bond, but every such coupon shall continue
to pass by delivery merely and shall remain payable to bearer.
Any fully registered Bond may be transferred only upon the books
for the registration and transfer of Bonds, upon the surrender thereof
at the corporate agency division of the Bond Registrar, together with
an assignment duly executed by the registered owner or his attorney,
substantially in the form set forth in Exhibit D. Upon the trans-
fer of any such fully registered Bond, there shall be issued in the
name of the transferee a new fully registered Bond or Bonds of any
of the authorized denominations, or, at the option-of the transferee,
coupon Bonds with coupons attached representing all unpaid interest
due or to become due thereon, of the same aggregate principal amount,
interest rate and maturity, as the surrendered Bond.
Coupon Bonds, upon the surrender thereof to the Bond Registrar
with all unmatured coupons and all matured coupons in default, if
any, pertaining thereto, may at the option of the Holder or registered
owner thereof, be exchanged for an equal aggregate principal amount
of fully registered Bonds of like interest rate and maturity of the
authorized denominations. Fully registered Bonds, upon the surrender
thereof to the Bond Registrar, together with an assignment duly exe-
cuted by the registered owner or his attorney, substantially in the form
set forth in Exhibit D, may, at the option of the registered owner
thereof, be exchanged for an equal aggregate principal amount of
coupon Bonds with coupons attached representing all unpaid interest
due or to become due thereon, or for registered Bonds of any other
authorized denominations, of like interest rate and maturity.
One exchange or transfer of a fully registered Bond for a coupon
Bond or coupon Bonds will be made without charge to the Bondholder.
The Corporation and the Bond Registrar may make a charge for every
other exchange or transfer of Bonds sufficient to reimburse them for
any tax, fee or other governmental charge, required to be paid with
respect to such exchange or transfer and the cost of preparing each
new Bond delivered upon such exchange or transfer and any and all
other expenses of the Corporation and the Bond Registrar incurred
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in connection therewith, and all such charges shall be paid before any
such exchange or transfer shall take place. Neither the Corporation
nor the Bond Registrar shall be required to make any such exchange
or transfer of a Bond during the fifteen (15) days next preceding an
interest payment date on such Bond or after such Bond has been called
for redemption or, in the case of any proposed redemption of Bonds,
during the fifteen (15) days next preceding the date of the publication
of notice of redemption.
Section 206. Pavments to Registered Owners of Bonds. As to
any fully registered Bond, or any coupon Bond registered as to princi-
pal, the person in whose naive the same shall be registered shall be
deemed to be and regarded as the absolute owner thereof for all pur-
poses, and payment of or on account of the principal or redemption
price of any such Bond and the interest on such a fully registered
Bond shall be made only to or upon the order of the registered owner
thereof or his legal representative, but such registration may be
changed as hereinabove provided. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Bond, includ-
ing the interest thereon, to the extent of the sum or sums so paid. The
Corporation and the Bond Registrar may deem and treat the bearer of
any coupon Bond not registered as to principal and the bearer of any
coupon pertaining to any coupon Bond, whether or not such Bond shall
be registered as to principal, as the absolute owner of such Bond or
coupon as the case may be, whether such Bond or coupon shall have
matured or not, for the purpose of receiving payment thereof, and
for all other purposes whatever and neither the Corporation nor the
Bond Registrar shall be affected by any notice to the contrary.
Section 207. Filing; of Closing Documents and Delivery of Bonds.
Said Bonds, upon their execution in the form and manner set forth in
Exhibits B, C and D, and as herein provided, shall be deposited
with the Trustee for authentication, but .before said Bonds shall be
authenticated and delivered by the Trustee there shall be filed with or
delivered to the Trustee the following:
(a) A copy of a resolution adopted by the Board of Directors
of the Corporation and certified by its Secretary authorizing the
issuance of the Bonds and directing the authentication and delivery
of such Bonds to or upon the order of the purchasers therein
named upon payment of the purchase price therein set forth;
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(b) Bond CounsePs opinion to the effect that:
i this Indenture has been duly and lawfully authorize
executed and delivered by the Corporation, is in full force
and effect, and is valid and binding upon the Corporation in
accordance with its terms, and that such Bonds are valid,
binding and direct obligations of the Corporation, in accord-
ance with their terms and the terms of this Indenture, and such
Bonds have been duly and validly authorized and issued in
accordance with law and this Indenture; and
(ii) the Bonds, under the circumstances of the issuance
and sale thereof, are not required to be registered under the
Securities Act of 1933, as amended, and qualification of this
Indenture under the Trust Indenture Act of 1939 is not
required; and
(iii) the Bonds, under the circumstances of the issuance
and sale thereof, are exempt from qualification under the
• California Corporate Securities Law.
Such Bonds may be authenticated, delivered and paid for in
amounts of less than the total authorized principal amount from time
to time, as the Corporation may direct upon its written order to the
Trustee.
When the documents mentioned,above shall have been filed with the
Trustee and when said Bonds shall have been executed and authenti-
cated as required by this Indenture, the Trustee shall deliver said
Bonds to or upon the order of the purchasers named in the resolution
mentioned in paragraph (a) of this Section, but only upon pay-
ment to the Trustee of the purchase price of said Bonds. The Trustee
shall be entitled to rely upon such resolution as to the names of the
purchasers and the amount of such purchase price.
Section 208. Disposition of Bond Proceeds. The proceeds of the
sale of the Bonds issued hereunder, including premium and accrued
interest, if any, shall be deposited by the Trustee to the credit of the
Construction Fund hereinafter created and established, to be disbursed
and applied as hereinafter provided.
Section 209., Mutilated, Destroyed, Lost or Stolen Bonds. In case
any Bond secured hereby shall become mutilated, destroyed, lost or
stolen, the Corporation may cause to be executed, and the Trustee may
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authenticate and deliver, a new Pond of like date and tenor in exchange
and substitution for and upon the cancellation of such mutilated Bond
and its interest coupons, if any, or in lieii of and in substitution for such
Pond and its interest coupons, if any, destroyed, lost or stolen, upon
the Holder's paying the reasonable expenses and charges of the Corpo-
ration and the Trustee in connection therewith, and, in the case of a
Bond destroyed, lost or stolen,his filing with the Trustee evidence satis-
factory to it and to the Corporation that such Bond and coupons, if any,
were destroyed, lost or stolen, and of his ownership thereof, and f ur-
nishing the Corporation and the Trustee with indemnity satisfactory to
them.
ARTICLE III
REDEMPTION OF BONDS PRIOR TO MATURITY
Section 301. Redemption Dates. In the event of loss of or damage
to or condemnation of the Project, as more fully set out hereafter, all
or part of the Bonds issued under this Indenture, at the time outstand-
ing, may be redeemed for the principal amount thereof together with
interest accrued to the redemption date plus a premium equal to one
quarter of one percent (1/4%) of said principal amount plus one quarter
of one percent (1/4%) for each year or fraction of a year from the
redemption date to the maturity date of the bond provided however,
that in no event shall such premium exceed four percent (417o) of
the principal amount. Redemption of the Bonds for the aforementioned
purposes may be made in the manner and from the funds hereinafter
provided at any time prior to their stated date of maturity, at the
option of the Corporation, as a whole, or in part, provided that if less
than all of the Bonds are redeemed, the Trustee shall determine a
principal amount of Bonds in each maturity to be redeemed so that
approximately equal annual debt service will prevail, and the Bonds
to be redeemed in each maturity shall be selected by lot by the Trustee.
Except as set forth in the preceding paragraph the Bonds maturing
on or prior to September 1, 1982, shall not be subject to call and redemp-
tion prior to maturity. The Bonds maturing; on Septenilher 1, 1983, and
thereafter may, at the option of the Corporation, be called for redemp=
tion prior to maturity in whole or in pArt on September 1, 1982, or on
any interest payment date thereafter, but only in the manner and only
from the funds as hereinafter provided, at a redemption price for each
redeemable Bond equal to the principal amount thereof plus a premium
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equal to one quarter of one percent (1/4%) of said principal amount
plus one quarter of one percent (1/4%) for each year or fraction of a
year from the redemption date to the maturity date of the Bond.
No Bond shall be so redeemed except from moneys deposited in
or transferred to the Bond Redemption Fund as hereinafter provided.
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Section 302. Method of Redemption. Except as otherwise herein-
before provided, if less than all of the Bonds shall be called for prior
redemption, such Bonds shall be redeemed in inverse order of maturity
and the particular bonds within a maturity to be redeemed shall be
selected by lot by the Trustee in such manner as the Trustee in its
discretion may determine; provided, however, that the portion of any
registered Bond to be redeemed shall be in the principal amount of
$5,000 or a multiple thereof, and that, in selecting coupon Bonds and
portions of fully registered Bonds for redemption, the Trustee shall
j treat each such fully registered Bond as representing that number of
coupon Bonds which is obtained by dividing the principal amount of
such fully registered Bond by $5,000.
Section 303. Notice of Redemption. A notice of any such redemp-
tion, either in whole or in part, signed by the Trustee, (a) shall be
published at least once not less than thirty (30) days prior to the re-
demption date in a daily financial journal or daily newspaper of general
circulation printed in the English language and published in The City
of New York, State of New York, and (b) shall be mailed, postage
prepaid, to all registered owners of Bonds to be redeemed at their
addresses as they appear on the registration books hereinbefore pro-
vided for. Such notice shall also be mailed to any financial consultant
connected with the issuance of the Bonds, and to any person, firm, cor-
poration or syndicate that originally purchased the Bonds, but failure
to so mail any such notice shall not affect the validity of the proceedings
for such prior redemption. Each such notice shall set forth the date
fixed for prior redemption, the redemption price to be paid and, if
less than all the Bonds then outstanding shall be called for prior re-
demption, the distinctive numbers of such Bonds to be redeemed, and,
in the case of registered Bonds without coupons to be redeemed in
part only, the portion of the principal amount thereof to be redeemed.
In case any registered Bond without coupons is to be redeemed in
• part only, the notice of redemption which relates to such Bond shall
state also that on or after the redemption date, upon surrender of such
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Bond, a new Bond or Bonds in principal amount equal to the un-
redeemed portion of such Bond and of the same maturity or maturities
will be issued.
Section 304. Cessation of Interest on Redemption. Notice of such
redemption having been published in the manner and under the condi-
tions hereinabove provided, the Bonds or portions of registered Bonds
so called for prior redemption shall, on the redemption date designated
in such notice, become and be due and payable at the redemption price
provided for prior redemption of such bonds or portions of registered
Bonds on such date. On the date so designated for prior redemption,
notice having been published and moneys for the payment of the
redemption price being held irrevocably in trust by the Trustee, all as
provided in this Indenture, interest on the Bonds or portions of regis-
tered Bonds so called for prior redemption shall cease to accrue; the
coupons for interest on any Bond so called for redemption maturing
subsequent to the redemption date shall be void; such Bonds and por-
tions of registered Bonds shall cease to be entitled to any lien,benefit or
security under this Indenture, and the Holders or registered owners of
such Bonds or portions of registered Bonds shall have no rights in
respect thereof except to receive payment of the redemption price
thereof, and, to the extent hereinafter in this Section provided, to
receive Bonds for any unredeemed portions of registered Bonds with-
out coupons.
In case part, but not all, of an outstanding registered Bond without
coupons shall be called for redemption, the registered owner thereof
may present and surrender such Bond to the Trustee for payment of
the redemption price of the principal amount thereof so called for prior
redemption, and there shall be executed, authenticated and delivered
to or upon the order of such registered owner, without charge therefor,
for the unredeemed balance of the principal amount of the registered
Bond without coupons so surrendered, either coupon Bonds or a
registered Bond of the same maturity of the Bond so presented and
surrendered at the option of such registered owner.
Notwithstanding the foregoing provisions of Section 303 and this
Section 304, payment of the redemption price of a portion of any Bond
registered in the name of a bank, trust company or insurance company
shall be made by the Trustee to the registered owner thereof without
presentation or surrender thereof to the Trustee if there shall be on file
with the Trustee (and not theretofore rescinded by written notice from
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such registered owner received by the Trustee) an agreement (or a con-
formed copy thereof) between the Corporation and such registered
holder that (1) payments will be so made; (2) such registered Holder
will make notations on such Bond of payment of the portions thereof
so redeemed; and (3) such registered Holder will not dispose of such
Bond without first presenting the same to the Trustee for appropriate
notation thereon of the portion of the principal amount thereof so
redeemed or surrendering same to the Trustee for exchange for a
+ Bond or Bonds in authorized denominations aggregating the same
principal amount and of the same maturity or maturities as the princi-
pal amount of the Bond or Bonds surrendered which shall remain un-
paid. The Trustee shall not be under any duty to determine that such
notations have been made.
Section 305. Bonds No Longer Outstanding. When any Bonds, or
when portions of registered Bonds without coupons, which have been
duly called for redemption under the provisions of this Article, or
with respect to which irrevocable instructions to call for prior re-
demption at the earliest redemption date have been given to the Trustee,
in form satisfactory to it, and sufficient moneys shall be held by the
Trustee irrevocably in trust for the Holders of the Bonds or portions
of Bonds to be redeemed for the payment of the redemption price of
such Bonds or portions of Bonds and accrued interest to the date fixed
for redemption, all as provided in this Indenture, then such Bonds
or portions of registered Bonds shall not be deemed to be outstanding
under the provisions of this Indenture.
ARTICLE IV
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
Section 401. Disposition of Moneys in the Construction Fund and
Interest During Construction Fund. Two special trust funds shall be
created, established and held by the Trustee, designated as "Hunting-
ton Beach Public Facilities Corporation Construction Fund" (herein-
after sometimes called the "Construction Fund"); and the Huntington
Beach Public Facilities Corporation Interest During Construction
Fund" (hereinafter sometimes called the"Interest During Construction
Fund") to the credit of which Construction Fund and Interest During
Construction Fund deposits shall be made as are hereinbefore and
hereinafter required.
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Upon receipt by the Trustee of the proceeds of the Bonds, the
Trustee after deducting the amounts required to be deposited in the
- Reserve Fund pursuant to Section 506 of Article V shall deposit the
,amount of $587,735 in the Interest During Construction Fund and
shall thereafter allocate the remaining portion of-the proceeds to the
Construction Fund for application to the payment of the Cost of the
Project. There shall also be deposited by the Trustee to the credit of
the Construction Fund: (i) all interest and other income earned on any
moneys deposited with the Trustee under the provisions of this Inden-
ture for periods prior to completion of the entire Project, and (ii) any
moneys to the extent received by the Trustee from any other source
(including, without limitation, any moneys donated for such purposes).
There shall be paid by the Corporation to the Trustee for credit to the
Construction Fund any moneys described in the foregoing clauses of
this paragraph.
The moneys deposited to the credit of the Construction Fund, in-
eluding all deposits and obligations held as investments thereof and
the proceeds of such deposits and obligations held as investments, shall
be held'in trust and applied only for the payment of the Cost of the
Project, as hereinafter provided, in accordance with the provisions
of this Article IV.
All the moneys held in the Construction Fund and in the Interest
During Construction Fund shall, as nearly as may be practicable,
be continuously invested and reinvested by the Trustee in direct obli-
gations of the United States of America or obligations for which the
full faith and credit of the United States are pledged for the payment
of principal and interest, or any obligations issued by federal land
banks or federal intermediate credit banks established under the Fed-
eral Farm Loan Act, as amended, bonds or debentures of the Federal
Home Loan Bank Board or of any federal home loan bank established
j under the Federal Home Loan Bank Act, and debentures and consoli-
dated debentures issued by the Central Bank for Cooperatives and
banks for cooperatives established under the Farm Credit Act of 1933,
as amended, or such moneys shall be deposited by the Trustee in any or
all the banks which are members of the Los Angeles Clearing House
Association in interest bearing deposits or certificates of deposit, or in
any or all of the savings and loan associations incorporated under the
laws of the United States of America or under the laws of the State of
California, which maintain an office in the County of Los Angeles,
California, and whose accounts are insured by the Federal Savings
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and Loan Insurance Corporation, in investment certificates or with-
drawable shares, such investment deposits, certificates and. shares to
mature or be withdrawable, as the case may be, in such amounts and
at such times as may be necessary, in the opinion of the Trustee to
provide funds when needed to pay the Cost of the Project or the interest
on the Bonds during the construction of the Project, and in any event
to mature or be withdrawable in not to exceed two years from the date
of investment. The deposits and obligations shall be held by the
Trustee and shall be deemed at all times to be a part of the Construction
Fund and the Interest During Construction Fund, as the case may
be, and the Trustee shall at all times keep the Corporation advised as
to the details of all investments and deposits.
The moneys deposited in the Interest During Construction Fund
including all deposits and obligations held as investments thereof,.shall
be held in trust and applied only for"the payment of interest on the Bonds
during the period of construction of the Project. The income proceeds
of all deposits and obligations held as investments in the Interest During
Construction Fund shall be transferred from time to time by the
Trustee to the Construction Fund and shall thereafter be deemed to
be a part of the Construction Fund.
Section 402. Payments Made from Construction Fund and Interest
During Construction Fund. Payment of the Cost of the Project shall be
made from moneys in the Construction Fund and payment of the
interest on the Bonds during construction of the Project shall be made
from moneys in the Interest During Construction Fund. Except as
otherwise expressly provided by other provisions of this Indenture,
all payments from the Construction Fund or Interest During Construe-
tion Fund shall be subject to the provisions and restrictions set forth
in this Article IV, and the Corporation covenant§ that it will not
cause or permit to be paid from the Construction Fund or Interest
During Construction Fund any sums except in accordance with such
provisions and restrictions.
Section 403. Procedure of Making Payments from Construction
Fund. Payments from the Construction Fund shall be made in accord-
ance with the provisions of this Section. Before any such payment
shall be made on account of the Cost of the Project, the Corporation
shall file with the Trustee:
(a) A requisition, signed by such officer or officers of the
Corporation as the Board of Directors of the Corporation shall
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designate by resolution, stating in respect to each payment to be
made:
(i) The item number of payment;
(ii) The name of the person to whom payment is to be
made;
(iii) The amount to be paid;
(iv) The purpose, by general classification, for which
payment is to be made;
(v) That obligations in the stated amounts have been
incurred by the Corporation, that each item is a proper charge
against the Construction Fund and that payment therefor has
not been made; and
(vi) That there has not been filed with or served upon the
Corporation notice of any lien, right to lien, or attachment
upon, or claim affecting the right to receive payment of, any
of the moneys payable to any of the persons named in such
requisition, which has not been released or will not be released
simultaneously with such payment; and
(b) In the case of each payment made under a construction
contract, the Corporation shall file with the Trustee a certificate
signed by the Consulting Architect and attached to such requisition,
certifying approval thereof and further certifying to the best
information and belief of the Consulting Architect that in so far as
each such obligation was incurred for work, materials, equipment
and supplies, such work was actually performed, or such materials,
equipment or supplies were actually installed, in furtherance
of the construction of the Project or delivered at the site of the
work for that purpose, or delivered for storage or fabrication at
a place or places approved by the Consulting Architect.
Upon receipt of each such requisition and the accompanying certifi-
cate where applicable, the Trustee shall pay each such item from the
Construction Fund directly to the person entitled thereto as named in
such requisition, or shall deliver to the Corporation a check or draft
for the payment thereof drawn to the person entitled thereto,as directed
by the Corporation.
The Consulting Architect and the Board of Directors of the Corpo-
ration shall cooperate in establishing a procedure so that at monthly
19
intervals during the construction period waivers of liens shall be filed
with the Trustee which are reasonably current with the status of the
construction of the Project.
Payments of interest on the Bonds during construction of the
Project shall be made by the Trustee from the Interest During Con-
struction Fund, such interest payments to be made directly to the Bond-
holders when due and payable.
Section 404. Retention of Records of Transactions. All requisi-
tions, statements and certificates received by the Trustee, as required
in this Article as conditions of payment from the Construction Fund,
may be relied upon by and shall be retained in the possession of the
Trustee, subject at all times to the inspection of the Corporation, its
agents and representatives.
Section 405. Construction Fund Report. At least once in each
six (6) months during the construction of the Project, the Trustee shall
prepare a report covering all receipts and moneys then on deposit with
the Trustee, in the name of the Trustee, or the Corporation, in the
Construction Fund and Interest During Construction Fund, and any
security specifically pledged therefor, any investments thereof, and all
disbursements made pursuant to the provisions of this Article N.
Said reports shall be mailed by the Trustee to the Corporation, to any
financial consultant connected with the issuance of the Bonds, to any
person, firm, corporation or syndicate that originally purchased the
Bonds and to any Bondholder who shall make written request for the
same.
Section 406. Completion Certificate and Transfer of Moneys.
After completion of construction of the Project, the Corporation shall
3eliver to the Trustee a certificate, signed by the Secretary of the
Corporation, stating the date upon which such completion occurred, and
the amount of money,if any, required for the payment of the remaining
cost thereof; the Trustee shall immediately transfer any moneys in
the Interest During Construction Fund to the Debt Service Fund
(hereinafter established) and shall make provision in the Construction
Fund for payment of such remaining construction cost, if any, and
Y any remaining balance shall.be transferred or held by the Trustee as
directed by a resolution of the Board of Directors of the Corporation
in the amounts and for the purposes as follows:
20
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(a) An amount to the Debt Service Fund which shall be
credited against the rent or additional rent due from the Public .
Corporation as provided in Section 5 of the Lease, or
(b) An amount to be retained in the Construction Fund for
changes, alterations and additions to the Project.
Any remaining balance after transfer to the Debt Service Fund and/or
retention in the Construction Fund, if any, shall be transferred by the
Trustee to the Rental Revenue Fund (hereinafter established).
ARTICLE V
RENTAL REVENUE AND APPLICATION THEREOF
Section 501. Establishment of Special Trust Funds. There shall
be created, established and held by the Trustee, the following several
special trust funds, in which deposits shall be made as are hereinbefore
and hereinafter required:
(a) The Huntington Beach Public Facilities Corporation
Rental Revenue Fund ("Rental Revenue Fund").
(b) The Huntington Beach Public Facilities Corporation Ad-
ministrative Expense Fund ("Administrative Expense Fund").
(c) The Huntington Beach Public Facilities Corporation Debt
Service Fund ("Debt Service Fund").
(d) The Huntington Beach Public Facilities Corporation Bond
Redemption Fund ("Bond Redemption Fund").
(e) The Huntington Beach Public Facilities Corporation Re-
serve Fund ("Reserve Fund").
Section 502. Rental Revenue Fund and Application. All Rental
Revenue shall be paid to the Trustee and deposited by the Trustee to
the credit of the Rental Revenue Fund.
All moneys on deposit in the Rental Revenue Fund shall be dis-
bursed, applied or set aside by the Trustee in the following order of
priority:
(a) Immediately after the receipt by the Trustee of any Rental
Revenue and also after the receipt of other moneys transferred to
the Rental Revenue Fund under any other provisions of this
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Indenture, the Trustee shall apportion and set apart out of the
Rental Revenue Fund and deposit in the Debt Service Fund an
amount sufficient together with the balance then on hand in said
Fund to pay the interest becoming due on the Bonds on both the
next succeeding two interest payment dates, and the principal
becoming due on the next succeeding principal payment date.
(b) Thereafter, the Trustee shall set aside in the Reserve
Fund such amount, if any, as is necessary and will be sufficient to
restore the Reserve Fund to that amount required by Section 506
t hereof.
(c) Thereafter, the Trustee shall set aside in the Adminis-
trative Expense Fund such amount as the Corporation shall certify
to the Trustee as necessary for the payment of the budgeted ad-
ministrative expenses of the Corporation.
(d) Thereafter, the Trustee shall apportion and set apart out
of the Rental Revenue Fund and deposit in the Bond Redemption
Fund the amount, if any, of any balance remaining after making
the deposits and allocations required by subparagraphs (a), (b)
and (c) above.
Section 503. Debt Service Fund. The Trustee shall pay the prin-
cipal and interest becoming due on the Bonds after completion of the
Project from the Debt Service Fund.
Section 504. Bond Redemption Fund. Moneys at any time
deposited in the Bond Redemption Fund shall be used as follows:
(a) If the deposits required to be made under subsections
(a), (b) and (c) of Section 502 are insufficient so that the
moneys on deposit to the credit of the Debt Service Fund or set
aside in the Reserve Fund or set aside in the Administrative
Expense Fund are less than the amounts hereinbefore required to
be on deposit or set aside therein at that time, and there are then
moneys on deposit in the Bond Redemption Fund, the Trustee shall
transfer from the Bond Redemption Fund and deposit to the credit
of the Debt Service Fund,and/or set aside in the Reserve Fund and
the Administrative Expense Fund, the amount sufficient to make up
any deficiency.
(b) The balance remaining in the Bond Redemption Fund
after making the deposits required by paragraph (a) of this See-
tion may be considered surplus by the Trustee and, upon receipt
22 .
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of a resolution of the Board of Directors of the Corporation
directing such action, such surplus shall be utilized by the Trustee
in accordance with the following provisions:
(i) to purchase any Bonds, in such manner as it may
determine, then outstanding on the most advantageous terms
obtainable with reasonable diligence, but such, price shall not
exceed 10417c of the principal amount thereof plus accrued
interest to the date of purchase, or
(ii) to call for redemption and redeem on the next ensuing
interest payment date such amount of Bonds as specified
at the applicable redemption prices. Prior to the redemption
date the Trustee shall withdraw from moneys in the Bond
Redemption Fund and deposit in a special trust account the
amounts required for the payment by the Trustee of the re-
demption price, exclusive of accrued interest, of the Bonds
so called for redemption and the Trustee shall withdraw from
the Debt Service Fund and deposit in such special trust
account the amounts required for the payment of interest on
such Bonds to the date of redemption, and such amounts so
withdrawn shall be applied for the payment of such redemp-
tion price and interest on or after the date of redemption of
such Bonds, or
(iii) to be transferred to the Construction Fund for
changes, alterations and additions to the Project, or
(iv) to reimburse the City for any rent or additional rent
previously paid to the Corporation pursuant to the terms of
the Lease.
Section 505. Administrative Expense fund. Moneys at any time
set aside in the Administrative Expense Fund shall be used and ap-
plied solely for the payment of such expenses of the Corporation as
approved by the Corporation. Payments of administrative expenses
shall be made by the Trustee upon receipt of a requisition, signed by
such officer or officers of the Corporation as the Board of Directors of
the Corporation shall designate by resolution, stating in respect to each
payment to be made (a) the item number of the payment, (b) the name
of the person to whom payment is to be made, (c) the amounts to be
paid, and (d) that obligations in the stated amounts have been incurred
by the Corporation, and have not been paid. Upon receipt of each such
requisition, the Trustee shall pay each such item directly to the person
23
entitled thereto as named in such requisition, or shall deliver to the
Corporation a cheek or draft for the payment thereof, as directed by
the Corporation.
Section 506. Reserve Fund. From the proceeds of the Bonds an
amount equal to one year's base rent under the Lease shall be placed
in the Reserve Fund. Thereafter, pursuant to Section 502 hereof,
there shall be placed in the Reserve Fund, from time to time by
annual transfers the amount necessary to maintain the Reserve Fund at
a level equal to one year's base rent under the Lease. Moneys in the
Reserve Fund shall be used solely for the purpose of paying the
principal of and interest on the Bonds in the event that the moneys
in the Debt Service Fund are insufficient therefor and for that
purpose may be withdrawn and transferred to the Debt Service Fund.
No payment need be made into the Reserve Fund so long as there shall
_ be in said fund a sum at least equal to one year's base rent
under the Lease. Whenever moneys are withdrawn from the Reserve
Fund to pay principal of and interest on the Bonds, the amount in the
Reserve Fund shall be restored to the amount required in this Section
from any available source from the first available moneys. If requested
by the Corporation at any time prior to the completion of the Project,
any moneys in the Reserve Fund in excess of the aforesaid minimum
amount shall be transferred to the Construction Fund, and thereafter
any moneys in the Reserve Fund in excess of said required minimum
shall on July 31 and January 31 of each year be transferred to the
Rental Revenue Fund. Moneys in the Reserve Fund may be used to
pay in full the remaining principal and interest on the Bonds. In the
event all of the Bonds are called for redemption prior to maturity,
moneys in the Reserve Fund may be deposited in the Bond Redemption
Fund and used in the manner and for the purposes provided in Article
III and Section 504 hereof.
Section 507. Unclaimed Moneys for Payment of Bonds and In-
terest. Any moneys which shall have been set aside for the purpose
of paying any particular Bonds, either at the maturity thereof, or
upon purchase or call for redemption as provided herein, or for the
purpose of paying any particular installments of interest on any par-
ticular Bonds, shall be held irrevocably in trust for and assigned to
the respective Holders of the Bonds or coupons entitled thereto, and if
the same shall remain unclaimed by the Holders of such Bonds or of
such coupons for a period of seven years after the date on.which such
24
4
Bonds or such coupons shall have become payable shall, upon request
in writing from the Corporation, be paid to the Corporation by the
Trustee and thereafter the Holders of such Bonds or such coupons
shall look only to the Corporation for payment and then 9nly to the
extent of the amounts so received without any interest thereon, and the
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Trustee shall have no responsibility with respect to such moneys.
Section 508. Disposition of Redeemed Bonds and Coupons. All
Bonds paid, redeemed or purchased, either at or before maturity,
together with all unmatured coupons, if any, appertaining thereto, shall
be cancelled when such payment, redemption or purchase is made, and
such Bond and coupons shall be delivered to the Trustee. All interest
coupons shall be cancelled upon their payment and delivered to the
Trustee. All cancelled Bonds and coupons shall be held by the Trustee
. until this Indenture shall be released; provided, however, that Bonds
and coupons so cancelled may at any time, upon direction of the
Corporation, be destroyed by cremation or chemical means by the
Trustee, who shall execute a certificate thereof in duplicate describing
the Bonds and coupons so destroyed, and one executed certificate shall
be filed with the Corporation and the other executed certificate shall
be retained by the Trustee.
Section 509. Pledge of All Rental Revenue and Moneys. All
Rental Revenue and any other moneys paid to or to be paid into the
funds or accounts created or set aside herein or pursuant hereto are
hereby assigned and pledged to the Trustee as provided herein in trust
for the benefit of the Holders of Bonds issued hereunder and pursuant
hereto to secure the payment of the principal and redemption price of,
and interest on, said Bonds. Such pledge and assignment shall immedi-
ately be effective without any physical delivery thereof or further act;
and the lien of such pledge and assignment shall be valid and binding
as against, and prior and superior to, any liens of all other parties
having claims of any kind in tort, contract or otherwise against the
Corporation, irrespective of whether such parties have notice thereof.
ARTICLE VI
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 60t. Moneys Deposited To Be Held in Trust. All moneys
deposited under the provisions of this Indenture with the Trustee shall
be held in trust and applied only in accordance with the provisions of
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this Indenture, and shall not be subject to lien or attachment by any
creditor of the Corporation, other than the lien of the Holders of the
Bonds issued pursuant to and secured by this Indenture.
Section 602. Security For Deposits. All moneys held hereunder
by the Trustee shall be continuously and fully secured, for the benefit
of the Corporation and the Holders of the Bonds in the same manner
as is provided by law for other trust funds.
Section 603. Investment of Funds. Moneys held in any fund
created hereunder shall be invested with reasonable diligence by the
Trustee in direct obligations of the United States of America or obliga-
tions for which the full faith and credit of the United States are pledged
for the payment of principal and interest, or any obligations issued
by federal land banks or federal intermediate credit banks established
under the Federal Farm Loan Act, as amended, bonds or debentures
of the Federal Home Loan Bank Board or of any federal home loan
bank established under the Federal Home Loan Bank Act, and deben-
tures and consolidated debentures issued by the Central Bank for Co-
operatives and banks for cooperatives established under the Farm Credit
Act of 1933, as amended, or at the direction of the Corporation, such
moneys shall be apportioned by the Trustee among any or all of the
banks which are members of the Los Angeles Clearing House Associa-
tion in interest bearing deposits or certificates of deposit, or in any or
all of the savings and loan associations incorporated under the.laws of
the United States of America or under the laws of the State of Cali-
forma,which maintain an office in the County of Los Angeles,California,
and whose accounts are insured by the Federal Savings and Loan In-
surance Corporation, in investment certificates or withdrawable shares,
such investments, certificates,deposits and shares to mature or be with-
drawable, as the case may be, not later than the date or dates when the
moneys held in such funds will be required for the purposes in this
Indenture provided, and in any event to mature or be withdrawable in
not to exceed two years from the date of investment.
• All the moneys in the funds referred to above shall be continuously
invested or deposited, as nearly as may be practicable, subject to the
conditions provided above and to the necessity to provide moneys when
needed for payments provided to be made from such funds.
Section 604. Investments and Income as Part of Funds; Liquida-
tion. Obligations purchased or deposits made with moneys in any fund
26
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created hereunder shall be deemed at all times to be a part of such
fund and the interest and income accruing thereon and any profit
realized from the liquidation of any such investment shall be credited
to such fund and any loss resulting from the liquidation of any such
investment shall be charged to such fund. For the purposes of any
such investment, obligations of the United States of America shall be
i deemed to mature at the earliest date on which the United States of
America is on demand irrevocably required to pay a fixed sum in
discharge of the whole of such obligations.
f
In computing the amount in any fund created under the provisions
of this Indenture for any purpose provided in this Indenture, obliga-
tions purchased as an investment of moneys therein shall be valued at
the cost thereof, adjusted annually for the amortization of premium
or the accumulation of discount.
The Trustee shall sell at the best price obtainable, or present for
redemption, any obligations so purchased as an investment whenever it
shall be requested in writing by the Corporation so to do or whenever
it shall be necessary in order to provide moneys to meet any payment
or transfer from any such fund. The Trustee shall not be liable or
responsible for making any investment or deposit in the manner pro-
vided above or for any loss resulting from any such investment or
deposit made in the manner provided above. The Trustee shall advise
the Corporation, in writing, when reasonably requested to do so, of the
details of all investments or deposits held for the credit of any such
funds in the custody of the Trustee under the provisions of this Inden-
ture as of the end of the preceding month.
ARTICLE VII
COVENANTS
Section 701. Covenants and the Duration Thereof. As part of
the terms and conditions of the Bonds, the Corporation makes the
covenants with the Bondholders which are set forth in the following
subdivisions of this Section. Each of said covenants shall remain in
full force and effect so long as any of the Bonds shall be outstanding
and unpaid, or so long as provision has not been made for the full
payment and discharge of all such outstanding Bonds, upon maturity,
or upon redemption prior to maturity, through the irrevocable setting
27
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apart in the appropriate fund or funds established in or pursuant to
this Indenture, or through the irrevocable setting apart in some other
special trust fund of money sufficient for that purpose or through
other irrevocable allocation to that purpose of money sufficient therefor.
Covenant 1. Prompt Payment. The Corporation shall cause pay-
ment to be promptly made of the principal, interest and the redemption
price,if any, on every Bond at the place, on the dates and in the manner
provided herein and in said Bonds and in any coupons thereto apper-
taining, according to the true intent and meaning thereof. Such prin-
cipal, interest and redemption price are payable in the manner and
to the extent hereinabove particularly specified. Nothing in the Bonds
or coupons or in this Indenture shall be construed as an indebtedness
of the City or of the State of California within the meaning of any
constitutional or statutory provision or limitation.
Covenant 2. To Construct. Upon the receipt of the proceeds of
the Bonds issued hereunder, the Corporation shall forthwith proceed
with the accomplishment of the Project in accordance with the plans
and specifications therefor and in conformity with law and all require-
ments of all governmental authorities having jurisdiction thereover,
and shall complete the Project with all expedition practicable in
accordance with such plans and specifications or such modifications or,
alterations thereof, as may be approved by the requisite parties and
governmental authorities and by the Consulting Architect assigned
thereto.
Before entering into any construction contract with respect to the
Project, the Corporation shall require each person, firm or corporation
with whom it may contract for labor or materials in connection with
the construction of the Project, or any part thereof, to furnish a
material and labor bond in an amount not less than fifty percent (50°Jo) of
the contract price, and a faithful performance bond in an amount not
less than said contract price, with respect to any contract exceeding
$5,000 in amount. The proceeds of any such performance bond will
forthwith, upon receipt of such proceeds, be applied toward the com-
pletion of the Project.
Covenant 3. To Discharge All Lawful Claims. The Corporation
shall duly observe and comply with all valid requirements of any
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governmental authority relative to the Project, or any part thereof,
or to the Corporation, and shall not create or suffer to be created any
lien or charge upon the Project or any part thereof, or on any proper-
ties or facilities thereof, or upon the rental revenue therefrom, except
the Lease and the lien and charge of this Indenture and the Bonds
secured hereby upon the Rental Revenue, and shall pay or cause to be
discharged or shall make adequate provision to satisfy and discharge,
within sixty days after the same shall accrue, all lawful claims and
demands for labor, materials, supplies or other objects which, if
unpaid, might by law become a lien upon the Project or any part
thereof, or any properties or facilities thereof, provided, however, that
nothing in this covenant shall require the Corporation to pay or cause
to be discharged, or make provision for, any such lien or charge, so
long as the validity thereof shall be contested in good faith and by
appropriate legal proceedings.
Covenant 4. Use of Rental Revenue for Proper Purpose. None
of the Rental Revenue shall be used for any purpose other than as
provided in this Indenture, and no contract or contracts shall be entered
into or any action taken by which the rights of the Trustee or of the
Bondholders will be impaired or diminished. .
Covenant 5. Protection of Funds. The Corporation shall, at any
and all times so far as it may be authorized by law, pass, make, do,
execute, acknowledge and deliver, all and every such further resolu-
tions, acts, deeds, conveyances, assignments, transfers and assurances
as may be necessary or desirable for the better assuring, conveying,
granting, assigning and confirming all and singular the rights, Rental
Revenue, and other moneys, securities and funds hereby pledged or
assigned, or intended so to be, or which the Corporation may here-
after become bound to pledge or assign. The Corporation shall at all
times, to the extent permitted by law, defend, preserve and protect the
pledge of the Rental Revenue and other moneys, securities and funds
pledged under this Indenture and all the rights of the Bondholders
under this Indenture against all claims and demands of all persons
whomsoever.
Covenant 6. Records and Audit. The Trustee shall annually,
within 120 days after the close of the Corporation's annual account-
ing period, make a report of the Trustee's books and accounts relating
to the Project for the preceding year. Promptly thereafter each such
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annual report shall be filed with the Corporation and with the Com-
missioner of Corporations of the State of California and copies of
such annual reports shall be mailed by the Trustee to the Holders of
any Bonds who shall have filed their names and addresses with the
Trustee for such purpose. Each such annual report shall set forth in
respect to the preceding 12 months:
(a) The Rental Revenue and all other moneys received by the
Trustee on account of the Lease;
(b) A summary of all payments, deposits and credits to and
payments, transfers and withdrawals from each fund and account
created under the provisions of this Indenture;
(c) The details of all Bonds issued, paid, purchased or re-
deemed;
(d) The amounts at the end of such period in each fund and
to the credit of each account, showing the respective amounts to
the credit of each fund and account, and showing the details of any
investments thereof.
Each such annual report shall set forth in respect to the succeeding
12 months the budgeted administrative expenses during such succeed-
ing periods.
Such annual reports shall be open to the inspection of any Bond-
holders, or their agents and representatives, at the corporate agency
division of the Trustee.
The Trustee shall at all times have access to those books and
records of the Corporation which may be reasonably required by the
Trustee to fulfill its duties and obligations hereunder, except that no
such access shall be allowed to any books or records constituting classi-
fied security information under any law or governmental regulation at
the time applicable thereto.
Covenant 7. Maintenance of Properties. If the Corporation takes
possession of the premises under the Lease it shall at all times keep
its properties in good repair, working order and condition.
Covenant 8. Against Debt. The Corporation shall not issue any
other obligations payable from Rental Revenue or any other payments
received or to be received under the Lease or in connection with the
Project, nor voluntarily create or cause to be created nor suffer to
continue to exist, any lien, pledge, assignment, encumbrance, or any
30
other charge thereon and shall not create, assume, incur or suffer to
exist any current or funded debt in connection with the Project, except:
(a) The Bonds issued and to be issued under and upon the
terms and conditions specified in this Indenture;
(b) Current liabilities (exclusive of indebtedness for money
borrowed) for accounts payable and expense accruals incurred or
assumed in the ordinary course of business, including therein obli-
gations for taxes, insurance, rents and interest, labor, wages,
materials and equipment, incurred in connection with the Project
as contemplated by this Indenture and by the Lease, in connection
with its operations in the ordinary course of its business under
the Lease; and
(c) Unsecured loans or debt for money borrowed for the
express purpose of, and used for, the payment of taxes, insurance
or other current liabilities of the Corporation for which it is
entitled to be reimbursed by the City under the Lease.
Covenant 9. Against Liens and Encumbrances. The Corporation
shall not sell, lease or otherwise dispose of or encumber its interests
in the Lease or the property leased thereunder or relating thereto or
any part thereof and shall not create or permit to be created any
charge or lien on the Rental Revenue. The Corporation shall not create,
assume, incur or suffer to be created, assumed or incurred or to exist
any mortgage, pledge, encumbrance or lien or charge of any kind upon
any of the properties of any character of the Corporation; provided,
however, that nothing in this covenant shall prevent or be deemed to
prohibit:
(a) The Corporation from issuing the Bonds as provided in
this Indenture; or
(b) The Corporation from depositing with or giving any form
of security to any governmental agency or other body created or
approved by law or governmental regulation in order to entitle
the Corporation to maintain self insurance, or to participate in any
fund in connection with workmen's compensation, unemployment
insurance, old age pensions, or other social security, or to share
in any privilege or benefit available to corporations participating
in any such arrangement or for any other purpose at any time
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
license, or from depositing assets of the Corporation with any
31
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surety company, a clerk of any.court, or an escrow, as collateral in
connection with or in lieu of any bond on appeal by the Corpora-
tion, from any judgment or decree against it or in connection with
any proceedings in actions at law or in equity by or against the
Corporation; or
(c) The Corporation from the incurring or suffering to be in-
curred or to exist upon any of its property or assets (i) the lien
of any taxes or assessments or governmental charges or levies, if
such taxes or assessments or charges or levies shall not at the time
be due and payable or if the Corporation shall currently be .con-
testing the validity thereof in good faith by appropriate proceed-
ings and shall have set aside on its books (or if the Trustee shall
have set aside) adequate reserves with respect thereto, (ii) the
liens of any judgments, if such judgments shall not have remained
undischarged or unstayed on appeal or otherwise for more than six
months, (iii) undetermined liens or charges incident to construe-
tion, (iv) any other claims for labor, materials and supplies, which
if unpaid, might by law become a lien or charge upon its property
if the Corporation shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside
on its books (or if the Trustee shall have set aside) adequate re-
serves with respect thereto, (v) any encumbrances consisting of
zoning restrictions, easements and restrictions on the use of real
property and minor defects and irregularities in title thereto,which
do not, in the opinion of the Board of Directors of the Corporation
materially impair the use of such property by the Corporation in
the operation of its business or the value of such property for the
purpose of such business, or (vi) any lien created by law for banks
on property in their possession for amounts owing to them by the
Corporation in the ordinary course of its business provided that
such property was furnished to the bank in the ordinary course
of the business of the Corporation and not as security for such
indebtedness; or
(d) The execution, delivery and maintenance in effect of the
Lease.
Covenant 10. To Maintain Insurance. The Corporation shall
secure or cause to be secured a policy or policies of insurance against
loss or damage to the property covered by the Indenture resulting
from fire, lightning, vandalism, malicious mischief, and such perils
' ordinarily defined as"extended coverage"and other perils as the Corpo-
ration and the City may agree should be insured against on forms and
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in amounts satisfactory to each. Provided such insurance is available
from reputable insurers, such insurance shall be maintained in an
amount not less than the full insurable value of said properties or the
! amount of the Corporation's outstanding Bonds, whichever amount is
less. The term "full insurable value" as used in this Section shall mean
the actual replacement cost "new" (including the cost of restoring the
surface of grounds owned or leased by the Corporation but excluding
the cost of restoring trees, plants and shrubs) less physical deprecia-
tion. Said "full insurable value" shall be determined from time to time
but not less frequently than once in every 36 months by an independent
appraisal firm or by any other method of appraising or valuation
mutually acceptable to the Corporation and the City. The Corporation
shall also:
(a) Maintain or cause to be maintained, as to the property
covered by the Indenture, insurance:
(i) Against war risks, as and when such insurance is
• obtainable from reputable insurance companies or the United
i States of America or any agency thereof, in amount not less
than 807o of the then full insurable value thereof; and
(ii) Against loss or damage from leakage of sprinkler
systems now or hereafter installed therein in amounts to be
determined by the Corporation; and
(iii) Against loss or damage by explosion of steam boil-
ers, pressure vessels and similar apparatus now or hereafter
installed therein in amounts to be determined by the Corpora-
tion.
(b) Maintain or cause to be maintained earthquake insurance,
if such insurance is obtainable on the open market from reputable
insurance companies, against loss or damage by earthquake in the
1 following amount:
(i) the full insurable value of the property (as defined
above) covered by the Indenture with deductible conditions of
not to exceed 109o' for any one loss which is less than the face
amount of the policy; or
(ii) the amount of the outstanding Bonds, if less than
(i) above.
(c) Maintain or cause to be maintained use and occupancy
or business interruption or rental income insurance against the
perils of fire, lightning, vandalism and malicious mischief and such
other perils ordinarily defined as "extended coverage"in an amount
33
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equal to not less than two years base rent due from the City
under the Lease; and
(d) Maintain or cause to be maintained public liability insur-
ance against claims for bodily injury or death, or damage to
property occurring upon, in or about the property covered by the
Indenture, such insurance to afford protection to a limit of not less
than $1,000,000 combined single limit bodily injury and property
damage; and
(e) Maintain or cause to be maintained workmen's compensa-
tion insurance issued by a responsible carrier authorized under the
laws of the State of California to insure employers against liability
for compensation under the Workmen's Compensation Insurance
and Safety Act now in force in California, or any act hereafter
enacted as an amendment or supplement thereto or in lieu thereof,
such workmen's compensation insurance to cover all persons em-
ployed in connection with the Project and to cover full liability
for compensation under any such act aforesaid, based upon death
or bodily injury claims made by, for or on behalf of any person
incurring or suffering injury or death during or in connection with
the Project or the business of the Corporation.
All insurance herein provided for shall be effected under policies
issued b insurers of recognized responsibility, licensed or permitted
Y � P Y�
to do business in the State of California.
All policies or certificates issued by the respective insurers for
• insurance shall provide that such policies or certificates shall not be
cancelled or materially changed without at least 30 days prior written
notice to the Trustee, and shall carry loss payable endorsements in
favor of the Trustee where applicable. Certified copies of such policies
shall be deposited with the Trustee by the Corporation, together with
appropriate evidence of payment of the premiums therefor; and, at
least ten days prior to the expiration dates of expiring policies or
contracts held by the Trustee, certified copies of renewal or new
policies on contracts or certificates, shall be deposited with the Trustee.
All proceeds of insurance with respect to loss or damage to the
i property shall be paid to the Trustee (except that proceeds for any
'F one loss not exceeding$5,000 need not be paid to the Trustee but may be
paid to the Corporation and applied by it to the repair, restoration or
replacement of the property destroyed or damaged). Upon payment
thereof to the Trustee, and upon the determination by the Corporation
34
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s
1
as provided in the Lease, (1) if the Project is to be repaired or rebuilt,
the Trustee shall deposit the same in the Construction Fund for appliea-
tion as provided with respect to moneys in such fund or (2) if the
Project is not to be repaired or rebuilt, the Trustee shall deposit the
same in the Bond Redemption Fund for application as provided for
moneys in such fund.
Covenant 11. Performance. The Corporation shall faithfully do,
perform and observe any and all covenants, undertakings, stipulations
and provisions contained in this Indenture and in each and every Bond
issued hereunder. The Corporation shall faithfully do, perform and
observe any and all covenants, undertakings, stipulations and provi-
sions contained in the Lease. The Corporation shall require the City
to comply with each and every covenant, undertaking, stipulation
and provision contained in the Lease and to take all actions and
proceedings necessary or required to compel the compliance by the
City with the covenants, undertakings, stipulations and provisions
contained in the Lease. The Corporation shall not terminate, or agree .
to the termination of, the Lease or to any amendment or modification
thereof which would reduce the length of the term thereof, or reduce
or modify the amount of rental and other charges payable by the City
thereunder, or change the time or times of payment of such rental or
other charges, or agree to any other amendment or modification thereof
in any manner detrimental to the rights of the Holders of the Bonds.
Covenant 12. To Maintain Corporate Existence. Subject to the
other provisions of this Indenture, the Corporation shall maintain its
corporate existence and right to carry on its business and duly procure
all necessary renewals and extensions thereof and use its best efforts to
maintain, preserve and renew all such rights, powers, privileges and
franchises.
Covenant 13. Not to Distribute Profits. The Corporation shall
carry on the business of the Corporation with respect to the Project,
and otherwise, in such manner that none of the net earnings, if any,
whether realized or unrealized, will inure to the benefit of any private
shareholder or individual, or any director, officer or member of the
Corporation.
Covenant 14. Disposition of Condemnation Award. The Corpora-
tion shall, subject to the provisions of the Lease, pay over to the
Trustee upon receipt thereof by the Corporation any moneys received
it
by the Corporation on account of the condemnation, or the sale under
threat thereof, of all or any part of the Project or all or any interest
in the leasehold estate held by the Corporation under the Lease. Upon
payment thereof to the Trustee, the Trustee shall deposit the, same
in the Bond Redemption Fund for application as provided for moneys
in such fund.
Covenant 15. To File Claims. Each year the Trustee shall in-
vestigate to determine if the amount necessary to pay all rental and
other amounts due under the Lease has been included in the budget
of the City, and, if said amounts are not included in said budget, take
all actions and proceedings required to compel their insertion therein.
Each year the Trustee shall cause the Corporation to file in the proper
n claim or claims which
form and manner any c may b required by law
e ye
as a prerequisite to payment by the City of any rental and other
amounts due under the Lease.
Covenant 16. To Maintain Paying Agents. The Corporation, with
the written approval of the Trustee, shall appoint and at all times have
• a Paying Agent in Los Angeles, California; Chicago, Illinois; and New
York, New York, for the payment of the principal of, and the interest
(and premium, if any) on, the Bonds.
! Covenant 17. Arbitrage. Sums credited to the various funds and
accounts pertaining to the Bonds or the Project shall not be invested in
such a manner as to result in the loss of exemption from federal income
taxation of interest on the Bonds. Such sums constituting in the aggre-
gate a major portion or more of the proceeds of all the Bonds shall not
be invested directly or indirectly in taxable obligations so as to produce
an adjusted yield (including permissible adjustments for any premiums,
discounts and costs), i.e., an adjusted effective interest rate, which
exceeds such an adjusted yield (adjusted effective interest rate) of the
Bonds by more than one-eighth of one per centum (0.1259,,) and the
amounts, if any, permitted by law, and which results in the Bonds
constituting taxable "arbitrage bonds" within the ineaning of section
+ 103(d), Internal Revenue Code of 1954, as amended by section 601(a),
Tax Reform Act of 1969 (83 Stat. 656), any subsequent amendments,
and the Income Tax Regulations issued thereunder; but such sums may
be otherwise invested if and when such act and regulations permit the
investment to be made in the manner made without causing the.Bonds to
become taxable"arbitrage bonds."
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ARTICLE V1rr
REMEDIES OF TRUSTEE AND BONDHOLDERS
• Section 801. Events of Default. Each of the following events
is hereby declared an "event of default", that is to say, if:
j (a) The Corporation shall fail to make payment of the in-
terest, principal or redemption price of any of the Bonds when the
j same shall become due and payable; or
(b) The Corporation shall unreasonably delay or fail to carry
on with reasonable dispatch, or shall discontinue the Project, or
any part thereof, for which Bonds shall have been issued under
this Indenture; or
(c) The Corporation shall for any reason be rendered incap-
able of fulfilling its obligations hereunder; or
(d) The Corporation shall fail in the performance or observ-
ance by it of any other of the covenants, agreements or conditions
i contained in this Indenture, or in the Bonds, and continue in such
failure for a period of sixty (60) days after written notice to the
Corporation by the Trustee; or
(e) The Corporation (1) is adjudged insolvent by a court of
j competent jurisdiction, (2) admits in writing its inability to pay its
debts generally as they become due, (3) files a petition in bank-
ruptcy, (4) makes an assignment for the benefit of creditors, or
(5) consents to the appointment of a receiver of itself or property
covered by the Lease; or
(f) An order, judgment or decree shall be entered by any
court of competent jurisdiction appointing, without the consent of
the Corporation, a receiver of the Corporation or of the property
covered by the Lease, and such order, judgment or decree shall
not be vacated or set aside or stayed within sixty (60).days from
the date of such appointment; or
(g) A court of competent jurisdiction shall enter an order,
judgment or decree approving a petition filed against the Corpora-
tion under the provisions of any bankruptcy act and such order,
l judgment or decree shall not be vacated or set aside or stayed
• within sixty (60) days from the date of entry of such order,
judgment or decree; or
(h) Under the provisions of any other law now or hereafter
existing for the relief or aid of debtors any court of competent
jurisdiction shall assume custody or control of the Corporation or
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of the property covered by the Lease or any part thereof, and
such custody or control shall not be terminated within sixty (60)
days from the date of assumption of such custody or control; or
(i) The City shall, for any reason whatsoever, fail in the
payment of the rentals at the times, in the amounts and in the
manner required by the.Lease, and such failure shall continue for
a period of thirty (30) days.
Section 802. Action Upon Default. Upon the happening and con-
tinuance of any event of default above specified, then and in every
such case the Trustee may proceed, and upon the written request
of the Holders of not less than twenty percent (207o' ) in principal
amount of the Bonds then outstanding hereunder shall proceed, to
protect and enforce its rights and the rights of the Bondholders under
this Indenture by such suits, actions or special proceedings in equity
or at law, or by proceedings in the office of any board or officer having
jurisdiction, either for the specific performance of any covenant or
agreement contained herein or in aid or execution of any power herein
granted or for the enforcement of any proper legal or equitable remedy,
as the Trustee, being advised by counsel, shall deem most effectual to
protect and enforce such rights. The Trustee may, if and to the extent
permitted by law, by such officer and agent as it may appoint, with or
without entry, sell all of the property subject to the lien hereof as an
entirety, or in such parcels as the Holders of a majority in principal
amount of the Bonds then outstanding shall in writing request, or, in
the absence of such request, as the Trustee may determine, at such
place and time as may be designated by the Trustee or as may be
required by law or by order of court, to the highest bidder at public
auction, first giving notice of the time, place and terms of- sale as
hereinafter provided; and may from time to time adjourn any such
sale in its discretion by announcement at the time and place appointed
for such sale or for such adjourned sale, without further notice except
such as may be required by law; and upon such sale may make and
deliver to the purchaser or purchasers a good and sufficient deed or
deeds or other appropriate instruments of transfer for the same. Any
such notice of sale shall state the time and place when and where the
sale shall be made and shall contain a particular description of the real
property to be sold and a general description of the personal property
to be sold,.and shall be sufficiently given if posted at least twenty (20)
days prior to the date of sale in one public place in the city where the
property is to be sold (or, if the property is not to be sold in a city,
then in the judicial district in which the property is to be sold), shall be
38
published once a week for the same period in some newspaper of general
circulation printed and published in the city in which the property or
some part thereof is situated (or, if no part of the property is situated
in a city,then in the judicial district in which the property or some part
thereof is situated, or, in case no newspaper of general circulation be
printed and published in the city or judicial district, as the case may be,
in some newspaper of general circulation printed and published in the
county), and shall be posted in some conspicuous place on the real
property to be sold at least twenty (20) days before the date of sale, and
shall conform to the applicable requirements of law. The place of
sale shall be such place in the County of Orange, State of Cali-
fornia, as may be fixed by the Trustee or as may be required by law or
by order of court. The Corporation does hereby covenant and agree
that the Trustee, in the exercise of the power of sale hereby granted
and conferred, shall not be governed by any law of the State of
California relating to the foreclosure of a chattel mortgage or pledge.
1 It is further covenanted and agreed that the personal property, if any,
sold by the Trustee pursuant to the provisions of this Section need
not be in view of those who attend any such sale, any rule of law or
statute to the contrary being hereby expressly waived. No demand for
performance or personal notice of such sale shall be necessary. The
Trustee and its successors are hereby irrevocably appointed the true
and lawful attorneys of the Corporation, in its name and stead, to make
all necessary conveyances, assignments, transfers and deliveries of
! property thus sold, and for that purpose may execute all necessary
deeds, bills of sale and instruments of assignment and transfer, and
may substitute one or more persons, firms or corporations with like
power, the Corporation hereby ratifying and confirming all that its
said attorneys, or such substitute or substitutes, shall lawfully do by
virtue hereof. Nevertheless, if so requested by the Trustee or by any
purchaser, the Corporation shall ratify and confirm any such sale or
transfer by executing and delivering to the Trustee or to such purchaser
or purchasers all proper conveyances, assignments, instruments of
transfer and releases as may be designated in any such request.
In the enforcement of any remedy under this Indenture, the
Trustee shall be entitled to sue for, enforce payment on and receive any
or all amounts then or during any default becoming, and any time
remaining, due from the Corporation for principal, redemption price,
interest or otherwise under any of the provisions of this Indenture
or of the Bonds, and unpaid, with interest on overdue payments at
the rate or rates of interest specified in such Bonds, together with any
and all costs and expenses of collection and of all proceedings here-
39
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under and under such Bonds, without prejudice to any other right or
remedy of the Trustee or of the Bondholders, and.to recover and en-
force judgment or decree against the Corporation for any portion of
such amounts remaining unpaid, with interest, costs, and expenses, and
to collect from any moneys available for such purpose, in any manner
provided by law, the moneys adjudged or decreed to be payable.
Upon the happening and continuance of any event of default
above specified, then and in any such case the Trustee may, and
upon the written request of the Holders of not less than twenty percent
(20%) in principal amount of the Bonds then outstanding hereunder,
. shall by notice in writing to the Corporation, declare the principal of all
Bonds hereby secured and then outstanding to be due and payable
immediately, and upon any such declaration the said principal shall
become and be due and payable immediately, anything in this Tn-
denture, or in said Bonds, to the contrary notwithstanding; pro-
vided, however, if at any time after the principal of the Bonds shall
have been so declared and become due and payable the Corpo-
ration shall pay or shall deposit with the Trustee a sum sufficient
to pay all arrears of interest upon all the Bonds (with interest upon
any overdue installments of interest at the rates expressed in the
Bonds to the date of such payment or deposit), and all other sums
payable under this Tndenture, except the principal of any Bonds
f which shall not have matured by their terms, shall have been duly
paid, and every other default in the performance of any covenant
or provision of the Bonds or of this Tndenture shall have been made
good or secured to the satisfaction of flip Trustee or arrangements
deemed by the Trustee to be adequate shall be made therefor, then and
l in every such case the Trustee shall consider the default waived and
shall rescind and annul such declaration and its consequences upon
j the receipt of written waivers of default from the Holders of not less
than sixty-six and two-thirds percent (6Fi?/,%) in principal amount of
the Bonds then outstanding; but no such waiver, rescission or annul-
ment shall extend to or affect any subsequent default or shall impair
or exhaust any right or power consequent thereon.
Section 803. Application of Moneys Upon Default. Tf at any time
the moneys in the Debt Service Fund, the Bond Redemption Fund and
the Reserve Fund shall not be sufficient to pay the principal of and the
interest on the Bonds as the same become due and payable, such moneys,
together with any moneys available or thereafter becoming available
for such purpose whether through the exercise of the remedies pro-
vided for in this Article or otherwise, shall he applied by the Trustee
as follows:
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(a) Unless the principal of all of the Bonds shall become due
and payable pursuant to Section 802, all such moneys shall be
- applied:
First: To the payment to the persons entitled thereto of
all installments of interest then due, in the order of the matur-
ity of the installments of such interest, and, if the amount
available shall not be sufficient to pay in fill any particular
installment, then to the payment ratably, according to the
amounts due on such installment, to the persons entitled there-
to, without any discrimination or preference except as to any
difference in the respective rates of interest specified in the
Bonds; and
Second: To the payment of the principal of the respective
Bonds as they become due in accordance with the provisions
of this Indenture and, if the amount available shall not be
sufficient to pay in full all Bonds due, then to the payment
ratably, according to the amounts due on such Bonds.
(b) If the principal of all of the Bonds shall become due and
payable, all such moneys shall be applied to the payment of the
principal and interest then duo and unpaid upon the Bonds,without
preference or priority of principal over interest or of interest over
principal, or of any installment of interest over any other install-
ment of interest, or of any Bond over any other Bond, ratably,
according to the amount due respectively for principal and interest,
to the persons entitled thereto, without any discrimination or pref-
erence except as to any difference in the respective rates of in-
terest specified in the Bonds.
Whenever moneys are to be applied by the Trustee pursuant to the
provisions of this Section, such moneys shall be applied by the Trustee
at such times, and from time to time, as the Trustee in its sole discretion
shall determine, having due regard to the amount of such moneys avail-
able for application and the likelihood of additional moneys becoming
available for such application in the future; setting aside such moneys
in trust for the proper purpose, shall constitute proper application by
the Trustee; and the Trustee shall incur no liability whatsoever to the
i Corporation, to any Bondholder or to any other person for any delay in
applying any such moneys, so long as the Trustee acts with reasonable
diligence, having due regard for the circumstances, and ultimately
applies the same in accordance with such provisions of this Indenture as
may be applicable at the time of application by the Trustee. Whenever
the Trustee shall exercise such discretion in applying such moneys, it
41
shall fix the date (which shall be an interest payment date unless the
Trustee shall deem another date more suitable) upon which such appli-
cation is to be made and upon sueh date interest on the amounts of
principal to be paid on such date (as determined by the Trustee using
commonly accepted methods of accounting) shall cease to accrue. The
'.Trustee shall give such notice as it may deem appropriate for the fixing
of any such date. The Trusted shall not, be rescluired to make payment
to the Holder of any unpaid coupon or any Bond unless such coupon
or such Bond shall be presented to the Trustee for appropriate endorse-
ment or for cancellation if fully paid.
Section 804. Discontinuance of Any Proceeding. In case any
proceeding taken by the Trustee on account of any defaiilt shall leave
been discontinued or abandoned for anv reason, then in every such
case the Corporation, the Trusted and the Bondholders shall be
• restored to their former positions and rights hereunder, respectively,
and all rights, remedies, powers and duties of the Trustee shall con-
tinue as though no such proceeding had been taken.
Section 805. Action of Trustee Directed by Majority of Bond-
holders. Anything in this Indenture to the contrary notwithstanding,
the Holders of a majority in principal amount of the Bonds then
outstanding hereunder shall have the right by an instrument or c.on-
curr2nt instruments in writing executed and delivered to the Trustee,
to direct the method and place of conducting all remedial proceedings
to be taken by the Trustee hereunder, provided that such direction
shall not be otherwise than in accordance with law or the provisions
of this Indenture, and that the Trustee sliall have the right to decline
to follow any such direction which in the opinion of the Trustee would
be unjustly prejudicial to 'Bondholders not parties to stick direction.
Section S06. Notice to Trustee Before Legal Action. No Holder
of any of the outstanding Bonds shall have any right to institute
any suit, action, mandamus or other proceeding in equity or at law
for the execution of any trust hereunder, or the protection or en-
forcement of any right under this Indenture or any right under law
unless the.Holders of not less than twenty percent (2017c) in principal
amount of the Bonds then outstanding shall have made written request
of the Trustee after the right to exercise such powers or right of action,
as the case may be, shall have accrued and shall have afforded the
Trustee a reasonable opportunity either to proceed to exercise the
powers herein granted or granted under the law or to institute such
action, suit or proceeding in its name,and the Trustee shall have refused
42
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or neglected to comply with such request within a reasonable time not
exceeding sixty (60) days. It is understood and intended that no one
or more Holders of the Bonds hereby secured shall have any right in
any manner whatever by his or their action to affect; disturb or pre.ju
dice the security of this Indenture, or to enforce any right hereunder or
under law with respect to the Bonds or this Indenture, except in the
manner herein provided, and that all proceedings at law or in equity
shall be instituted, had and maintained in the manner herein provided
and for the benefit of all Holders of the outstanding Bonds and coupons.
Anything in this Indenture to the contrary notwithstanding, the
right of any Holder of any Bond to receive payment of the principal
of and interest on such Bond, on or after the respective due dates
expressed in such Bond, or to institute suit for the enforcement of any
such payment on or after such respective dates shall not be impaired
or affected without the consent of such Holder.
�. Section 807. Action by Trustee on Behalf of Bondholders. All
rights of action under this Indenture or under any of the Bonds, en-
forceable by the Trustee, may be enforced by it without the posses-
sion of any of the Bonds or the coupons appertaining thereto or the
production thereon the trial or other proceeding relative thereto,
and any.such suit, action or proceeding instituted by the Trustee shall
be brought in its name for the benefit of all the Holders of such Bonds
and coupons, subject to the provisions of this Indenture.
Section 808. Remedies Cumulative. No remedy herein conferred
upon or reserved to the Trustee or to the Holders of the Bonds is
intended to be exclusive of anv other remedy or remedies, and each
and every such remedy shall be -cumulative and shall,be in addition
to any other remedy given hereunder or now or hereafter existing
at law or in equity or by statute.
Section 809. No Waiver of Default. No delay or omission of the
Trustee or of any Holder of the Bonds to exercise any right or power
accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence
therein; and every power and remedy given by this Indenture to the
Trustee and the holders of the Bonds, respectively, may be exercised
front tine to time and as often as may be deemed expedient.
The Trustee may, and upon written request of the Holders of not
less than a majority in principal amount of the Bonds then outstanding
shall, waive any default which in its opinion shall have been remedied
43
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before the' completion of the enforcement of any remedy under this
Indenture, but no such waiver shall extend to or affect any other exist-
ing or any subsequent default or defaults or impair any rights or
remedies consequent thereon.
Section 810. Notification of Default. The Trustee shall give to
the Bondholders notice of each default hereunder known to the
Trustee within ninety (90) days after the occurrence thereof, unless
such default shall have been remedied or cured before the giving of such
notice; provided that except in the case of default in the payment
of the principal of, premium, if any, or interest on any of the Bonds,
j the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee
of directors or responsible officers of the Trustee in good faith deter-
mines that the withholding of such notice is in the interests of the
i Bondholders. Each such notice of default shall be given by the Trustee
by mailing written notice thereof: (1) to all Holders of registered
Bonds then outstanding, as the names and addresses of such Holders
appear upon the books for registration and transfer of Bonds as kept
by the Trustee; (2) to such Bondholders as have, within 2 years pre-
ceding such transmission, filed their names and addresses with the
Trustee for that purpose; and (3) to each Bondholder whose name and
address the Trustee shall receive and preserve in its capacity as paying
agent hereunder.
The term "default", as used in this Section shall mean the hap-
pening of any of the events of default above specified, except,
for the purposes of this Section only, there shall be eliminated from
the specification of any such event of default any reference therein to
the continuance of any default or of any failure upon the part of the
Corporation to act, or the continuance in force of any decree or order,
for any period of days therein specified.
ARTICLE I%
CONCERNING THE TRUSTEE
Section 901. Acceptance of Trusts by Trustee. The Trustee ac-
cepts and agrees to execute the trusts imposed upon it by this
Indenture, but only upon the terms and conditions and subject to
the provisions of this Indenture, to all of which the parties hereto
and the respective Holders of the Bonds agree. All funds created
under this Indenture shall be held by the Trustee and administered
as trust funds as herein provided.
44
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Section 902. Absence of Responsibility of Trustee. The Trustee
shall be under no obligation to effect or maintain insurance, or to
renew any policies of insurance, or to inquire as to the sufficiency of
'. any policies of insurance carried by the Corporation under the Lease.
The Trustee shall not have any responsibility in respect of the validity
or sufficiency of this Indenture or the due execution or acknowledg-
ment thereof by the Corporation, or in respect of the validity of any
Bonds authenticated and delivered by the Trustee in accordance with
the provisions of this Indenture, or of the coupons appertaining thereto.
The recitals, statements and representations contained herein and
in the Bonds (excluding the Trustee's certificate on the Bonds) shall
be taken and construed as made by and on the part of the Corporation
and not by the Trustee and the Trustee does not assume nor shall
it be under any responsibility for the correctness of the same.
Section 903. Trustee Not Responsible for Actions of Corporation.
The Trustee shall not be liable or responsible because of the failure
of the Corporation or of any of its officers, employees or agents to
make any collections or deposits, or to perform any act herein re-
quired of the Corporation or its officers, directors, employees or agents.
The Trustee shall not be responsible for the application of any of
the proceeds of the Bonds or any other moneys deposited with it and
paid out, invested, withdrawn or transferred in accordance with the
I provisions of this Indenture. The immunities and exemptions from
liability of the Trustee hereunder shall extend to its directors, officers,
employees and agents.
Section 904. Compensation of Trustee. Subject to the provisions
of any contract between the Corporation and the Trustee, the Corpo-
ration shall, from the Administrative Expense Account, pay to the
Trustee, in the manner provided in this Indenture, reasonable com-
pensation for all services performed by it hereunder, and also all of its
reasonable expenses, charges and other disbursements and those of
its attorneys, agents, and employees incurred in and about the accept-
ance, administration and execution of the trusts hereby created and the
I' performance of its powers and duties hereunder, and, from such Ad-
ministrative Expense Account, shall indemnify and save the Trustee
harmless against any liabilities which it may incur in the exercise and
performance of its powers and duties hereunder.
Section 905. Trustee's Right to Own and Deal in Bonds. The
bank or trust company acting as Trustee under this Indenture, and
45
its directors, officers, employees or agents, may in good faith buy, sell,
own, hold and deal in any of the Bonds or coupons issued under and
secured by this Indenture, as permitted by the Trust Indenture Act of
1939, as amended, and may join in any action which any bondholder
may be entitled to take with like effect as if such bank or trust company
were not the Trustee under this Indenture.
Section 906. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an event of default and after the curing of
all events of default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an event of default has occurred (which has not
been cured) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
• No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that:
(a) Prior to the occurrence of an event of default and after
the curing of all events of default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in
this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the state-
ments and the correctness of the opinions expressed therein,
upon any certificates or opinion furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to deter-
mine whether or not they conform to the requirements of
this Indenture;
(b) 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;
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(c) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in principal
amount of the Bonds 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 Indenture.
Section 907. Certain Rights of Trustees. Except as otherwise
above provided;
(a) The Trustee may rely and shall be protected in acting or
! refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
coupon 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) Any request, direction, order or demand of the Corpora-
tion mentioned herein shall be sufficiently evidenced by an instru-
ment signed in the name of the Corporation by the President or
Vice President and the Secretary or Treasurer (unless other evi-
dence in respect thereof be herein specifically prescribed) ; and any
resolution of the Board of Directors of the Corporation may be
evidenced to the Trustee by a copy thereof certified by the Secre-
tary of the Corporation;
(c) The Trustee may consult with counsel and any opinion
of such counsel shall be full and complete authorization and pro-
tection in respect of any action taken or suffered by it hereunder
in good faith and in accordance with such opinion;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Bondholders, pursuant
to the provisions of this Indenture, unless such Bondholders shall
have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; and
(e) The Trustee shall not be liable for any action taken by it
in good faith and believed by it to be authorized or within the
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discretion or rights or powers conferred upon it by this Indenture.
Section 908. Right of Trustee to Rely on Certificates. Except as
otherwise above provided, whenever in the administration of the pro-
visions of this Indenture the Trustee shall deem it necessary or de-
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sirable that a matter be provided or established prior to taking or
suffering any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in the ab-
sence of negligence or bad faith on the part of the Trustee, be deemed
to be conclusively proved and established by a certificate signed by
the President or Vice President and by the Secretary or Treasurer
of the Corporation and delivered to the Trustee and such certificate,
in the absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of this Indenture upon the faith
thereof.
Section 909. Eligibility for Appointment as Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing
business under the laws of the United States or the State of Cali-
forma authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $1,000,000, subject to
supervision or examination by Federal or State authority and having
its principal office and place of business in the State of California. If
such corporation publishes reports of its condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority,then for the purposes of this Section the combined
capital and surplus of such corporation shall be deemed to be its com-
bined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect below
specified.
Section 910. Resignation and Removal; Appointment of Successor
Trustee.
(a) The Trustee, or any trustee hereafter appointed, may at
any time resign by giving written notice of resignation to the
Corporation and by publication of notice of resignation at least once in
a newspaper printed in the English language and customarily pub-
lished at least once a day for at least five (5) days in each calendar
week and of general circulation in the City of Los Angeles, State of
California. Upon receiving such notice of resignation and evidence
satisfactory to it of such publication, the Corporation shall promptly
appoint a succressor trustee by written instrument, in duplicate, executed
by order of the Board of Directors of the Corporation, one copy of
48
which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within thirty (30) days
after the publication of such notice of resignation,the resigning Trustee
may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Bondholder who has been a bona fide Holder
of a Bond or Bonds for at least six (6) months may on behalf of himself
and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur—
(i) The Trustee shall cease to be eligible and shall fail to
resign after written request therefor by the Corporation or by
any such. Bondholder, or
(ii) The Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidations
then, in any such case, the Corporation may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, execu-
ted by order of the Board of Directors of the Corporation, one copy of
which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, any Bondholder who has been a bona
fide Holder of a Bond or Bonds for at least six (6) months may, on
behalf of himself and all other similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appoint-
ment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of
the Bonds at the time outstanding may at any time remove the Trustee
and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee.pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the successor
trustee as provided below.
This method of substitution is in lieu of all other methods of
substitution.
49
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Section 911. Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as above provided shall execute,
acknowledge and deliver to the Corporation and to its predecessor
trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein; but, nevertheless, on the
written request of the Corporation or of the successor trustee, the
trustee ceasing to act shall, upon payment of its charges then unpaid,
execute, acknowledge and deliver an instrument transferring to such
successor trustee all the rights and powers of the trustee so ceasing to
act. Upon request of any such successor trustee, the Corporation shall
execute any and all instruments in writing for more.fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a lien
upon all property or funds held or collected by such trustee to secure
any amounts then due it.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee
shall be eligible.
No successor trustee shall be appointed under the provisions of
this Indenture or be substituted for the present Trustee hereunder
or for any successor of the present Trustee hereunder unless the Com-
missioner of Corporations of the State of California shall have been
notified in writing of such proposed appointment or substitution and
shall not have disapproved thereof within a period of fifteen (15) days
after the giving of such notice.
Upon acceptance of appointment by a successor trustee as provided
in this Section, the Corporation shall publish notice of the succession of
such trustee hereunder at least once in a newspaper of general circula-
tion printed in the English language and published in the City of Los
Angeles, State of California. If the Corporation fails to publish such
notice within ten (10) days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
published at the expense of the Corporation.
Section 912. Merger or Consolidation of Trustee. Any corpora-
tion into which the Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or con-
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solidation to which the Trustee shall be a party, or any corporation
j succeeding to the corporate trust business of the Trustee, shall be the
successor trustee hereunder,provided such corporation shall be eligible,
without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary not-
withstanding.
Section 913. Requirements as to Trustee's Records. So long as
any of the Bonds shall remain outstanding: (i) the records of the
Trustee pertaining to the Bonds and to the Trustee hereunder shall
be available to and open for inspection at all times by the Corporation,
the City and the Commissioner of Corporations of the State of Cali-
fornia, and (ii) the Trustee shall retain in its possession all financial
statements furnished to it pursuant to. this Indenture. The Trustee
shall transfer to any successor trustee copies of the records of the
Trustee pertaining to the Bonds and to the Trustee.
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• ARTICLE X
EXECUTION OF INSTRUMENTS BY BONDHOLDERS
F AND PROOFS OF OWNERSHTP OF BONDS
Section 1001. Method of Execution of Instruments by Bondholders.
Any request, direction, consent or other instrument in writing
required or permitted by this Indenture to be signed or executed
by Bondholders may be in any number of concurrent instruments
of similar tenor, and may be signed or executed by such Bond-
holders in person or by agent appointed by an instrument in writing.
Proof of the execution of any such instrument and of the ownership of
Bonds shall be sufficient for any purpose of this Indenture, and shall be
conclusive, in favor of the Trustee with regard to any action taken
under such instrument, if made in the following manner:
(a) The fact and date of the execution by any person of any
such instrument may be proved by the verification of any officer
in any jurisdiction who, by the laws thereof, has power to take
affidavits within such jurisdiction, to the effect that such instru-
ment was subscribed and sworn to before him, or by an affidavit
of a witness to such execution;
(b) The fact of the holding of coupon Bonds by any Bond-
i holder and the amount and the numbers of such Bonds and the
date of his holding the same (unless such Bonds be registered)
may be proved by the affidavit of the person claiming to be such
31
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Holder, if such affidavit shall be deemed by the Trustee to be
satisfactory, or by a certificate executed by any trust company,
bank, banker or any other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, show-
ing that at the date therein mentioned such person had on deposit
with such trust company, bank, banker or other depositary the
Bonds described in such certificate. The Trustee may conclusively
assume that such ownership continues until written notice of the
contrary is served upon the Trustee. The ownership of registered
Bonds shall be proved by the registration books kept by the Trustee
under the provisions of this Indenture.
Nothing contained in this Article shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept
any other evidence of the matters herein stated which may seem sufli-
cient. Any request or consent of the Holder of any Bond shall bind
every future Holder of the same Bond in respect of anything done by
the Trustee in pursuance of such request or consent.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101.. Without Consent of Bondholders. The Corporation
and the Trustee,may,from time to time and at any time, enter into such
indentures or agreements supplemental hereto as shall not be incon-
sistent with the terms and provisions hereof (which supplemental
indentures or agreements shall thereafter form a part hereof),
(a) to cure any ambiguity or formal defect or omission in this
Indenture or in any supplemental agreement, or
(b) to grant to or confer upon the Trustee for the benefit of
the Bondholders any additional rights, remedies, powers, authority
or security that may lawfully be granted to or conferred upon
the Bondholders or the Trustee.
Section 1102. With Consent of Bondholders. Subject to the terms
and provisions contained in this Section, and not otherwise, the Holders
of not less than sixty six and two-thirds percent (662/3 o) in aggregate
principal amount of the Bonds then outstanding shall have the right,
from time to time, anything contained in this Indenture to the contrary
notwithstanding,to consent to and approve the execution by the Corpo-
ration and the Trustee of such indentures or agreements supplemental
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hereto as shall be deemed necessary or desirable by the Corporation for
the purpose of modifying, altering, amending, adding to or rescinding,
in any particular, any of the terms or provisions contained in this
Indenture or in any supplemental indenture or agreement; provided,
however, that nothing herein contained shall permit, or be construed
as permitting, (a) an extension of the maturity of the principal of or
the interest on any Bond issued hereunder, or (b) a reduction in the
principal amount or redemption price of any Bond or the rate of
interest thereon, or (c) the creation of a lien upon or a pledge of the
Rental Revenue herein pledged ranking prior to or on a parity with
the lien and pledge created by this Indenture, or (d) a preference
or priority of any Bond or Bonds over any other Bond or Bonds,
or (e) a reduction in the aggregate principal amount of the Bonds
required for consent to such a supplemental agreement.
If at any time the Corporation shall request the Trustee to enter
into any supplemental indenture or agreement for any of the purposes
of this Section, the Trustee shall, at the expense of the Corporation,
cause notice of the proposed execution of such supplemental agreement
to be published in a daily financial journal or daily newspaper of
general circulation in the City of Los Angeles, State of California,
and shall also cause a similar notice to be mailed, postage prepaid,
(1) to all Holders of registered Bonds then outstanding, at their
addresses as they appear on the registration books hereinabove pro-
vided for, (2) to such Bondholders as have, within two (2) years pre-
ceding such transmission, filed their names and addresses with the
Trustee for that purpose, and (3) to each Bondholder whose name and
address the Trustee shall receive and preserve in its capacity as paying
agent hereunder. Such notice shall briefly set forth the nature of the
proposed supplemental indenture or agreement and shall state that a
copy thereof is on file at the office of the Trustee for inspection by all
Bondholders. The Trustee shall not,however,be subject to any liability
to any Bondholder by reason of its failure to mail the notice required
by this Section, and any such failure shall not affect the validity of
such supplemental indenture or agreement when consented to and
approved as provided in this Section.
Whenever at any time within one year after date of the first publi-
cation of such notice, the Corporation shall deliver to the Trustee an
instrument or instruments purporting to be executed by the Holders
of not less than sixty six and two-thirds percent (662/3%) in aggregate
principal amount of the Bonds then outstanding, which instrument or
instruments shall refer to the proposed supplemental indenture qr
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agreement described in such notice, and shall specifically consent to
and approve the execution thereof in substantially the form of the copy
thereof referred to in such notice as on file with the Trustee, thereupon,
but not otherwise,the Trustee may execute such supplemental indenture
or agreement in substantially such form, without liability or responsi-
bility to any Holder of any Bond,whether or not such Holder shall have
consented thereto.
If the Holders of not less than sixty six and two-thirds percent
(662/3%) in aggregate principal amount of the Bonds outstanding at the
time of the execution of such supplemental indenture or agreement
shall have consented to and approved the execution thereof as herein
provided, no Holder of any Bond shall have any right to object to the
execution of such supplemental indenture or agreement, or to object
to any of the terms and provisions contained therein or the operation
thereof, or in any manner to question the propriety of the execution
jthereof, or to enjoin or restrain the Trustee or the Corporation from
executing the same or from taking any action pursuant to the provisions
thereof.
j Upon the execution of any supplemental indenture or agreement
pursuant to the provisions of this Section, this Indenture shall be, and
be deemed to be, modified and amended in accordance therewith, and
the respective rights, duties and obligations under this Indenture of the
Corporation and the Trustee.and all Holders of Bonds then outstanding
shall thereafter be determined, exercised and enforced hereunder, sub-
ject in all respects to such modifications and amendments.
Section 1103. Approval by Counsel. The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, the opinion
of $ond Counsel, as conclusive evidence that any such proposed sup-
plemental indenture or agreement complies with the provisions of
this Indenture, and that it is proper for the Trustee, under the pro-
visions of this Article, to join in the execution of such supplemental
indenture or agreement.
I
Section 1104. Approval by Corporation and Bondholders. Not-
withstanding anything contained in the foregoing provisions of this
Indenture, the rights and obligations of the Corporation and of the
Holders of the Bonds, and the terms and provisions of the Bonds,
and this Indenture or any supplemental indenture or agreement, may
i - be modified or altered in any respect with the consent of the Corpo-
ration, the Trustee and the consent of the Holders of all of the Bonds
then outstanding.
54
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ARTICLE XII
DEFEASANCE
Section 1201. Payment of Bonds and Discharge of Indenture. If
the Corporation shall pay or cause to be paid, or there shall otherwise
be paid, to the Holders of the Bonds and coupons, the principal and
interest and redemption price, if any, to become due thereon, then the
pledge of the Rental Revenue and other moneys and securities hereby
Pledged, the right, title and interest of the Trustee, and all other rights
granted hereby, shall thereupon cease, terminate and become void and
be discharged and satisfied. In such event, the Trustee shall cause an
accounting for such period or periods as shall be requested by the
Corporation, to be prepared and filed with the Corporation, and the
Trustee, upon the request of the Corporation, shall release this Inden-
ture and execute and deliver to the Corporation all such instruments as
may be desirable to evidence such release, discharge and satisfaction,
and the Trustee and the Paying Agent shall pay over or deliver to
the Corporation all moneys or securities held by them pursuant to this
j Indenture which are not required for the payment or redemption of
Bonds or coupons not theretofore surrendered for such payment or
redemption.
i
Section 1202. Bonds, Coupons and Redemption Price Deemed
to be Repaid. Bonds or coupons for the payment or redemption of
which moneys shall then be held by the Trustee or the Paying Agent
(through deposit by the Corporation of funds for such payment or
redemption or otherwise), whether at or prior to the maturity or the
redemption date of such Bonds, shall be deemed to have been paid;
provided, however, that if any such Bonds are to be redeemed prior
to the maturity thereof, the Corporation shall have taken all action
necessary to redeem such Bonds and notice of such redemption shall
have been duly given or provision satisfactory to the Trustee shall
have been made for the giving of such notice; and provided' further,
that, if the maturity or redemption date of any such Bond shall not
have arrived, provision shall have been made by the Corporation by
deposit with the Trustee or Paying Agent, or other method satis-
factory to the Trustee, for the payment to the Holder of any such
Bonds and coupons, upon surrender thereof, whether or not prior
to the maturity or redemption date thereof, of the full amount to which
they would be entitled by way of principal, redemption price or inter-
, _ est to the date of such maturity or redemption, and provision shall have
been made by the Corporation, satisfactory to the Trustee, for the
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publication, at least twice, at an interval of not less than seven (7) days
between publications, in a daily financial journal or daily newspaper of
general circulation published in the City of Los Angeles, State of
California, of a notice to the Holders of such Bonds and coupons that
such moneys are so available for such payment.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 1301. Successor to Corporation. All of the covenants,
stipulations, obligations and agreements contained in this Indenture
by or in behalf of or for the benefit of the Corporation shall bind or
inure to the benefit of the successor or successors of the Corporation
from time to time, and any officer, board, corporation, commission,
authority, agency or instrumentality to whom or to which any power
or duty affecting such covenants, stipulations, obligations and agree-
ments shall be transferred by or in accordance with law.
Section 1302. Notice. Any notice, demand, direction, request or
other instrument authorized or required by this Indenture to be given
to or filed with the Corporation or the Trustee shall be deemed to
have been sufficiently given or filed for all purposes of this Indenture
if and when sent by registered mail, return receipt requested:
to the Corporation if addressed to such address as may be desig-
nated in writing by the Corporation to the Trustee;
to the Trustee, at its corporate agency division 'in Los Angeles,
California.
All documents received by the Trustee under the provisions. of this
Indenture shall be retained in its possession, subject at all reasonable
times to the inspection of. the Corporation, any Bondholder, and the
agents and representatives thereof.
Section 1303. Indenture for Sole Benefit of Parties and Bond-
holders. Nothing in this Indenture express or implied is intended
or shall be construed to confer upon any person, firm or corporation
other than the parties hereto and the Holders of the Bonds and the
coupons thereunto appertaining any right, remedy or claim, legal or
equitable, under or by reason of this Indenture or any provision hereof,
this Indenture and all its provisions being intended to be and being
for the sole and exclusive benefit of the parties hereto and-the Holders
from time to time of the Bonds and such coupons.
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Section 1304. Severability. In case any one or more of the pro-
visions of this Indenture or of the Bonds or coupons, or the application
thereof to any person or circumstances shall for any reason be held to
be illegal or invalid, such illegality or invalidity shall not affect any
other provision of this Indenture or of said Bonds or coupons, or the
application thereof to other persons or circumstances,but this Indenture
and said Bonds and coupons shall be construed and enforced as if such
illegal or invalid provisions had not been contained therein. In case any
covenant, stipulation, obligation or agreement contained in the Bonds
or in this Indenture shall for any reason be held to be in violation of
law,then such covenant, stipulation, or obligation or agreement shall be
deemed to be the covenant, stipulation, obligation or agreement of the
Corporation to the full extent permitted by law.
• Section 1305. Waiver of Personal Liability. All covenants, stipu-
lations, obligations and agreements of the Corporation contained in this
Indenture shall be deemed to be covenants, stipulations, obligations and
agreements of the Corporation to the full extent authorized and per-
,nitted by the Constitution and laws of the State of California. No cove-
nant, stipulation, obligation or agreement contained herein shall be
deemed to be a covenant, stipulation, obligation or agreement of any
past, present or future incorporator, member, director, officer, agent or
employee of the Corporation in his individual capacity, and any officer
of the Corporation executing the Bonds shall not be liable personally on
the Bonds or be subject to any personal liability or accountability by
reason of the issuance thereof. No recourse under or upon any obliga-
tion, covenant or agreement contained in this Indenture, or in any Bond
or coupon hereby secured, or under any judgment obtained against the
Corporation, or by the enforcement of any assessment or by any legal
or equitable proceeding by virtue of any constitution or statute or
otherwise, or under any circumstances, under or independent of this .
Indenture, shall be had against any incorporator, member, director,
officer, agent or employee, as such, past, present or future, of the
Corporation, either directly or through the Corporation, or otherwise
for the payment for or to the Corporation or any receiver thereof, or
for or to the Holder of any Bond or coupon issued hereunder or other-
wise, of any sum that may be due and unpaid by the Corporation upon
any such Bond or coupon, and any and all personal liability of every
nature, whether at common law or in equity, or by statute or by consti-
tution or otherwise, of any such incorporator, member, director, officer,
agent or employee as such, to respond by reason of omission on his
57
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part or otherwise, for the payment for or to the Corporation or any
receiver thereof, for or to the Holder of any Bond or coupon issued
hereunder or otherwise of any sum that remain due and unpaid
I; � S may S aid p
upon the Bonds and coupons hereby secured or any of them, is hereby
expressly waived and released as a condition of and consideration for
the execution of this Indenture and the issue of such Bonds and cou-
p
Nothing provided in this Section shall operate as a protection
4 from liability for acts constituting bad faith, wilful misfeasance, gross
'r
negligence or reckless disregard of duties.
1306. Subordination of Indenture. This Indenture and the rights
and privileges hereunder of the Trustee and the Holders of the Bonds
are specifically made subject and subordinate to the rights and privi-
leges of the Corporation and the City set forth in the Lease.
Section 1307. Validity of Multiple Copies. This Indenture may
` be executed in multiple counterparts, each of which shall be regarded
for all purposes as an original; and such counterparts shall constitute
but one and the same instrument.
Section 1308. Headings. Any headings preceding the texts of the
several Articles hereof, and any table of contents or marginal notes
appended to copies hereof, shall be solely for convenience of reference
and shall not constitute a part of this Indenture, nor shall they affect
its me^ning, construction or effect.
jIN WITNESS WHEREOr, the Corporation has caused this Indenture
to be executed by its President and Secretary and its corporate seal
affixed, and Trustee has caused this Indenture to be executed by its
Vice President and Assistant Vice President and its corporate seal
affixed, all as of the day and year first above written.
IIUNTINGTON BEACH PUBLIC (Seal)
FACILITIES CORPORATION
te J
Pr 'dent
beer tarp
Lank f rica. N.T.&S.A.
Trustee
By
Vice esi n
I
(Seal)
Ass't. ce President
58
STATE OF CALIFORNIA
COUNTY of ORANaa as.
i
On this`1 k day of 2Vk0f........ 1972, before me, the undersigned,
a Notary Public in and for said State, personally appeared LAEaY L.
Cumui; and DARRELL E. WARD known to me to be the President and
the Secretary, respectively, of Huimn- FTON BEACH PUBLIC FACILITIES
CORPORATION, one of the corporations that executed the within instru-
ment, known to me to be the persons who executed the within instru-
ment on behalf of such corporation, and acknowledged to me that
such corporation executed the within instrument pursuant to its by-laws
and a resolution of its Board of Directors.
WrrNEss my hand and official seal.
memo rr..___-.YYrrr■Yra■r rrrYYllla......aaa
OFFICIAL SEAL ,
FLOYD G. BELSITO Notary Public in and for the
TA Jb NORY PUBLIC - CALIFORNIA r State of California
PRINCIPAL OFFICE IN r -
r ORANGE COUNTY
:i My Commission Expires Mar. 10, 1974 My Commission Expires
Ir��rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrri
it
............................................
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STATE OF CALIFORNIA
CouwTY OF Los AxoELEs ss'
On thislV
day of / ��_�S.T'_, 1972, before me, the undersigned
a Notary Public in and for said State, personally appeared
and known to me to be a Vice President and an Assistant
Vice President, respectively, of Bank of America National Trust and
Savings Association, one of the corporations that executed the within
instrument, known to me to be the persons who executed the within
instrument on behalf of such corporation, and acknowledged to me that
such corporation executed the within instrument pursuant to its by-laws
or a resolution of its board of directors.
WITNTFss my hand and official seal.
(Seal)
OFFICIAL SEAL
BARBARA DELIGEANNIS j Notary Public in and for the
NOTARY PUBLIC - CALIFORNIA State of California
PRINCIPAL OFFICE IN
COUNTY OF LOS ANGELES
MY COMMISSION EXPIRES OCTOBER 8, T�2 My Commission Expires
60
e
EXHIBIT A
That portion of the South-half (Si/2) of the Southwest one quarter
(SW1/4) of Section 26, Township 5 South, Range 11 West, and that
portion of the Northwest quarter of the Northwest quarter of Section
35, Township 5 South, Range 11 West, partly in the Rancho Las Bolsas
and partly in the Rancho La Bolsa Chica, County of Orange, State of
California, as shown on a map recorded in Book 51, Page 13 of Miscel-
laneous Maps, in the office of the County Recorder of said County
described as follows:
Beginning at the Southwest corner of said section 26 thence
North 89' 20' 21" East 50.00 feet along southline of said Section
26 to a point on a line parallel with and 50.00 feet easterly,measured
at right angles, from the west line of said Southwest one-quarter
(SW1/.t) ; thence North 0° 50' 12" West 30.00 feet along said line
to the TRUE POINT OF BEGINNING; Thence continuing along
said line North 00 50' 12" West 1290.57 feet to a point on the North
line of the South one-half (Sl/2) of said Southwest one-quarter
(SWi/_j.) ; thence North 89° 21' 27" East 610.00 feet along said line
to a point on the East line of the West 20 acres of said South one-
half (S'/2) ; thence South 0° 50' 04" East 673.85 feet along said east
line of the West 20 acres to a point; thence North 89° 09' 55" East
23.57 Feet to a point on a tangent curve concave to the Southwest
having a radius of 420.00 feet; thence southeasterly along said
curve through a central angle of 40' 40' 27" an are distance of
298.16 feet to a point on a tangent curve concave to the southwest
having a radius of 160.00 feet; thence southeasterly along said
curve through a central angle of 49' 30' 00" an are distance of
138.23 feet to a point on a tangent line; thence South 0° 39' 38"
East 437.00 feet to a point on a line parallel with and 10.00 feet
southerly measured at right angles from the south line of said
Section 26; thence South 89' 20' 22" West 342.50 feet along said
line to a point; thence North 37' 08' 10" West 53.11 feet to a point
on a line parallel with and 30.00 feet North measured at right angles
from south line of said Section 26; thence South 89° 20' 22" West
587.71 feet along said line to the TRUE POINT OF BEGINNING.
61
s s
[THIS PAGE INTENTIONALLY LEFT BLANK]
62
EXHIBIT B
FORM OF COUPON BOND
No. $5,000
HUNTINGITON BEACH PUBLIC FACILITIES CORPORATION
LEASEHOLD MORTGAGE BOND
SECOND ISSUE
BNOw ALL MEN BY THESE PRESENTS that HUNTINGTON BEACH
PUBLIC FACILITIES CORPORATION (hereinafter called the "Corpora-
tion"), a non-profit corporation duly organized and existing under
the laws of the State of California, for value received, hereby
promises to pay to the bearer, or, if this bond be registered, to
the registered owner hereof, on the first day of September, 19....,
unless redeemed prior thereto as hereinafter provided, upon the
presentation and surrender hereof, the principal sum of FIVE
THOUSAND DOLLARS ($5,000) and to pay interest on said
principal sum from the date hereof, at the rate of ................ per cent
(......%) per annum, until the payment of such principal sum has
been made or provided for, such interest being payable semi-
annually on the first day of March and the first day of Septem-
ber in each year, upon the presentation and surrender of the
attached coupons evidencing such interest as the same respectively
fall due. The principal of, interest, and premium, if any, on, this
bond are payable in lawful money of the United States of America
at the corporate agency division of the Trustee,hereinafter referred
-to,in the City of Los Angeles, State of California, or at the princi-
pal office of any paying agent in the City of Chicago, Illinois or
The City of New York, New York, at the option of the holder
hereof.
The bonds of the issue of which this bond is one are redeemable
at any time prior to their stated dates of maturity in the event
of loss of or damage to or condemnation of the Project, as more
fully set out in the Indenture hereinafter referred to, for the
principal amount thereof together with interest accrued to the
redemption date plus a premium equal to one quarter of one per-
cent (1/4%) of said principal amount plus one quarter of one
percent (1/4%) for each year or fraction of a year from the redemp-
tion date to the maturity date of this bond provided that such
63
premium shall not exceed four percent (4%) of the principal
amount. Redemption of the bonds for such purposes may be made,
at the option of the Corporation, as a whole, or in part, but only in
the manner and only from the funds as provided in said Indenture.
Except as set forth in the preceding paragraph, if this bond
matures on or prior to September 1, 1982, it shall not be subject to
call and redemption prior to maturity. If this bond matures on
September 1, 1983,or thereafter, it may, at the option of the Corpo-
ration, be called for redemption prior to maturity in whole or in
part on September 1, 1982, or on any interest payment date there-
after, but only in the manner and only from the funds as provided
in said Indenture, at a redemption price for each redeemable
bond equal to the principal amount thereof together with accrued
interest to the redemption date plus a premium equal to one
quarter of one percent (1/4%) of said principal amount plus one
quarter of one. percent (1/4%) for each year or fraction of a year
from the redemption date to the maturity date of the bond.
A notice of the redemption of any of said bonds shall be
published at least once not less than thirty (30) days prior to the
redemption date in a daily financial journal or daily newspaper of
general circulation printed in the English language and published
in The City of New York, State of New York, and mailed to the
registered owners of said bonds, in the manner provided in the
Indenture. The bonds so duly called for redemption shall become
and be due and payable at the redemption price provided for such
bonds on the date designated for redemption, and when the neces-
sary moneys shall have been deposited with, or shall be held by the
Trustee, interest on such bonds called for redemption shall cease to
accrue, the coupons for any such interest becoming due after the
redemption date shall be void, and the holders or registered owners
of said bonds called for redemption shall not have any lien, rights,
benefits or security in respect thereof under the Indenture except
to receive payment of the redemption price'from moneys deposited
with or held by the Trustee for such redemption of such bonds.
This bond is one of a duly authorized issue of bonds of the
Corporation limited to the aggregate principal amount of Five
Million Dollars ($5,000,000), known as its "Leasehold Mortgage
Bonds, Second Issue," of like date, tenor and effect, except as to
number, date of maturity, interest rate and authorized denom-
64
inations, and all issued or to be issued under and pursuant to an
Indenture of Mortgage and Deed of Trust (said Indenture, to-
gether with all supplemental Indentures hereafter entered into in
conformity with the terms and provisions thereof, being herein
referred to collectively as the "Indenture"), dated as of the first
day of September, 1972, made and entered into by and between
the Corporation and Bank of America National Trust and Savings
Association, as Trustee (said bank and any successor thereto under
the Indenture being referred to herein as the "Trustee"), an exe-
cuted counterpart of which said Indenture is on file at the corporate
agency division of the Trustee in Los Angeles, California. Ref-
erence is made to said Indenture for the provisions, among others,
relating to the terms and security of the bonds, the collection and
application of rental revenues and other funds pledged to the pay-
ment of the bonds, the custody and application of the proceeds of
the bonds, the rights and remedies of the holders of the bonds,
the rights, duties, and obligations of the Corporation and of the
Trustee, and each successive holder of this bond, by his acceptance
hereof, irrevocably assents to all of the terms, conditions and pro-
visions of said Indenture.
The bonds are issued or are to be issued by the Corporation
for the purpose of paying the cost of acquisition, construction, de-
velopment, equipment and financing of a certain Project defined in
said Indenture, and are payable both as to principal and interest,
from certain of the rental revenues and other funds to be derived
by 'the Corporation from the lease of said Project all in the
manner provided in the Indenture. The bonds are direct obliga-
tions of the Corporation and the full faith and credit of the.
Corporation are pledged for the payment of such principal, in-
test and redemption price.
This bond is transferable by delivery unless registered as to
principal in the.name of the holder on books of the Corporation to
be kept for that purpose at the corporate agency division of the
Trustee in Los Angeles, California, such registration to be noted
hereon. After such registration no transfer shall be valid unless
made upon such books by the registered owner in person or by at-
torney duly authorized in writing and similarly noted hereon; but
this bond may be discharged from registration by being in like
manner transferred to bearer and thereupon transferability by de-
livery shall be restored, after which this bond may again from
65
time to time be registered or discharged from registration as before.
Such registration, however, shall not affect the negotiability of the
coupons for interest hereto attached which shall always continue
to be payable to bearer and to be transferable by delivery merely,
and payment to the bearer thereof shall fully discharge the Corp;- .
ration in respect to the interest therein mentioned whether or not
this bond be registered as to principal.
The Corporation and the Trustee may deem and treat the
bearer of this bond or, if this bond shall be registered as to prin-
cipal, the person in whose name this bond shall be so registered,
and the bearer of any interest coupon appertaining hereto whether
or not this bond shall be so registered as to principal, as the
absolute owner of such bond or such coupon, as the case may be
(whether or not this bond or such coupon shall have become due
and payable), for all purposes, and neither the Corporation nor
the Trustee shall be affected by any notice to the contrary.
The bonds of the issue of which this bond is one are issuable as
coupon bonds payable to bearer and registrable as to principal
alone, in the denomination of Five Thousand Dollars ($5,000) each,
and as registered bonds without coupons in the denomination of
Five Thousand Dollars ($5,000) each or in any multiple thereof.
The coupon bonds and the registered bonds without coupons are
interchangeable for bonds of the same interest rate and maturity
upon the surrender thereof for such purpose by the holder or
registered owner at the corporate agency division of the Trustee
in Los Angeles, all in the manner and upon the payment of the
charges and otherwise as provided in the Indenture.
Except as provided in the Indenture, no recourse shall be had
for the payment of the principal of,or the interest or premium,if any
on this bond, or of any claim based hereon, or in respect hereto or
of the Indenture, against any incorporator, member, officer or.di-
rector,as such,past,present or future, of the Corporation or of any
successor company,whether directly or through a receiver or trustee
in bankruptcy,whether by virtue of any statute or rule or law or by
the enforcement of any assessment or penalty, or otherwise,all such
liabilities being, by the acceptance hereof, expressly waived and
released and being likewise waived and released by the terms of
the Indenture, all as more fully provided therein.
Neither this bond nor any interest coupon appertaining hereto
shall be valid or become obligatory for any purpose unless and
66
I
I
until this bond shall have been authenticated by the execution of
the certificate hereon by the Trustee under the Indenture.
All things necessary to make this bond, when authenticated by
i the Trustee, the valid, binding and legal obligation of the Corpora-
tion payable in accordance with the terms hereof and as in the
Indenture provided, and to make the Indenture valid, binding and
legal for the security thereof, have been done and performed.
IN WrTNESs WHEREOF, HUNTINGTON BEACH PUBLIC FACILITIES
CoRPoRATIow has caused this bond to be signed in its corporate name
by the facsimile signature of its President, and its corporate seal
lor a facsimile thereof to be hereunto affixed and attested by the
facsimile signature of its Secretary and coupons for interest bear-
ing the facsimile signature of its Secretary to be hereunto attached,
` as of the first day of September, 1972.
I _
HUNTINGTOw BEACH PUBLIC
FACILITIES CORPORATION
I
! By...............................................................
President
[SEAL)
ATTEST:
I
Secretary
FORM OF INTEREST COUPON)
)
No.
On the first day of , 19 (unless the bond hereafter
mentioned shall have been duly called for previous redemption and
payment duly provided therefor), upon surrender of this coupon,
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION Will pay to the
67
bearer at the corporate agency division of BANS of AMEwcA
NATIONAL, TRuST AND SAVINGS AssocuTloN, in the City of Los
Angeles, State of California, or at the principal office of any
paying agent in the City of Chicago, Illinois or The City of New
York, New York, at the option of the holder hereof ($................) in
lawful money of the United States of America, being the interest
then due on its Leasehold Mortgage Bond, Second Issue, dated
September 1, 1972.
No.............................
................. ..........
Secretary
(REGISTRATION DORM)
Date of Name of Signature of Authorized
Registration Registered Holder Officer of Trustee
68
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I
EXHIBIT C
[FORM of REGISTERED BOND]
HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION
LEASEHOLD MORTGAGE BOND
SECOND ISSUE
No. R $
CouponBond Nos-----------------------------------------------------------------------------------------
KNow ALL MEN BY THESE PRESENTS that HUNTINGTON BEACH
PvBLIc FAcmrrms CORPORATION (hereinafter called the "Corpora-
tion"), a non-profit corporation duly organized and existing under
the laws of the State of California, for value received, hereby
promisesto pay to --------------------------------------------------------------------------------------
----.._..-•............................................................................................................ ..
or his registered assigns, on the first day of September, 19__-,
upon presentation and surrender of.this Bond, the sum of ..............
------------------------------------------------------------------------DOLLARS ($----------------------)
together with interest thereon from September 1, 1972 or from
the most recent interest payment date to which interest has been
paid or duly provided for, at the rate of ...... percent (......°Jo) per
annum, such interest being payable semi-annually on the first
day of March and the first day of September in each year. The
principal of,interest, and premium, if any, on this bond are payable
in lawful money of the United States of America at the corporate .
agency division of the Trustee in the City of Los Angeles, State of
California, or at the principal office of any paying agent in the City
of Chicago, Illinois or The City of New York, New York, at the
option of the holder hereof. Both principal of and interest on this
Bond are payable to, or upon the order of, the person appearing as
the registered owner hereof at the close of business on the 15th
day preceding the payment date on registration books kept by the
Trustee.
The bonds of the issue of which this bond is one are redeemable
- at any time prior to their stated dates of maturity in the event
of loss of or damage to or condemnation of the Project, as more
fully set out in the Indenture hereinafter referred to, for the
69
principal amount thereof together with interest accrued to the
redemption date plus a premium equal to one quarter of one
percent (1/4%) of said principal amount plus one quarter of one
percent (1/4%) for each year or fraction of a year from the redemp-
tion date to the maturity date of this Bond, provided that such pre-
mium shall not exceed four percent (49o' ) of the principal amount.
Redemption of the bonds for such purposes may be made, at the
option of the Corporation, as a whole, or in part, but only in the
manner and only from the funds as provided in said Indenture.
Except as set forth in the preceding paragraph, if this bond
matures on or prior to September 1, 1982, it.shall not be subject to
call and redemption prior to maturity. If this bond matures on
September 1, 1983, or thereafter, it may, at the option of the Cor-
poration, be called for redemption prior to maturity in whole or in
part on September 1, 1982, or on any interest payment date there-
after, but only in the manner and only from the funds as provided
in said Indenture at a redemption price for each redeemable bond
equal to the principal amount thereof together with accrued interest
to the redemption date plus a premium equal to one quarter of one
percent (1/4%) of said principal amount plus one quarter of one
percent (1/4%) for each year or fraction of a year from the redemp-
tion date to the maturity date of the bond.
A notice of the redemption of any of said bonds shall be
published at least once not less than thirty (30) days prior to the
redemption date in a daily financial journal or daily newspaper
of general circulation printed in the English language and pub-
lished in The.City of New York, State of New York, and mailed
to the registered owners of said Bonds, in the manner provided in
the Indenture. The bonds or any portions thereof so duly called
for redemption shall become and be due and payable at the
redemption price provided for such bonds on the date designated
for redemption, and when the necessary moneys shall have been
deposited with, or shall be held by the Trustee, interest on such
bonds or any portions thereof so called for redemption shall cease
to accrue, and the holders or registered owners of said bonds or
portions so called for redemption shall not have any lien, rights,
benefits or security in respect thereof under the Indenture except
to receive payment of the redemption price from moneys deposited
or held by the Trustee for such redemption of such bonds or
portions thereof.
70
This bond is one of a duly authorized issue of bonds of the
Corporation limited to the aggregate principal amount of Fve Mil-
lion Dollars ($5,000,000) known as its "Leasehold Mortgage Bonds,
Second Issue" of like tenor and effect, except as to number, date of
maturity,interest rate and authorized denominations,and all issued
or to be issued under and pursuant to an Indenture of Mortgage and
Deed of Trust (said Indenture, together with all supplemental In-
dentures hereafter entered into in conformity with the terms and
provisions thereof, being herein referred to collectively as the "In-
denture"), dated as of the first day of September, 1972, made and
entered into by and between the Corporation and Bank of America
National Trust and Savings Association, as Trustee (said bank and
any successor thereto under the Indenture being referred to herein
as the "Trustee"), an executed counterpart of which said Indenture
is on file at the corporate agency division of the Trustee in Los An-
geles, California. Reference is made to said Indenture for the pro-
visions, among others relating to the terms and security of the
bonds, the collection and application of rental revenues and other
funds pledged to the payment of the bonds, the custody and applica-
tion of the proceeds of the bonds, the rights and. remedies of the
holders of the bonds, the rights, duties and obligations of the Cor-
poration and of the Trustee, and each successive holder of this
bond, by his acceptance hereof, irrevocably assents to all of the
terms, conditions and provisions of said Indenture.
The bonds are issued or are to be issued by the Corporation for
the .purpose of paying the cost of acquisition, construction, de-
velopment, equipment and financing of a certain Project defined
in said Indenture, and are payable both as to principal and interest
from certain of the rental revenues and other funds to be derived
by the Corporation from the lease of said Project all in the man-
ner provided in the Indenture. The bonds are direct obligations
of the Corporation and the full faith and credit of the Corpora-
tion are pledged for the payment of such principal, interest and
redemption price.
This bond is transferable by the registered holder hereof in
person or by his attorney duly authorized in writing at the corpo-
rate agency division of the Trustee in Los Angeles, California but
only in the manner, subject to the limitations, and upon payment of
the charges provided in the Indenture, and upon surrender, and
71
I
cancellation of this bond. Upon any such transfer the Corporation
shall issue in the name of the transferee and, after due authenti-
cation by the Trustee, deliver, in exchange for this bond, a new
registered bond or new registered bonds without coupons, of
authorized denominations, or, at the option of the transferee,
' coupon bonds with coupons attached representing all unpaid
interest due or to become due thereon, in aggregate principal
amount equal to the principal amount of this bond, or the un-
redeemed portion thereof, of the same maturity and bearing inter-
est at the same rate.
The bonds of the issue of which this bond is one are issuable
as coupon bonds payable to bearer and registrable as to principal
alone, in the denomination of Five Thousand Dollars ($5,000) each,
I - and as registered bonds without coupons in the denomination of
Five Thousand Dollars ($5,000) each or in any multiple thereof.
The coupon bonds and the registered bonds without coupons are
interchangeable for bonds of the same interest rate and maturity
upon the surrender thereof for such purpose by the holder or
registered owner at the corporate agency division of the Trustee
in the City of Los Angeles, California, all in the manner and upon
the payment of the charges and otherwise as provided in the
Indenture.
f Except as provided in the Indenture, no recourse shall be had
for the payment of the principal of, or the interest, or premium,
if any, on this bond, or of any claim based hereon, or in respect
hereto or of the Indenture, against any incorporator, member,
officer or director, as such, past, present or future, of the Corpo-
ration or of any successor company, whether directly or through
a receiver or trustee in bankruptcy, whether by virtue of any
statute or rule of law or by the enforcement of any assessment or
penalty, or otherwise, all such liabilities being, by the acceptance
hereof, expressly waived and released by the terms of the Inden-
ture, all as more fully provided therein.
This bond shall not be valid or become obligatory for any
purpose unless and until this bond shall have been authenticated
by the execution of the certificate hereon by the Trustee under
the Indenture.
All things necessary to make this bond, when authenticated
by the Trustee, the valid, binding and legal obligation of the Cor-
72
f a�
y
poration payable in accordance with the terms hereof and as in
the Indenture provided, and to make the Indenture valid, binding
and legal for the security thereof, have been done and performed.
IN WITNESS WHEREOF, HIINTINGTON BEACH PIIBLIC FACILITIES
r CORPORATION has caused this bond to be signed in its corporate name
by the facsimile signature of its President, and its corporate seal
or a facsimile thereof to be hereunto armed and attested by the
facsimile signature of its Secretary.
Dated- ------------------------------------- 19-----
HvNTINGToN BEAUS Puxic
FACILITIES CORPORATION
By............................................................
President
(SEAL)
Attest:
-----------------------------------------------------------------
Secretary
73
EXHIBIT D
FORM OF TRUSTEES CERTIFICATE OF AUTHENTICATION
COUPON AND REGISTERED BONDS
This bond is one of the bonds issued pursuant to and under the
provisions of the within mentioned Indenture.
................................................................
Bank of America National Trust
and Savings Association, as Trustee,
By............................................................
Authorized Officer
FORM OF ASSIGNMENT FOR ALL BONDS
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfersunto ------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
the within bond and hereby irrevocably constitutes and appoints
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
attorney to transfer said bond on the registry books kept for that
purpose with full power of substitution in the premises.
Dated:................................................
..................................................................
Witness:
-----------------------------------------------------------------.
......................."--------...--------------------------.....
74
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4 f/'
[CONFORMED COPY]
Huntington Beach
Public Facilities Corporation
to
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
TRUSTEE
LOS ANGELES, CALIFORNIA
Rerb of c3rtst
Dated as of January 15, 1972
$11,100,000
Huntington Beach
Public Facilities Corporation
LEASEHOLD MORTGAGE BONDS
FIRST ISSUE
Dated January 15, 1972
Recorded in the Office of the County Recorder
of Orange County on February 11, 1972 as
Document No. 9622, Book 9998, page 756,
of Official Records of Orange County.
II, TABLE OF CONTENTS
Page
Parties....................•---•-----=---................................................._....------.................._....... 1
Recitals...............•------..............---•----........._.............................--------_........--••• 1
ClauseFirst....................................................•----....__....-------.................---------------•-- 3
ClauseSecond........................................... .......................................................... 3
Clause Third...............................
ClauseFourth..........................................................................................................
ARTICLE I
Definitions
Section
101 Definitions.................................................................................................... 4
102 Inclusiveness of Certain Terms.............................................................. 6
103 References to Indenture.................................................................._.._....._ 6
ARTICLE II
y,o Form, Authentication, Delivery and Registration of Bonds
r
201 Bonds Issued Only in Accordance with Indenture......................... 6
202 Form of Bonds and Security.................................................................. 6
203 Details of Bonds.....:...................•---...............................................-•-•--...._. 7
204 Authentication of Bonds...... . ............................................................... 9
205 Registration of Bonds............................•---.................................•-•-•-....--- 9
206 Payments to Registered Owners of Bonds........................................ 11
207 Filing of Closing Documents and Delivery of Bonds.................... 11
208 Disposition of Bond Proceeds................................................................ 12
209 Mutilated, Destroyed, Lost or Stolen Bonds.................................... 12
ARTICLE THREE
Redemption of Bonds Prior to Maturity
301 Redemption Dates..................................._................................................. 13
302 Method of Redemption............................................................................. 14
303 Notice of Redemption......................................... ................................ 14
e
Il
Section Page
304 Cessation of Interest Upon Redemption............................................. 15
305 Bonds No Longer Outstanding............................................................. 16
ARTICLE IV
Custody and Application of Proceeds of Bonds
401 Disposition of Moneys in the Construction Fund............................ 16
402 Payments Made from Construction Fund.......................................... 18
403 Procedure of Making Payments from Construction Fund............ 18-
404 Retention of Records of Transactions.................................................. 20
405 Audit of the Construction Fund........................................................... 20
406 Completion Certificate and Transfer of Moneys............................... 20
ARTICLE V
Rental Revenues and Application Thereof
501 Establishment of Special Trust Funds................................................ 21
502 Rental Revenue Fund and Application................................................ 21
503 Debt Service Fund.................................................................................... 22
504 Bond Redemption Fund............................................................................ 22
505 Administrative Expense Fund................................................................ 23
506 Reserve Fund.............................................................................................. 24
507 Unclaimed Moneys for Payment of Bonds and Interest............... 24
508 Disposition of Redeemed Bonds and Coupons.................................. 25
509 Pledge of all Rental Revenue and Moneys....................................... 25
ARTICLE VI
Security for Deposits and Investment of Funds
601 Moneys Deposited to be Held in Trust.............................................. 25
602 Security for Deposits............................................................•.................... 26
603 Investment of Funds................................................................................ 26
604 Investments and Income as Part of Funds; Liquidation.............. 26
i
111
Section Page
ARTICLE VII
Covenants
701 Covenants and the Duration Thereof.................................................. 27
Covenant 1 Prompt Payment............................................................. 28
Covenant 2 To Construct-------------------------------------------------------------------- 28
-� Covenant 3 To Discharge All Lawful Claims............................... 29
Covenant 4 Use of Rental Revenue for Proper Purpose.......... 29
Covenant 5 Protection of Funds....................................................... 29
Covenant 6 Records and Audit......................................................... 29
Covenant 7 Maintenance of Properties............................................ 30
Covenant 8 Against Debt-------------------------------------------------------------------- 30
Covenant 9 Against Liens and Encumbrances.............................. 31
Covenant 10 To Maintain Insurance.................................................. 32
Covenant 11 Performance------------------- .................................................. 35
Covenant 12 To Maintain Corporate Existence.............................. 35
o
Covenant 13 Not to Distribute Profits.............................................. 35
Covenant 14 Disposition of Condemnation Award........................ 35
Covenant 15 To File Claims................................................................. 36
Covenant 16 To Maintain Paying Agents........................................ 36
II
ARTICLE VIII
Remedies of Trustee and Bondholders
801 Events of Default....................................................................................... 36
802 Action Upon Default-------------------------------------------------------------------------------- 37
803 Application of Moneys Upon Default.................................................. 40
804 Discontinuance of Any Proceeding....................................................... 41
805 Action of Trustee Directed by Majority of Bondholders.............. 42
806 Notice to Trustee Before Legal Action.............................................. 42
807 Action by Trustee on Behalf of Bondholders................................... 43
808 Remedies Cumulative.................................................................•-------------. 43
809 No Waiver of Default------------------------------------------------------------------------------ 43
810 Notification of Default......................... ................--.............-...... 43
i
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Section Page
ARTICLE IX
Concerning the Trustee
901 Acceptance of Trusts by Trustee......................................................... 44
902 Absence of Responsibility of Trustee.................................................. 44
903 Trustee not Responsible for Actions of Corporation...................... 45
904 Compensation of Trustee................................................................:........ 45
905 Trustee's Right to Own and Deal in Bonds.................................... 45
906 Duties and Responsibilities of Trustee................................................ 46
j 907 Certain Rights of Trustee....................................................................... 47
I 90$ Right of Trustee to Rely on Certificates............................................ 47
909 Eligibility for Appointment as Trustee............................................... 48
910 Resignation and Removal; Appointment of Successor Trustee.... 48
911 Acceptance of Appointment by Successor Trustee......................... 49
912 Merger or Consolidation of Trustee.................................................... 50
913 Requirements as to Trustee's Records................................................. 51
I
ARTICLE X
Execution of Instruments by Bondholders
and Proofs of Ownership of Bonds
1001 Method of-Execution of Instruments by Bondholders................... 51
ARTICLE XI
Supplemental Indentures
1101 Without Consent of Bondholders.......................................................... 52
1102 With Consent of Bondholders................................................................ 52
1103 Approval by Counsel................................................................................ 54
1104 Approval by Corporation and Bondholders........................................ 54
L
ARTICLE XII
Defeasance
1201 Payment of Bonds and Discharge of Indenture............................... 55
1202 Bonds, Coupons and Redemption Price Deemed to be Repaid........ 55
i
•
Section Page
ARTICLE XIII
Miscellaneous Provisions
1301 Successor to Corporation..........................................................._............. 56
1302 Notice.............................................................................................._............. 56
1303 Indenture for Sole Benefit of Parties and Bondholders.._............. 56
1304 Severability................................................................................................... 57
1305 Waiver of Personal Liability................................................................. 57
1306 Subordination of Indenture.....---------_...........---------.................................... 58
i
1307 Validity of Multiple Copies-----------_-----------------------------------_-------------------- 58
j1308 Headings---------------
Execution.................................................................................................................. 58
Formof Bond..........................................................................................--------...... 63
Form of Interest Coupon......................................................................--------.--... 67
Formof Registration............................................................•--......................------. 68
Form of Registered Bond.......................................................................--------..... 69
Form of Trustee's Authentication Certificate................................................ 74
This table of contents is presented for convenience and reference
only and is not to be deemed a part of this Indenture.
4
i
This Mortgage is, among other things a Mortgage of Chattels
THIS INDENTURE OF MORTGAGE AND DEED OF TRUST,
dated as of the fifteenth day of January, 1972, by and between
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION, a corporation
duly organized and existing as a non-profit corporation under and by
virtue of the laws of the State of California, and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking associa-
tion duly organized and existing under the laws of the United States of
America and having a principal office in the City of Los Angeles,
w California, which is authorized under such laws to exercise corporate
trust powers, as Trustee,
- WITNESSETH:
WHEREAS, pursuant to a certain Lease entitled "Huntington Beach
Public Facilities Corporation Lease and Sublease" the Corporation has
leased from the City for the term stated therein, certain real property
owned by the City and described in Clause First of the granting clauses
of this Indenture; and
WHEREAS, pursuant to the provisions of the Lease, the Corporation
has agreed to construct certain buildings and related facilities including
a city hall, police building and related facilities to each such building
Y (the "Facilities") in accordance with the plans and specifications
referred to in the Lease; and
WHEREAS, the Corporation has subleased to the City said real
property, as improved by the construction of the Facilities, for the term
set forth in the Lease; and
WHEREAS, the Corporation has determined to provide under this
Indenture for the issuance of its Leasehold Mortgage Bonds, for the
purpose of providing funds to pay the costs of acquisition, construction
and development of the Facilities; and
WHERF7AS, the Articles of Tneorporation of the Corporation provide
that it is organized as a nonprofit corporation, and that no gains, profits
or dividends shall be distributed to any of its members, and no part of
the net earnings, funds or assets of the Corporation shall inure to the
benefit of any Inember, private shareholder or individual or any other
person, firm or corporation excepting only the City, and that the
property of the Corporation is irrevocably dedicated to charitable
1
�I
purposes; and that upon the dissolution, liquidation or winding up
of the Corporation, the assets of the Corporation remaining after
payment of or provision for all debts and obligations of the Corpora-
tion shall be distributed to the City; and
WHEREAS, the Corporation has determined that the Bonds shall be
secured by this Indenture and has ascertained and determined that the
provisions herein contained for protecting and enforcing the rights and
remedies of the Holders of such Bonds are reasonable, proper and in
accordance with law, that this Indenture is necessary to the perform-
ance of its,duties and the execution of its powers under law, and does
deem and determine all of the provisions herein contained to be reason-
able and proper for the security of the Holders of such Bonds; and
WHEREAS, the execution and delivery of this Indenture have been
duly authorized by resolution of the Board of Directors of the Corpora-
tion; and
WHEREAS, all acts and things required by law and by the Articles of
Incorporation and By-Laws of the Corporation necessary to make this
Indenture a valid and binding trust instrument for the security of all
Bonds duly issued hereunder, have been done and performed and the
execution and delivery of this Indenture have been in all respects duly
authorized; and
WHEREAS, the Trustee has accepted the trust created and estab-
lished by this Indenture and in evidence thereof has joined in the
execution hereof;
Now THERErORE, THIS INDENTURE WITNESSETH, that in considera-
tion of the premises, of the acceptance by the Trustee of the trust
hereby created, and of the purchase and acceptance of the Bonds
by the Holders thereof, and of the sum of one dollar paid to the
Corporation by the Trustee at or before the delivery hereof, the receipt
of which is hereby acknowledged, and for the purpose of fixing and
declaring the terms and conditions upon which the Bonds are to be
issued, authenticated, delivered, secured and accepted by all persons
• who shall from time to time be or become Holders thereof, and in
order to secure the payment of all the Bonds at any time issued and
outstanding hereunder and the interest thereon according to their
tenor, purport and effect, and in order to secure the performance and
2
observance of all of the covenants, agreements and conditions therein
and herein contained, the Corporation by these presents does grant,
bargain, sell, release, convey, assign, transfer, mortgage and confirm
unto the Trustee the following property, rights and privileges (which
collectively are hereinafter called "the Trust Estate"), to wit:
CLAUSE FIRST
The leasehold estate of the Corporation created under the Lease,
by which Lease, among other things, the City demised to the Corpora-
tion for the term of years set forth therein, and on the terms, conditions
and provisions set forth therein, the premises described in Exhibit A
attached hereto and made a part hereof.
CLAUSE SECOND
Also, all right, title and interest of the Corporation, under the
j .Lease or otherwise, in and to all buildings, structures and improve-
ments now located or hereafter to be erected in, under or upon the
premises demised by the Lease.
CLAUSE THIRD
Also, all property which is by the express provisions of this Inden-
ture, required to be subjected to the lien hereof; and any additional
property that may from time to time, by delivery or by writing of any
kind, be subjected to the lien hereof by the Corporation or by anyone in
its behalf, and the Trustee is hereby authorized to receive the same at
any time as additional security hereunder.
CLAUSE FOURTH
Also, all the rents, issues, profits, revenues and other income or
proceeds or receipts of the Trust Estate, which rents, issues, profits,
revenues, income and other proceeds or receipts are hereby expressly
assigned, with the right to take and collect said rents, issues, profits,
revenues, income and proceeds and receipts.
To have and to hold the Trust Estate unto the Trustee and its
successors and assigns forever.
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Subject, however, with respect to all of the foregoing clauses, to
such permitted encumbrances under this Indenture as may be superior
(by operation of law or otherwise) to the lien hereof.
But in trust, nevertheless, with power of sale, for the equal and
proportionate benefit of the Holders from time to time, of all the Bonds
(and their pertinent coupons) authenticated hereunder and issued by
the Corporation and outstanding without any priority of any one Bond
or coupon over any other.
And upon the trusts, and subject to the covenants and conditions
hereinafter set forth.
ARTICLE I
DEFINITIONS
Section 101. Definitions. The following words and terms, unless
a different meaning clearly appears from the context, shall have the
following meanings in this Indenture:
"Bond" or "Bonds" shall mean any Bond or Bonds authenticated
and delivered under and pursuant to the provisions of this Indenture.
"Bondholder" or "Holder", or any similar term when used with
• reference to a Bond or Bonds, shall mean the bearer or owner of any
outstanding Bond or Bonds.
"Bond Counsel" shall mean the firm of O'Melveny&Myers or other
nationally recognized bond counsel of favorable reputation.
"Bond Registrar" shall mean the Trustee.
"City" shall mean the City of Huntington Beach.
"Consulting Architect" shall mean the architect or architects, or
firm or firms of architects, having a favorable repute for skill and
experience as consulting architects, or an engineer or engineers, or
firm or firms of engineers, each having a favorable repute for skill
and experience as consulting engineers, at the time retained by the
Corporation or by the City on behalf of the Corporation to perform
the acts and carry out the duties provided for such Consulting Archi-
tects in this Indenture.
"Corporation" shall mean the Huntington Beach Public Facilities
Corporation.
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"Cost of the Project" shall mean the cost of the acquisition, con-
struction, development, and financing of the Project to and including
the date of completion, and shall include, without limitation, the cost
of acquisition of any land or interest therein required therefor, the
j cost of any taxes or assessments paid or to be paid to any local govern-
mental body, the cost of any indemnity and surety bonds and premiums
on title insurance and insurance during construction, the administrative
expenses of the Corporation, including, without limitation, compensa-
tion of employees of the Corporation and consultants engaged in super-
vision, inspection or testing of materials, legal fees, any fees or ex-
penses of the Trustee during construction, the cost of issuance of the
Bonds by the Corporation and commissions, financing charges and
fees and expenses of attorneys, accountants, financial advisers and con-
sultants, the cost of audits, the cost of engineering, architectural
services, plans, specifications and surveys, estimates of cost, the re-
imbursement of all moneys, if any, advanced by the City or any other
public agency, instrumentality, commission or officer, from public funds
for the payment of any item or items of cost of the Project, and such
other costs and expenses, whether or not specified herein, as may be
necessary or incidental to the acquisition, construction, development
and financing of the Project, and the placing of the same in operation.
"Fiscal Year" shall mean the fiscal year as established from time
to time by the City, being as of the date of this Indenture, the period
li from July 1 to and including the following June 30.
"Lease" shall mean the Huntington Beach Public Facilities Corpo-
ration Lease and Sublease.
"Paying Agent" shall mean such paying agent as may from time
to time be designated by the Corporation.
"Project" shall mean the acquisition, construction and development
of the facilities described in the recitals hereof,as required by the Lease.
"Rental Revenue" shall mean all rent received by the Trustee
under the Lease and this Indenture from the rental of.the Project, all
damage payments received from the City that are not a part of the"Cost
of the Project", all damage payments received from any contractor in
connection with the Project to the extent that siich damage payments
are attributable to delay in completion and all proceeds of rental
interruption insurance policies, if any, carried with respect to the
Project pursuant to the Lease or in.accordance with this Indenture.
5
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"Trustee" shall mean Bank of America National Trust and Savings
Association,its successor or successors and any other corporation which
may hereafter be substituted in its place as Trustee under this Inden-
ture.
Section 102. Inclusiveness of Certain Terms. Words of the mas-
culine gender shall be deemed and construed to include correlative
words of the feminine and neuter genders. Unless the context shall
otherwise indicate, the words "Bonds", "coupon", "owner", "Holder"
and "person" shall include the plural as well as the singular number,
and the word "person" shall include corporations and associations,
including public bodies, as well as natural persons.
Section 103. References to Indenture. The terms "hereby",
" �, "herein" « »
hereof , hereto , , "hereunder", and any similar terms, as
used in this Indenture, refer to this Indenture, and unless the context
shall otherwise indicate, the term "Indenture" shall mean this Inden-
ture together with any Indenture supplemental hereto.
I
ARTICLE II
FORM, AUTHENTICATION, DELIVERY AND
REGi-ISTRATION OF BONDS
Section 201. Bonds Issued and in Accordance with Indenture. No
Bonds may be issued under the provisions of this Indenture except
in accordance with the provisions of this Article.
Section 202. Form of Bonds and Security. All Bonds shall be
initially issued in coupon form payable to bearer and registrable as to
principal alone (hereinafter referred to as "coupon Bonds"), exchange-
able for bonds in fully registered form without coupons (hereinafter
referred to as "fully registered Bonds" or "registered Bonds"). All
coupon Bonds shall be issued in the denomination of $5,000 each. All
fully registered Bonds shall be issued in the denomination of$5,000 each,
or any multiple thereof. The coupon Bonds and the coupons to be
attached thereto shall be substantially in the form set forth in Exhibit B,
attached hereto and by this reference incorporated herein; the form of
fully registered Bonds without coupons shall be substantially in the
form set forth in Exhibit C, attached hereto, and by this reference in-
corporated herein; and the Trustee's certificate of authentication to be
endorsed on all Bonds and the form of assignment on all Bonds shall
be substantially in the form set forth in Exhibit D, attached hereto,
and by this reference incorporated herein; provided, however, that
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such modifications, insertions, omissions and changes as are required
or permitted by this Indenture or any supplemental indenture hereafter
entered into under the provisions of this Indenture may be made; and
provided, further that any or all of said Bonds may have endorsed
thereon such legends or text as may be necessary or appropriate to
conform to the rules and regulations of any governmental authority
or any usage or requirement of law with respect thereto.
This Indenture shall be a continuing lien to secure the full pay-
ment of the principal, interest and redemption price on the Bonds
executed, authenticated and delivered pursuant to the terms hereof,
without priority as to the security afforded by this Indenture of any
Bond over any other Bond by reason of date of issue, date of maturity,
date of delivery or any other characteristics whatsoever. The Bonds
shall be direct obligations of the Corporation, and the full faith and
credit of the Corporation are hereby pledged for the payment of such
principal, interest and redemption price.
Section 203. Details of Bonds. There shall be authenticated and
delivered under and secured by this Indenture, for the purpose of
paying the Cost of the Project, Bonds in the aggregate principal
amount of $11,100,000. The Bonds thus to be authenticated and de-
livered shall be designated "Huntington Beach Public Facilities Corpo-
ration, Leasehold Mortgage Bonds, First Issue", shall be numbered in
such reasonable manner as the Trustee in its discretion shall determine,
shall bear interest payable semi-annually on the fifteenth day of July
and the fifteenth day of January in each year at the rates per annum
and shall mature serially on January 15, in the years and amounts as
follows:
Interest Interest
Year Amount Rate Year Amount Rate
1975 $200,000 7 % 1987 $430,000 51/11 %
1976 210,000 7 1988 460,000 51/2
1977 230,000 7 1989 490,000 51/2
1978 240,000 7 1990 530,000 51/�
1.979 260,000 7 1991 560,000 51/.,
1980 270,000 7 1992 600,000 51/t,
1981 290,000 7 1993 640,000 51/,
1.982 3107000 7 1994 680,000 51/>
1.983 330,000 5.70 1.995 730,000 51/2
19S4 360,000 51/.' 1996 780,000 51/,,
1985 380,000 51/,, 1997 830,000 5
1986 400,000 51/., 1998 890,000 5
7
}
All coupon Bonds issued under this Indenture and all fully
registered Bonds delivered pursuant to Section 202 are to be dated
January 15, 1972. Thereafter, fully registered Bonds shall be dated
and shall bear interest as hereinafter provided: (i) if such fully
registered Bonds are issued on a date which is between interest pay-
inent dates, such Bonds shall bear interest from, and shall be dated
as of the interest payment date next preceding the date on which
the same shall be withenticated by the Trustee; or (ii) if the date
of authentication shall be an interest payment date, such Bonds shall
bear interest from and shall be dated as of such interest payment
date; or (iii) if such Bonds are authenticated and delivered upon
transfer of or in exchange or substitution for a Bond or Bonds on
which interest is in default, such Bonds shall bear interest from and
shall be dated as of the date from which interest is payable on such
Bond or. Bonds; or (iv) if such date of authentication shall be a
date prior to the first interest payment date, such Bonds shall bear
interest from and shall be dated as of the commencement of the first
interest period.
In case any officer of the Corporation whose signature, or a fac-
simile thereof, shall appear on any Bonds or coupons shall cease to be
such officer before the delivery of such Ponds, such signature, or fac-
simile thereof, shall nevertheless be valid and legally sufficient for all
purposes as fully and to the same extent as if he had remained in office
until the delivery of such Bonds.
I
Any Bonds or coupons may be signed by, or bear the facsimile
signature of, such officers of the Corporation who at the actual time of
the execution of such Bonds or coupons shall be the proper officers to
execute such Bonds or coupons, although at the date of issuance stated
in such Bonds such officers did not then hold such offices.
The principal of, interest and any premium on the Bonds shall
be payable in lawful money of the United States of America.
The principal of interest on and any premium upon the redemp-
tion thereof on all fully registered Bonds shall be payable at the corpo-
rate agency division of the Trustee in Los Angeles, California and on
all coupon Bonds shall be. payable at the corporate agency division of
the Trustee or the principal office of any Paying Agent or Agents at the
option of the holder thereof. Payment of interest on coupon Bonds rep-
resented by.coupons shall be made only upon presentation and sur-
render of the coupons representing such interest as the same respec-
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tively fall due. Payment of the interest on each fully registered Bond
without coupons shall be made on each interest payment date to or upon
P p 3'm � p
the order of, the person appearing as the registered owner thereof, at
the close of business on the 10th day preceding the interest payment
date, on the registration books kept by the Bond Registrar, hereinafter
provided for, by check or draft mailed to such registered owner at his
address as it appears on such registration books. Payment of the prin-
cipal of all coupon bonds and of all fully registered bonds shall be made
only upon the presentation and surrender of such Bonds as the same
shall become due and payable.
Section 204. Authentication of Bonds. Only such of the Bonds
as shall have endorsed thereon a certificate of authentication sub-
stantially in the form set forth in Exhibit D, duly executed by the
Trustee, shall be entitled to any rights, benefits, or security under
this Indenture. No Bonds, and no coupon appertaining to any Bond,
shall be valid or obligatory for any purpose unless and until such
certificate of authentication shall have been duly executed by the
Trustee, and such certificate of the Trustee upon any such Bond shall
be conclusive and the only evidence that such Bond has been duly
authenticated and delivered under this Indenture. The Trustee's cer-
tificate of authentication on any Bond shall be deemed to have been
duly executed if signed by an authorized officer of the Trustee, but
. it shall not be necessary that the same officer sign the certificate of
authentication on all of the Bonds that may be issued hereunder at
any one time. Before authenticating or delivering any Bonds with
coupons the Trustee shall detach and cancel all matured coupons, if
any, appertaining thereto, representing interest theretofore paid. Such
cancelled coupons may at any time be destroyed in the manner provided
in this Indenture.
I
Section 205. Registration of Bonds. Title to any coupon Bond,
unless such Bond is registered as to principal in the manner herein-
after provided, and to any interest coupon, shall pass by delivery in
the same manner as a negotiable instrument payable to bearer. At the
option of the bearer, any coupon Bond may be registered as to principal
on books for the registration and transfer of Bonds, kept by the Bond
Registrar, upon presentation thereof to the Bond Registrar, which
shall make notation of such registration thereon. Any coupon Bond
registered as to principal may thereafter be transferred only upon an
assignment duly executed by the registered owner or his attorney,
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substantially in the form set forth in Exhibit D, such transfer to
be made on such books and endorsed on the Bond by the Bond
Registrar. Such transfer may be to bearer and thereby transferability
by delivery shall be restored, subject, however, to successive registra-
tions and transfers as before. Registration of any coupon Bond as to
principal, however, shall not affect the negotiability by delivery of the
coupons pertaining to such Bond, but every such coupon shall continue
to pass by delivery merely and shall remain payable to bearer.
Any fully registered Bond may be transferred only upon the books
• for the registration and transfer of Bonds, upon the surrender thereof
at the corporate agency division of the Bond Registrar, together with
an assignment duly executed by the registered owner or his attorney,
substantially in the form set forth in Exhibit D. Upon the trans-
fer of any such fully registered Bond, there shall be issued in the
name of the transferee a new fully registered Bond or Bonds of any
of the authorized denominations, or, at the option of the transferee,
coupon Bonds with coupons attached representing all unpaid interest
due or to become due thereon, of the same aggregate principal amount,
interest rate and maturity, as the surrendered Bond.
Coupon Bonds, upon the surrender thereof to the Bond Registrar
with all unmatured coupons and all matured coupons in default, if
any, pertaining thereto, may at the option of the Holder or registered
owner thereof, be exchanged for an equal aggregate principal amount
of fully registered Bonds of like interest rate and maturity of the
authorized denominations. Fully registered Bonds, upon the surrender
thereof to the Bond Registrar, together with an assignment duly exe-
cuted by the registered owner or his attorney, substantially in the form
set forth in Exhibit D, may, at the option of the registered owner
thereof, be exchanged for an equal aggregate principal amount of
coupon Bonds with coupons attached representing all unpaid interest
due or to become due thereon, or for registered Bonds of any other
authorized denominations, of like interest rate and maturity.
One exchange or transfer of a fully registered Bond for a coupon
Bond or coupon Bonds will be made without charge to the Bondholder.
The Corporation and the Bond Registrar may make a charge for every
other exchange or transfer of Bonds sufficient to reimburse them for
any tax, fee or other governmental charge, required to be paid with
respect to such exchange or transfer and the cost of preparing each
new Bond delivered upon such exchange or transfer and any and all
other expenses.of the Corporation and the Bond Registrar incurred
10
in connection therewith, and all such charges shall be paid before any
such exchange or transfer shall take place. Neither the Corporation
nor the Bond Registrar shall be required to make any such exchange
or transfer of a Bond during the fifteen (15) days next preceding an
interest payment date on such Bond or after such Bond has been called
for redemption or, in the case of any proposed redemption of Bonds,
during the fifteen (15) days next preceding the date of the publication
of notice of redemption.
Section 206. Payments to Registered Owners of Bonds. As to
any fully registered Bond, or any coupon Bond registered as to princi-
pal, the person in whose name the same shall be registered shall be
deemed to be and regarded as the absolute owner thereof for all pur-
poses, and payment of or on account of the principal or redemption
price of any such Bond and the interest on such a fully registered
Bond shall be made only to or upon the order of the registered owner
thereof or his legal representative, but such registration may be
changed as hereinabove provided. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Bond, includ-
ing the interest thereon, to the extent of the sum or sums so paid. The
Corporation and the Bond Registrar may deem and treat the bearer of
any coupon Bond not registered as to principal and the bearer of any
coupon pertaining to any coupon Bond, whether or not such Bond shall
be registered as to principal, as the absolute owner of such Bond or
coupon as the case may be, whether such Bond or coupon shall have
matured or not, for the purpose of receiving payment thereof, and
for all other purposes whatever and neither the Corporation nor the
Bond Registrar shall be affected by any notice to the contrary.
Section 207. Filing of Closing Documents and Delivery of Bonds.
Said Bonds, upon their execution in the form and manner set forth in
Exhibits B, C and D, and as herein provided, shall be deposited
with the Trustee for authentication, but before said Bonds shall be
authenticated and delivered by the Trustee there shall be filed with or
delivered to the Trustee the following:
(a) A copy of a resolution adopted by the Board of Directors
of the Corporation and certified by its Secretary authorizing the
issuance of the Bonds and directing the authentication and delivery
of such Bonds to or upon the order of the purchasers therein
named upon payment of the purchase price therein set forth;
11
(b) Bond Counsel's opinion to the effect that:
(i) this Indenture has been duly and lawfully authorized,
executed and delivered by the Corporation, is in full force
and effect, and is valid and binding upon the CorporatioA in
accordance with its terms, and that such Bonds are valid,
binding and direct obligations of the Corporation, in accord-
ance with their terms and the terms of this Indenture, and such
Bonds have been duly and validly authorized and issued in
accordance with law and this Indenture; and
(ii) the Bonds, under the circumstances of the issuance
and sale thereof, are not required to be registered under the
Securities Act of 1933, as amended, and qualification of this
Indenture under the Trust Indenture Act of 1939 is not
required; and
(iii) the Bonds, under the circumstances of the issuance
and sale thereof, are exempt from qualification under the
!, California Corporate Securities Law.
Such Bonds may be authenticated, delivered and paid for in
amounts of less than the total authorized principal amount from time
to time, as the Corporation may direct upon its written order to the
Trustee.
When the documents mentioned above shall have been filed with the
Trustee and when said Bonds shall have been executed and authenti-
cated as required by this Indenture, the Trustee shall deliver said
Bonds to or upon the order of the purchasers named in the resolution
mentioned in paragraph (a) of this Section, but only upon pay-
ment to the Trustee of the purchase price of said Bonds. The Trustee
shall be entitled to rely upon such resolution as to the names of the
purchasers and the amount of such purchase price.
Section 208. Disposition of Bond Proceeds. The proceeds of the
sale of the Bonds issued hereunder, including premium and accrued
interest, if any, shall be deposited by the Trustee to the credit of the
Construction Fund hereinafter created and established, to be disbursed
and applied as hereinafter provided.
Section 209. Mutilated, Destroyed, Lost or Stolen Bonds. In case
any Bond secured hereby shall become mutilated, destroyed, lost or
stolen, the Corporation may cause to be executed, and the Trustee may
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authenticate and deliver, a new Bond of like date and tenor in exchange
and substitution for and upon the cancellation of such mutilated Bond
and its interest coupons, if any, or in lieu of and in substitution for such
Bond and its interest coupons, if any, destroyed, lost or stolen, upon
the Holder's paying the reasonable expenses and charges of the Corpo-
ration and the Trustee in connection therewith, and, in the case of a
Bond destroyed, lost or stolen, his filing with the Trustee evidence satis-
factory to it and to the Corporation that such Bond and coupons, if any,
were destroyed, lost or stolen, and of his ownership thereof, and fur-
nishing the Corporation and the Trustee with indemnity satisfactory to
them.
ARTICLE III
REDEMPTION OF BONDS PRIOR TO MATURITY
Section 301. Redemption Dates. In the event of loss of or damage
to or condemnation of the Project, as more fully set out hereafter, all
or part of the Bonds issued under this Indenture, at the time outstand-
ing, may be redeemed for the principal amount thereof together with
interest accrued to the redemption date plus a premium equal to one
quarter of one percent (1/4%) of said principal amount plus one quarter
of one percent (1/4%) for each year or fraction of a year from the
redemption date to the maturity date of the bond provided however,
that in no event shall such premium exceed four and one-half percent
(41/2%) of the principal amount. Redemption of the Bonds for the
aforementioned purposes may be made in the manner and from the
funds hereinafter provided at any time prior to their stated date of
maturity, at the option of the Corporation, as a whole, or in part,
provided that if less than all of the Bonds are redeemed, the Trustee
shall determine a principal amount of Bonds in each maturity to be
redeemed so that approximately equal annual debt service will prevail,
and the Bonds to be redeemed in each maturity shall be selected by lot
by the Trustee.
Except as set forth in the preceding paragraph the Bonds maturing
on or prior to January 15, 1982, shall not be subject to call and redemp-
tion prior to maturity. The Bonds maturing on January 15, 1983, and
thereafter may, at the option of the Corporation, be called for redemp-
tion prior to maturity in whole or in part on January 15, 1982, or on
any interest payment date thereafter, but only in the manner and only
from the funds as hereinafter provided, at a redemption price for each
redeemable Bond equal to the principal amount thereof plus a premium
13
equal to one quarter of one percent (1/�fo) of said principal amount
plus one quarter of one percent (1/�%) for each year or fraction of a
year from the redemption date to the maturity date of the Bond.
No Bond shall be so redeemed except from moneys deposited in
or transferred to the Bond Redemption Fund as hereinafter provided.
Section 302. Method of Redemption. Except as otherwise herein-
before provided, if less than all of the Bonds shall be called for prior
redemption, such Bonds shall be redeemed in inverse order of maturity
and the particular bonds within a maturity to be redeemed shall be
selected by lot by the Trustee in such manner as the Trustee in its
discretion may determine; provided, however, that the portion of any
registered Bond to be redeemed shall be in the principal amount of
$5,000 or a multiple thereof, and that, in selecting coupon Bonds and
portions of fully registered Bonds for redemption, the Trustee shall
treat each such fully registered Bond as representing that number of
coupon Bonds which is obtained by dividing the principal amount of
such fully registered Bond by $5,000.
Section 303. Notice of Redemption. A notice of any such redemp-
tion, either in whole or in part, signed by the Trustee, (a) shall be
published at least once not less than thirty (30) days prior to the re-
demption date in a daily financial journal or daily newspaper of general
circulation printed in the English language and published in The City
of New York, State of New York, and (b) shall be mailed, postage
prepaid, to all registered owners of Bonds to be redeemed at their
addresses as they appear on the registration books hereinbefore pro-
vided for. Such notice shall also be mailed to any financial consultant
connected with the issuance of the Bonds, and to any person, firm, cor-
poration or syndicate that originally purchased the Bonds, but failure
to so mail any such notice shall not affect the validity of the proceedings
for such prior redemption. Each such notice shall set forth the date
fixed for prior redemption, the redemption price to be paid and, if
less than all the Bonds then outstanding shall be called for prior re-
demption, the distinctive numbers of such Bonds to be redeemed, and,
in the case of registered Bonds without coupons to be redeemed in
part only, the portion of the principal amount thereof to be redeemed.
In case any registered Bond without coupons is to be redeemed in
part only, the notice of redemption which relates to such Bond shall
state also that on or after the redemption date, upon surrender of such
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Bond a new Bond or Bonds in q principal amount equal to the un-
redeemed redeemed portion of such Bond and of the same maturity or maturities
will be issued.
Section 304. Cessation of Interest on Redemption. Notice of such
redemption having been published in the manner and under the condi-
tions hereinabove provided, the Bonds or portions of registered Bonds
so called for prior redemption shall, on the redemption date designated
in such notice, become and be due and payable at the redemption price
provided for prior redemption of such bonds or portions of registered
Bonds on such date. On the date so designated for prior redemption,
r notice having been published and moneys for the payment of the
redemption price being held irrevocably in trust by the Trustee, all as
provided in this Indenture, interest on the Bonds or portions of regis-
tered Bonds so called for prior redemption shall cease to accrue; the
coupons for interest on any Bond so called for redemption maturing
subsequent to the redemption date shall be void; such Bonds and por-
tions of registered Bonds shall cease to be entitled to any lien,benefit or
security under this Indenture, and the Holders or registered owners of
such Bonds or portions of registered Bonds shall have no rights in
respect thereof except to receive payment of the redemption price
thereof, and, to the extent hereinafter in this Section provided, to
receive Ronds for any unredeemed portions of registered Bonds with-
out coupons.
In case part, but not all, of an outstanding registered Bond without
coupons shall be called for redemption, the registered owner thereof
may present and surrender such Bond to the Trustee for payment of
the redemption price of the principal amount thereof so called for prior
redemption, and there shall be executed, authenticated and delivered
to or upon the order of such registered owner, without charge therefor,
for the unredeemed balance of the principal amount of the registered
Bond without coupons so surrendered, either coupon Bonds or a
registered Bond of the same maturity of the Bond so presented and
surrendered at the option of such registered owner. .
Notwithstanding the foregoing provisions of Section 303 and this
` Section 304, payment of the redemption price of a portion of any Bond
registered in the name of a bank, trust company or insurance company
shall be made by the Trustee to the registered owner thereof without
presentation or surrender thereof to the Trustee if there shall be on file
with the Trustee (and not theretofore rescinded by written notice from
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such registered owner received by the Trustee) an agreement (or a con-
formed copy thereof) between the Corporation and such registered
holder that (1) payments will be so made; (2) such registered Holder
will make notations on such Bond of payment of the portions thereof
so redeemed; and (3) such registered Holder will not dispose of such
Bond without first presenting the same to the Trustee for appropriate
notation thereon of the portion of the principal amount thereof so
redeemed or surrendering same to the Trustee for exchange for a
Bond or Bonds in authorized denominations aggregating the same
principal amount and of the same maturity or maturities as the princi-
pal amount of the Bond or Bonds surrendered which shall remain un-
paid. The Trustee shall not be under any duty to determine that such
notations have been made.
Section 305. Bonds No Longer Outstanding. `'Then any Bonds, or
when portions of registered Bonds without coupons, which have been
duly called for redemption under the provisions of this Article, or
with respect to which irrevocable instructions to call for prior re-
demption at the earliest redemption date have been given to the Trustee,
in form satisfactory to it, and sufficient moneys shall be held by the
Trustee irrevocably in trust for the Holders of the Bonds or portions
of Bonds to be redeemed for the payment of the redemption price of
such Bonds or portions of Bonds and accrued interest to the date fixed
for redemption, all as provided in this Indenture, then such Bonds
or portions of registered Bonds shall not be deemed to be outstanding
under the provisions of this Indenture.
ARTICLE IV
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
Section 401. Disposition of Moneys in the Construction Fund and
Interest During Construction Fund. Two special trust funds shall be
created, established and held by the Trustee, designated as "Hunting-
ton Beach Public Facilities Corporation Construction Fund" (herein-
after sometimes called the "Construction Fund")! and the Huntington
Beach Public Facilities Corporation Interest During Construction
Fund" (hereinafter sometimes called the"Interest During Construction
Fund") to the credit of which Construction Fund and Interest During
Construction Fund deposits shall be made as are hereinbefore and
hereinafter required.
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Upon receipt by the Trustee of the proceeds of. the Bonds, the
Trustee after deducting the amounts required to be deposited in the
Deserve Fund pursuant to Section 506 of Article V shall deposit the
amount of $1,370,8722 in the Interest During Construction Fund and
shall thereafter allocate the remaining portion of the proceeds to the
Construction Fund for application to the payment of the Cost of the
Project. There shall also be deposited by the Trustee to the credit of
the Construction Fund: (i) all interest and other income earned on any
moneys deposited with the Trustee under the provisions of this Inden-
ture for periods prior to completion of the entire Project, and (ii) any
moneys to the extent received by the Trustee from any other source
(including, without limitation, any moneys donated for such purposes).
There shall be paid by the Corporation to the Trustee for credit to the
Construction Fund any moneys described in the foregoing clauses of
this paragraph.
The moneys deposited to the credit of the Construction Fund, in-
eluding all deposits and obligations held as investments thereof and
the proceeds of such deposits and obligations held as investments, shall
be held in trust and applied only for the payment of the Cost of the
Project, as hereinafter provided, in accordance with the provisions
' of this Article IV.
All the moneys held in the Construction Fund and in the Interest
During Construction Fund shall, as nearly as may be practicable,
be continuously invested and reinvested by the Trustee in direct obli-
gations of the United States of America or obligations for which the
full faith and credit of the United States are pledged for the payment
of principal and interest, or any obligations issued by federal land
banks or federal intermediate credit banks established under the Fed-
eral Farm Loan Act, as amended, bonds or debentures of the Federal
Home Loan Bank Board or of any federal home loan bank established
under the Federal Home Loan Bank Act, and debentures and consoli-
dated debentures issued by the Central Bank for Cooperatives and
banks for cooperatives established under the Farm Credit Act of 1933,
as amended, or such moneys shall be deposited by the Trustee in any.or
all the banks which are members of the Los Angeles Clearing House
Association in interest bearing deposits or certificates of deposit, or in
any or all of the savings and loan associations incorporated under the
laws of the United States of America or under the laws of the State of
California, which maintain an office in the County of Los Angeles,
California, and whose accounts are insured by the Federal Savings
17
i
and Loan Insuranee Corporation, in investment certificates or with-
drawable shares, such investment deposits, certificates and shares to
mature or be withdrawable, as the case may be, in such amounts and
at such times as may be necessary, in the opinion of the Trustee to
provide funds when needed to pay the Cost of the Project or the interest
on the Bonds during the construction of the Project, and in any event
to mature or be withdrawable in not to exceed two years from the date
of investment. The deposits and obligations shall be held by the
Trustee and shall be deemed at all times to be a part of the Construction
_ Fund and the Interest During Construction Fund, as the case may
be, and the Trustee shall at all times keep the Corporation advised as
to the details of all investments and deposits.
The moneys deposited in the Interest During Construction Fund
including all deposits and obligations held as investments thereof, shall
be held in trust and applied only for the payment of interest on the Bonds
during the period of construction of the Project. The income proceeds
j. of all deposits and obligations held as investments in the Interest During
Construction Fund shall be transferred from time to time by the
Trustee to the Construction Fund and shall thereafter be deemed to
be a part of the Construction Fund.
Section 402. Payments Made from Construction Fund and Interest
During Construction Fund. Payment of the Cost of the Project shall be
made from moneys in the Construction Fund and payment of the
interest on the Bonds during construction of the Project shall be made
from moneys in the Interest During Construction Fund. Except as
otherwise expressly provided by other provisions of this Indenture,
all payments from the Construction Fund or Interest During Construe-
' tion Fund shall be subject to the provisions and restrictions set forth
in this Article IV, and the Corporation covenants that it will not
cause or permit to be paid from the Construction Fund or Interest
During Construction Fund any sums except in accordance with such
I.
provisions and restrictions.
Section 403. Procedure of Making Payments from Construction
Fund. Payments from the Construction Fund shall be made in accord-
ance with the provisions of this Section. Before any such payment
shall be made on account of the Cost of the Project the or� e Corporation
shall file with the Trustee:
(a) A requisition, signed by such officer or officers of the
Corporation as the Board of Directors of the Corporation shall
18
i
designate by resolution, stating in respect to each payment to be
made:
(i) The item number of payment;
(ii) The name of the person to whom payment is to be
made;
(iii) The amount to be paid;
(iv) The purpose, by general classification, for which
payment is to be made;
(v) That obligations in the stated amounts have been
incurred by the Corporation, that each item is a proper charge
against the Construction Fund and that payment therefor has
not been made; and
(vi) That there has not been filed witli or served upon the
Corporation notice of any lien, right to lien, or attachment
upon, or claim affecting the right to receive payment of, any
of the moneys payable to any of the persons named in such
requisition, which has not been released or will not be released
simultaneously with such payment; and
(b) In the case of each payment made under a construction
conti act, the Corporation shall file with the Trustee a certificate
signed by the Consulting Architect and attached to such requisition,
certifying approval thereof and further certifying to the best
information and belief of the Consulting Architect that in so far as
each such obligation was incurred for work, materials, equipment
and supplies, such work was actually performed, or such materials,
equipment or supplies were actually installed, in furtherance
of the construction of the Project or delivered at the site of the
work for that purpose, or delivered for storage or fabrication at
a place or places approved by the Consulting Architect.
Upon receipt of each such requisition and the accompanying certifi-
cate where applicable, the Trustee shall pay each such item from the
Construction Fund directly to the person entitled thereto as named in
such requisition, or shall deliver to the Corporation a check or draft
for the payment thereof drawn to the person entitled thereto, as directed
by the Corporation.
The Consulting Architect and the Board of Directors of the Corpo-
ration shall cooperate in establishing a procedure so that at monthly
19
intervals during the construction period waivers of liens shall be filed
with the Trustee which are reasonably current with the status of the
construction of the Project.
Payments of interest on the Bonds during construction of the.
Project shall be made by the Trustee from the Interest During Con-
struction Fund, such interest payments to be made directly to the Bond-
holders when due and payable.
Section 404. Retention of Records of Transactions. All requisi-
tions, statements and certificates received by the Trustee, as required
in this Article as conditions of payment from the Construction Fund,
may be relied upon by and shall be retained in the possession of the
Trustee, subject at all times to the inspection of the Corporation, its
agents and representatives.
Section 405. Construction Fund Report. At least once in each
six (6) months during the construction of the Project, the Trustee shall
prepare a report covering all receipts and moneys then on deposit with
the Trustee, in the name of the Trustee, or the Corporation, in the
Construction Fund and Interest During Construction Fund, and any
security specifically pledged therefor, any investments thereof, and all
disbursements made pursuant to the provisions of this Article IV.
Said reports shall be mailed by the Trustee to the Corporation, to any
financial consultant connected with the issuance of the Bonds, to any
person, firm, corporation or syndicate that originally purchased the
Bonds and to any Bondholder who shall make written request for the
same.
Section 406. Completion Certificate and Transfer of Moneys.
After completion of construction of the Project, the Corporation shall
deliver to the Trustee a certificate, signed by the Secretary of the
Corporation, stating the date upon which such completion occurred, and
the amount of money,if any, required for the payment of the remaining
cost thereof; the Trustee shall immediately transfer any moneys in
the Interest During Construction Fund to the Debt Service Fund
(hereinafter established) and shall make provision in the Construction
Fund for payment of such remaining construction cost, if any, and
any remaining balance shall be transferred or held by the Trustee as
directed by a resolution of the Board of Directors of the Corporation
in the amounts and for the purposes as follows:
• 20
(a) An amount to the Debt Service Fund which shall be
credited against the rent or additional rent due from the Public
Corporation as provided in Section 5 of the Lease, or
(b) An amount to be retained in the Construction Fund for
changes, alterations and additions to the Project.
Any remaining balance after transfer to the Debt Service Fund and/or
retention in the Construction Fund, if any, shall be transferred by the
Trustee to the Rental Revenue Fund (hereinafter established).
ARTICLE V
RENTAL REVENUE AND APPLICATION THEREOF
Section 501. Establishment of Special Trust Funds. There shall
be created, established and held by the Trustee, the following several
special trust funds, in which deposits shall be made as are hereinbefore
and hereinafter required:
(a) The Huntington Beach Public Facilities Corporation
Rental Revenue Fund ("Rental Revenue Fund").
(b) The Huntington Beach Public Facilities Corporation Ad-
ministrative Expense Fund ("Administrative Expense Fund").
(c) The Huntington Beach Public Facilities Corporation Debt
Service Fund ("Debt Service Fund").
(d) The Huntington Beach Public Facilities Corporation Bond
Redemption Fund ("Bond Redemption Fund").
(e) The Huntington Beach Public Facilities Corporation Re-
serve Fund ("Reserve Fund").
Section 502. Rental Revenue Fund and Application. All Rental
Revenue shall be paid to the Trustee and deposited by the Trustee to
the credit of the Rental Revenue Fund.
All moneys on deposit in the Rental Revenue Fund shall be dis-
bursed, applied or set aside by the Trustee in the following order of
priority:
(a) Immediately after the receipt by the Trustee of any Rental
Revenue and also after the receipt of other moneys transferred to
the Rental Revenue Fund under any other provisions of this
21
i
Indenture, the Trustee shall apportion and set apart out of the
Rental Revenue Fund and deposit in the Debt Service Fund an
amount sufficient together with the balance then on hand in said
`. Fund to pay the interest becoming due on the Bonds on both the
next succeeding two interest payment dates, and the principal
becoming due on the next succeeding principal payment date.
(b) Thereafter, the Trustee shall set aside in the Reserve
Fund such amount, if any, as is necessary and will be sufficient to
restore the Reserve Fund to that amount required by Section 506
hereof.
(e) Thereafter, the Trustee shall set aside in the Adminis-
trative Expense Fund such amount as the Corporation shall certify
to the Trustee as necessary for the payment of the budgeted ad-
ministrative expenses of the Corporation.
(d) Thereafter, the Trustee shall apportion and set apart out
of the Rental Revenue Fund and deposit in the Bond Redemption
Fund the amount, if any, of any balance remaining after making
the deposits and allocations required by subparagraphs (a), (b)
and (c) above.
Section 503. Debt Service Fund. The Trustee shall pay the prin-
cipal and interest becoming due on the Bonds after completion of the
Project from the Debt Service Fund.
Section 504. Bond Redemption Fund. Moneys at any time
deposited in the Bond Redemption Fund shall be used as follows:
(a) If the deposits required to be made under subsections
(a), (b) and (c) of Section 502 are insufficient so that the
moneys on deposit to the credit of the Debt Service Fund or set
aside in the Reserve Fund or set aside in the Administrative
Expense Fund are less than the amounts hereinbefore required to
be on deposit or set aside therein at that time, and there are then
moneys on deposit in the Bond Redemption Fund, the Trustee shall
transfer from the Bond Redemption h'und and deposit to the credit
of the Debt Service Fund, and/or set aside in the Reserve Fund and
the Administrative Expense Fund, the amount sufficient to make up
any deficiency.
(b) The balance remaining in the Bond Redemption Fund
after making the deposits required by paragraph (a) of this Sec-.
tion may be considered surplus by the Trustee and, upon receipt
• 22
of a resolution of the Board of Directors of the Corporation
directing such action, such surplus shall be utilized by the Trustee
in accordance with the following provisions:
(i) to purchase any Bonds, in such manner as it may
determine, then outstanding on the most advantageous terms
obtainable with reasonable diligence, but such price shall not
exceed 1041/27o of the principal amount thereof plus accrued
interest to the date of purchase, or
(ii) to call for redemption and redeem on the next ensuing
interest payment date such amount of Bonds as specified
'at the applicable redemption prices. Prior to the redemption
date the Trustee shall withdraw from moneys in the Bond
Redemption Fund and deposit in a special trust account the
amounts required for the payment by the Trustee of the re-
demption price, exclusive of accrued interest, of the Bonds
so called for redemption and the Trustee shall withdraw from
the Debt Service Fund and deposit in such special trust
account the amounts required for the payment of interest on
such Bonds to the date of redemption, and such amounts so
withdrawn shall be applied for the payment 'of such redemp-
tion price and interest on or after the date of redemption of
such Bonds, or
(iii) to be transferred to the Construction Fund for
changes, alterations and additions to the Project, or
(iv) to reimburse the City for any rent'or additional rent
previously paid to the Corporation pursuant to the terms of
the Lease.
Section 505. Administrative Expense Fund. Moneys at any time
set aside in the Administrative Expense Fund shall be used and ap-
plied solely for the payment of such expenses of the Corporation as
approved by the Corporation. Payments of administrative expenses
shall be made by the Trustee upon receipt of a requisition, signed by
such officer or officers of the Corporation as the Board of Directors of
the Corporation shall designate by resolution, stating in respect to each
payment to be made (a) the item number of the payment, (b) the name
of the person to whom payment is to be made, (c) the amounts to be
paid, and (d) that obligations in the stated amounts have been incurred
by the Corporation, and have not been paid. Upon receipt of each such
requisition, the Trustee shall pay each such item directly to the person
23
s
entitled thereto as named in such requisition, or shall deliver to the
Corporation a check or draft for the payment thereof, as directed by
the Corporation.
Section 506. Reserve Fund. From the proceeds of the Bonds an
amount equal to one year's base rent under the Lease shall be placed
in the Reserve Fund. Thereafter, pursuant to Section 502 hereof,
there shall be placed in the Reserve Fund, from time to time by
annual transfers the amount necessary to maintain the Reserve Fund at
a level equal to one year's base rent under the Lease. Moneys in the
Reserve Fund shall be used solely for the purpose of paying the
principal of and interest on the Bonds in the event that the moneys
in the Debt Service Fund are insufficient therefor and for that
purpose may be withdrawn and transferred to the Debt Service Fund.
No payment need be made into the Reserve Fund so long as there shall
be in said fund a sum at least equal to one year's base rent
under the Lease. Whenever moneys are withdrawn from the Reserve
Fund to pay principal of and interest on the Bonds, the amount in the
Reserve Fund shall be restored to the amount required in this Section
from any available source from the first available moneys. If requested
by the Corporation at any time prior to the completion of the Project,
any moneys in the Reserve Fund in excess of the aforesaid minimum
amount shall be transferred to the Construction Fund, and thereafter
any moneys in the Reserve Fund in excess of said required minimum
shall on July 31 and January 31 of each year be transferred to the
Rental Revenue Fund. Moneys in the Reserve Fund may be used to
pay in full the remaining principal and interest on the Bonds. In the
event all of the Bonds are called for redemption prior to maturity,
moneys in the Reserve Fund may be deposited in the Bond Redemption
Fund and used in the manner and for the purposes provided in Article
III and Section 504 hereof.
Section 507. Unclaimed Moneys for Payment of Bonds and In-
terest. Any moneys which shall have been set aside for the purpose
of paying any particular Bonds, either at the maturity thereof,. or
upon purchase or call for redemption as provided herein, or for the
purpose of paying any particular installments of interest on any par-
ticular Bonds, shall be held irrevocably in trust for and assigned to
the respective Holders of the Bonds or coupons entitled thereto, and if
the same shall remain unclaimed by the Holders of such Bonds or of
such coupons for a period of seven years after the date on which such
24
y
i
Bonds or such coupons shall have become payable shall, upon request
in writing from the Corporation, be paid to the Corporation by the
Trustee and thereafter the Holders of such Bonds or such coupons
shall look only to the Corporation for payment and then only to the
extent of the amounts so received without any interest thereon, and the
Trustee shall have no responsibility with respect to such moneys.
Section 508. Disposition of Redeemed Bonds and Coupons. All
Bonds paid, redeemed or purchased, either at or before maturity,
together with all unmatured coupons, if any, appertaining thereto, shall
be cancelled when such payment, redemption or purchase is made, and
such Bond and coupons shall be delivered to the Trustee. All interest
coupons shall be cancelled upon their payment and delivered to the
Trustee. All cancelled Bonds and coupons shall be held by the Trustee
until this Indenture shall be released; provided, however, that Bonds
and coupons so cancelled may at any time, upon direction of the
Corporation, be destroyed by cremation or chemical means by the
Trustee, who shall execute a certificate thereof in duplicate describing
the Bonds and coupons so destroyed, and one executed certificate shall
be filed with the Corporation and the other executed certificate shall
be retained by the Trustee.
Section 509. Pledge of All Rental Revenue and Moneys. All
Rental Revenue and an other moneys aid to or to be aid into the
Y Y P P
funds or accounts created or set aside herein or pursuant hereto are
hereby assigned and pledged to the Trustee as provided herein in trust
for the benefit of the Holders of Bonds issued hereunder and pursuant
hereto to secure the payment of the principal and redemption price of,
and interest on, said Bonds. Such pledge and assignment shall immedi-
ately be effective without any physical delivery thereof or further act;
and the lien of such pledge and assignment shall be valid and binding
as against, and prior and superior to, any liens of all other parties
having claims of any kind in tort, contract or otherwise against the
Corporation, irrespective of whether such parties have notice thereof.
. ARTICLE VI
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 601. Moneys Deposited To Be held in Trust. All moneys
deposited under the provisions of this Indenture with the Trustee shall
be held in trust and applied only in accordance with the provisions of
25
i
this Indenture, and shall not be subject to lien or attachment by any
creditor of the Corporation, other than the lien of the Holders of the
Bonds issued pursuant to and secured by this Indenture.
Section 602. Security For Deposits. All moneys held hereunder
by the Trustee shall be continuously and fully secured, for the benefit
of the Corporation and the Holders of the Bonds in the same manner
as is provided by law for other trust funds.
!, Section 603. Investment of Funds. Moneys held in any fund
created hereunder shall be invested with reasonable diligence by the
Trustee in direct obligations of the United States of America or obliga-
tions for which the full faith and credit of the United States are pledged
for the payment of principal and interest, or any obligations issued
by federal land banks or federal intermediate credit banks established
under the Federal Farm Loan Act, as amended, bonds or debentures
of the Federal Home Loan Bank Board or of any federal home loan
bank established under the Federal Home Loan Bank Act, and deben-
tures and consolidated debentures issued by the Central Bank for Co-
operatives and banks for cooperatives established under the Farm Credit
Act of 1933, as amended, or at the direction of the Corporation, such
moneys shall be apportioned by the Trustee among any or all of the
banks which are members of the Los Angeles Clearing House Associa-
tion in interest bearing deposits or certificates of deposit, or in any or
all of the savings and loan associations incorporated under the laws of
the United States of America or under the laws of the State of Cali-
forma,which maintain an office in the County of Los Angeles, California,
and whose accounts are insured by the Federal Savings and Loan In-
surance Corporation, in investment certificates or withdrawable shares,
such investments, certificates, deposits and shares to mature or be with-
drawable, as the case may be, not later than the date or dates when the
moneys held in such funds will be required for the purposes in this
Indenture provided, and in any event to mature or be withdrawable in
not to exceed two years from the date of investment. .
• All the moneys in the funds referred to above shall be continuously
invested or deposited, as nearly as may be practicable, subject to the
conditions provided above and to the necessity to provide moneys when
needed for payments provided to be made from such funds.
Section 604. Investments and Income as Part of Funds; Liquida-
tion. Obligations purchased or deposits made with moneys in any fund
26
i
created hereunder shall be deemed at all times to be a part of such
fund and the interest and income accruing thereon and any profit
realized from the liquidation of any such investment shall be credited
to such fund and any loss resulting from the liquidation of any such
investment shall be charged to such fund. For the purposes of any
such investment, obligations of the United States of America shall be
deemed to mature at the earliest date on which the United States of
America is on demand irrevocably required to pay a fixed sum in
discharge of the whole of such obligations.
In computing the amount in any fund created under the provisions
of this Indenture for any purpose provided in this Indenture, obliga-
tions purchased as an investment of moneys therein shall be valued at
the cost thereof, adjusted annually for the amortization of premium
or the accumulation of discount.
The Trustee shall sell at the best price obtainable, or present for
redemption, any obligations so purchased as an investment whenever it
shall be requested in writing by the Corporation so to do or whenever
it shall be necessary in order to provide moneys to meet any payment
or transfer from any such fund. The Trustee shall not be liable or
responsible for making any investment or deposit in the manner pro-
vided above or for any loss resulting from any such investment or
deposit made in the manner provided above. The Trustee shall advise
the Corporation in writing, when reasonably requested to do so, of the
details of all investments or deposits held for the credit of any such
funds in the custody of the Trustee under the provisions of this Inden-
ture as of the end of the preceding month.
ARTICLE VII
COVENANTS
Section 701. Covenants and the Duration Thereof. As part of
the terms and conditions of the Bonds, the Corporation makes the
covenants with the Bondholders which are set forth in the following
subdivisions of this Section. Each of said covenants shall remain in
full force and effect so long as any of the Bonds shall be outstanding
and unpaid, or so long as provision has not been made for the full
payment and discharge of all such outstanding Bonds, upon maturity,
or upon redemption prior to maturity, through the irrevocable setting
27
apart in the appropriate fund or funds established in or pursuant to
this Indenture, or through the irrevocable setting apart in some other
special trust fund of money sufficient for that purpose or through
other irrevocable allocation to that purpose of money sufficient therefor.
Covenant 1. Prompt Payment. The Corporation shall cause pay-
ment to be promptly made of the principal, interest and the redemption
price,if any, on every Bond at the place, on the dates and in the manner
provided herein and in said Bonds and in any coupons thereto apper-
taining, according to the true intent and meaning thereof. Such prin-
cipal, interest and redemption price are payable in the manner and
to the extent hereinabove particularly specified. Nothing in the Bonds
or coupons or in this Indenture shall be construed as an indebtedness
of the City or of the State of California within the meaning of any
constitutional or statutory provision or limitation.
Covenant 2. To Construct. Upon the receipt of the proceeds of
the Bonds issued hereunder, the Corporation shall forthwith proceed
with the accomplishment of the Project in accordance with the plans
and specifications therefor and in conformity with law and all require-
ments of all governmental authorities having jurisdiction thereover,
and shall complete the Project with all expedition practicable in
accordance with such plans and specifications or such modifications or
alterations thereof, as may be approved by the requisite parties and
governmental authorities and by the Consulting Architect assigned
thereto.
Before entering into any construction contract with respect to the
Project, the Corporation shall require each person, firm or corporation
with whom it may contract for labor or materials in connection with
the construction of the Project, or any part thereof, to furnish a
material and labor bond in an amount not less than fifty percent (5017o) of
the contract price, and a faithful performance bond in an amount not
less than said contract price, with respect to any contract exceeding
$5,000 in amount. The proceeds of any such.performance bond will
forthwith, upon receipt of such proceeds, be applied toward the com-
pletion of the Project.
j
Covenant 3. To Discharge All Lawful Claims. The Corporation
shall duly observe and comply with all valid requirements of any
28
governmental authority relative to the Project, or any part thereof,
or to the Corporation, and shall not create or suffer to be created any
lien or charge upon the Project or any part thereof, or on any proper-
ties or facilities thereof, or upon the rental revenue therefrom, except
the Lease and the lien and charge of this Indenture and the Bonds
secured hereby upon the Rental Revenue, and shall pay or cause to be
discharged or shall make adequate provision to satisfy and discharge,
within sixty days after the same shall accrue, all lawful claims and
demands for labor, materials, supplies or other objects which, if
unpaid, might by law become a lien upon the Project or any part
thereof, or any properties or facilities thereof, provided, however, that
nothing in this covenant shall require the Corporation to pay or cause
to be discharged, or make provision for, any such lien or charge, so
long as the validity thereof shall be contested in good faith and by
appropriate legal proceedings.
Covenant 4. Use of Rental Revenue for Proper Purpose. None
of the Rental Revenue shall be used for any purpose other than as
provided in this Indenture, and no contract or contracts shall be entered
into or any action taken by which the rights of the Trustee or of the
Bondholders will be impaired or diminished.
Covenant 5. Protection of Funds. The Corporation shall, at any
and all times so far as it may be authorized by law, pass, male, do,
execute, acknowledge and deliver, all and every such further resolu-
tions, acts, deeds, conveyances, assignments, transfers and assurances
as may be necessary or desirable for the better assuring, conveying,
granting, assigning and confirming all and singular the rights, Rental
Revenue, and other moneys, securities and funds hereby pledged or
assigned, or intended so to be, or which the Corporation may here-
after become bound to pledge or assign. The Corporation shall at all
times, to the extent permitted by law, defend, preserve and protect the
pledge of the Rental Revenue and other moneys, securities and funds
pledged under this Indenture and all the rights of the Bondholders
under this Indenture against all claims and demands of all persons
whomsoever.
Covenant 6. Records and Audit. The Trustee shall annually,
within 120 days after the close of the Corporation's annual account-
ing period, make a report of the Trustee's books and accounts relating
to the Project for the preceding year. Promptly thereafter each such
29
annual report shall be filed with the Corporation and with the Com-
missioner of Corporations of the State of California and copies of
such annual reports shall be mailed by the Trustee to the Holders of
any Bonds.who shall have filed their names and addresses with the
Trustee for such purpose. Each such annual report shall set forth in
respect to the preceding 12 months:
(a) The Rental Revenue and all other moneys received by the
Trustee on account of the Lease;
(b) A summary of all payments, deposits and credits to and
payments, transfers and withdrawals from each fund and account
created under the provisions of this Indenture;
(c) The details of all Bonds issued, paid,.purchased or re-
deemed;
(d) The amounts at the end of such period in each fund and
to the credit of each account, showing the respective amounts to
the credit of each fund and account, and showing the details of any
investments thereof.
Each such annual report shall set forth in respect to the succeeding
12 months the budgeted administrative expenses during such succeed-
ing periods.
Such annual reports shall be open to the inspection of any Bond-
. holders, or their agents and representatives, at the corporate agency
division of the Trustee.
The Trustee shall at all times have access to those books and
records of the Corporation which may be reasonably required by the
Trustee to fulfill its duties and obligations hereunder, except that no
such access sliall be allowed to any books or records constituting classi-
fied security information under any law or governmental regulation at
the time applicable thereto.
Covenant 7. Maintenance of Properties. If the Corporation takes
possession of the premises under the Lease it shall at all times keep
its properties in good repair, working order and condition.
Covenant 8. Against Debt. The Corporation shall not issue any
other obligations payable from Rental Revenue or any other payments
received or to be received under the Lease or in connection with the
Project, nor voluntarily create or cause to be created nor suffer to
continue to exist, any lien, pledge, assignment, encumbrance, or any
30
other charge thereon and sliall not create, assume, incur or suffer to
exist any current or funded debt in connection with the Project, except:
(a) The Bonds issued and to be issued under and upon the
terms and conditions specified in this Indenture;
(b) Current liabilities (exclusive of indebtedness for money
borrowed) for accounts payable and expense accruals incurred or
assumed in the ordinary course of business, including therein obli-
gations for taxes, insurance, rents and interest, labor, wages,
materials and equipment, incurred in connection with the Project
as contemplated by this Indenture and by the Lease, in connection
with its operations in the ordinary course of its business under
the Lease; and
(c) Unsecured loans or debt for money borrowed for the
express purpose of, and used for, the payment of taxes, insurance
or other current liabilities of the Corporation for which it is
entitled to be reimbursed by the City under the Lease.
Covenant 9. Against Liens and Encumbrances. The Corporation
shall not sell, lease or otherwise dispose of or encumber its interests
in the Lease or the property leased thereunder or relating thereto or
any part thereof and shall not create or permit to be created any
charge or lien on the Rental Revenue. The Corporation shall not create,
assume, incur or suffer to be created, assumed or incurred or to exist
any mortgage, pledge, encumbrance or lien or charge of any kind upon
any of the properties of any character of the Corporation; provided,
however, that nothing in this covenant shall prevent or be deemed to
prohibit:
(a) The Corporation from issuing the Bonds as provided in
this Indenture; or
(b) The Corporation from depositing with or giving any form
of security to any governmental agency or other body created or
approved by law or governmental regulation in order to entitle
the Corporation to maintain self insurance, or to participate in any
fund in connection with workmen's compensation, unemployment
insurance, old age pensions, or other social security, or to share
in any privilege or benefit available to corporations participating
in any such arrangement or for any other purpose at any time
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
license, or from depositing assets of the Corporation with any
• 31
surety company, a clerk of any court, or an escrow, as collateral in
connection with or in lieu of any bond on appeal by the Corpora-
tion, from any judgment or decree against it or in connection with
any proceedings in actions at law or in equity by or against the
Corporation; or
(c) The Corporation from the incurring or suffering to be in-
curred or to exist upon any of its property or assets (i) the lien
of any taxes or assessments or governmental charges or levies, if
such taxes or assessments or charges or levies shall not at the time
be due and payable or if the Corporation shall currently be con-
testing the validity thereof in good faith by appropriate proceed-
ings and shall have set aside on its books (or if the Trustee shall
have set aside) adequate reserves with respect thereto, (ii) the
liens of any judgments, if such judgments shall not have remained
undischarged or unstayed on appeal or otherwise for more than six
months, (iii) undetermined liens or charges incident to construc-
tion, (iv) any other claims for labor, materials and supplies, which
if unpaid, might by law become a lien or charge upon its property
if the Corporation shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside
on its books (or if the Trustee shall have set aside) adequate re-
serves with respect thereto, (v) any encumbrances consisting of
zoning restrictions, easements and restrictions on the use of real
property and minor defects and irregularities in title thereto,which
do not, in the opinion of the Board of Directors of the Corporation
materially impair the use of such property by the Corporation in
the operation of its business or the value of such property for the
purpose of such business, or (vi) any lien created by law for banks
on property in their possession for amounts owing to them by the
Corporation in the ordinary course of its business provided that
such property was furnished to the bank in the ordinary course
of the business of the Corporation and not as security for such
indebtedness; or
(d) The execution, delivery and maintenance in effect of the
Lease.
Covenant 10. To Maintain Insurance. The Corporation shall
secure or cause to be secured a policy or policies of insurance against
loss or damage to the property covered by the Indenture resulting
from fire, lightning, vandalism, malicious mischief, and such perils
ordinarily defined as"extended coverage"and other perils as the Corpo-
ration and the City may agree should be insured against on forms and
32
in amounts satisfactory to each. Provided such insurance is available
from reputable insurers, such insurance shall be maintained in an
amount not less than the full insurable value of said properties or the
amount of the Corporation's outstanding Bonds, whichever amount is
less. The term "full insurable value" as used in this Section shall mean
the actual replacement cost "new" (including the cost of restoring the
surface of grounds owned or leased by the Corporation but excluding
the cost of restoring trees, plants and shrubs) less physical deprecia-
tion. Said "full insurable value" shall be determined from time to time
but not less frequently than once in every 36 months by an independent
appraisal firm or by any other method of appraising or valuation
mutually acceptable to the Corporation and the City. The Corporation
shall also:
(a) Maintain or cause to be maintained, as to the property
covered by the Indenture, insurance:
(i) Against war risks, as and when such insurance is
obtainable from reputable insurance companies or the United
States of America or any agency thereof, in amount not less
than 807o of the then full insurable value thereof; and
(ii) Against loss or damage from leakage of sprinkler
• systems now or hereafter installed therein in amounts to be
determined by the Corporation; and
(iii) Against loss or damage by explosion of steam boil-
ers, pressure vessels and similar apparatus now or hereafter
installed therein in amounts to be determined by the Corpora-
tion.
(b) Maintain or cause to be maintained earthquake insurance,
if such insurance is obtainable on the open market from reputable
insurance companies, against loss or damage by earthquake in the
following amount:
(i) the full insurable value of the property (as defined
above) covered by the Indenture with deductible conditions of
not to exceed 107o for any one loss which is less than the face
• amount of the policy; or
(ii) the amount of the outstanding Bonds, if less than
(i) above.
(c) Maintain or cause to be maintained use and occupancy
or business interruption or rental income insurance against the
perils of fire, lightning, vandalism and malicious mischief and such
other perils ordinarily defined as "extended coverage"in an amount
33
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equal to not less than two ears base rent due from the City
q Y Y
under the Lease; and
(d) Maintain or cause to be maintained public liability insur-
ance against claims for bodily injury or death, or damage to
property occurring upon, in or about the property covered by the
Indenture, such insurance to afford protection to a limit of not less
than $1,000,000 combined single limit bodily injury and property
damage; and
(e) Maintain or cause to be maintained workmen's compensa-
tion insurance issued by a responsible carrier authorized under the
laws of the State of California to insure employers against liability
for compensation under the Workmen's Compensation Insurance
and Safety Act now in force in California, or any act hereafter
enacted as an amendment or supplement thereto or in lieu thereof,
such workmen's compensation insurance to cover all persons em-
ployed in connection with the Project and to cover full liability
for compensation under any such act aforesaid, based upon death
or bodily injury claims made by, for or on behalf of any person
incurring or suffering injury or death during or in connection with
j the Project or the business of the Corporation.
All insurance herein provided for shall be effected under policies
issued by insurers of recognized responsibility, licensed or permitted
to do business in the State of California.
All policies or certificates issued by the respective insurers for
insurance shall provide that such policies or certificates shall not be
cancelled or materially changed without at least 30 days prior written
notice to the Trustee, and shall carry loss payable endorsements in
favor of the Trustee where applicable. Certified copies of such policies
shall be deposited with the Trustee by the Corporation, together with
appropriate evidence of payment of the premiums therefor; and, at
least ten days prior to the expiration dates of expiring policies or
contracts held by the Trustee, certified copies of renewal or new
policies on contracts or certificates, shall be deposited with the Trustee.
All proceeds of insurance with respect to loss or damage to the
' property shall be paid to the Trustee (except that proceeds for any
• one loss not exceeding$5,000 need not be paid to the Trustee but may be
paid to the Corporation and applied by it to the repair, restoration or
replacement of the property destroyed or damaged). Upon payment
thereof to the Trustee, and upon the determination by the Corporation
t 34
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ill
as provided in the Lease 1 if the Project is to be repaired or rebuilt
p � ( ) J p
the Trustee shall deposit the same in the Construction Fund for applica-
tion as provided with respect to moneys in such fund or (2) if the
Project is not to be repaired or rebuilt, the Trustee shall deposit the
same in the Bond Redemption Fund for application as provided for
moneys in such fund.
Covenant 11. Performance. The Corporation shall faithfully do,
perform and observe any and all covenants, undertakings, stipulations
and provisions contained in this Indenture and in each and every Bond
issued hereunder. The Corporation shall faithfully do, perform and
observe any and all covenants, undertakings, stipulations and provi-
sions contained in the Lease. The Corporation shall require the City
to comply with each and every covenant, undertaking, stipulation
and provision contained in the Lease and to take all actions and
proceedings necessary or required to compel the compliance by the
City with the covenants, undertakings, stipulations and provisions
contained in the Lease. The Corporation shall not terminate, or agree
I'I to the termination of, the Lease or to any amendment or modification
thereof which would reduce the length of the term thereof, or reduce
or modify the amount of rental and other charges payable by the City
thereunder, or change the time or times of payment of such rental or
other charges, or agree to any other amendment or modification thereof
in any manner detrimental to the rights of the Holders of the Bonds.
Covenant 1.2. To Maintain Corporate Existence. Subject to the
other provisions of this Indenture, the Corporation shall maintain its
corporate existence and right to carry on its business and duly procure
all necessary renewals and extensions thereof and use its best efforts to
maintain, preserve and renew all such rights, powers, privileges and
franchises.
Covenant 13. Not to Distribute Profits. The Corporation shall
carry on the business of the Corporation with respect to the Project,
and otherwise, in such manner that none of the net earnings, if any,
whether realized or unrealized, will inure to the benefit of any private
shareholder or individual, or any director, officer or member of the
Corporation.
Covenant 14. Disposition of Condemnation Award. The Corpora-
tion shall, subject to the provisions of the Lease, pay over to the
Trustee upon receipt thereof by the Corporation any moneys received
35
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by the Corporation on account of the condemnation, or the sale under
threat thereof, of all or any part of the Project or all or any interest
in the leasehold estate held by the Corporation under the Lease. Upon
payment thereof to the Trustee, the Trustee shall deposit the, same
in the Bond Redemption Fund for application as provided for moneys
in such fund.
Covenant 15. To File Claims. Each year the Trustee shall in-
vestigate to determine if the amount necessary to pay all rental and
other amounts due under the Lease has been included in the budget
of the City, and, if said amounts are not included in said budget, take
all actions and proceedings required to compel their insertion therein.
Each near the Trustee shall cause the Corporation to file in the proper
form and manner any claim or claims which may be required by law
as a prerequisite to payment by the City of any rental and other
amounts due under the Lease.
Covenant 16. To Maintain Paying Agents. The Corporation, with
the written approval of the Trustee, shall appoint and at all times have
a Paying Agent in Los Angeles, California; Chicago, Illinois; and New
York, New York, for the payment of the principal of, and the interest
(and premium, if any) on, the Bonds.
ARTICLE VIII
REMEDIES. OF TRUSTEE AND BONDHOLDERS
Section 801. Events of Default. Each of the following events
is hereby declared an "event of default", that is to say, if:
(a) The Corporation shall fail to make payment of the in-
terest, principal or redemption price of any of the Bonds when the
same shall become due and payable; or
(b) The Corporation shall unreasonably delay or fail to carry
on with reasonable dispatch, or shall discontinue the Project, or
any part thereof, for which Bonds shall have been issued under
this Indenture; or
(c) The Corporation shall for any reason be rendered incap-
able of fulfilling its obligations hereunder; or
(d) The Corporation shall fail in the performance or observ-
ance by it of any other of the covenants, agreements or conditions
contained in this Indenture, or in the Bonds, and continue in such
36
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failure for a period of sixty (60) days after written notice to the
Corporation by the Trustee; or
i
(e) The Corporation (1) is adjudged insolvent by a court of
competent jurisdiction, (2) admits in writing its inability to pay its
debts generally as they become due, (3) files a petition in bank-
ruptcy, (4) makes an assignment for the benefit of creditors, or
(5) consents to the appointment of a receiver of itself or property
covered by the Lease; or
(f) An order, judgment or decree shall be entered by any
court of competent jurisdiction appointing, without the consent of
the Corporation, a receiver of the Corporation or of the property
covered by the Lease, and such order, judgment or decree shall
not be vacated or set aside or stayed within sixty (60) days from
the date of such appointment; or
(g) A court of competent jurisdiction shall enter an order,
judgment or decree approving a petition filed against the Corpora-
tion under the provisions of any bankruptcy act and such order,
judgment or decree shall not be vacated or set aside or stayed
within sixty (60) days from the date of entry of such order,
i -
judgment or decree; or
(h) Under the provisions of any other law now or hereafter
existing for the relief or aid of debtors any court of competent
jurisdiction shall assume custody or control of the Corporation or
of the property covered by the Lease or any part thereof, and
such custody or control shall not be terminated within sixty (60)
days from the date of assumption of such custody or control; or
(i) The City shall, for any reason whatsoever, fail in the
payment of the rentals at the times, in the amounts and in the
manner required by the Lease, and such failure shall continue for
a period of thirty (30) days.
Section 802. Action Upon Default. Upon the happening and con-
tinuance of any event of default above specified, then and in every
such case the Trustee may proceed, and upon the written request
of the Holders of not less than twenty percent (207o) in principal
amount of the Bonds then outstanding hereunder shall proceed, to
protect and enforce its rights and the rights of the Bondholders under
this Indenture by such suits, actions or special proceedings in equity
or at law, or by proceedings in the office of any board or officer having
jurisdiction, either for the specific performance of any covenant or
37
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agreement contained herein or in aid or execution of any power herein
granted or for the enforcement of any proper legal or equitable remedy,
as the Trustee, being advised by counsel, shall deem most effectual to
protect and enforce such rights. The Trustee may, if and to the extent
permitted by law, by such officer and agent as it may appoint, with or
without entry, sell all of the property subject to the lien hereof as an
entirety, or in such parcels as the Holders of a majority in principal
amount of the Bonds then outstanding shall in writing request, or, in
the absence of such request, as the Trustee may determine, at such
place and time as may be designated by the Trustee or as may be
required by law or by order of court, to the highest bidder at public
auction, first giving notice of the time, place and terms of sale as
hereinafter provided; and may from time to time adjourn any such
sale in its discretion by announcement at the time and place appointed
for such sale or for such adjourned sale, without further notice except
such as may be required by law; and upon such sale may make and
deliver to the purchaser or purchasers a good and sufficient deed or
deeds or other appropriate instruments of transfer for the same. Any
such notice of sale shall state the time and place when and where the
sale shall be made and shall contain a particular description of the real
property to be sold and a general description of the personal property
to be sold, and shall be sufficiently given if posted at least twenty (20)
days prior to the date of sale in one public place in the city where the
property is to be sold (or, if the property is not to be sold in a city,
then in the judicial district in which the property is to be sold), shall be
published once a week for the same period in some newspaper of general
circulation printed and published in the city in which the property or
some part thereof is situated (or, if no part of the property is situated
in a city, then in the judicial district in which the property or some part
thereof is situated, or, in case no newspaper of general circulation be
printed and published in the city or judicial district, as the case may be,
in some newspaper of general circulation printed and published in the
county), and shall be posted in some conspicuous place on the real
property to be sold at least twenty (20) days before the date of sale, and
shall conform to the applicable requirements of law. The place of
sale shall be such place in the County of Orange, State of Cali-
fornia, as may be fixed by the Trustee or as may be required by law or
by order of court. The Corporation does hereby covenant and agree
that the Trustee, in the exercise of the power of sale hereby granted
and conferred, shall not be governed by any law of the State of
California relating to the foreclosure of a chattel mortgage or pledge.
It is further covenanted and agreed that the personal property, if any,
38
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sold by the Trustee pursuant to the provisions of this Section need
not be in view of those who attend any such sale, any rule of law or
statute to the contrary being hereby expressly waived. No demand for
performance or personal notice of such sale shall be necessary. The
Trustee and its successors are hereby irrevocably appointed the true
and lawful attorneys of the Corporation, in its name and stead, to make
all necessary conveyances, assignments, transfers and deliveries of
• property thus sold, and for that purpose may execute all necessary
deeds, bills of sale and instruments of assignment and transfer, and
may substitute one or more persons, firms or corporations with like
power, the Corporation hereby ratifying and confirming all that its
said attorneys, or such substitute or substitutes, shall lawfully do by
virtue hereof. Nevertheless, if so requested by the Trustee or by any
purchaser, the Corporation shall ratify and confirm any such sale or
transfer by executing and delivering to the Trustee or to such purchaser
or purchasers all proper conveyances, assignments, instruments of
transfer and releases as may be designated in any such request.
In the enforcement of any remedy under this Indenture, the
Trustee shall be entitled to sue for, enforce payment on and receive any
or all amounts then or during any default becoming, and any time
remaining, due from the Corporation for principal, redemption price,
interest or otherwise under any of the provisions of this Indenture
or of the Bonds, and unpaid, with interest on overdue payments at
the rate or rates of interest specified in such Bonds, together with any
and all costs and expenses of collection and of all proceedings here-
under and under such Bonds, without prejudice to any other right or
remedy of the Trustee or of the Bondholders, and to recover and en-
force judgment or decree against the Corporation for any portion of
such amounts remaining unpaid, with interest, costs, and expenses, and
to collect from any moneys available for such purpose, in any manner
provided by law, the moneys adjudged or decreed to be payable.
Upon the happening and continuance of any event of default
above specified, then and in any such case the Trustee may, and
upon the written request of the Holders of not less than twenty percent
(20%) in principal amount of the Bonds then outstanding hereunder,
shall by notice in writing to the Corporation, declare the principal of all
Bonds hereby secured and then outstanding to be due and payable
immediately, and upon any such declaration the said principal shall
become and be due and payable immediately, anything in this In-
denture, or in said Bonds, to the contrary notwithstanding; pro-
vided, however, if at any time after the principal of the Bonds shall
39
have been so declared and become due and payable the Corpo-
ration shall pay or shall deposit with the Trustee a sum sufficient
to pay all arrears of interest upon all the Bonds (with interest upon
any overdue installments of interest at the rates expressed in the
Bonds to the date of such payment or deposit), and all other sums
payable under this Indenture, except the principal of any Bonds
which shall not have matured by their terms, shall have been duly
paid, and every other default in the performance of any covenant
or provision of the Bonds or of this Indenture shall have been made
good or secured to the satisfaction of the Trustee or arrangements
deemed by the Trustee to be adequate shall be made therefor, then and
in every such case the Trustee shall consider the default waived and
shall rescind and annul such declaration and its consequences upon
the receipt of written waivers of default from the Holders of not less
than sixty-six and two-thirds percent (662/3%) in principal amount of
the Bonds then outstanding; but no such waiver, rescission or annul-
ment shall extend to or affect any subsequent default or shall impair
or exhaust any right or power consequent thereon.
Section 803. Application of Moneys Upon Default. If at any time
the monevs in the Debt Service Fund, the Bond Redemption Fund and
the Reserve Fund shall not be sufficient to pay the principal of and the
interest on the Bonds as the same become due and payable, such moneys,
together with any moneys available or thereafter becoming available
for such purpose whether through the exercise of the remedies pro-
vided for in this Article or otherwise, shall be, applied by the Trustee
as follows:
(a) Unless the principal of all of the Bonds shall become due
and payable pursuant to Section 802, all such moneys shall be
applied:
First: To the payment to the persons entitled thereto of
all installments of interest then due, in the order of the matur-
ity of the installments of such interest, and, if the amount
available shall not be sufficient to pay in full any particular
installment, then to the payment ratably, according to the
amounts due on such installment, to the persons entitled there-
to, without any discrimination or preference except as to any
difference in the respective rates of interest specified in the
Bonds; and
Second: To the payment of the principal of the respective
Bonds as they become due in accordance with the provisions
40
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of this Indenture and, if the amount available shall not be
sufficient to pay in full all Bonds due, then to the payment
ratably, according to the amounts due on such Bonds.
(b) If the principal of all of the Bonds shall become due and
payable, all such moneys shall be applied to the payment of the
principal and interest then due and unpaid upon the Bonds, without
preference or priority of principal over interest or of interest over
principal, or of any installment of interest over any other install-
ment of interest, or of any Bond over any other Bond, ratably,
according to the amount due respectively for principal and interest,
to the persons entitled thereto, without any discrimination or pref-
erence except as to any difference in the respective rates of in-
terest specified in the Bonds.
Whenever moneys are to be applied by the Trustee pursuant to the
f provisions of this Section, such moneys shall be applied by the Trustee
at such times, and from time to time, as the Trustee in its sole discretion
shall determine, having due regard to the amount of such moneys avail-
able for application and the likelihood of additional moneys becoming
4 available for such application in the future; setting aside such moneys
in trust for the proper purpose, shall constitute proper application by
the Trustee; and the Trustee shall incur no liability whatsoever to the
Corporation, to any Bondholder or to any other person for any delay in
applying any such moneys, so long as the Trustee acts with reasonable
diligence, having due regard for the circumstances, and ultimately
applies the same in accordance with such provisions of this Indenture as
may be applicable at the time of application by the Trustee. Whenever
the Trustee shall exercise such discretion in applying such moneys, it
shall fig the date (which shall be an interest payment date unless the
Trustee shall deem another date more suitable) upon which such appli-
cation is to be made and upon such date interest on the amounts of
principal to be paid on such date (as determined by the Trustee using
'i commonly accepted methods of accounting) shall cease to accrue. The
Trustee shall give such notice as it may deem appropriate for the fixing
of any such date. The Trustee shall not be required to make payment
to the Holder of any unpaid coupon or any Bond unless such coupon
or such Bond shall be presented to the Trustee for appropriate endorse-
ment or for cancellation if fully paid.
Section 804. Discontinuance of Any Proceeding. In case any
proceeding taken by the Trustee on account of any default shall have
41
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been discontinued or abandoned for any reason, then in every such
case the Corporation, the Trustee and the Bondholders shall be
restored to their former positions and rights hereunder, respectively,
and all rights, remedies, powers and duties of the Trustee shall con-
tinue as though no such proceeding had been taken.
Section 805. Action of Trustee Directed by Majority of Bond-
holders. Anything in this Indenture to the contrary notwithstanding,
the Holders of a majority in principal amount of the Bonds then
outstanding hereunder shall have the right by an instrument or con-
current instruments in writing executed and delivered to the Trustee,
to direct the method and place of conducting all remedial proceedings
to be taken by the Trustee hereunder, provided that such direction
shall not be otherwise than in accordance with law or the provisions
of this.Indenture, and that the Trustee shall have the right to decline
to follow any such direction which in the opinion of the Trustee would
be unjustly prejudicial to Bondholders not parties to such direction.
Section 806. Notice to Trustee Before Legal Action. No Holder
of any of the outstanding Bonds shall have any right to institute
any suit, action, mandamus or other proceeding in equity or at law
for the execution of any trust hereunder, or the protection or en-
forcement of any right under this Indenture or any right under law
unless the Holders of not less than twenty percent (207o) in principal
amount of the Bonds then outstanding shall have made written request
of the Trustee after the right to exercise such powers or right of action,
as the case may be, shall have accrued and shall have afforded the
Trustee a reasonable opportunity either to proceed to exercise the
powers herein granted or granted under the law or to institute such
action,suit or proceeding in its name,and the Trustee shall have refused
or neglected to comply with such request within a reasonable time not
exceeding sixty (60) days. It is understood and intended that no one.
or more Holders of the Bonds hereby secured shall have any right in
any manner whatever by his or their action to affect, disturb or preju-
dice the security of this Indenture, or to enforce any right hereunder or
under law with respect to the Bonds or this Indenture, except in the
manner herein provided, and that all proceedings at law or in equity
shall be instituted, had and maintained in the manner herein provided
and for the benefit of all Holders of the outstanding Bonds and coupons.
Anything in this Indenture to the contrary notwithstanding, the
right of any Holder of any Bond to receive payment of the principal
42
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of and interest on such Bond, on or after the respective due dates
expressed in such Bond, or to institute suit for the enforcement of any
such payment on or after such respective dates shall not be impaired
or affected without the consent of such Holder.
Section 807. Action by Trustee on Behalf of Bondholders. All
rights of action under this Indenture or under any of the Bonds, en-
forceable by the Trustee, may be enforced by it without the posses-
sion of any of the Bonds or the coupons appertaining thereto or the
production thereon the trial or other proceeding relative thereto,
and any such suit, action or proceeding instituted by the Trustee shall
be brought in its name for the benefit of all the Holders of such Bonds
and coupons, subject to the provisions of this Indenture.
Section 808. Remedies Cumulative. No remedy herein conferred
upon or reserved to the Trustee or to the Holders of the Bonds is
intended to be exclusive of any other remedy or remedies, and each
and every such remedy shall be cumulative and shall be in addition
to any other remedy given hereunder or now or hereafter existing
at law or in equity or by statute.
Section 809. No Waiver of Default. No delay or omission of the
Trustee or of any Holder of the Bonds to exercise any right or power
accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence
therein; and every power and remedy given by this Indenture to the
Trustee and the Holders of the Bonds, respectively, may be exercised
from time to time and as often as may be deemed expedient.
The Trustee may, and upon written request of the Holders of not
less than a majority in principal amount of the Bonds then outstanding
shall, waive any default which in its opinion shall have been remedied
before the completion of the enforcement of any remedy under this
Indenture, but no such waiver shall extend to or affect any other exist-
ing or any subsequent default or defaults or impair any rights or
remedies consequent thereon.
Section 810. Notification of Default. The Trustee shall give to
the Bondholders notice of each default hereunder known to the
Trustee within ninety (90) days after the occurrence thereof, unless
such default shall have been remedied or cured before the giving of such
notice; provided that except in the case of default in the payment
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of the principal of, premium, if any, or interest on any of the Bonds,
the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee
of directors or responsible officers of the Trustee in good faith deter-
mines that the withholding of such notice is in the interests of the
Bondholders. Each such notice of default shall be given by the Trustee
by mailing written notice thereof: (1) to all Holders of registered
Bonds then outstanding, as the names and addresses of such Holders
appear upon the books for registration and transfer of Bonds as kept
by the Trustee; (2) to such Bondholders as have, within 2 years pre-
ceding such transmission, filed their names and addresses with the
Trustee for that purpose; and (3) to each Bondholder whose name and
address the Trustee shall receive and preserve in its capacity as paying
agent hereunder.
The term "default", as used in this Section shall mean the hap-
pening of any of the events of default above specified, except,
for the purposes of this Section only, there shall be eliminated from
the specification of any such event of default any reference therein to
the continuance of any default or of any failure upon the part of the
Corporation to act, or the continuance in force of any decree or order,
for any period of days therein specified.
i
ARTICLE IX
CONCERNING THE TRUSTEE
Section 901. Acceptance of Trusts by Trustee. The Trustee ac-
cepts and agrees to execute the trusts imposed upon it by this
j Indenture, but only upon the terms and conditions and subject to
the provisions of this Indenture, to all of which the parties hereto
and the respective Holders of the Bonds agree. All funds created
ander this Indenture shall be held by the Trustee and administered
as trust funds as herein provided.
Section 902. Absence of Responsibility of Trustee. The Trustee
shall be under no obligation to effect or maintain insurance, or to
renew any policies of insurance, or to inquire as to the sufficiency of
any policies of insurance carried by the Corporation under the Lease.
The Trustee shall not have any responsibility in respect of the validity
or sufficiency of this Indenture or the due execution or acknowledg-
ment thereof by the Corporation, or in respect of the validity of any
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Bonds authenticated and delivered by the Trustee in accordance with
the provisions of this Indenture, or of the coupons appertaining thereto.
i The recitals, statements and representations contained herein and
in the Bonds (excluding the Trustee's certificate on the Bonds) shall
f be taken and construed as made by and on the part of the Corporation
and not.by the Trustee and the Trustee does not assume nor shall
it be under any responsibility for the correctness of the same.
Section 903. Trustee Not Responsible for Actions of Corporation.
The Trustee shall not be liable or responsible because of the failure
of the Corporation or of any of its officers, employees or agents to
make any collections or deposits, or to perform any act herein re-
quired of the Corporation or its officers, directors, employees or agents.
The Trustee shall not be responsible for the application of any of
the proceeds of the Bonds or any other moneys deposited with it and
paid out, invested, withdrawn or transferred in accordance with the
provisions of this Indenture. The immunities and exemptions from
liability of the Trustee hereunder shall extend to its directors, officers,
employees and agents.
Section 904. Compensation of Trustee. Subject to the provisions
of any contract between the Corporation and the Trustee, the Corpo-
ration shall, from the Administrative Expense Account, pay to the
Trustee, in the manner provided in this Indenture, reasonable com-
pensation for all services performed by it hereunder, and also all of its
reasonable expenses, charges and other disbursements and those of
its attorneys, agents, and employees incurred in and about the accept-
ance, administration and execution of the trusts hereby created and the
performance of its powers and duties hereunder, and, from such Ad-
ministrative Expense Account, shall indemnify and save the Trustee
harmless against any liabilities which it may incur in the exercise and
performance of its powers and duties hereunder.
Section 905. Trustee's Right to Own and Deal in Bonds. The
bank or trust company acting as Trustee under this Indenture, and
its directors, officers, employees or agents, may in good faith buy, sell,
own, hold and deal in any of the Bonds or coupons issued under and
secured by this Indenture, as permitted by the Trust Indenture Act of
1939, as amended, and may join in any action which any bondholder
may be entitled to take with like effect as if such bank or trust company
were not the Trustee under this Indenture.
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Section 906. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an event of default and after the curing of
all events of default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an event of default has occurred (which has not
been cured) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that:
(a) Prior to the occurrence of an event of default and after
the curing of all events of default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in
this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the state-
ments and the correctness of the opinions expressed therein,
upon any certificates or opinion furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to deter-
mine whether or not they conform to the requirements of
this Indenture;
(b) 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;
(c) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in principal
amount of the Bonds 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 Indenture.
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Section 907. Certain Rights of Trustees. Except as otherwise
above provided:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
coupon 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) Any request, direction, order or demand of the Corpora-
tion mentioned herein shall be sufficiently evidenced by an instru-
ment signed in the name of the Corporation by the President or
Vice President and the Secretary or Treasurer (unless other evi-
dence in respect thereof be herein specifically prescribed) ; and any
resolution of the Board of Directors of the Corporation may be
evidenced to the Trustee by a copy thereof certified by the Secre-
tary of the Corporation;
(c) The Trustee may consult with counsel and any opinion
of such counsel shall be full and complete authorization and pro-
tection in respect of any action taken or suffered by it hereunder
in good faith and in accordance with such opinion;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Bondholders, pursuant
to the provisions of this Indenture, unless such Bondholders shall
have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; and
(e) The Trustee shall not be liable for any action taken by it
in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
Section 908. Right of Trustee to Rely on Certificates. Except as
otherwise above provided, whenever in the administration of the pro-
visions of this Indenture the Trustee shall deem it necessary or de-
sirable that a matter be provided or established prior to taking or
suffering any action hereunder, such matter (unless other evidence
• in respect thereof be herein specifically prescribed) may, in the ab-
sence of negligence or bad faith on the part of the Trustee, be deemed
to be conclusively proved and established by a certificate signed by
the President or Vice President and by the Secretary or Treasurer
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of the Corporation and delivered to the Trustee and such certificate,
in the absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken, suffered or
j omitted by it under the provisions of this Indenture upon the faith
thereof.
Section 909. Eligibility for Appointment as Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing
business under the laws of the United States or the State of Cali-
fornia authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $1,000,000, subject to
supervision or examination by Federal or State authority and having
its principal office and place of business in the State of California. If
such corporation publishes reports of its condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section the combined
capital and surplus of such corporation shall be deemed to be.its com-
bined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect below
specified.
Section 910. Resignation and Removal; Appointment of Successor
Trustee.
(a) The Trustee, or any trustee hereafter appointed, may at
any time resign by giving written notice of resignation to the
Corporation and by publication of notice of resignation at least once in
a newspaper printed in the English language and customarily pub-
lished at least once a day for at least five (5) days in each calendar
week and of general circulation in the City of Los Angeles, State of
California. Upon receiving such notice of resignation and evidence
satisfactory to it of such publication, the Corporation shall promptly
appoint a successor trustee by written instrument, in duplicate, executed
by order of the Board of Directors of the Corporation, one copy of
which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within thirty (30) days
after the publication of such notice of resignation, the resigning Trustee
may petition any count of competent jurisdiction for the appointment of
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a successor trustee, or any Bondholder who has been a bona fide Bolder
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of a Bond or Bonds for at least six (6) months may on behalf of himself
and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur—
• (i) The Trustee shall cease to be eligible and shall fail to
resign after written request therefor by the Corporation or by
any such Bondholder, or
(ii) The Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Corporation may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, execu-
ted by order of the Board of Directors of the Corporation, one copy of
which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, any Bondholder who has been a bona
fide Holder of a Bond or Bonds for at least six (6) months may, on
behalf of himself and all other similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appoint-
ment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of
the Bonds at the time outstanding may at any time remove the Trustee
and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the successor
trustee as provided below.
This method of substitution is in lieu of all other methods of
substitution.
Section 911. Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as above provided shall execute,
acknowledge and deliver to the Corporation and to its predecessor
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trustee an instrument acce tin such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein; but, nevertheless, on the
written request of the Corporation or of the successor trustee, the
' trustee ceasing to act shall, upon payment of its charges then unpaid,
execute, acknowledge and deliver an instrument transferring to such
successor trustee all the rights and powers of the trustee so ceasing to
act. Upon request of any such successor trustee, the Corporation shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a lien
upon all property or funds held or collected by such trustee to secure
any amounts then due it.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee
shall be eligible.
No successor trustee shall be appointed under the provisions of
this Indenture or be substituted for the present Trustee hereunder
or for any successor of the present Trustee hereunder unless the Coni-
missioner of Corporations of the State of California shall have been
notified in writing of such proposed appointment or substitution and
shall not have disapproved thereof within a period of fifteen (15) days
after the giving of such notice.
Upon acceptance of appointment by a successor trustee as provided
in this Section, the Corporation shall publish notice of the succession of
such trustee hereunder at least once in a newspaper of general circula-
tion printed in the English language and published in the City of Los
Angeles, State of California. If the Corporation fails to publish such
notice within ten (10) days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
published at the expense of the Corporation.
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Section 912. Merger or Consolidation of Trustee. Any corpora-
tion into which the Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or con-
solidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the
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successor trustee hereunder, provided such corporation shall be eligible,
without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary not-
withstanding.
Section 913. Requirements as to Trustee's Records. So long as
any of the Bonds shall remain outstanding: (i) the records of the
• Trustee pertaining to the Bonds and to the Trustee hereunder shall
be available to and open for inspection at all times by the Corporation,
the City and the Commissioner of Corporations of the State of Cali-
fornia, and (ii) the Trustee shall retain in its possession all financial
statements furnished to it pursuant to this Indenture. The Trustee
shall transfer to any successor trustee copies of the records of the
Trustee pertaining to the Bonds and to the Trustee.
ARTICLE X
EXECUTION OF INSTRUMENTS BY BONDHOLDERS
AND PROOFS OF OWNERSHIP OF BONDS
Section 1001. Method of Execution of Instruments by Bondholders.
Any request, direction, consent or other instrument in writing
required or permitted by this Indenture to be signed or executed .
by Bondholders may be in any number of concurrent instruments
of similar tenor, and may be signed or executed by such Bond-
holders in person or by agent appointed by an instrument in writing.
Proof of the execution of any such instrument and of the ownership of
Bonds shall be sufficient for any purpose of this Indenture, and shall be
conclusive, in favor of the Trustee with regard to any action taken
under such instrument, if made in the following manner:
(a) The fact and date of the execution by any person of any
such instrument may be proved by the verification of any officer
in any jurisdiction who, by the laws thereof, has power to take
affidavits within such jurisdiction, to the effect that such instru-
ment was subscribed and sworn to before him, or by an affidavit
of a witness to such execution;
(b) The fact 'of the holding of coupon Bonds by any Bond-
holder and the amount and the numbers of such Bonds and the
date of his holding the same (unless such Ponds be registered)
may be proved by the affidavit of the person claiming to be such
Holder, if such affidavit shall be deemed by the Trustee to be
satisfactory, or by a certificate executed by any trust company,
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bank, banker or any other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, show-
ing that at the date therein mentioned such person had on deposit
with such trust company, bank, banker or other depositary.the
Bonds described in such certificate. The Trustee may conclusively
assume that such ownership continues until written notice of the
contrary is served upon the Trustee. The ownership of registered
Bonds shall be proved by the registration books kept by the Trustee
under the provisions of this Indenture.
Nothing contained in this Article shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept
any other evidence of the matters herein stated which may seem suffi-
cient. Any request or consent of the Holder of any Bond shall bind
every future Holder of the same Bond in respect of anything done by
the Trustee in pursuance of such request or consent.
ARTICLE %I
SUPPLEMENTAL INDENTURES
Section 1101.. Without Consent of Bondholders. The Corporation
and the Trustee,may,from time to time and at any time, enter into such
indentures or agreements supplemental hereto as shall not be incon-
sistent with the terms and provisions hereof (which supplemental
indentures or agreements shall thereafter form a part hereof),
(a) to cure any ambiguity or formal defect or omission in this
Indenture or in any supplemental agreement, or
(b) to grant to or confer upon the Trustee for the benefit of
the Bondholders any additional rights, remedies,.powers, authority
or security that may lawfully be granted to or conferred upon
the Bondholders or the Trustee.
Section 1102. With Consent of Bondholders. Subject to the terms
and provisions contained in this Section, and not otherwise, the Holders
of not less than sixty six and two-thirds percent (662/3%) in aggregate
principal amount of the Bonds then outstanding shall have the right,
• from time to time, anything contained in this Indenture to the contrary
notwithstanding, to consent to and approve the execution by the Corpo-
ration and the Trustee of such indentures or agreements supplemental
hereto as shall be deemed necessary or desirable by the Corporation for
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the purpose of modifying, altering, amending, adding to or rescinding,
in any particular, any of the terms or provisions contained in this
Indenture.or in any supplemental indenture or agreement; provided,
however, that nothing herein contained shall permit, or be construed
as permitting, (a) an extension of the maturity of the principal of or
the interest on any Bond issued hereunder, or (b) a reduction in the
principal amount or redemption price of any Bond or the rate of
interest thereon, or (c) the creation of a lien upon or a pledge of the
Rental Revenue herein pledged ranking prior to or on a parity with
the lien and pledge created by this Indenture, or (d) a preference
or priority of any Bond or Bonds over any other Bond or Bonds,
or (e) a reduction in the aggregate principal amount of the Bonds
required for consent to such a supplemental agreement.
If at any time the Corporation shall request the Trustee to enter
into any supplemental indenture or agreement for any of the purposes
of this Section, the Trustee shall, at the expense of the Corporation,
cause notice of the proposed execution of such supplemental agreement
to be published in a daily financial journal or daily newspaper of
general circulation in the City of Los Angeles, State of California,
and shall also cause a similar notice to be mailed, postage prepaid,
(1) to all Holders of registered Bonds then outstanding, at their
addresses as they appear on the registration books hereinabove pro-
vided for, (2) to such Bondholders as have, within two (2) years pre-
ceding such transmission, filed their names and addresses with the
Trustee for that purpose, and (3) to each Bondholder whose name and
address the Trustee shall receive and preserve in its capacity as paying
agent hereunder. Such notice shall briefly set forth the nature of the
proposed supplemental indenture or agreement and shall state that a
copy thereof is on file at the office of the Trustee for inspection by all
Bondholders. The Trustee shall not,however,be subject to any liability
to any Bondholder by reason of its failure to mail the notice required
by this Section, and any such failure shall not affect the validity of
such supplemental indenture or agreement when consented to and
approved as provided in this Section.
Whenever at any time within one year after date of the first publi-
cation of such notice, the Corporation shall deliver to the Trustee an
instrument or instruments purporting to be -executed by the Holders
of not less than sixty six and two-thirds percent (.662/3%) in aggregate
principal amount of the Bonds then outstanding, which instrument or
instruments shall refer to the proposed supplemental indenture or
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agreement described in such notice, and shall specifically consent to
and approve the execution thereof in substantially the form of the copy
thereof referred to in such notice as on file with the Trustee, thereupon,
but not otherwise, the Trustee may execute such supplemental indenture
or agreement in substantially such form, without liability or responsi-
bility to any Holder of any Bond, whether or not such Holder shall have
consented thereto.
If the Holders of not less than sixty six and two-thirds percent
(662/3%) in aggregate principal amount of the Bonds outstanding at the
time of the execution of such supplemental indenture or agreement
shall have consented to and approved the execution thereof as herein
provided, no Holder of any Bond shall have any right to object to the
execution of such supplemental indenture or agreement, or to object
to any of the terms and provisions contained therein or the operation
thereof, or in any manner to question the propriety of the execution
thereof, or to enjoin or restrain the Trustee or the Corporation from
executing the same or from taking any action pursuant to the provisions
thereof.
Upon the execution of any supplemental indenture or agreement
pursuant to the provisions of this Section, this Indenture shall be, and
be deemed to be, modified and amended in accordance therewith, and
the respective rights, duties and obligations under this Indenture of the
Corporation and the Trustee and all Holders of Bonds then outstanding
shall thereafter be determined, exercised and enforced hereunder, sub-
ject in all respects to such modifications and amendments.
Section 1103. Approval by Counsel. The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, the opinion
of Bond Counsel, as conclusive evidence that any such proposed sup-
plemental indenture or agreement complies with the provisions of
this Indenture, and that it is proper for the Trustee, under the pro-
visions of this Article, to join in the execution of such supplemental
indenture or agreement.
Section 1104. Approval by Corporation and Bondholders. Not-
withstanding anything contained in the foregoing provisions of this
Indenture, the rights and obligations of the Corporation and of the
Holders of the Bonds, and the terms and provisions of the Bonds,
and this Indenture or any supplemental indenture or agreement, may
be modified or altered in any respect with the consent of the Corpo-
ration, the Trustee and the consent of the Holders of all of the Bonds
then outstanding.
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ARTICLE XII
DEFEASANCE
Section 1201. Payment of Bonds and Discharge of Indenture. If
the Corporation shall pay or cause to be paid, or there shall otherwise
be paid, to the Holders of the Bonds and coupons, the principal and
interest and redemption price, if any, to become due thereon, then the
pledge of the Rental Revenue and other moneys and securities hereby
pledged, the right, title and interest of the Trustee, and all other rights
granted hereby, shall thereupon cease, terminate and become void and
be discharged and satisfied. In such event, the Trustee shall cause an
accounting for such period or periods as shall be requested by the
Corporation, to be prepared and filed with the Corporation, and the
Trustee, upon the request of the Corporation, shall release this Inden-
ture and execute and deliver to the Corporation all such instruments as
may be desirable to evidence such release, discharge and satisfaction,
and the Trustee and the Paying Agent shall pay over or deliver to
the Corporation all moneys or securities held by them pursuant to this
Indenture which are not required for the payment or redemption of
Bonds or coupons not theretofore surrendered for such payment or
redemption.
Section 1202. Bonds, Coupons and Redemption Price Deemed
to be Repaid. Bonds or coupons for the payment or redemption of
which moneys shall then be held by the Trustee or the Paying Agent
(through deposit by the Corporation of funds for such payment or
redemption or otherwise), whether at or prior to the maturity or the
redemption date of such Bonds, shall be deemed to have been paid;
provided, however, that if any such Bonds are to be redeemed prior
to the maturity thereof, the Corporation shall have taken all action
necessary to redeem such Bonds and notice of such redemption shall
have been duly given or provision satisfactory to the Trustee shall
have been made for the giving of such notice; and provided, further,
that, if the maturity or redemption date of any such Bond shall not
have arrived, provision shall have been made by the Corporation by
deposit with the Trustee or Paying Agent, or other method satis-
factory to the Trustee, for the payment to the Holder of any such
Bonds and coupons, upon surrender thereof, whether or not prior
to the maturity or redemption date thereof, of the full amount,to which
they would be entitled by way of principal, redemption price or inter-
est to the date of such maturity or redemption, and provision shall have
been made by the Corporation, satisfactory to the Trustee, for the
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publication, at least twice, at an interval of not less than seven (7) days
between publications, in a daily financial journal or daily newspaper of
general circulation published in the City of Los Angeles, State of
California, of a notice to the Holders of such Bonds and coupons that
such moneys are so available for such payment.
f ARTICLE XIII
IIISCELLANE1OUS PROVISIONS
Section 1301. Successor to Corporation. All of the covenants,
stipulations, obligations and agreements contained in this Indenture
by or in behalf of or for the benefit of the Corporation shall bind or
inure to the benefit of the successor or successors of the Corporation
from time to time, and any officer, board, corporation, commission,
authority, agency or instrumentality to whom or to which any power
or duty affecting such covenants, stipulations, obligations and agree-
ments shall be transferred by or in accordance with law.
Section 1302. Notice. Any notice, demand, direction, request or
other instrument authorized or required by this Indenture to be given
to or filed with the Corporation or the Trustee shall be deemed to
have been sufficiently given or filed for all purposes of this Indenture
if and when sent by registered mail, return receipt requested:
to the Corporation if addressed to such address as may be desig-
nated in writing by the Corporation to the Trustee;
to the Trustee, at its corporate agency division in Los Angeles,
California.
All documents received by the Trustee under the provisions of this
Indenture shall be retained in its possession, subject at all reasonable
times to the inspection of. the Corporation, any Bondholder, and the
agents and representatives thereof.
Section 1303. Indenture for Sole Benefit of Parties and Bond-
holders. Nothing in this Indenture express or implied is intended
or shall be construed to confer upon any person, firm or corporation
other than the parties hereto and the Holders of the Bonds and the
coupons thereunto appertaining any right, remedy or claim, legal or
equitable, under or by reason of this Indenture or any provision hereof,
this Indenture and all its provisions being intended to be and being
for the sole and exclusive benefit of the parties hereto and the Holders
from time to time of the Bonds and such coupons.
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Section 1304. Severability. In case any one or more of the pro-
visions of this Indenture or of the Bonds or coupons, or the application
thereof to any person or circumstances shall for any reason be held to
be illegal or invalid, such illegality or invalidity shall not affect any
other provision of this Indenture or of said Bonds or coupons, or the
application thereof to other persons or circumstances,but this Indenture
and said Bonds and coupons shall be construed and enforced as if such
illegal or invalid provisions had not been contained therein. In case any
covenant, stipulation, obligation or agreement contained in the Bonds
or in this Indenture shall for any reason be held to be in violation of
law, then such covenant, stipulation, or obligation or agreement shall be
deemed to be the covenant, stipulation, obligation or agreement of the
Corporation to the full extent permitted by law.
Section 1.305. Waiver of Personal Liability. All covenants, stipu-
lations, obligations and agreements of the Corporation contained in this
Indenture shall be deemed to be covenants, stipulations, obligations and
agreements of the Corporation to the full extent authorized and per-
mitted by the Constitution and laws of the State of California. No cove-
nant, stipulation, obligation or agreement contained herein shall be
deemed to be a covenant, stipulation, obligation or agreement of any
past, present or future incorporator, member, director, officer, agent or
employee of the Corporation in his individual capacity, and any officer
of the Corporation executing the Bonds shall not be liable personally on
the Bonds or be subject to any personal liability or accountability by
reason of the issuance thereof. No recourse under or upon any obliga-
tion, covenant or agreement contained in this Indenture, or in any Bond
or coupon hereby secured, or under any judgment obtained against the
Corporation, or by the enforcement of any assessment or by any legal
or equitable proceeding by virtue of any constitution or statute or
otherwise, or under any circumstances, under or independent of this
Indenture, shall be had against any incorporator, member, director,
officer, agent or employee, as such, past, present or future, of the.
Corporation, either directly or through the Corporation, or otherwise
for the payment for or to the Corporation or any receiver thereof, or
for or to the Holder of any Bond or coupon issued hereunder or other-
wise, of any sum that may be due and unpaid by the Corporation upon
any such Bond or coupon, and any and all personal liability of every
nature, whether at common law or in equity, or by statute or by consti-
tution or otherwise, of any such incorporator, member, director, offieer,
agent or employee as such, to respond by reason of omission on his
57
part or otherwise, for the payment for or to the Corporation or any
receiver thereof, for or to the Holder of any Bond or coupon issued
hereunder or otherwise, of any sum that may remain due and unpaid
upon the Bonds and coupons hereby secured or any of them, is hereby
expressly waived and released as a condition of and consideration for
the execution of this Indenture and the issue of such Bonds and cou-
pons. Nothing provided in this Section shall operate as a protection
from liability for acts constituting bad faith, wilful misfeasance, gross
negligence or reckless disregard of duties.
1306. Subordination of Indenture. This Indenture and the rights
and privileges hereunder of the Trustee and the Holders of the Bonds
are specifically made subject and subordinate to the rights and privi-
leges of the Corporation and the City set forth in the Lease.
Section 1307. Validity of Multiple Copies. This Indenture may
be executed in multiple counterparts, each of which shall be regarded
for all purposes as an original; and such counterparts shall constitute
but one and the same instrument.
Section 1308. headings. Any headings preceding the texts of the
several Articles hereof, and any table of contents or marginal notes
appended to copies hereof, shall be solely for convenience of reference
and shall not constitute a part of this Indenture, nor shall they affect
its meaning, construction or effect.
IN WITNESS WHEREOF, the Corporation has caused this Indenture
to be executed by its President and Secretary and its corporate seal
affixed, and Trustee has caused this Indenture to be executed by its
Trust Officer and Assistant Trust Officer and its corporate seal affixed,
all as of the day and year first above written.
HUNTINGTON BEACH PUBLIC (Seal)
FACILITIES CiORPORATION
LARRY L. CURRAN
President
DARRELL E. WARD
Secretary
Bank of America N.T.&S.A.
Trustee
By A. D'ANTONIO
Trust Officer .
F. S. MORSE (Seal)
Ass't.Trust Officer
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STATE of CALnrormu
F COUNTY OF OBANGS s8.
I
On this 24th day of January, 1972, before me, the undersigned,
a Notary Public in and for said State, personally appeared LARRY L.
I'I CURRAN and DARRELL E. WARD known to me to be the President and
the Secretary, respectively, of HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION, one of the corporations that executed the within.instru-
ment, known to me to be the persons who executed the within instru-
ment on behalf of such corporation, and acknowledged to me that
such corporation executed the within instrument pursuant to its by-laws
and a resolution of its Board of Directors.
WrrxEss my hand and official seal.
(Seal)
FLOYD G. BELSITO
Notary Public in and for the
,. OFFICIAL SEAL State of California
FLOYD G. BELSITO
_ NOTARY PUBLIC-CALIFORNIA
PRINCIPAL OFFICE IN Commission E ires
ORANGE COUNTY Y xP
My Commission Expires March 10, 1974 ............................................
59
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STATE OF CiALIFORNIA
COUNTY OF Los ANGELEB ss.
On this 19th day of January, 1972, before me, the undersigned,
j a Notary Public in and for said State,personally appeared A. D'ANTONIO
and F. S. MORSE known to me to be a Trust Officer and an Assistant
Trust Officer, respectively, of Bank of America National Trust and
F Savings Association, one of the corporations that executed the within
instrument, known to me to be the persons who executed the within
instrument on behalf of such corporation, and acknowledged to me that
such corporation executed the within instrument pursuant to its by-laws
or a resolution of its board of directors.
WrrNEss my hand and official seal.
(Seal)
BARBARA DEI-4IGEANNIS
i
j Notary Public in and for the
OFFICIAL SEAL State of California
BARBARA DELIGEANNIS
NOTARY PUBLIC-CALIFORNIA
PRINCIPAL OFFICE IN M Commission Expires
COUNTY OF LOS ANGELES F P
My Commission Expires October 8, 1972 ............................................
i
1 ,
EXHIBIT A
That portion of the southwest one-quarter of Section 2 Township
6 South, Range 11 West, San Bernardino Base and Meridian, in the
City of Huntington Beach, County of Orange, State of California,
described as follows:
Beginning at the centerline intersection of Main Street, 120.00 feet
in width as now ]aid out, with the centerline of Seventeenth Street,
70.00 feet in width as now laid out, as shown on a map of Tract
No. 12 recorded in Book 9 Page 13 of Miscellaneous Maps, Records
of said County; thence north 206.14 feet along the centerline of
said Main Street to a point; thence east 60.00 feet to a point on the
east line of said Main Street, said point being the true point of
beginning; thence north 1158.31 feet along said east line to a point
on a tangent curve, concave to the southeast having a radius of
32.00 feet; thence northeasterly along said curve thru a central
angle of 90' 00' 00" an are distance of 50.27 feet to a point on a
tangent line, said line being the northline of said Tract No. 12,
said line also being the southline of Mansion Avenue as described
in a deed recorded in Book 294 Page 390 of Deeds, Records of said
County; thence east 503.30 feet along said line to an angle point
in the line; thence south 48° 41' east 439.84 feet along said north-
line of Tract No. 12 and said southline of Mansion Avenue to a
point on the northwesterly line of the before mentioned Seven-
teenth Street; thence south 41' 19' west 1226.32 feet along said
northwesterly line to a point on a tangent curve concave to the
northeast having a radius of 32.00 feet; thence westerly along said
curve thru a central angle of 138° 41' 00" an are distance of 77.46
feet to the true point of beginning.
61
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EXHIBIT B
[FORM OF COUPON BOND
No. $5,000
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
LEASEHOLD MORTGAGE BOND
FIRST ISSUE
KNOW ALL MEN BY THES1,7 PRESENTS that HUNTINGTON BEACH
PUBLIC FACILITIES CORPORATION (hereinafter called the "Corpora-
tion"), a non-profit corporation duly organized and existing under
the laws of the State of California, for value received, hereby
promises to pay to the bearer, or, if this bond be registered, to
the registered owner hereof, on the fifteenth day of January, 19....,
unless redeemed prior thereto as hereinafter provided, upon the
presentation and surrender hereof, the principal sum of FIVE
THOUSAND DOLLARS ($5,000) and to pay interest on said
principal sum from the date hereof, at the rate of ................ per cent
(------%) per annum, until the payment of such principal sum has
been made or provided for, such interest being payable semi-
annually on the fifteenth day of July and the fifteenth day of Jan-
uary in each year, upon the presentation and surrender of the
attached coupons evidencing such interest as the same respectively
fall due. The principal of, interest, and premium, if any, on, this
bond are payable in lawful money of the United States of America
at the corporate agency division of the Trustee,hereinafter referred
to, in the City of Los Angeles, State of California, or at the princi-
pal office of any paying agent in the City of Chicago, Illinois or
The City of New York, New York, at the option of the holder
hereof.
The bonds of the issue of which this bond is one are redeemable
at any time prior to their stated dates of maturity in the event
of loss of or damage to or condemnation of the Project, as more
fully set out in the Indenture hereinafter referred to, for the
principal amount thereof together with interest accrued to the
redemption date plus a premium equal to one quarter of one per-
cent (1/4%) of said principal amount plus one quarter of one
percent (1/4%) for each year or fraction of a year from the redemp-
tion date to the maturity date of this bond provided that such
. 63
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premium shall not exceed four and one-half percent (41/2%)
of the principal amount. Redemption of the bonds for such pur-
poses may be made, at the option of the Corporation, as a whole,
or in part, but only in the manner and only from the funds as
provided in said Indenture.
Except as set forth in the preceding paragraph, if this bond
matures on or prior to January 15, 1982, it shall not be subject to
call and redemption prior to maturity. If this bond matures on
January M, 1983, or thereafter, it may, at the option of the Corpo-
ration, be called for redemption prior to maturity in whole or in
part on January 15, 1982, or on any interest payment date there-
after, but only in the manner and only from the funds as provided
in said Indenture, at a redemption price for each redeemable
bond equal to the principal amount thereof together with accrued
interest to the redemption date plus a premium equal to one
quarter of one percent (1/4%) of said principal amount plus one
quarter of one percent (1/4%) for each year or fraction of a year
from the redemption date to the maturity date of the bond.
A notice of the redemption of any of said bonds shall be
published at least once not less than thirty (30) days prior to the
redemption date in a daily financial journal or daily newspaper of
general circulation printed in the English language and published
in The City of New York, State of New York, and mailed to the
registered owners of said bonds, in the manner provided in the
Indenture. The bonds so duly called for redemption shall become
and be due and payable at the redemption price provided for such
bonds on the date designated for redemption, and when the neces-
sary moneys shall have been deposited with, or shall be held by the
Trustee, interest on such bonds called for redemption shall cease to
accrue, the coupons for any such interest becoming due after the
redemption date shall be void, and the holders or registered owners
of said bonds called for redemption shall not have any lien, rights,
benefits or security in respect thereof under the Indenture except
to receive payment of the redemption price from moneys deposited
with or held by the Trustee for such redemption of such bonds.
This bond is one of a duly authorized issue of bonds of the
Corporation limited to the aggregate principal amount of Eleven
Million One Hundred Thousand Dollars ($11,100,000), known as
its"Leasehold Mortgage Bonds,First Issue,"of like date, tenor and
effect, except as to number, date of maturity, interest rate and
64
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authorized denominations, and all issued or to be issued under and
pursuant to an Indenture of Mortgage and Deed of Trust (said
Indenture, together with all supplemental Indentures hereafter
entered into in conformity with the terms and provisions thereof,
being herein referred to collectively as the "Indenture"), dated as
of the fifteenth day of January, 1972, made and entered into by and
between the Corporation and Bank of America National Trust and
Savings Association, as Trustee (said bank and any successor there-
to under the Indenture being referred to herein as the "Trustee"),
an executed counterpart of which said Indenture is on file at the
corporate agency division of the Trustee in Los Angeles, California.
Reference is made to said Indenture for the provisions, among
others,relating to the terms and security of the bonds, the collection
and application of rental revenues and other funds pledged to the
payment of the bonds, the custody and application of the proceeds
1 of the bonds, the rights and remedies of the holders of the
bonds, the rights, duties and obligations of the Corporation
and of the Trustee, and each successive holder of this bond, by his
j acceptance hereof, irrevocably assents to all of the terms, condi-
tions and provisions of said Indenture.
The bonds are issued or are to be issued by the Corporation
for the purpose of paying the cost of acquisition, construction, de-
velopment, equipment and financing of a certain Project defined in
said Indenture, and are payable both as to principal and interest,
from certain of the rental revenues and other funds to be derived
by the Corporation from the lease of said Project all in the
manner provided in the Indenture. The bonds are direct obliga-
tions of the Corporation and the full faith and credit of the
Corporation are pledged for the payment of such principal, in-
test and redemption price.
This bond is transferable by delivery unless registered as to
principal in the name of the holder on books of. the Corporation to
be kept for that purpose at the corporate agency division of the
Trustee in Los Angeles, California, such registration to be' noted
hereon. After such registration no transfer shall be valid unless
made upon such books by the registered owner in person or by at-
torney duly authorized in writing and -similarly noted hereon; but
this bond may be discharged from registration by being in like
i manner transferred to bearer and thereupon transferability by de-
livery shall be restored, after which this bond may again from
f
65
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time to time be registered or discharged from registration as before.
Such registration, however, shall not affect the negotiability of the
coupons for interest hereto attached which shall always continue
to be payable to bearer and to be transferable by delivery merely,
and payment to the bearer thereof shall fully discharge the Corpo-
ration in respect to the interest therein mentioned whether or not
this bond be registered as to principal.
The Corporation and the Trustee may deem and treat the
bearer of this bond or, if this bond shall be registered as to prin-
cipal, the person in whose name this bond shall be so registered,
and the bearer of any interest coupon appertaining hereto whether
or not this bond shall be so registered as to principal, as the
absolute owner of such bond or such coupon, as the case may be
(whether or not this bond or such coupon shall have become due
and payable), for all purposes, and neither the Corporation nor
the Trustee.shall be affected by any notice to the contrary.
The bonds of the issue of which this bond is one are issuable as
coupon bonds payable to bearer and registrable as to principal
alone,in the denomination of Five Thousand Dollars ($5,000) each,
and as registered bonds without coupons in the denomination of
Five Thousand Dollars ($5,000) each or in any multiple thereof.
The coupon bonds and the registered bonds without coupons are
interchangeable for bonds of the same interest, rate and maturity
upon the surrender thereof for such purpose by the holder or
registered owner at the corporate agency division of the Trustee
in Los Angeles, all in the manner and upon the payment of the
charges and otherwise as provided in the Indenture.
Except as provided in the Indenture, no recourse shall be had
for the payment of the principal of,or the interest or premium,if any
on this bond, or of any claim based hereon, or in respect hereto or
of the Indenture, against any incorporator, member, officer or di-
rector,as such, past,present or future, of the Corporation or of any
successor company,whether directly or through a receiver or trustee
in bankruptcy,whether by virtue of any statute or rule or law or by
the enforcement of any assessment or penalty, or otherwise, all such
liabilities being, by the acceptance hereof, expressly waived and
released and being likewise waived and released by the terms of
the Indenture, all as more fully provided therein.
• Neither this bond nor any interest coupon appertaining hereto
shall be valid or become obligatory for any purpose unless and
66
until this bond shall have been authenticated by the execution of
the certificate hereon by the Trustee under the Indenture.
All things necessary to make this bond, when authenticated by
the Trustee, the valid, binding and legal obligation of the Corpora- .
tion payable in accordance with the terms hereof and as in the
Indenture provided, and to make the Indenture valid, binding and
legal for the security thereof, have been done and performed.
IN WITNFSs WHEREOF, HUNTINGTON BEACH PUBLIC FACILITIE s
CORPORATION has caused this bond to be signed in its corporate name
by the facsimile signature of its President, and its corporate seal
or a facsimile thereof to be hereunto affixed and attested by the
facsimile signature of its Secretary and coupons for interest bear-
ing the facsimile signature of its Secretary to be hereunto attached,
as of the fifteenth day of January, 1972.
HUNTINGTON BEACH PUBLIC
FACILITIES CORPORATION
r
By................................................................
President
NEAL)
ATTEsT:
......................................................
Secretary
(FORM OF INTEREST COUPON
No.
On the fifteenth day of , 19 (unless the bond hereafter
mentioned shall have been duly called for previous redemption and
payment duly provided therefor), upon surrender of this coupon,
HUNTINGTON BEACH PUBLIC FACILITIEs CORPORATION will pay t0 the
67
hearer at the corporate agency division of BANK OF AMERICA
NATIONAL TRUST AND SAVINGs ASSOCIATION, in the City of Los
Angeles, State of California, or at the principal office of any
paying agent in the City of Chicago, Illinois or The City of New
York, New York, at the option of the.holder hereof ($................) in
lawful money of the United States of America, being the interest
then due on its Leasehold Mortgage Bond, First Issue, dated
' January 15, 1972.
No.............................
............................................
Secretary
(REMISTRATION FORM)
Date of Name of Signature of Authorized
Registration Registered Holder Officer of Trustee
68
EXHIBIT C
FORM Or REGISTERED BOND
HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION
• LEASEHOLD MORTGAGE BOND
FIRST ISSUE
No. R $
CouponBond Nos- ------------------------ ---------------------------------------------------------------
KNOW ALL DIEN BY THP;SE PRESENTS that HuNTINGTON BEACH
PuBLIc FACILITIES CORPORATION (hereinafter called the "Corpora-
tion"), a non-profit corporation duly organized and existing under
the laws 'of the State of California, for value received, hereby
promisesto pay to ----------------------------------------------- --------------------------------------
----------------------------------- ------------------------------------------------------------------------------------
or his registered assigns, on the fifteenth day of January, 19.-..,
upon presentation and surrender of this Bond, the sum of ..............
------------------------------------------------------------------------DOLLARS ($----------...------...)
together with interest thereon from January 15, 1972 or from
the most recent interest payment date to which interest has been
paid or duly provided for, at the rate of ...... percent (......70) per
annum, such interest being payable semi-annually on the fifteenth
day of July and the fifteenth day of January in each year. The
principal of, interest, and premium, if any, on this bond are payable
in lawful money of the United States of America at the corporate
agency division of the Trustee in the City of Los Angeles, State of
California, or at the principal office of any paying agent in the City
of Chicago, Illinois or The City of New York, New York, at the
option of the holder hereof. Both principal of and interest on this
Bond are payable to, or upon the order of, the person appearing as
• the registered owner hereof at the close of business on the loth
day preceding the payment date on registration books kept by the
Trustee.
The bonds of the issue of which this bond is one are redeemable
at any time prior to their stated dates of maturity in the event
of loss of or damage to or condemnation of the Project, as more
fully set out in the Indenture hereinafter referred to, for the
• 69
•
principal ainount thereof together with interest accrued to the
redemption date plus a premium equal to one quarter of one
percent (1/4%) of said principal amount plus one quarter of one
percent (lla%) for each year or fraction of a year from the.redemp-
tion date to the maturity date of this Bond, provided that such
premium shall not exceed four and one-half percent (41/2%) of the
principal amount. Redemption of the bonds for such purposes
may be made, at the option of the Corporation, as a whole, or in
part, but only in the manner and only from the funds as provided
in said Indenture.
Except as set forth in the preceding paragraph, if this bond
matures on or prior to January 15; 1982, it shall not be subject to
call and redemption prior to maturity. If this bond matures on
January 15, 1983, or thereafter, it may, at the option of the Corpo-
ration, be called for redemption prior to maturity in whole or in
part on January 15, 1982, or on any interest payment date there-
after, but only in the manner and only from the funds as provided
in said Indenture at a redemption price for each redeemable bond
equal to the principal amount thereof together with accrued interest
to the redemption date plus a premium equal to one quarter of one
percent (1/4%) of said principal amount phis one quarter of one
percent (1/4 ) for each ,year or fraction of a year from the redemp-
tion date to the maturity date of the bond.
A notice of the redemption of any of said bonds shall be
published at least once not less than thirty (30) days prior to the
redemption date in a daily financial journal or daily newspaper
of general circulation printed in the English language and pub-
lished in The City of New York, State of New York, and mailed
to the registered owners of said Bonds, in the manner provided in
.the Indenture. The bonds or any portions thereof so duly called
for redemption shall become and be due and payable at the
redemption price provided for such bonds on the date designated
for redemption, and when the necessary moneys shall have been
deposited with, or shall be held by the Trustee, interest on such
bonds or any portions thereof so called for redemption shall cease
to accrue, and the holders or registered owners of said bonds or
portions so called for redemption shall not have any lien, rights,
benefits or security in respect thereof under the.Tndenture except
* to receive payment of the redemption price from moneys deposited
or held by the Trustee for such redemption of such bonds or
portions thereof.
70
This bond is one of a duly authorized issue of bonds of the
Corporation limited to the aggregate principal amount of Eleven
Million One Hundred Thousand Dollars ($11,100,000) known
as its "Leasehold Mortgage Bonds, First Issue" of like tenor and
effect, except as to number, date of maturity, interest rate and
authorized denominations, and all issued or to be issued under and
pursuant to an Indenture of Mortgage and Deed of Trust (said
Indenture, together with all supplemental Indentures hereafter
entered into in conformity with the terms and provisions thereof,
being herein referred to collectively as the "Indenture"), dated as
of the fifteenth day of January, 1972, made and entered into by and
between the Corporation and Bank of America National Trust and
Savings Association, as Trustee (said bank and any successor there-
to under the Indenture being referred to herein as the "Trustee"),
an executed counterpart of which said Indenture is on file at the
corporate agency division of the Trustee in Los Angeles, California.
Reference is made to said Indenture for the provisions, among
others, relating to the terms and security of the bonds, the col-
lection and application of rental revenues and other funds pledged
to.the payment of the bonds, the custody and application of the
proceeds of the bonds, the rights and remedies of the holders of
the bonds, the rights, duties and obligations of the Corporation
and of the Trustee, and each successive holder of this bond, by
his acceptance hereof, irrevocably assents to all of the terms, con-
ditions and provisions of .said Indenture.
The bonds are issued or are to be issued by the Corporation for
the purpose of paying the cost of acquisition, construction, de-
velopment, equipment and financing of a certain Project defined
in said Indenture, and are payable both as to principal and interest
from certain of the rental revenues and other funds to be derived
by the Corporation from the lease of said Project all in the man-
ner provided in the Indenture. The bonds are direct obligations
of the Corporation and the full faith and credit of the Corpora-
tion are pledged for the payment of such principal; interest and
redemption price.
This bond is transferable by the registered holder hereof in
person or by his attorney duly authorized in writing at the corpo-
rate agency division of the Trustee in Los Angeles, California but
> only in the manner, subject to the limitations, and upon payment of
the charges provided in the Indenture, and upon surrender and
71
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cancellation of this bond. Upon any such transfer the Corporation
shall issue in the name of the transferee and, after clue authenti-
cation by the Trustee, deliver, in exchange for this bond, a new
registered bond or new registered bonds without coupons, of
authorized denominations, or, at the option of the transferee,
coupon bonds with coupons attached representing all unpaid
interest due or to become due thereon,.in aggregate principal
amount equal to the principal amount of this bond, or the un-
redeemed portion thereof, of the same maturity and bearing inter-
est at the same rate.
The bonds of the issue of which this bond is one are issuable
as coupon bonds payable to bearer and registrable as to principal
alone,in the denomination of Five Thousand Dollars ($5,000) each,
and as registered bonds without coupons in the denomination of
Five Thousand Dollars ($5,000) each or in any multiple thereof.
The coupon bonds and the registered bonds without coupons are
interchangeable for bonds of the same interest rate and maturity
upon the surrender thereof for such purpose by the holder or
registered owner at the corporate agency division of the Trustee
in the City of Los Angeles, California, all in the manner and upon
the payment of the charges and otherwise as provided in the
Indenture.
Except as provided in the Indenture, no recourse shall be had
for the payment of the principal of, or the interest, or premium,
if any, on this bond, or of any claim based hereon, or in respect
hereto or of the Indenture, against any incorporator, member,
officer or director, as such, past, present or future, of the Corpo-
ration or of any successor company, whether directly or through
a receiver or trustee in bankruptcy, whether by virtue of any
statute or rule of law or by the enforcement of any assessment or
penalty, or otherwise, all such liabilities being, by the acceptance
hereof, expressly waived and released by the terms of the Inden-
ture, all as more fully provided therein.
This bond shall not be valid or become obligatory for any
purpose unless and until this bond shall have been authenticated
by the execution of the certificate hereon by the Trustee under
the Indenture.
• All things necessary to make this bond, when authenticated
.by the Trustee, the valid, binding and legal obligation of the Cor-
72
poration payable in accordance with the terms hereof and as in
the Indenture provided, and to make the Indenture valid, binding
and legal for the security thereof, have been done and performed.
IN WITNrss WHEREOF, HUNTINGTON BEACH PUBLIC FACILITIES
CORPORATION has caused this bond to be signed in its corporate name
by the facsimile signature of its President, and its corporate seal
" or a facsimile thereof to be hereunto affixed and attested by the
facsimile signature of its Secretary.
Dated: ...... ................ 19.....
HUNTINGTON BEACH PUBLIO
FACILITIES CORPORATION
By............................................................
President
Attest:
.........................•.......................................
Secretary
A
73
EXHIBIT D
FORM OF TRUSTEES CERTIFICATE OF AUTHENTICATION)
This bond is one of the bonds issued pursuant to and under the
provisions. of the within mentioned Indenture.
-----••--•..............................................••...---•-
Bank of America National Trust
and Savings Association, as Trustee,
BY.... ....... .......•----•-----------....•--...........
Authorized Officer
FORM OF ASSIGNMENT FOR ALL BONDS)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
.......-•................................•--•-•------•--•••----•-•-•----------••••-•----•------........--•-----•-...--•--•••------
the within bond and hereby irrevocably constitutes and appoints
..................................... ------.....•--•---•----•---•-•.....•-----•------•--•-...-•---••----........------•----------
attorney to transfer said bond on the registry books kept for that
purpose with full power of substitution in the premises.
Dated:.........--•---......---•••-••-•-.....-........
.....--•---........-•.............•-------•-------......-•••-•_...
Witness:
--•........................•----•---------•--••-•-•-..__......_..
........................ ............................•••--_.....
74
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HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
A California Non-Profit Corporation
Orange County, California
BOARD OF DIRECTORS
L.ARRY L. CURRAN, President
WILLIAM D. ARMSTRONG ROBERT N. POLLY
DR. RICHARD DUDLEY BOYCE DARRELL E.WARD
THE DATE OF THIS OFFICIAL STATEMENT IS DECEMBER 15, 1971
CITY OF HUNTINGTON BEACH
Orange County, California
Incorporated February 17, 1909
CITY COUNCIL
GEORGE C. MCCRACKEN, Mayor
TED W. BARTLETT JACK GREEN
ALVIN M. COEN JERRY A. MATNEY
NORMA BRANDEL GIBBS DR. DONALD D. SHIPLEY
CITY OFFICIALS
BRANDER D. CASTLE
Acting City Administrator
PAUL C. JONES DON P. BONFA WARREN G. HALL
City Clerk City Attorney City Treasurer
FRANK B. ARGUELLO JAMES R. WHEELER
Director of Finance Director of Public Works
PROFESSIONAL SERVICES
IN CONNECTION WITH THE CIVIC CENTER PROJECT
O'MELVENY&MYERS, Los Angeles
Bond Counsel
KURT MEYER & ASSOCIATES
and
HONNOLD, REIBSAMEN &REX,Los Angeles
Architects
STONE &YOUNGBERG MUNICIPAL FINANCING.CONSULTANTS,INC.,San Francisco
Financing Consultants
BANK OF AMERICA N.T. &S.A., Los Angeles
Trustee
BANK OF AMERICA N.T. &S.A., Los Angeles
CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY, Chicago
FIRST NATIONAL CITY BANK OF NEW YORK,New York
Paying Agents
The information contained in this Official Statement was prepared under the direction of the Governing Board of the
Huntington Beach Public Facilities Corporation by Stone & Youngberg Municipal Financing Consultants, Inc., financing
consultants to the Corporation in connection with the Civic Center project.
All of the following summaries of the statutes, Trust Indenture, Lease and Sublease, City Charter, and project reports
are made subject to all of the provisions of such documents. These summaries do not purport to be complete statements
of such provisions and reference is made to such documents for further information.
The Official Statement contains estimates and matters of opinion which are not intended as representations of fact. All
estimates, statements, and assumptions in this Official Statement have been made on the best information available, and are
believed to be reliable and correct, but no representation whatsoever is made that such estimates, statements, and assump-
tions are correct or will be realized.This Official Statement is not to be construed as a contract with the purchasers of the bonds.
CONTENTS
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The Corporation Municipal Government . . . . . . . . . . . . . . 18
on Or anizati 2 Population and Area . . . . . . . . . . . . . . . . 18
g Lease and Sublease . . . . . . . . . . . . . . . . . 2 Indices of Growth . . . . . . . . . . . . . . . . . . 19
The Trustee . . . . . . . . . . . . . . . . . . . . . . . 3 Industry and Employment . . . . . . . . . . . . 19
Housing and Construction . . . . . . . . . . . . 23
The Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Commercial Activity . . . . . . . . . . . . . . . . 28
Authority for Issuance . . . . . . . . . . . . . . . 4 Personal Income 28
. . . . . . . . . . . . . . . . . . .
Sale of Bonds . . . . . . . . . . . . . . . . . . . . . . 4 Transportation . . . . . . . . . . . . . . . . . . . . . 29
Description of the Bonds . . . . . . . . . . . . . 4 Agriculture . . . . . . . . . . . . . . . . . . . . . . . 30
Redemption Provisions . . . . . . . . . . . . . . 5 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Notice of Redemption . . . . . . . . . . . . . . . 5 Community Facilities . . . . . . . . . . . . . . . . 30
Registration . . . . . . . . . . . . . . . . . . . . . . . 5 Education . . . . . . . . . . . . . . . . . . . . . . . . . 31
Legal Opinion . . . . . . . . . . . . . . . . . . . . . 5 Recreation . . . . . . . . . . . . . . . . . . . . . . . . 33
Tax Exempt Status . . . . . . . . . . . . . . . . . . 5 Military . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Eligibility for National Banks . . . . . . . . . 5
Sale of Bonds in States other than
California . . . . . . . . . . . . . . . . . . . . . . . 5
Purpose of Issue . . . . . . . . . . . . . . . . . . . . 6 TABLES
Security .. . . . . . . . . . . . . . . . . . . . . . . . . 6
Creation of Special Funds ' ' ' ' ' ' ' ' ' ' ' ' 6 Table 1. Huntington Beach Public Facilities
p Corporation Leasehold Mortgage
Disposition of Bond Proceeds . . . . . . . . . 7 Bonds, First Issue, Estimated An-
Deposit and Application of Revenues . . . 7 nual Bond Service . . . . . . . . . . . . . . 9
Additional Bonds . . . . . . . . . . . . . . . . . . . 8
Refunding Bonds 8 Table 2. Huntington Beach Civic Center,
g . . . . . . . . . . . . • • • • • • Estimated Project Costs . . . . . . . . . 12
Additional Covenants . . . . . . . . . . . . . . . . 8
Revenue Bond Service Requirements . . . 8 Table 3. Statement of Direct and Overlapping
Bonded Debt . . . . . . . . . . . . . . . . . 16
The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Contractor's Obligations . . . . . . . . . . . . . . 11 Table 4. Summary of Receipts and Expendi-
tures . . . . . . . . . . . . . . . . . . . . . . . . 17
Estimated Project Costs . . . . . . . . . . . . . . 12
Financial Data 13 Table 5. Employe Employers o Largest 20
Assessed Valuation . . . . . . . . . . . . . . . . . 13
Tax Rates, Levies, and Delinquencies . . . 13 Table 6. Largest Industrial Employers in
Direct and Overlapping Bonded Debt . . . 15 Huntington Beach and Adjacent
pp g Communities (100 or More Em-
Receipts, Expenditures and Cash Funds . . 15 ployees) . . . . . . . . . . . . . . . . . . . . . 22
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Base map reproduced by permission of Automobile Club of Southern California,copyright owner.
Vicinity Map.Orange County is the unshaded area outlined in black,and the City of Huntington Beach is identified as the shaded area within the county.
INTRODUCTION
The Huntington Beach Public Facilities Corpora- such fund to be maintained over the life of the bonds
tion was incorporated under the laws of the State and to be replenished from the revenue fund if drawn
of California as a non-profit corporation for the upon.
purpose of financing the construction of a new Civic 2. Various types of insurance, including earth-
Center complex and other public buildings for the quake, extended coverage, public liability and busi-
City of Huntington Beach, Orange County, Califor- ness interruption (in an amount equal to two years'
nia. The Civic Center project is to be constructed rental) are to be provided.
at a new location, and will replace the existing obso- 3. A policy of title insurance, insuring the valid-
lescent city offices. Bonds are being issued by the ity of the lease between the Corporation and the
Corporation at this time to provide the necessary city will also be provided.
funds for all of the costs related to the Civic Center The exact amount of the annual lease payments
complex (the Facilities). will be determined after the award of the bonds to
The Facilities will be subleased to the City of the successful bidder. At that time, the final Lease
Huntington Beach by the Corporation, and the rev- and Sublease will be executed by the city and the
enues derived from the lease payments will provide Corporation, the construction contract will be
the funds for the principal and interest payments awarded, and construction will begin as soon as pos-
on the Corporation's bonds. The bonds will be se- sible. It is anticipated that the building will be com-
cured by the sublease with the city (and in the lease- pleted by October 31, 1973.
hold estate created thereby), under which the city Huntington Beach is the fastest growing city in
agrees to sublease the Facilities for a period of time Orange County in terms of population increases, and
(through January 15, 2002), which is beyond the is the third largest city in the county when measured
final maturity date of the bonds. The sublease will by,either population or area. As of November 1971,
provide-for annual lease payments by the city which the city's population is estimated at 132,000 persons;
will be sufficient to provide funds for the annual an increase of 1,048 percent since the 1960 census.
principal and interest payments of the bonds (base Continued growth of the city is evident from both
rent). In addition, the sublease will provide that the building permit valuations and annual increases in
city shall also pay, as a part of the sublease payments, assessed valuations. In the period from 1960 through
all costs of the operation of the Corporation, includ- 1970, the city issued building permits with a total
ing whatever taxes or assessments may be levied value of almost $670 million, of which approxi-
upon it (additional rent). The obligation to meet mately 65 percent represented new dwelling unit
the rental payments is an annual charge against the valuations. During the same time, the assessed valu-
general fund of the city, for which the city agrees ation of Huntington Beach increased from $75,-
to make annual appropriations in its budget. 903,380 (1960/61) to $370,230,779 (1971/72),
To insure prompt payment of the bonds, the fol-
or nearly 388 percent.
lowing additional measures have been taken: The economy of the city, once largely dependent
on petroleum production and recreation, has broad-
1. A bond reserve fund equal to one year's base ened considerably in recent years, and now includes
rent (equivalent to the maximum annual bond serv- a sizable commercial and industrial base that provide
ice) will be established initially from bond proceeds, a strong measure of stability to the community.
1
THE CORPORATION
Organization Director—Darrell E. Ward, President of Smith's
The Huntington Beach Public Facilities Corpora- Mortuary, Huntington Beach and Vice President of
tion was incorporated under the laws of the State of Pacific View Memorial Park, Newport Beach.
California as a non-profit corporation and its Ar- The Articles of Incorporation provide, among
ticles of Incorporation were filed on November 25, other things, that the Corporation shall have the fol-
1970. The Corporation was formed for the primary lowing powers:
purpose of financing a new Civic Center complex 1. To incur indebtedness and in connection there-
and Central Library in the City of Huntington Beach. with to issue bonds, debentures, notes or other evi-
The bonds now being offered will provide financing dences of indebtedness;
for the Civic Center, and a second issue will be 2. To lease any real property owned by the City
separately authorized at a later date to finance the of Huntington Beach to construct or provide for the
proposed library, as more fully described under the construction of municipal buildings and facilities
heading "Authority for Issuance" on page 4 of this thereon, and to sublease such real property as im-
official statement. The Corporation will lease the proved to the City of Huntington Beach;
Civic Center site from the city, provide financing for 3. To assign, transfer, mortgage, convey in trust,
and construction of the proposed improvements and, pledge and hypothecate the leasehold estate created
upon completion, sublease the Civic Center to the by any such sublease and the rentals payable to this
city. Corporation under any such sublease as security for
The Corporation functions as an independent or- any such bonds, debentures, notes or other evidences
ganization and its policies are determined by a five- of indebtedness;
member Board of Directors. A brief description of 4. To construct buildings and facilities or to con-
each member is as follows: tract with others for the construction of all or por-
President—Larry L. Curran, Member of the State tions thereof; and
Bar of California, Attorney-at-Law with offices in 5. To exercise any and all rights and powers
the City of Santa Ana, and member of several civic which a corporation organized under the General
groups in Huntington Beach. Non-Profit Corporation Law of the State of Califor-
Vice-President—William D. Armstrong, retired nia may now or hereafter exercise.
Lt. Colonel, United States Marine Corps, and pres-
ently an educator with the Orange County juvenile
system. Lease and Sublease
Director—Dr. Richard Dudley Boyce, President The Huntington Beach Public Facilities Corpo-
of Golden West College, Coast Community College ration Lease and Sublease has been approved as to
District, a public educational institution in Hunting- form by both the Corporation and the city and will
ton Beach. be executed on behalf of each after bond bids have
Director—Robert N. Polly, Deputy Controller of been received but before the bonds have been deliv-
McDonnell Douglas Astronautics Co., the city's larg- ered.
est employer. The ground lease section of the document provides
2
that the site for the proposed Civic Center is owned with the written consent of the Corporation.
by the city, will be leased to the Corporation for a The sublease contains provisions for the main-
period of time commencing on the date of execution tenance of insurance. The Corporation has the op-
and ending one week after the end of the term of tion of rebuilding or terminating the sublease in case
the sublease of the improved site to the city. of destruction or condemnation.
The Corporation will award the contract for con-
struction of the improvements and additions on the Should the city default and fail to remedy any
basis of construction bids received November 23, default, the Corporation has the right to terminate
1971, and will proceed with the construction when the sublease and re-enter the premises or, without
the required financing has been guaranteed. terminating the sublease, re-enter and relet the prem-
The term of the sublease will commence upon ises as the agent of and for the account of the city.
completion of construction and the occupancy of It is also provided that upon payment, or provi-
the facility by the city. Based upon construction bids sion for payment, of the First Issue Bonds, all assets
received November 23, 1971, completion is ex- of the Corporation related to the Civic Center Facili-
pected to occur by October 31, 1973. Under the ties will be distributed to the city.
terms of the sublease the city is obligated to pay a
pro rated rent for the use of the facility during the A copy of the Lease and Sublease is included with
remainder of the fiscal year. the Basic Legal Documents accompanying this official
The terms of the sublease further require the city statement.
pay to the Trustee on or before July 31 of each year
a base rental payment sufficient to pay the annual The Trustee
bond principal and interest due on January 15 and The Bank of America N.T. & S.A. has been ap-
July 15 of the subsequent calendar year. pointed Trustee pursuant to an Indenture of Mort-
The city is required to pay additional rent above gage and Deed of Trust. The Trustee will receive all
the annual rental payments for additional expenses of the bond proceeds and will disburse bond moneys
including: (1) all taxes and assessments, if any, (2) in conformity with the Indenture. In addition to hold-
insurance premiums, and (3) all administrative costs ing and administering the various funds of the Cor-
of the Corporation. poration, the Trustee will invest the funds held in
The city is obligated to occupy the Civic Center trust and will be the recipient of all revenues of the
and is entirely responsible for payment of all costs Corporation. The Trustee will also act as paying
of maintaining and operating the Facilities. During agent of the Corporation, paying bond principal and
the term of the sublease, the city has the right to interest. The Trustee will act as bond registrar and
make additions or improvements to the Facilities will authenticate all registered bonds.
3
THE BONDS
Authority for Issuance hold Mortgage Bonds is presently estimated at ap-
The $11,100,000 Huntington Beach Public Fa- Proximately $4,500,000. Under the current time
cilities Corporation Leasehold Mortgage Bonds, First schedule for the library project, construction bids
Issue (the Bonds), are to be issued in accordance are to be received during April of 1972, and the
with the terms of an Indenture of Mortgage and Deed actual principal amount of Second Issue bonds will
of Trust (the Indenture) from the Corporation to be established at that time.
the Bank of America N.T. & S.A., as Trustee. A copy of the Indenture is included with the Basic
The bonds are to be secured by a sublease between
Legal Documents which accompany this official state-
the City of Huntington Beach and the Corporation ment.
(and in the leasehold estate created thereby), in
which the city agrees to occupy and maintain the Sale of Bonds
Facilities, while making annual rental payments to Sealed bids for the bonds will be received by the
the Corporation in amounts sufficient to pay bond City Clerk of the City of Huntington Beach on be-
principal and interest and other necessary costs of half of the Board of Directors of the Corporation at
operation of the Corporation. The exact amount of 11:00 A.M., Wednesday, January 12, 1972, at the
the base rental payments will be established subse- Office of the City Clerk, City Administrative Offices,
quent to the determination of the interest rate the 520 Pecan Street, Huntington Beach, California, and
bonds will bear. the bonds will be awarded to the best bidder at a
The Huntington Beach Public Facilities Corpora- meeting of the Board of Directors later the same day
tion Leasehold Mortgage Bonds, First Issue, de- (after/or concurrent with approval by the City Coun-
scribed in this official statement, are being issued to cil). Details of the terms of sale are included in the
finance all authorized costs connected with the con- Official Notice Inviting Bids adopted by the Board of
struction of the proposed Civic Center. No additional Directors on December 15, 1971, a copy of which
bonds of the Corporation may be issued which are (together with Bid Form) accompanies this official
secured by and payable from the same revenues as statement.
the First Issue bonds. However, it is anticipated that Upon determination of the best bid, the city, the
a Second Issue of the Corporation's Leasehold Mort- Corporation and the Trustee will execute the Lease
gage Bonds will be offered for sale in June of 1972 and Sublease and the Indenture.
to finance the construction of a new Huntington
Beach Central Library which will be leased to the Description of the Bonds
city under the terms of a separate sublease. Such
bonds will be authorized and issued in accordance The $11,100,000 principal amount of Huntington
with the provisions of an Indenture of Mortgage and Beach Public Facilities Corporation Leasehold Mort-
Deed of Trust separate and distinct from the Inden- gage Bonds, First Issue, will be dated January 15,
ture under which the First Issue bonds are author- 1972, and will be initially issued as coupon bonds in
ized, and secured by an unrelated sublease. The pro- the denomination of $5,000 each, numbered in a
posed library will not be located on the Civic Center manner to be determined by the Trustee, exchange-
site described elsewhere in this official statement. able for fully registered bonds without coupons in
On the basis of preliminary estimates of construc- denominations of $5,000, or any multiple thereof.
tion and all incidental costs of the proposed Central Bonds mature serially on January 15 in the following
Library, the principal amount of Second Issue Lease- years and in the amounts indicated.
4
Notice of Redemption
SCHEDULE OF MATURITIES Notice of redemption is to be published in a daily
newspaper of general circulation or daily financial
Principal Principal journal, published in The City of New York, New
Year Amount Year Amount
York, not less than 30 days prior to the redemption
1975 . . . . . . $200,000 1987 . . . . . . $430,000 date. The Trustee is required to give written notice
1976 . . . .. . 210,000 1988 . . . .. . 460,000 to the owners of any registered bonds.
1977 . . . . . . 230,000 1989 . . . . . . 490,000
1978 . . . . . . 240,000 1990 . . . . . . 530,000
1979 . .. . . . 260,000 1991 . . . . . . 560,000 Registration
1980 . .. . . . 270,000 1992 . . . . . . 600,000 The bonds are to be issued initially as coupon
1981 . . . . . . 290,000 1993 . . . .. . 640,000 bonds registrable as to principal only, exchangeable
1982 . .. . . . 310,000 1994 . .. . . . 680,000 for fully registered bonds, as set forth in the Inden-
1983 . . . . . . 330,000 1995 . . . .. . 730,000
1984 . . . . . . 360,000 1996 . . . .. . 780,000 ture.
1985 . . . .. . 380,000 1997 . . . .. . 830,000
1986 . . . .. . 400,000 1998 . . . . . . 890,000 Legal Opinion
All proceedings in connection with the issuance
Interest is payable semiannually on January 15 of these bonds are subject to the approval of O'Mel-
and July 15 of each year. Both principal and interest veny&Myers, Los Angeles, California, bond counsel
on coupon bonds are payable at the Corporate for the Huntington Beach Public Facilities Corpora-
Agency Division of the Bank of America N.T.&S.A., tion. The unqualified opinion of O'Melveny & Myers
Los Angeles, California, or at paying agents for the attesting to the validity of the bonds will be supplied
Corporation in Chicago, Illinois or New York, New free of charge to the original purchasers of the bonds.
York. Principal and interest on fully registered bonds
are payable only at the offices of the Trustee in Los
Angeles, California. Tax Exempt Status
The Corporation has obtained a tax ruling from
the Internal Revenue Service that provides the in-
Redemption Provisions terest on the bonds is exempt from income taxes of
the United States of America under present Federal
In the event of loss of, or substantial damage to, income tax laws. Such interest is not exempt from
or condemnation of the Facilities which render them personal income taxes of the State of California
unusable, all or any part of the bonds may be re- under present state income tax laws.
deemed at any time by the payment of the principal,
accrued interest and a premium as set forth below.
Bonds maturing on or prior to January 15, 1982 Eligibility for National Banks
are not subject to call and redemption prior to their A request has been made to the Comptroller of
fixed maturity date except as provided above. Bonds the Currency for a ruling that the bonds of the Cor-
maturing on or after January 15, 1983, a principal poration are eligible for purchase, dealing in, under-
amount of $9,090,000, are subject to call and re- writing and unlimited holding by national banks. The
demption at the option of the Corporation as a whole ruling ,is expected prior to the date of sale of the
or in part on January 15, 1982, or on any interest bonds.
payment date thereafter, upon payment of the re-
demption price equal to the principal amount thereof
plus a premium equal to one-fourth of one percent Sale of Bonds in States
Other than California
of the principal amount redeemed, plus one-fourth
of one percent for each year or fraction of a year Except in California, the Corporation will assume
from the redemption date to the maturity date of no responsibility for any permits and/or filing fees
the bonds, but in no event shall the premium exceed which may be required to qualify the Bonds for offer
four and one-half percent. or sale in other states.
5
A copy of the Blue Sky Survey accompanies this from other sources, thus freeing an equivalent
official statement. amount of general fund income. In addition, Hunt-
ington Beach recently imposed a petroleum sever-
ance tax of 2.5 cents per barrel against oil producers
Purpose of Issue in the city, which is expected to produce an unen-
Proceeds received from the sale of the Hunting- cumbered income of $350,000 per year.
ton Beach Public Facilities Corporation Leasehold Although the duty to meet annual rental payments
Mortgage Bonds, First Issue will be used for the is a general fund obligation of the city, it is the
construction and financing of a complete Civic Cen-
city's intention to meet such payments from the
ter complex to serve the City of Huntington Beach, proceeds of a utility users' tax imposed at the rate
as described in this official statement in the section of five percent on all billings for electricity, gas, tele-
entitled "The Project". phone, water and cable television service. The utility
tax was adopted by the City Council in January of
1971 and the first revenues were received at the
Security end of March of 1971. Revenues received by the
Both principal and interest on the bonds are pay- city from this tax during the last quarter of the
able from the revenues of the Corporation, to be 1970/71 fiscal year amounted to $324,220, and
comprised principally of the annual lease payments the city's Director of Finance has estimated such
by the City of Huntington Beach. Under the terms income at more than $100,000 per month in
of the Lease and Sublease, the city agrees to pay 1971/72, increasing at the rate of 8.25 percent per
the Corporation a fixed annual rental which will be annum. The legality of a charter city's ability to levy
sufficient to repay the bonds and the interest thereon. a utility tax has been upheld by a unanimous decision
In addition to the base rental, the city agrees to pay of the Supreme Court of the State of California, and
additional rental to meet other necessary expenses assures the continuance of this source of revenues in
of the Corporation. The city has covenanted to in- Huntington Beach. On the basis of actual receipts and
clude the rental payments required each year in projected growth, the city's Director of Finance esti-
its annual budget, and to appropriate the necessary mates that the utility tax will produce the following
funds therefor. revenues over the current and next five fiscal years:
Under provisions of the City Charter, Hunting-
ton Beach may levy a maximum tax rate for general
municipal purposes of $1.00 r $100 assessed Utility
p p rp per Fiscal Tax
valuation. The present (1971/72) tax rate for such Year Revenues
purpose is $.9507 per $100 assessed valuation, or
$.0493 less than the maximum permitted. At the 1972/73 . . . . . .. . . . .. . . . . . . . . . . .. . . $1,416,000
,000
197
city's 1971/72 assessed valuation of $370,230,779, /74 . 1,529
the unused general fund taxing power would pro- 1973/7 1, ,000
1974/75 . . . ..... . .. . . . . .. . ... .. . 1,65252,000
duce approximately $182,500. In the absence of 1975/76 . . .. . .. . ... .. . .. . ... ... ... 1,784,000
other revenues, annual rental payments could be 1976/77 . .. . . .. .. . . .. . . . .. . ... . . . . 1,926,000
met solely from the city's general fund taxing power
only by reducing or reallocating other expendi-
tures financed from this source of funds. However,
the present general fund tax rate presently includes
levies that may legally be met from separate tax
rates or service charges. These include: refuse col-
lectionFunds services which are currently subsidized by the The Indenture provides for the establishment of
general fund at the rate of about $635,000 per year; special trust funds, all to be held and administered
local sewerage service which is similarly subsidized by the Trustee. These funds, together with their
by almost $100,000 annually; and non-critical ex- sources and uses are listed on the following page.
penditures for beach use and promotion exceeding Moneys held in the various funds may be invested
$300,000 annually. The city possesses the legal by the Trustee under the provisions of Sections 401
power to recover any or all of these expenditures and 603 of the Indenture.
6
i
Fund or Account Source Use
Reserve Fund (Section 506) . .. . . . . . . . Bond Proceeds and Bond principal and interest
Rental Revenue Fund
Construction Fund (Section 401) . . . . .. Bond Proceeds Cost of project
Interest During Construction Fund
(Section 401) . . . . . . . . . . ... . . . .. . . Bond Proceeds First twenty-six months'
interest on bonds
Rental Revenue Fund (Section 502) . . . City Rent Payments Required transfers to various funds,
and/or other specified purposes
Debt Service Fund (Section 503) . . . . . . Transfers from Revenue Fund Bond principal and interest
Administrative Expenses Fund
(Section 505) . .. . . . . ... . .. . . . ... . Transfers from Revenue Fund Corporation operating expenses
Bond Redemption Fund (Section 504) . Transfers from Revenue Fund Call and redemption of bonds,
changes, alterations or additions
to the project, or reimbursement
of any base rent or additional
rent previously paid by the city
Disposition of Bond Proceeds the Debt Service Fund an amount sufficient, to-
The Indenture provides that the proceeds from gether with any balance then on hand, to pay the
the sale of the bonds shall be deposited with the interest becoming due on the bonds on the next two
Trustee. The Trustee will then make the following succeeding interest payment dates, and the principal
allocations: becoming due on the next succeeding principal pay-
ment date.
1. To the Reserve Fund an amount equal to one
year's base rent (equivalent to the maximum annual 2. Reserve Fund—After requirements of the
debt service). Debt Service Fund have been fulfilled, the Trustee
shall set aside in the Reserve Fund such amount as
2. To the Interest During Construction Fund, may be necessary to restore the Reserve Fund to
an amount equal to the first twenty-six months' the required balance (one year's base rent). Moneys
interest on the bonds. in the Reserve Fund shall be used solely for the pur-
3. To the Construction Fund all remaining pro- pose of paying the principal and interest on the
ceeds of the bond issue, including accrued interest bonds in the event that the moneys in the Debt Serv-
and premium, if any. ice Fund are insufficient for this purpose, and when-
ever withdrawn, must be replenished. Moneys in
the fund may be used to retire the last outstanding
Deposit and Application of Revenues bonds of the issue.
All revenues of the Corporation, as defined in the 3. Administrative Expense Fund—The Trustee
Indenture, are pledged to the punctual payment of will next set aside in the Administrative Expense
the bonds and the interest thereon. All revenues Fund such amounts as the Corporation shall certify
will be immediately deposited with the Trustee, who to the Trustee are necessary for the payment of
shall credit the moneys to the Revenue Fund. All budgeted administrative expenses of the Corporation.
moneys in the Revenue Fund are to be set aside and 4. Bond Redemption Fund—Any amounts re-
deposited in the following order of priority and are maining in the Rental Revenue Fund after making
to be withdrawn from the special funds only for the the required deposits in the funds listed above,
purposes set forth. shall be deposited in the Bond Redemption Fund
1. Debt Service Fund — On receipt of any and used (1) for redemption of bonds in accordance
rental revenue or other moneys transferred to the with terms of the Indenture, (2) for changes, altera-
Rental Revenue Fund, the Trustee will deposit in tions or additions to the project, or (3) for reim-
7
bursement of base rent or additional rent previously less than 80 percent of the then full insurable value
paid by the city. If there are funds on hand in the thereof; (c) against loss or damage from sprinkler
Bond Redemption Fund, such funds must first be system leakage; (d) against explosion of steam boil-
used to make up any deficiency which may occur ers and similar pressure vessels; and (e) against
in the deposits to be made to the Debt Service Fund, earthquake, if such insurance is available on the
Reserve Fund, or Administrative Expense Fund. open market from reputable insurance companies,
either by a policy in an amount not less than the
Additional Bonds full insurable value of the properties, subject to
Under the terms of the Indenture, the Corpora- a deductible amount of not more than 10 percent
tion may not issue any other obligations payable of the face value of the insurance for any one loss
from rental revenues or other payments to be re- which is less than the face amount of the policy, or
ceived under the Lease. Other than the bonds of by a separate policy in the amount of the Corpora-
this issue, no current or funded debt may be created tion's outstanding bonds, if less than the full in-
other than ordinary accounts payable and expenses surable value.
assumed in the normal course of business, which 5. To maintain or cause to be maintained use
current liabilities are to be paid by the City of Hun- and occupancy or rental income insurance against
tington Beach. fire, lightning and such other perils ordinarily de-
fined as "extended coverage" in an amount of not
Refunding Bonds less than two years' rental under the Lease and
Sublease.
No refunding bonds may be issued by the Cor- 6. To maintain or cause to be maintained public
poration for any purpose. liability and property damage insurance of not less
Additional Covenants than $1,000,000 combined single limit bodily injury
and property damage.
The Indenture of Mortgage and Deed of Trust 7. To maintain or cause to be maintained work-
contain covenants including, but not limited to the men's compensation for all persons employed in
following, in which the Corporation agrees: connection with the Facilities.
1. To punctually pay principal and interest of 8. To pay, discharge, or contest any taxes, as-
the bonds as they become due. sessments, or other governmental charges upon the
2. Not to mortgage, encumber, sell, lease, place Facilities or the revenues which might impair the
a charge on or otherwise dispose of the Facilities security of the bonds.
or the revenues therefrom and not to enter any 9. To maintain or cause to be maintained and
agreement which impairs the operation of the to keep in good repair, the Facilities and all equip-
Facilities or otherwise impairs the rights of the ment.
bondholders with respect to the revenues or opera-
tion without making adequate provision to protect Revenue Bond Service Requirements
the rights of bondholders. Table 1 presents an illustration of the annual
3. To construct and complete the Civic Center bond service based on an estimated annual interest
Facilities in conformity with the construction con- rate of 63/4 percent. On the basis of this schedule,
tract. the annual rental will amount to $951,575, but the
4. To maintain or cause to be maintained in- actual city annual base rental payment will be estab-
surance, if such insurance is available on the open lished after bond bids are received. Construction of
market from reputable insurance companies: (a) the Facilities is expected to be completed by October
against loss or damage to the property resulting from 31, 1973, and a pro-rata rental payment will be due
fire, lightning, and other perils ordinarily defined as when the city is served with notice of completion.
"extended coverage" in amounts, if available, not Beginning July 1, 1974, the city's annual rental Pay-
less than the full insurable value of the properties ment will provide funds for the payment of bond
as defined in the Indenture or the amount of the principal and interest due on January 15 and July 15
Corporation's outstanding bonds, whichever is less; of the following calendar year. The pro-rata rental
(b) against war risks, as and when such insurance payment, together with the remaining balance of
is obtainable from reputable insurance companies capitalized interest, will be used for the payment of
of the United States of America, in an amount not interest due on July 15, 1974.
8
Table 1
i
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
$11,100,000 Leasehold Mortgage Bonds, First Issue
Estimated Annual Bond Service
t
Year Interest Principal Total
Ending Bonds Estimated Maturing Bond
Jan. 15 Outstanding at 63/4% January 15 Service
i
1973 . ... .. . .. . ... ... . . . .. $11,100,000 $ 749,250( $ - $ 749,250
1974 . .. . .... . . .. . ... . . . .. 11,100,000 749,25000 - 749,250
1975 . . . . .... .. . .. ... . .. .. 11,100,000 749,2500i 200,000 949,250
r 1976 . . . . ... . .. . . . ... .. . .. 10,900,000 735,750 210,000 945,750
1977 . .. . .. ... . ... . . . .. . .. 10,690,000 721,575 230,000 951,575
f 1978 . . . . .. .... ... .. . ... . . 10,460,000 706,050 240,000 946,050
j 1979 . ... .. .... . .. . . . ... . . 10,220,000 689,850 260,000 949,850
3
{ 1980 . . ... . .. .. . .. . ... . . . . 9,960,000 672,300 270,000 942,300
1981 . . . . .... .. .. . .. . . . . .. 9,690,000 654,075 290,000 944,075
{ 1982 . .. . .... .. .. . ... ... . . 9,400,000 634,500 310,000 944,500
1983 . . ... . .. . .. . .. . . . ... . 9,090,000 613,575 330,000® 943,575
1984 . ... . .. .. . .. . ... .. . .. 8,760,000 591,300 360,0000 951,300
1985 . . .. . ... . . . ... . .. . .. . 8,400,000 567,000 380,000® 947,000
1986 . .. . .. .... . .. .. . ... . . 8,020,000 541,350 400,000® 941,350
1987 . . ... . .. . . . .. . ... .. .. 7,620,000 514,350 430,00n 944,350
1988 . . . . .. .... . . . ... .. . .. 7,190,000 485,325 460,0000 945,325
1989 . .. . .. .. .. . .. ... ... . . 6,730,000 454,275 490,000® 944,275
1990 . . ... . .. ... ... . .. .... 6,240,000 421,200 530,000® 951,200
1991 . .. . . .. . . . ... .. . ... .. 5,710,000 385,425 560,000(D 945,425
1992 . . ... . .. .. . ... ... .. . . 5,150,000 347,625 600,000® 947,625
1993 . . ... ... . .. ... . .. . . .. 4,550,000 307,125 640,0000 947,125
1994 . . .. .. .... .. . ... ... .. 3,910,000 263,925 680,0000 943,925
1995 . . .. . ... . . . ... ... . .. . 3,230,000 218,025 730,0000 948,025
1996 . ... ...... ... .. . ..... 2,500,000 168,750 780,000® 948,750
1997 . . ... . .. ... . .. ... .... 1,720,000 116,100 830,0000 946,100
1998 . . .. .. .... .. . ... .. . .. 890,000 60,075 890,000® 950,075
$13,117,275 $11,100,000 $24,217,275
Q First twenty-six months'interest($1,623,375) paid from bond proceeds.
®Subject to call and redemption on or after January 15, 1982.
d
3
9
POLICE 1 !
0 BUILDING
/77
COUNCIL DEVELOPMENT
CHAMBER BUILDING
F�1 \
O
HUNTINGTON BEACH CIVIC CENTER SITE PLAN \v
/
THE PROJECT
The proposed Civic Center project will replace a
series of structures that have been constructed or
acquired at various times since 1922. Many of the
existing facilities were originally designed for other
uses, and all are considered to be functionally obso-
lete. During the last several years, the city has
conducted a series of studies investigating the de-
partmental needs, site location, design criteria and
financial feasibility of the project before adopting the
present program.
The new Civic Center will be located on a 14.28
acre site, and consists of four major elements which
are integrated into a unified complex. A five-level
administrative structure will connect the separate
two-story police/public safety building with a single-
level wing containing departments related to munici-
pal development. Council Chambers, meeting rooms
and related facilities are to be located in a specialized
structure, but inter-connected with the other elements
of the project by way of a lower level access. Speci-
fications for the project provide space and flexibility
for future expansion to serve the ultimate needs of
the community.
Architects for the Huntington Beach Civic Center
are Kurt Meyer & Associates and Honnold, Reibsa-
men & Rex, Los Angeles, California. An architect's
rendering of the project appears on the frontispiece
of this official statement, and a site plan is presented
on the opposite page.
Contractor's Obligations
The contractor has 600 calendar days in which
to complete the project. To assure completion, the
contractor is required to post 100 percent faithful
performance and 50 percent labor and materialmen's
bonds. In addition, the contractor is required to have
builder's risk insurance covering all risks, including
fire and earthquake, upon all structures and upon
all materials in or adjacent thereto.
11
If the contractor fails to complete the project on Paramount Warrior, Inc., Paramount, California.
schedule, he will be subject to liquidated damages at The total net project cost for construction, contin-
the rate of$2,000 per day. gencies, fees, incidentals, capitalized interest, and a
reserve fund is $11,100,000, as shown in Table 2.
Estimated Project Costs Bond proceeds will also be used by the Corporation
Construction bids for the Civic Center project to reimburse the city for a portion of the site acquisi-
were received on November 23, 1971. The low tion costs, in the form of a single site rental pay-
bidder was Diversified Builders, Inc., A Division of ment.
Table 2
HUNTINGTON BEACH CIVIC CENTER
Estimated Project Costs
Basic construction cost( • •. . .. . ... . .. . .. . . . ... .. . . .. ... .. . ... .. . ... .. .. .. ... .. . ... •• • •• $ 6,484,500
Construction contingency . ... . .. . .. . ... . .. . .. ... . .. . . . .. . . .. .. . .. . ... ... . . .. .. . .. . ... . . 299,500
Miscellaneous construction and improvements . . ... . . . .. . ... .. . ... ... . . .... .. . . . ... . .. ... . . 646,000
Architectural, engineering and similar services . . .. . .. . . . . . . .. . ... .. ... . .. ... . . .. . . . ... ... .. 637,500
Testing, inspection, supervision and permits . . . . .. . .. . .. . ... . . . . . . .. . ... .. . ... .. . . . .. . ... .. 82,500
Legal, financing and incidentals (including insurance, printing, trustee fees and related costs) . . .. . .. 265,050
Advancesite rental . .. . ... . . . .. . ... . ... . . . ... ... . .. ... ... . .. ... ... .. . .. . .. . .. . . . . .. . .. 350,000
Subtotal .. .. .. . . .. . . .. . . . .. . . . .. . .. . ... ... ... ...... . .. . . .. .. .. ... . .. . .. . . . .. $ 8,765,050
Interest during construction (26 months @ 6.75%) . . . . .. . . . . .. • •.• •. • •.••.• • •. . . .. . . . . ... .. 1,623,375
Reserve fund (one year's base rent) . . . . ..... . ... .. . ... ... .. . ...... . ... ... ... .. . .. . ... ... . . 951,575
Subtotal . . . . . . . . :.. ... . .. . . ... . .. .. . ... .. . ... ... . .. . .. . .. . . .. .. .. .. .. . ... . . . .. $11,340,000
Less: Interest earnings @ 4% . . .. . .. . . . ..••• • ••. .. . ...... . . . ... ... . ....... .. .. . ... .. • •• 240,000
Principal Amount of Bonds . .. . ... .. .... ... . .. .. .... .. . .. . ...... ..... . . ... . .. . .. . . $11,100,000
QQ Based on low construction bid received November 23, 1971.
12
Assessed Valuation
The City of Huntington Beach uses the facilities
of Orange County for the assessment and collection
of taxes for city purposes. City taxes are assessed
FINANCIAL DATA
and collected at the same times and on the same tax
rolls as are county, school, and special district taxes.
Taxes are payable in two installments on November
1 and February 1 and become delinquent on Decem-
ber 10 and April 10, respectively.
The State Board of Equalization reports the 1971/
72 Orange County valuations to average 24 percent
of full value, except for public utility property, which
is assessed by the state at approximately 29 percent
of full value.
Under the provisions of the State Constitution and
legislation adopted in 1968, two additional types of
exemptions were authorized beginning in the tax year
1969/70. The first of these currently exempts 30
percent of the assessed valuation of business inven-
tories from taxation. The second provides for ex-
emption of $750 of the assessed valuation of an
owner-occupied dwelling for which application has
been made to the County Assessor.
Revenue estimated to be lost to local taxing agen-
cies due to such exemption, however, is reimbursed
from state sources. The reimbursement is based
upon total taxes due upon these exempt values and
therefore is not reduced by any amount for estimated
delinquencies.
Following is the 1971/72 assessed valuation of
the City of Huntington Beach as reported by the
Orange County Assessor, before provision for the
two exemptions described above.
CITY OF HUNTINGTON BEACH
1971/72 Assessed Valuation
Secured roll . . . . . . . . . .. . . . . . . . $298,705,460
Unsecured roll . . . . . . . . . . . .. .. . 26,668,229
Utility roll . . . . . . . . . . . .. .. . . . . 44,857,090
Total . . . . ... . . . . . . . . . .. . $370,230,779
Tax Rates, Levies, and Delinquencies
The following tabulation presents a five-year sum-
mary of the city's assessed valuation, secured tax
levies and delinquencies. Levies and delinquencies
are for city taxes only. A six-year summary of city
tax rates by purpose is also shown.
13
Secured Tax Levies and Delinquencies
Fiscal Assessed Secured Delinquent Percent
Year Valuation Tax Levy June 30 Delinquent
1966/67 . . . . . .. . . .. . . .. . . . . . . $220,691,540 $2,864,489 $58,931 2.06%
1967/68 . .. . . .. . . . . . . . . .. .. . . 273,733,620 3,471,790 51,781 1.49
1968/69 . . . . . .. . . . . . . .. .. .. . . 284,033,290 3,898,311 41,777 1.07
1969/70 . . . .. .. . . .. .. . . . . .. . . 305,631,576 3,991,983 50,787 1.27
1970/71 . . . . . .. .. . . . . .. . . . . . . 339,783,919 4,441,769 56,684 1.28
Composition of City Tax Rate
Fiscal General Music& Parks& Bond Capital
Year Fund Promotion Library Recreation Service Outlay(D Retirement Total
1966/67 . . . . $.82959 $.05000 $.09532 $.07071 $.02353 $.15000 $.11085 $1.33000
1967/68 . . . . .78769 .05000 .09677 .10941 .01970 .15000 .11643 1.33000
1968/69 . .. . .85000 .01748 .11362 .19191 .01568 .15000 .11131 1.45000
1969/70 . . . . .87695 .01812 .12237 .19000 .01495 .10000 .12761 1.45000
1970/71 . . . . .84476 .03014 .12237 .19000 .01306 .10000 .14967 1.45000
1971/72 . . . . .95070 .02799 .15000 .17000 .13575 - .18556 1.62000
i0 Part of allowable general fund levy.
A total of 30 tax code areas are located within $100 assessed valuation on all taxable property,
the City of Huntington Beach for 1971/72. Tax rates plus $0.4737 in special taxes on land and improve-
applicable throughout the city vary slightly among ments only. Components of the 1971/72 tax rate in
different code areas. The largest code area (4-001) this code area are indicated below, and a five-year
has a 1971/72 secured assessed valuation of $65,- summary of total tax rates appears on the following
339,110 and carries a total rate of $10.8616 per page.
1971/72 Tax Rate
Code Area 4-001
OrangeCounty . . . . . . . . . . . . . .. . . . . . . . ... . . . . . . . . . .. . ... . .. . . . . .. . .. .. . . . .. . .. . .. . ... . . . $ 2.0400
City of Huntington Beach . . . .. . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . 1.6200
Schools . . . . . .. . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . .. . . . . . . . .. . .. . .. . . . . .. . . . . . . . . . 6.6000
Orange County Transit District . . . . . . . . . . . . . . . . .. . . . . . .. . . . . .. . . . . . . . .. . .. . . . . . . . . . . . . . . . .0200
Orange County Flood Control District . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . ... . . . . .. . . . . . . . . . . . . .2481 +
Orange County Harbor District . . . . . .. . . .. . . . . . . . . . .. . . . . .. . .. . . . . . .. . . . .. . . . . . . . . . . . . . . . .1247
Orange County Mosquito Abatement District .. . . . . . . . . .. . . . . .. . . . . .0088
Metropolitan Water District . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . . . . . ... . . . . . . .. . .2000
Tax Rate, All Property . . . . . . . . . . . . . .. . . . . . . . . . .. . .. . . . . ... . . . .. . . . . . . . . . . . . .. . .. . $10.8616
Orange County Sanitation District #11 . . . . . . . . . . ... . . . . . . ... . . . . . . . . . .. . . . . .. . . . .. . ... . . . $ .393700
Orange County Water District . . .. . . . . . . . . . . . . . .. . . . . . . .. . . . . . . . ... . . ... . ... . . . . .. . ... . . . $ .08001D
iT Applied to land and improvements only.
14
Record of Tax Rates
Code Area 4-001
1967/68 1968/69 1969/70 1970/71 1971/72
t City Tax Rate . . . . . . . . . .. .. . $1.3 300 $1.4500 $1.4500 $1.4500 $ 1.6200
County Tax Rate . . . . . .. .. .. 1.7100 1.6800 1.6700 1.7000 2.0400
Schools & Other . .. . . . . .. .. . 5.3101 5.5304 5.8691 6.4449 7.2016
Total Rate . .. . . . . .. . . $8.3501 $8.6604 $8.9891 $9.5949 $10.8616
Direct Tax Supported Debt
Balance
Original Outstanding
Year Principal Final January 12,
Issued Amount Purpose Maturity 1972
1955 . .. . . .. . . . . .. .. . . .. . . . . .. . . .. . . .. . $ 860,000 water 1980 $ 315,000
1970 . . . .. .. .. .. .. . . .. .. . . .. .. .. .. .. .. . 6,000,000 parks 1995 5,890,000
Direct and Overlapping Bonded Debt indicates that general government expenses are fully
The City of Huntington Beach has a total of funded from current revenues, with annual surpluses
$6,205,000 in general obligation bonds outstanding, which are applied to capital outlays or accumulated
as reflected in the summary above. for major capital expenditures in subsequent years.In-
cluded in capital outlay costs are preliminary expen-
Huntington Beach also has an outstanding balance ditures for public works projects (such as the 1968
of $3,360,000 water revenue bonds remaining from Parking Program, the 1970 Parks Program, and the
a total of $3,750,000 originally issued in 1963 for proposed Civic Center and Central Library) which
water system acquisition and improvement. These have or will be reimbursed from bond proceeds.
bonds will be retired in 1993 and are payable solely
from revenues of the municipal water system. The The city's cash fund balances as of June 30, 1971
city is also obligated to make annual rental payments are presented in the following tabulation.
of $170,050 to the Huntington Beach Parking Au-
thority for lease of the beachfront parking facilities Cash Fund Balances
financed with the proceeds of the 1968 Parking Rev-
enue Bonds issued by the Authority. These facilities June 30, 1971
are operated by the city, and the Director of Finance General Fund . . .. . .. .. . . .. .. .. .. $ 1,663,377
reports that annual lease payments are fully self- Recreation & Parks 986,213
supporting from parking revenues. Sewer . .. .. . .. .. . . . .. .. ...... .. 1,386,224
Table 3 on page 16 presents a summary of the Drainage . . . . . . .. . .. .. .. .... .. .. 1,135,718
city's direct and overlapping bonded debt as of Water 1,408,216
January 12, 1972. Construction Funds .. . .. .. .. .. .. . 3,251,041
n Capital Outlay . .. ... . ... . .. .. .. . 181,297
z
Receipts, Expenditures and Cash Funds Other Special Funds . .. .. .. ....... 760,888
A summary of the city's receipts and expenditures Total Cash Balances . ... ... ... . . $10,772,974
for the fiscal years 1966/67 through 1970/71, based Encumbered Funds . .. . . . . .. . . . 1,639,236
on the city's annual reports to the State Controller, Unreserved Cash Balances . .. .. .. $ 9,133,738
is presented in Table 4 on page 17. The summary
15
Table 3
CITY OF HUNTINGTON BEACH
Statement of Direct and Overlapping Bonded Debt
Estimated Population (November 1971) . . . . . . . . . . . . . . . . . . . . . .. . . . 132,000
1
1971/72 Assessed Valuation . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . $ 370,230,779
Estimated Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . $1,510,000,0000
Debt Applicable January 12, 1972Q
Percent Amount
Orange County . . . . . . . . . . . . . . . ... . . . . . . .. . . . . . . .. . . . . . . .. . . 8.522% $ 419,282
Orange County Flood Control District . .. . . . . . . .. .. . . . . . . . . . . . . 8.522 2,332,898
Metropolitan Water District (general issues) . . . . . .. . . .. . . . . . . . . . 1.276 6,064,892
Orange County Sanitation District No. 3 . . . . . .. . . . . .. .. .. . . . . . . 8.778 804,416
Orange County Sanitation District No. 11 . . . . . . . . .. . . . .. . . . . .. . 99.772 1,217,218
Huntington Beach School District . . . .. . . . . . . . . .. . . . . . . . . .. . . . . 93.806 6,472,614
Ocean View School District (various issues) . . . . . . . . . . . . . . . . . . . .. 90.361- 90.847 5,471,585
Fountain Valley School District . . . . . . . .. . . . . . . . . .. . . . . .. . . . . . . 33.114- 33.408 1,296,352
Westminster School District (various issues) . . . . . . . . . . . .. . . . . . . . 26.574- 28.435 855,659
Huntington Beach Union High School District . .. . . . . . . . . . . .. . . . 60.411 10,163,547
Other School and Special Districts . .. . . . . . . . . . . . . . . . . . . . . . . . . . . Various 4,283
City of Huntington Beach . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100. 6,205,0000
TOTAL DIRECT AND OVERLAPPING BONDED DEBT. . . . . . . .. . . . . . . . . . . . . .. . $41,307,740D
Ratio To
1971/72 Estimated
Assessed Market Per
Valuation Value Capita
1971/72 Assessed Valuation . . . . .. . . . . . . . . . . . . . . . . . . — — $2,805
Direct Debt . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . 1.68% .41% 47
Total Debt . .. . . . . . . . . . . . .. . . . . . . . . . .. . . . . ... . . . . 11.16 2.74 313
iQ The State Board of Equalization reports that 1971/72 Orange County assessed valuations average 24% of full value, with
public utility property ($44,857,090) assessed at about 29% of full value.
Q Excludes sales, if any, between December 15, 1971 and January 12, 1972.
®Does not include $3,360,000 City of Huntington Beach Water Revenue Bonds, $2,205,000 City of Huntington Beach
Parking Authority Revenue Bonds, nor the $11,100,000 Huntington Beach Public Facilities Corporation Leasehold Mortgage
Bonds,First Issue,now being offered for sale.
Q Excludes city's share ($2,583,062) of Orange County Building Authority Revenue Bonds.
t
NOTE: City's share of state school building aid repayable as of June 30, 1971 amounted to$32,134,692.
City's share of authorized and unsold bonds:
Metropolitan Water District (general issues) . . . . . . . .. . . . . . . . . . . . . . . $5,933,400
Ocean View School District . . . . . . . . . . . . . .. . . . .. . . .. . . . . . . .. . . .. . 6,785,362
Fountain Valley School District . . . . . . . . . . . . .. . . . . . . . ... . . . . . . . . . 2,204,730
Westminster School District . .. . . . . . . .. . . . . . . . . . .. . . . . . . . . .. . . . . 187,878
Huntington Beach School District . .. . . . . . . . . . . . . .. . . . . .. . .. . .. .. . 3,423,919
16
Table 4
CITY OF HUNTINGTON BEACH
Summary of Receipts and Expenditures
1966/67 1967/68 1968/69 1969/70 1970/71
Revenues:
Property Taxes . .. . . .. .. . . $2,852,180 $ 3,6909363 $ 4,196,577 $ 4,279,905 $ 4,656,235
Sales & Use Taxes . . . . . .. . 734,064 1,016,863 1,350,061 1,647,917 1,869,118
Other Taxes .. . .. .. .. . . .. 218,179 312,468 279,981 460,101 540,638
Licenses & Permits . .. .. . . . 838,164 909,743 880,833 960,854 884,669
Fines & Penalties . .. . . .. .. 196,054 235,972 249,922 311,338 3309636
Use of Money & Property . . 317,755 377,929 445,183 727,363 463,265
Subventions &Grants . .. .. . 1,422,196 1,690,569 2,120,573 2,340,159 2,769,064
Current Service Charges . .. . 599,676 1,285,454 1,598,554 914,888 723,942
Other Revenue . .. .. . . . . .. 111,071 103,488 121,192 1,441,448 1,385,699
Water Utility .. . .. .. . ... .. 1,2749900 1,451,322 1,631,774 1,966,865 2,089,332
Parking Authority . .. .. . . . . - - 65,478 170,050 170,050
Total Revenues . .. . . $8,564,239 $11,074,171 $12,940,128 $15,220,888 $15,882,648
Expenses:
General Government . . ... . $1,114,887 $ 1,213,139 $ 1,711,858 $ 1,907,495 $ 2,182,790
Public Safety . .. . . .. .. . . . . 1,981,643 2,519,419 3,124,143 3,969,287 4,602,164
Public Works . . .. . .. ..... 1,599,719 1,724,782 1,925,350 2,334,882 2,757,108
Libraries . .. . . . . .. .. . . .. . 199,353 229,534 296,356 352,374 395,841
Parks & Recreation . . . .. .. . 623,457 779,371 934,700 1,108,305 1,322,526
Water Utility . . . .. .. . .. . .. 919,704 1,051,533 1,186,901 1,448,582 1,521,452
Parking Authority . .. . . . . . - - 15,711 - 236
Bond Service . . . . . . . .. .. . 218,932 236,291 252,708 261,508 890,363
Total Expenses . .. . . $6,657,695 $ 7,754,069 $ 9,447,727 $11,382,433 $13,672,480
Capital Outlays:
General Government . .. .. . $ 36,263 $ 85,973 $ 92,255 $ 466,314 $ 319,768
Public Safety . . . .. .. .. . . .. 246,861 162,610 380,287 296,003 801,100
Public Works . . . .. .. .. ... 615,165 1,412,112 1,371,668 2,102,671 19250,273
Libraries . .. . . .. .. ....... 7,262 12,107 238,949 24,806 169,921
Parks & Recreation . .. .. .. . 282,576 221,223 206,660 968,366 713,653
Water Utility . .. .. .. .... .. 209,202 122,274 243,903 282,065 269,647
Total Capital Outlays. $1,397,329 $ 2,016,299 $ 2,533,722 $ 4,140,225 $ 3,524,362
17
Municipal Government
The City of Huntington Beach was incorporated
in 1909 and operates under its own charter, which
THEUC ^'Tv was granted in 1937. The city is governed under a
H G CITY council-administrator form of government. The char-
ter provides for election of the City Clerk, City
Treasurer, and City Attorney.
The City Council is comprised of seven members
elected at large for alternating four-year terms. Sev-
The City of Huntington Beach occupies almost 27 eral commissions consisting of public-spirited citizens,
square miles of land in the northwestern Orange including the planning, park and recreation, and li-
County coastal area. It is 18 miles southeast of the brary commissions, assist the City Council in making
nearest seaport, Long Beach, 35 miles southeast of policy recommendations in their special fields. The
the City of Los Angeles, and 90 miles northwest of city has a staff of 700 full-time and 200 part-time
San Diego. Average elevation is 40 feet. It enjoys and seasonal employees under the overall coordina-
a mild climate with an average temperature of 52 tion of the City Administrator. Principal departments
degrees in winter and 69 degrees in summer. Annual include public works, police, fire, harbors and
rainfall is about 12 inches. beaches, recreation and parks, planning, and build-
The city has long been noted as a major oil pro-
ing. The water department is operated as part of the
public works department.
ducing and beach resort area of Southern California.
However, beginning in 1960, a series of residential Acting City Administrator at the present time is
housing developments were started that initiated a Mr. Brander Castle, Assistant City Administrator,
continuous growth period extending to the present who is able and experienced in the administration of
time. In terms of population increase, Huntington municipal affairs.Mr. Castle has served the city since
Beach has been the fastest growing city in Orange 1958.
County during the last 10 years. An important
commercial and industrial base is developing in the
city, providing a more evenly balanced economy that
is not wholly dependent on the petroleum industry Population and Area
or recreation. Huntington Beach has been gaining population at
Huntington Beach is situated in one of the most the rate of about 10,000 new residents annually in
rapidly growing areas in the United States. Accord- recent years. Between 1960 and 1970, there was an
increase of 104 468 persons. This was the largest
'n he 197 U. . Census Orange County n , p g
i to 0 S. O an Co ranks g � g Y
first among California counties in population growth numerical increase in population of all Orange
since the 1960 census with an estimated increase of County cities, and represented a ten-fold increase
101.8 percent from 1960 to 1970. The city's popu- for the city during the period. County population
lation increased 909 percent in the same period, to doubled during the same time span.
a level of 115,960. It is expected that population In April 1971, the State Department of Finance
growth and industrial development in Huntington estimated the city's population at 126,900, an in-
Beach will continue as new residents seek the city's crease of 10,940 from the previous year's federal
desirable living conditions and industries are at- census. Total population grew to 132,000 by No-
tracted to the area's established technological centers. vember 1971, according to the City Planning De-
Well-supported civic programs completed, under- partment.
way, or planned serve to enhance the city's attraction Huntington Beach is now the third largest city in
as a destination resort center and convention locale. Orange County in terms of both population and
Although Huntington Beach is now the third most area. Total area within the city limits is presently
populous city in Orange County, in terms of popu- seven times greater than the size of the original city
lation density per square mile it ranks 13th among in 1909. The accompanying summary illustrates the
county jurisdictions. Clearly, there is room for fur- rapid growth in city area and in city and county
ther growth. population since 1950.
18
CITY OF HUNTINGTON BEACH
Growth Indicators
(Dollars are in Thousands)
1966 1967 1968 1969 1970
Building Permit Valuation . .. .. . . . . . $54,772 $ 57,685 $ 64,155 $100,133 $ 47,126
Dwelling Units Authorized . .. .. . . . . . 2,164 2,163 2,762 5,001 2,158
Post Office Receipts . .. . . . . . . .. . . . . $ 590 $ 694 $ 1,043 $ 1,229 $ 1,297
Taxable Sales . . . . . . . . .. . . . . . . . .. . $73,406 $116,086 $116,401 $143,472 $168,718
Water Accounts . . . . . . . . . .. . .. . . . . 21,025 22,373 24,805 28,462 30,235
Electric Meters . . . . .. . . .. . . . . . . . . 28,164 29,947 30,182 32,778 36,784
Gas Meters . . .. . . . .. . . . . .. . .. . .. . 24,152 26,249 28,975 30,901 32,785
at the same month a year ago. More than 27 percent
Population and Area of all nonagricultural wage and salary workers are
in manufacturing, with durable goods predominating.
City Area City County However, the nonmanufacturing categories are as-
Year (Square Miles) Population Population
suming greater importance; trade and service indus-
1950 . .. . . 4.71 5,237 216,224 tries registering impressive gains in recent years.
1960 . . . . . 23.41 11,492 703,925 State labor analysts expect county employment to
1970 . . . . . 26.61 115,960 1,420,386 top 491,000 at year-end, as Christmas selling pushes
retail trade to a new high.
The vigorous growth in Huntington Beach is ex- The diversity of Orange C'ounty's manufacturing
pected to continue according to all indications. Ap- base is evident in the list of leading industries. Pres-
proximately 40 percent of the total city land area ently the top five categories of manufacturing em-
is yet undeveloped. ployment are electrical equipment, ordnance, non-
electrical machinery, fabricated metal products, and
Median family income in the city is $10,324, based transportation equipment. Next in importance are
on federal census reports. One census tract, in the printing and publishing, instruments, food products,
northwest quadrant of the city, has a median family and rubber and plastics.
income over $20,000.
Government cutbacks in defense and aerospace
Indices of Growth contracts have resulted in curtailment of durable
goods manufacturing in the county, with particular
Further evidence of the sustained residential and impact on three of the four elements of the aerospace
commercial development in the city over the last five industry-electrical equipment, ordnance, and air-
year period can be seen in the tabulation at the top craft. Employment in the fourth aerospace element-
of this page. instruments-increased in the 1968-70 period, and
is presently accelerating.
Industry and Employment Nondurable manufacturing has displayed surpris-
In view of the convenient freeway network, all of ing strength, in view of the weakness in durable
Orange County is essentially one labor market. Resi- goods. Employment in this group of industries rose
dents of the city commute into southern Los Angeles to 27,1001 last year, an increase of 12 percent over
County as well. More than 300 industrial firms em- the 1968 level.
ploying 100 or more persons are located within a The accompanying tabulation presents total Orange
20-mile radius of the city. County civilian employment by industry in the 1968-
Total civilian employment in Orange County was 1970 period. On page 20 is a list of Orange County
488,100 in September 1971, compared with 486,000 industrial firms employing 500 or more persons.
19
Table 5
ORANGE COUNTY
Largest Industrial Employers
(500 or More)
No.of
Firm Product or Service Employees
t
Autonetics, Div. North American Rockwell Corp., Anaheim Electronics&electromechanical research&
development,&mfg.of systems 17,000
Rockwell Mfg. Co., Brea Valves,power tools,meters 13,000
Alpha Beta Acme Markets, Inc., La Habra Food products, drug supplies 7,300
McDonnell Douglas Astronautics Co., Huntington Beach Space systems, missiles 7,000
Hunt-Wesson Foods, Inc., Fullerton Food & grocery products (seasonal) 6,000-12,000
Hughes Aircraft Co., Fullerton Radar,data processing,computer systems 6,000
No. American Rockwell Corp., Seal Beach Saturn second stage 4,500
Aeronutronic Div., Philco-Ford Corp., Newport Beach Tactical weapons,air defense systems,radar 4,000
Beckman Instruments, Inc., Fullerton Instruments,systems&components 3,500
Collins Radio Co., Newport Beach Electronic components,data communication
equipment 1,800
Northrop Corp., Anaheim Aerospace electronics 1,630
Aerojet-General Corp., Fullerton Missile&jet engine components 1,620
Hughes Aircraft Co., Newport Beach Circuits,frequency generation&control
devices 1,200
Bertea Corp., Irvine Aircraft flight controls&avionics equip. 1,100
Interstate Electornics,Anaheim Missile instrumentation&tracking devices 1,100
W.J.Voit Rubber Corp.,Santa Ana Rubber sporting goods 1,080
Astrodata-Comcor, Anaheim Electronic data control systems
& instrumentation 1,050
California Computer Products, Anaheim Data processing equipment 1,030
Buzza-Cardoza, Anaheim Greeting cards, gift wrap 1,000
Philco-Ford.,Autonutronic Div.,Anaheim Weapons systems 1,000
Hyland,Div.Travenol Laboratories,Costa Mesa Diagnostic&therapeutic products 950
Kirkhill Rubber Co., Brea Custom-made rubber products 850
Kwikset Div.,Emhart Corp.,Anaheim Residential hardware 750
Swedlow, Inc., Fullerton Aircraft canopies,windshields,windows 750
Adhor Milk Farms,Santa Ana Dairy products 750
Amercoat Corp.,Brea Protective coatings&fiberglass reinforcing 700
Standard Pressed Steel Co.,Santa Ana Precision fasteners,steel office&shop
furniture 668
ITT Cannon Electric,Santa Ana Electrical connectors 650
LTV Ling Altec,Inc.,Anaheim Communications systems 630
Kimberly-Clark Corp., Fullerton Kleenex tissue,paper towels,napkins 625
Varian Data Machines,Inc.,Irvine Computers 625
C.B.S. Musical Instruments,Fullerton Guitars,drums,pianos&lifiers 600
Randolph Rubber Co.,Inc.,Fullerton Canvas footwear 600
Kaynar Mfg.Co.,Inc.,Fullerton Aircraft&specialty fasteners 500
Certron Corp., Anaheim Magnetic recording tape 570
Conolon Corp.,Santa Ana Fiberglass fishing rods 540
Townsend Co., Cherry Rivet Div.,Santa Ana Aerospace&commercial fasteners 530
Babcock Electronics Corp.,Costa Mesa Electronic mfg.-systems&components 520
Union Oil Co.of Calif.,Brea Petroleum research 520
Lear Siegler,Inc.,Anaheim Electronic telephone&ordnance devices 500
Kraft Foods Co.,Brea Food products 500
Atlantic Research Corp.,Costa Mesa Research missile/marine systems 500
Air-Industries of Calif.,Fullerton Aircraft&missile hardware 500
Borg Warner Corp.,Santa Ana Frequency changers,magnetic tape 500
recorders
20