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TRJ\NSMITTAL

Date: MAY 2 7 2011

THE COUNCIL

THE MAYOR

TRANSMITTED FOR YOUR CONSIDERATION. PLEASE SEE ATTACHED.

~~ ANTONIO R. VILLARAIGOSA

Mayor

r_..ITY OF LOS ANGELES

RICHARD L. BENBOW GENERAL MANAGER

CALIFORNIA COMMUNITY DEVELOPMENT

DEPARTMENT

1200 W. SEVENTH STREET Los ANGELES, CA 90017

ANTONIO R. VILLARAIGOSA MAYOR

May 18,2011

The Honorable Antonio R. Vil!araigosa Mayor, City of Los Angeles Room 303, City Hall

Attention: Pamela Finley, Legislative Coordinator

Council File: New Council District No.: 3 Contact Persons & Extensions: Ninoos Benjamin 744-7392 May M. Smith 7 44-9360

COMMITTEE TRANSMiTTAL: REQUEST AUTHORITY TO EXECUTE AND DELIVER SUPPLEMENTS TO SERIES 2005A INSTALLMENT SALE AGREEMENT AND SER~ES 2005A TRUST AGREEMENT IN CONNECTION WITH SUBSTITUTING LETTER OF CREDIT AND ADDITION OF A CONFIRMING LETTER OF CREDIT FOR THE CITY OF LOS ANGELES ADJUSTABLE RATE CERTIFICATES OF PARTICIPATION SERIES 2005A, ISSUED FOR KADIMA HEBREW ACADEMY

DEADLINE FOR ACTION

JULY 1, 2011. The current Letter of Credit (LOG) issued by Bank of America is due to expire on August 1, 2011. A substitute LOC, from California Bank & Trust, is required to be in place on or before July 1, 201, pursuant to terms of Series 2005A Trust Agreement which requires delivery of a substitute LOG not later than thirty (30) days prior to the expiration of the current LOG.

The General Manager of Community Development Department (COD) requests your referral of this transmittal to the appropriate Council Committee(s) and the City Council.

RECOMMENDA T!ONS

The General Manager, COD, requests that the Mayor and City Council:

1. FIND the subject transaction is necessary and appropriate to accomplish the City's community and economic development objectives;

Kadima Hebrew Academy 2 May 18, 2011

2. ADOPT the Resolution, annexed hereto as Attachment I (Council Resolution), all documents for the substitution of the existing Letter of Credit and documents for addition of a confirming Letter of Credit, for the City of Los Angeles Adjustable Rate Certificates of Participation Series 2005A (COPs) for the benefit of Kadima Hebrew Academy, the borrower, a not for profit California corporation (Kadima); and

3. AUTHORIZE the General Manager of COD, or designee, to negotiate and execute all documents required to carry out the intent of the Council Resolution for the benefit of Kadima, subject to approval of the City Attorney as to form.

SUMMARY

Transmitted herewith for your review, approval and further processing is a Council Resolution to enter into certain supplements of the City of Los Angeles (City) Subordinate COPs, Installment Sale Agreement and the Series 2005A Trust Agreement in an original aggregate principal amount of $7,300,000, to substitute the current LOC from Bank of America with a substitute LOC from California Bank & Trust; and addition of a confirming LOC from US Bank and/or other banking institutions. The COPs were executed and delivered on September 7, 2005. Proceeds from COPs were used by Kadima to finance certain improvements to the property located at 7011 Shoup Avenue, West Hills, California 91307 (Property).

The City's rights under the Series 2005A Installment Sale Agreement, including the right to receive payments from Kadima, which in turn are assigned to Wells Fargo Bank, National Association, as trustee (Trustee).

FISCAL IMPACT

There is no General Fund impact to the City as a result of the recommended actions.

The actions recommended in this transmittal comply with the City's financial and debt management policies. The COPs were issued in 2005 by the City and were secured by a LOC from Bank of America. The COPs do not have the pledge of public funds, security or repayment commitment of the City. The source of debt service and repayment of the COPs is solely the operating revenues of the Borrower, and guaranteed by LOC for benefit of COP investors. The financing structure of COPs provides for the City not to bear any financial responsibility for debt service and repayment of COPs under any circumstance.

The CDD will receive a modification processing fee of $5,000.

BACKGROUND

Kadima is a not for profit California corporation with 501 (c)(3) designation from the Internal Revenue Service. Located in West Hills region of Los Angeles, Kadima is an independent co-educational elementary school enrolling children from age two through Grade Eight. The school was founded in 1970 by Rabbi Eli Schochet of Congregation Beth Kodesh


(CBK). The school disaffiliated with CBK in 1977 and became a community school, and incorporated as a non-profit institution. The school has been occupying its current location since 2004. Kadima is governed by a 21 member Board of Directors and it is now affiliated with the Bureau of Jewish Education Division of the Jewish Federation Council of Greater Los Angeles. Also, Kadima is a member of The Solomon Schechter Day School Association, and fully accredited by the Western Association of Schools and Colleges.

Kadima Hebrew Academy's current enrollment is 248 pupils with 7:1 student-teacher ratio.

~ tu ent 2010 2011 s d D h" emograp 1cs City %City City LA City LA- Outside- Outside-

Category Total Residents of LA -Male Female Male Female 2 yr. - 8th Grade 248 216 87% 113 103 24 8

At Kadima, financial assistance is available for children beginning in pre-kindergarten and is based on the parents' ability to pay. The maximum financial assistance provided varies by degree of need and applies towards tuition and after school care. Currently, 57 percent of pupils receive some level of financial aid while 18 percent receive discounted tuition.

The ethnic make-up of the student body consists primarily of individuals from Eastern Europe with a smaller percentage from Sephardic (Middle East and Africa) backgrounds. Though Kadima professes a Jewish based educational curriculum, students from various religious and ethnic backgrounds are encouraged to apply. Except for religious studies, Kadima has a full staff of teachers and administrators representing various religious faiths. Kadima welcomes students of all racial, ethnic and religious backgrounds. The student body is diverse, including ethnic, origin, economic and language diversity. Approximately 30 percent of students are from homes where a language other than English is the dominant language.

PROJECT OVERVIEW

Prior to the acquisition and rehabilitation of the current school property in 2004, Kadima had been renting space in campus of the Los Angeles Unified School District in Woodland Hills, CA. With the continued growth of pupils' population over time, where Kadima was grown by five folds, Board of Directors determined to relocate into the current location, a larger and permanent campus that also provided a way to control facility costs.

Kadima completed substantial renovations to the subject property, consisting 62,000 square feet in September 2004. Part of the Property used by Kadima for religious purposes has been excluded from the financing.

PROJECT FINANCING

Kadima as requested for the City's approval, execution and delivery of supplements to the Series 2005A Installment Sale Agreement and the Series 2005A Trust Agreement to provide for the substitution of expiring LOC from Bank of America by a new LOC from


California Bank & Trust, concurrent with a confirming LOC from the U.S. Bank. The City's approval is necessary for the addition of a confirming LOC.

Issuer: Issuer's Counsel: Borrower: Bond Counsel: Trustee:

City of Los Angeles City Attorney Kadima Hebrew Academy Kutak Rock LLP Wells Fargo Bank, National Association

STAFFING AND WAGES

Kadima currently employs 69 workers with salaries ranging from $10.30 to $89 per hour (see table below). This represents a 35 percent increase, or 18 jobs, since the COPs were issued in 2005. Employees receive a full benefits package that includes medical, vision, paid holidays, sick leave, vacation, 403b Retirement Plan, and optional dental, life and disability coverage. Kadima meets the wage and benefit standards as prescribed by the Living Wage Ordinance.

Minimum Maximum Average Total in Position Salary* Salary Salary Category

Managerial $35,000 $185,000 $70,884 $ 779,730 Skilled $ 7,000 $ 70,482 $36,253 $1,486,377 Semi-Skilled $ 4,800 $ 31,000 $17,295 $ 190,247 Unskilled $10,715 $ 24,885 $18,133 $ 108,798 TOTAL $ 4,800 $185,000 $37,176 $2,565,152

*Minimum salaries are low because Kadima has many part-time employees. The range of hours in this category is between 2 and 40 hours per week. The semi-skilled employees work on average 12 and 40 hours per week.

2010-2011 Staff Demographics

Non New City % City City - Non- Jobs of City Resident Resident City City 2005 Since

Category Total LA oflA -Male -Female Male Female Jobs 2005 ManaQement 11 8 73% 4 4 1 2 5 6 Skilled 41 29 71% 5 24 3 9 34 7 Semi-Skilled 11 7 64% 0 7 1 3 9 2 Unskilled 6 6 100% 1 5 0 0 3 3 TOTAL 69 50 72% 10 40 5 14 51 18


Anticipated new jobs over the next 12-24 months:

Skilled 3 Semi-Skilled 3 Unskilled 1 Total New Jobs 7

A copy of this transmittal and all supporting legal documents were forwarded to the City's outside legal counsel for review and comment. In addition, copies have also been sent to the City Attorney's Office for concurrent review. Based on a review of the documents and discussions with members of the bond finance team, the transaction is structured as a true conduit financing. The City has no obligation or liability with respect to the repayment of the COPs. The documents provide for the payment or reimbursement to the City of expenses incurred in the future with respect to the financing and standard indemnification provisions.

RICHARD L. BENBOW General Manager

RLB:RS:NYB:MMS

Attachment I: Council Resolution

Attachment I

A RESOLUTION OF THE COUNCIL OF THE CITY OF LOS ANGELES AUTHORIZING THE EXECUTION AND DELIVERY OF A FIRST SUPPLEMENT TO SERIES 2005A INSTALLMENT SALE AGREEMENT AND A FIRST SUPPLEMENT TO SERIES 2005A TRUST AGREEMENT IN CONNECTION WITH THE CITY OF LOS ANGELES ADJUSTABLE RATE CERTIFICATES OF PARTICIPATION (KADIMA HEBREW ACADEMY) SERIES 2005A FOR THE BENEFIT OF KADIMA HEBREW ACADEMY

WHEREAS, the City of Los Angeles is a charter city and municipal corporation duly organized and existing under and pursuant to the Constitution and laws of the State of California (the "City");

WHEREAS, on September 7, 2005, Kadima Hebrew Academy, a California nonprofit public benefit corporation (the "Corporation"), with the City's assistance, undertook the financing and refinancing of the acquisition, construction, renovation, improvement and equipping of an elementary school (the "Project") located at 7011 Shoup Avenue, West Hills, California 91307 (the "Facility");

WHEREAS, the Corporation undertook the Project for the purpose of expanding and improving the educational opportunities and experiences of the students attending the Facility; and

WHEREAS, the Facility is located wholly within the City;

WHEREAS, in connection with such financing and refinancing, the Corporation sold the real property on which the Facility is located (the "Real Property") to the City and the City has purchased the Real Property from the Corporation upon the terms and conditions set forth in the Series 2005A Installment Purchase Agreement, dated as of August 1, 2005 (the "Installment Purchase Agreement"), between the City and the Corporation; and

WHEREAS, the City also entered into a Series 2005A Installment Sale Agreement, dated as of August 1, 2005 (the "Installment Sale Agreement") with the Corporation pursuant to which the City sold the Real Property where the Facility is located back to the Corporation upon the terms and conditions set forth therein; and

WHEREAS, the City, the Corporation and Wells Fargo Bank, National Association, as trustee (the "Trustee"), entered into a Series 2005A Trust Agreement, dated as of August 1, 2005 (the "Trust Agreement"), pursuant to which the Trustee agreed to execute and deliver certificates of participation (the "Certificates"), evidencing a proportionate interest in the Installment Payments (as defined in the Installment Sale Agreement) made by the City under the Installment Purchase Agreement with a principal component equal to the aggregate principal amount of Certificates so executed and delivered; and

WHEREAS, the Corporation has requested that the City approve and enter into supplements to the Installment Sale Agreement and the Trust Agreement to substitute the current Letter of Credit provide for the issuance of a Support Letter of Credit to support the

payment of principal and interest with respect to the Certificates (the "Amendments");

WHEREAS, pursuant to Section 9.01(a) of the Trust Agreement, the Installment Sale Agreement and the Trust Agreement may be supplemented to effect the Amendments pursuant to supplements to such agreements entered into by the City, the Trustee and the Corporation;

WHEREAS, there is on file with the City Clerk, copies of the following documents:

(a) a First Supplement to Series 2005A Installment Sale Agreement (the "First Supplement to Sale Agreement") which supplements the Installment Sale Agreement; and

(b) a First Supplement to Series 2005A Trust Agreement (the "First Supplement to Trust Agreement") which supplements the Trust Agreement.

WHEREAS, upon the adoption of this resolution, all acts, conditions and things required by the City's Charter and the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of the First Supplement to Sale Agreement and the First Supplement to Trust Agreement, and the consummation of the transactions authorized hereby do exist, have happened and have been performed as required by law, and the City is duly authorized and empowered, pursuant to each and every requirement of the Charter and the law, to consummate such transactions for the purpose, in the manner and upon the terms herein provided;

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Los Angeles, as follows:

Section 1. All of the above recitals are true and correct, and this Cou neil so finds and determines.

Section 2. The City hereby specifically finds and declares that the actions authorized hereby constitute municipal affairs of the City.

Section 3. The form of First Supplement to Sale Agreement presented to this meeting and on file with the City Clerk is hereby approved. The General Manager or any Assistant General Manager of the Community Development Department are, and each of them acting alone is, hereby authorized and directed for and in the name and on behalf of the City, to execute, acknowledge and deliver to the Corporation said First Supplement to Sale Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 4. The form of First Supplement to Trust Agreement presented to this meeting and on file with the City Clerk is hereby approved. The General Manager or any Assistant General Manager of the Community Development Department are, and each of them acting alone is, hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver to the Corporation and the Trustee said First Supplement to Trust Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 5. The City Clerk is hereby authorized and directed to attest the signature of the General Manager or any Assistant General Manager of the Community Development Department, as applicable, in connection with the execution and delivery of said First Supplement to Sale Agreement and said First Supplement to Trust Agreement.

Section 6. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the execution and delivery of the First Supplement to Sale Agreement and the First Supplement to Trust Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. Such actions heretofore taken by such officers, including the holding of the hearing referred to in the recitals hereof, are hereby ratified, confirmed and approved. The General Manager or any Assistant General Manager of the Community Development Department may waive any of the City's conduit financing policy guidelines with respect to the transactions referred to in this Resolution so long as there is no material impact to the City or the security for the Certificates.

Section 7. This Resolution shall take effect immediately upon its approval.

I hereby certify that the foregoing Resolution was passed and adopted by the Council of the City of Los Angeles at a meeting thereof duly held on the day of ______ , 2011 by a majority vote of all its members.

Approved as to Form: CARMEN A. TRUTANICH City Attorney

By ________________________ __ Assistant City Attorney

JUNE LAGMAY City Clerk

By ________________________ _ Deputy

4839-4041-1145.1

FIRST SUPPLEMENTAL TO

SERIES 2005A TRUST AGREEMENT

dated as of June 1, 2011

among

CITY OF LOS ANGELES,

KADIMA HEBREW ACADEMY

and

WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee

Relating to:

$7,300,000 City of Los Angeles

Adjustable Rate Certificates ofParticipation (Kadima Hebrew Academy)

Series 2005A

Supplementing and Amending Series 2005A Trust Agreement

dated as of August 1, 2005

Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17. Section 18. Section 19. Section 20. Section 21. Section 22. Section 23.

4839-404!-! 145.1

TABLE OF CONTENTS

Page

Definitions ........................................................................................................ 2 Amendment to Section 4.06 of the Original Trust Agreement. ........................ 2 Amendment to Section 5.01 of the Original Trust Agreement.. ....................... 3 Amendment to Section 5.02 of the Original Trust AgreemenL ........................ 3 Amendment to Section 5.08 of the Original Trust Agreement.. ...................... .4 Amendment to Section 5.09 of the Original Trust Agreement. ........................ 4 Support Letter of Credit .................................................................................... 4 Amendment to Section 6.06 of the Original Trust Agreement.. ....................... 5 Amendment to Section 7.01 of the Original Trust Agreement.. ....................... 5 Amendment to Section 7.03 of the Original Trust Agreement.. ....................... 6 Amendment to Section 7.07 ofthe Original Trust Agreement.. ....................... 6 Amendment to Section 7.08 of the Original Trust Agreement.. ....................... 6 Amendment to Section 8.01 of the Original Trust Agreement ......................... 6 Amendment to Section 8.02 of the Original Trust Agreement.. ....................... 7 Amendment to Section 8.03 of the Original Trust Agreement.. ....................... 8 Amendment to Section 11.07 of the Original Trust Agreement. ...................... & Amendment to Atiicle XI of the Original Trust Agreement ............................ 8 Agreement ........................................................................................................ 9 Partial Invalidity ............................................................................................... 9 Effective Date ................................................................................................... 9 Governing Law ................................................................................................. 9 Binding Effect ................................................................................................... 9 Execution in Counterparts ................................................................................ 9

FIRST SUPPLEMENT TO SERIES 2005A TRUST AGREEMENT

THIS FIRST SUPPLEMENT TO SERIES 2005A TRUST AGREEMENT, made and entered into as of June 1, 2011 (this "Supplemental Trust Agreement"), by and among the CITY OF LOS ANGELES, a municipal corporation and charter city duly established and existing under the Constitution and the laws of the State of California (as further defined in Section 1.01 of the Original Sale Agreement hereinafter mentioned, the "City"), KADIMA HEBREW ACADEMY, a California nonprofit public benefit corporation duly organized and existing under the laws of the State of California (as further defined in Section 1.01 of the Original Sale Agreement, the "Corporation"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America (as further defined in Section 1.01 of the Original Sale Agreement, the "Trustee") amends and supplements the Trust Agreement, dated as of August 1, 2005 (the "Original Trust Agreement"):

WIT N E S SETH: ----------WHEREAS, the City purchased from the Corporation cetiain real property and

improvements of the Corporation located at 7011 Shoup Avenue, West Hills, California (the "Real Property"), as more fully described in and pursuant to the Installment Purchase Agreement, dated as of August 1, 2005 (the "Original Purchase Agreement"), by and between the City and the Corporation;

WHEREAS, the improvements situated on the Real Property consist of renovated 62,000 square foot building and other educational facilities (the "Improvements" and, together with the Real Property, the "Facility");

WHEREAS, pursuant to the Original Purchase Agreement, the City is obligated to make certain installment payments (the "Installment Payments") to the Corporation for the purchase of the Facility;

WHEREAS, the City sold the Facility to the Corporation pursuant to the Installment Sale Agreement, dated as of August 1, 2005, (the "Original Sale Agreement"), by and between the City and the Corporation;

WHEREAS, pursuant to the Original Sale Agreement, the Corporation is obligated to make ce1iain payments (the "Purchase Payments") to the City for the purchase of the Facility;

WHEREAS, the obligation of the City to make the Installment Payments is payable solely from the Purchase Payments and the other funds held by the Trustee under the Original Trust Agreement;

WHEREAS, the Corporation has requested the City's assistance in amending certain obligations and covenants in the Original Sale Agreement and the Original Trust Agreement ("Amendments");

4839-4041-1145.1

WHEREAS, the Corporation and the City have determined that the Amendments will require the execution and delivery of a Supplemental Installment Sale Agreement by and between the Corporation and the City (the "Supplemental Sale Agreement"), and a Supplemental Trust Agreement, by and among the City, the Corporation and the Trustee (the "Supplemental Trust Agreement");

WHEREAS, pursuant to Section 9.08 of the Original Sale Agreement, the Original Sale Agreement may be amended by written agreement of the Corporation and the City, with the consent of the Tmstee in accordance with the provisions of the Original Trust Agreement and the concurring written consent of the Bank in accordance with the provisions of the Reimbursement Agreement;

WHEREAS, the City and the Corporation have determined that all acts and proceedings required by law to exist, happen and be performed precedent to and in connection with the execution and entering into of this Supplemental Trust Agreement have existed, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly empowered to execute and enter into this Supplemental Trust Agreement; and

WHEREAS, the City and the Corporation have duly authorized the execution and delivery of this Supplemental Trust Agreement;

WHEREAS, Bank of America [and California Bank & Trust] have consented to the execution of this Supplemental Sale Agreement concurrently with the execution hereof by the City and the Corporation;

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows:

Section 1. Definitions. Unless the context clearly otherwise requires, all capitalized terms used herein shall have the meanings assigned to such terms in Section 1.01 of the Original Sale Agreement, as originally executed or as it may from time to time be supplemented, modified or amended as provided therein and in the Original Trust Agreement, including as provided in the Supplemental Sale Agreement.

Section 2. Amendment to Section 4.06 of the Original Trust Agreement. A new subsection (g) is hereby added to Section 4.06 to read as follows:

(g) Expiration of the Support Letter of Credit. Unless the Corporation shall deliver to the Trustee a substitute Support Letter of Credit at least 30 days prior to the expiration date of the Support Letter of Credit, the Trustee shall provide notice to each Ce1iificate Owner, by first class mail, postage prepaid, of a mandatory tender date relating to all of the Series 2005A Certificates which will be 10 days prior to the expiration date of the Support Letter of Credit, as defined therein, and requiring each Owner to tender his Series 2005A Ce1iificates to the Tender Agent for purchase on the date 10 days prior to the expiration date of the Support Letter of Credit at a price of

4839-4041-1145.1 2

100% of the principal amount thereof, plus accrued and unpaid interest to such date, and stating that such mandatory tender shall be required for purchase.

Section 3. Amendment to Section 5.01 of the Original Trust Agreement. Subsection (d) of Section 5.01 is hereby amended in its entirety to read as follows:

(d) The following Funds and Accounts shall be established and maintained by the Trustee or Paying Agent hereunder:

(i) Costs of Delivery Fund;

(ii) Project Fund;

(iii) Debt Service Fund (with Interest Account and Principal Account, including the Sinking Account, therein);

(iv) Letter of Credit Fund;

(v) Support Letter of Credit Fund;

(vi) Rebate Fund;

(vii) Purchase Fund; and

(viii) Prepayment Fund.

Section 4. Amendment to Section 5.02 of the Original Trust Agreement. Subsection (b) of Section 5.02 of the Original Trust Agreement is hereby amended in its entirety to read as follows:

(b) Amounts on hand in the Debt Service Fund shall be applied as follows, and in the following order ofpriority:

4839·4041-1145.1

(i) to the Bank, on Interest Payments Dates, as reimbursement to the Bank for payments made to the Certificate Owners from draws on the Letter of Credit;

(ii) to the Suppmt Letter of Credit Bank, on Interest Payment Dates, as reimbursement to the Support Letter of Credit Bank for payments made to the Certificate Owners from draws on the Support Letter of Credit; and

(ii) to Certificate Owners, in the event Available Moneys then on hand in the Letter of Credit Fund are insufficient therefor, the balance due and payable on the Interest Payments Dates with respect to the Outstanding Series 2005A Certificates.

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Section 5. Amendment to Section 5.08 of the Original Trust Agreement.

(a) Subsection (a), (b) and (c) of Section 5.08 of the Original Trust Agreement are hereby amended in their entirety to read as follows:

(a) no later than 1:00 p.m., California time, on the second Business Day preceding each Interest Payment Date, in an amount sufficient to pay (i) the interest becoming due and payable on the Series 2005A Certificates on such Interest Payment Date; and (ii) the principal with respect to the Series 2005A Certificates maturing on such Interest Payment Date, if any;

(b) no later than 1 :00 p.m., California time, on the second Business Day preceding each date fixed for prepayment of the Series 2005A Certificates, in an amount which, when added to any Seasoned Funds equal to the applicable prepayment premium, if any, will be sufficient to redeem the Series 2005A Certificates; and

(c) prior to 8:30a.m., California time, on the Business Day prior to a Purchase Date for any Series 2005A Certificates for which funds are not on deposit with the Tender Agent in any amount sufficient to make timely payment of all Series 2005A Certificates tendered or deemed tendered on such Purchase Date.

Section 6. Amendment to Section 5.09 of the Original Trust Agreement. The second paragraph of Section 5.09 is hereby amended in its entirety to read as follows:

Moneys drawn under the Letter of Credit shall be deposited only in the Letter of Credit Fund or the Purchase Fund, as provided herein, and shall not be commingled with the moneys on deposit in any other fund or account established hereunder. The Trustee shall have the sole right of withdrawal from the Letter of Credit Fund and the Tender Agent from the Purchase Fund, in both cases, for the benefit of the registered Owners, from time to time, of the Series 2005A Certificates, and neither the Corporation nor the City shall have any legal, equitable or beneficial right, title or interest therein.

Moneys drawn under the Support Letter of Credit shall be deposited only in the Support Letter of Credit Fund or the Purchase Fund, as provided herein, and shall not be commingled with the moneys on deposit in any other fund or account established hereunder. The Trustee shall have the sole right of withdrawal from the Support Letter of Credit Fund and the Tender Agent from the Purchase Fund, in both cases, for the benefit of the registered Owners, from time to time, of the Series 2005A Certificates, and neither the Corporation nor the City shall have any legal, equitable or beneficial right, title or interest therein.

Section 7. Support Letter of Credit. A new Section 5.11 1s hereby added to the Original Trust Agreement to read as follows:

Section 5.11. Support Letter of Credit. The Support Letter of Credit shall be held by the Trustee and drawn upon in accordance with its terms. Moneys derived from

4839·404l-ll45.l 4

draws upon the Support Letter of Credit as a result of the wrongful dishonor by the Bank of a properly presented and conforming draw on the Letter of Credit or the repudiation of the Letter of Credit by the Bank shall be deposited in the "Support Letter of Credit Fund" which is hereby created and which shall be held by the Trustee, except draws relating to the purchase of Series 2005A Certificates which are not remarketed which shall be deposited into the Pmchase Fund, as an account separate and apart from all other funds and accounts held by the Trustee. Neither the Trustee, the Remarketing Agent, the City, the Bank nor any other person other than the Owners of the Series 2005A Certificates shall have a lien against any proceeds of drawings made under the Support Letter of Credit; provided, however, that any amount remaining in the Support Letter of Credit Fund remaining after all payment required to be made the Certificate Owners have been made shall be returned to the Support Letter of Credit Bank.

Notwithstanding anything to the contrary herein, in making drawings under the Support Letter of Credit, the Trustee shall act solely as Trustee hereunder on behalf of the Owners of the Series 2005A Ce1tificates.

Section 8. Amendment to Section 6.06 of the Original Trust Agreement A new subsection (d) is hereby added to Section 6.06 to read as follows:

(d) The Trustee shall draw under the Support Letter of Credit in accordance with Section 7.01 hereof and with the terms of the Support Letter of Credit, so that sufficient moneys are available thereunder to make payments of principal and interest with respect to the Series 2005A certificates at all appropriate times.

Section 9. Amendment to Section 7.01 ofthe Original Trust Agreement

(a) A new subsection (e) is hereby added to Section 7.01 to read as follows:

(e) the wrongful dishonor by the Bank of a properly presented and conforming draw on the Letter of Credit or the repudiation of the Letter of Credit by the Banlc

(b) The final paragraph of Section 7.01 is hereby amended in its entirety to read as follows:

4839-4041-1145. [

Upon the occurrence of an Event of Default described in Section 7.01(e), the Trustee shall, by notice in writing to the City, the Tender Agent, the Remarketing Agent, the Corporation, the Bank and the Support Letter of Credit Bank declare the principal of all the 2005A Certificates then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the 2005A Ce1tificates contained to the contrary notwithstanding. Upon any such declaration the Trustee shall draw upon any then existing Support Letter of Credit by 12:00 noon, California time, on the Business Day preceding the date on which the principal of, premium, if any, or interest on the 2005A Certificates is to be paid to the Owners, in accordance with the terms thereof in amounts necessary to make full and timely payments of principal of,

5

premium, if any, and interest on the 2005A Certificates, other than 2005A Ce1iificates held on account of the Bank and the Corporation, when due. Interest on the 2005A Certificates shall cease to accrue upon the declaration of acceleration. The Trustee shall notify the Owners of the date of acceleration and the cessation of accrual of interest on the 2005A Ce1iificates in the same manner as for a notice of prepayment.


(a) The parenthetical in the first paragraph of Section 7.03 is hereby amended in its entirety to read as follows: "(subject to Section 11.10 and except for moneys on deposit in the Rebate Fund, the Letter of Credit Fund, the Support Letter of Credit Fund and the Purchase Fund set aside to pay the purchase price of Series 2005A Certificates theretofore tendered or deemed tendered)."

(b) Subsection (c) is hereby amended in its entirety to read as follows: "(c) to the Bank and the Support Letter of Credit Bank.

Section 11. Amendment to Section 7.07 of the Original Trust Agreement Section 7.07 is hereby amended in its entirety to read as follows:

Section 7.07. In case any proceedings taken by the Trustee, the Bank or any one or more Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Owners, then in every such case the City, the Corporation, the Trustee and the Certificateowners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the City, the Corporation, the Bank, the Suppmi Letter of Credit Bank, the Trustee and the Certificateowners shall continue as though no such proceedings had been taken.

Section 12. Amendment to Section 7.08 of the Original Trust Agreement. Section 7.08 is hereby amended in its entirety to read as follows:

Section 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, the Bank, the Support Letter of Credit Bank, or to the Owners of the Series 2005A Certificates is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.


(a) follows:

Subsection (b) of Section 8.01 is hereby amended in its entirety to read as

(b) Either the City or the Corporation may, with the consent of the Bank and the Suppmi Letter of Credit Bank, remove the Trustee at any time

4839-4041-1145.1 6

unless an Event of Default shall have occmTed and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Bank, so long as the Reimbursement Agreement is then in effect and the Bank has not wrongfully dishonored drawings thereunder, or the Owners of not less than 66 2/3% in aggregate principal amount of Series 2005A Certificates then Outstanding, or their attorneys duly authorized in writing, or if at any time the Trustee shall cease to be eligible in accordance with paragraph (e) below, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or its prope1ty or affairs for the purpose of rehabilitation, conservation or liquidation; in each case by giving written notice of such removal to the Trustee, and thereupon shall appoint, with the written consent of the other party, a successor Trustee by an instrument in writing.

(b) Subsection (c) of Section 8.01 is hereby amended in its entirety to read as follows:

(c) The Trustee may at any time resign by giving written notice of such resignation to the City, the Bank, the Support Letter of Credit Bank and the Corporation, and by giving the Certificateowners notice of such resignation by mail at their addresses appearing on the Certificate registration books maintained by the Trustee. Upon receiving such notice of resignation, any one of the City or the Corporation, or the Bank shall promptly appoint a successor Trustee by an instrument in writing.

(c) The first sentence of subsection (d) of Section 8.01 is hereby amended in its entirety to read as follows: "Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon the consent of the Bank and the Support Letter of Credit Bank to such appointment and upon acceptance of appointment and assumption of duties by the successor Trustee."

(d) The last sentence of subsection (d) of Section 8.01 is hereby amended in its entirety to read as follows: "The Trustee shall transfer all funds and property then held by the Trustee under the Series 2005A Trust Agreement to the successor Trustee, including the Letter of Credit and the Support Letter of Credit."

Section 14. Amendment to Section 8.02 of the Original Trust Agreement. Section 8.02 is hereby amended in its entirety to read as follows:

Section 8.02. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate tmst business, provided such company shall be eligible under Section S.Ol(e), shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding; provided, however, that any

4839-4041-1145.1 7

successor Trustee shall be required to comply with the provisions of the Letter of Credit and the Support Letter of Credit respecting a transfer of its coverage to the successor Trustee, including the payment of any transfer fees, which shall be for the account of the Corporation.

Section 15. Amendment to Section 8.03 of the Original Trust Agreement. Subsection (c) of Section 8.03 is hereby amended in its entirety to read as follows:

(c) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Series 2005A Trust Agreement at the request, order or direction of the Bank or any of the Certificateowners pursuant to the provisions of this Series 2005A Trust Agreement unless such Certificateowners shall have offered to the Trustee reasonable security or indemnity, satisfactory to the Trustee, against the costs, expenses and liabilities which may be incurred therein or thereby; provided, however, that the Trustee shall not be entitled to any security or indemnity in connection with its obligations to make timely draws under the Letter of Credit or the Support Letter of Credit, remit principal and interest with respect to the Series 2005A Certificates to the Owners thereof, effect mandatory tenders of the Series 2005A Certificates in accordance with the Series 2005A Sale Agreement and this Series 2005A Trust Agreement and accelerate the maturity of the Series 2005A Certificates in accordance with Section 7.02 hereof.


(a) The following address is hereby added to Section 11.07:

To the Support Letter of Credit Bank:

Northern Trust Company 355 South Grand Avenue# 2600 Los Angeles, CA 90071-1505 Attention: Telephone:

(b) Subsection (a) of Section 11.07 is hereby amended in its entirety to read as follows: "material amendments to the Series 2005A Installment Sale Agreement, this Series 2005A Trust Agreement, the Letter of Credit or the Support Letter of Credit;"

(c) Subsection (c) of Section 11.07 is hereby amended in its entirety to read as follows: "the expiration, termination, cancellation, extension or substitution of the Letter of Credit or the Support Letter of Credit;"

Section 17. Amendment to Article XI of the Original Trust Agreement. A new Section 11.19 is hereby added to read as follows:

Section 11.19. References to the Support Letter of Credit Bank After the expiration or termination of the Support Letter of Credit and on and after the substitution of the Letter of Credit in accordance with the requirements of Section 6.08 hereof such that no Support Letter of Credit is required, all references to the Support Letter of Credit

4839-4041 "1145 .1 8

Bank and the Support Letter of Credit contained herein shall be null and void and of no further force and effect.

Section 18. Agreement. Except as specifically supplemented and amended hereby, the Original Trust Agreement, shall remain in full force and effect as in existence as of the date hereof. After the effective date (as set fmih in Section 4.03 hereof), any reference by the City or the Corporation to the Trust Agreement shall mean the Original Trust Agreement as supplemented and amended by this Supplemental Trust Agreement.

Section 19. Partial Invalidity. If any one or more of the terms, provisions, promises, covenants or conditions of this Supplemental Trust Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Supplemental Trust Agreement shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law.

Section 20. Effective Date. This Supplemental Trust Agreement shall become effective on the date this Supplemental Trust Agreement is executed by the parties hereto.

Section 21. Governing Law. This Supplemental Trust Agreement shall be governed by the laws of the State of California.

Section 22. Binding Effect. This Supplemental Trust Agreement shall inure to the benefit of and shall be binding upon the City, the Corporation, the Trustee and their respective successors and assigns, subject, however, to the limitations contained herein.

Section 23. Execution in Counterparts. This Supplemental Trust Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

[Signature page follows]

4839-404!-1145.! 9

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Trust Agreement to be signed in their respective names by their duly authorized officers all as of the day and year first above written.

Attest:

By __________________________ ___

Deputy City Clerk

Approved as to form: Carmen A. Trutanich, City Attorney

By __________________________ __

Assistant City Attorney

CITY OF LOS ANGELES

By ____________________________ _

Richard L. Benbow, General Manager Commtmity Development Department

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

By~~~~~~~------------------[_], Vice President


By ______________________________ _

[_]

[Signature Page to Supplemental Trust Agreement]

4839-4041-1145.1

4836-0067-0729.1

FIRST SUPPLEMENTAL TO

SERIES 2005A INSTALLMENT SALE AGREEMENT

CITY OF LOS ANGELES, as Seller

and

KADIMA HEBREW ACADEMY, as Purchaser

dated as of June 1, 2011

Relating to

$7,300,000 City of Los Angeles

Adjustable Rate Certificates ofParticipation (Kadima Hebrew Academy)

Series 2005A

Supplementing and Amending Series 2005A Installment Sale Agreement

dated as of August 1, 2005

Section 1. Section 2.

Section 3.

Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16.

4836-0067-0729.1

TABLE OF CONTENTS

Page

Authority to Enter into Supplemental Sale Agreement.. ........................................ 2 Re-Affirmation of the Corporation's Representations and Warranties under the Original Sale Agreement ........................................................................ 2 Re-Affirmation of the City's Representations under the Original Sale Agreement .............................................................................................................. 2 Findings of the City ................................................................................................ 3 Definitions .............................................................................................................. 3 Amendment to Section 4.01 ofthe Original Sale Agreement.. ............................. .4 Amendment to Section 4.08 of the Original Sale Agreement ............................... .4 Amendment to Section 5.01 ofthe Original Sale Agreement ............................... .4 Addition of Section 5.18 ofthe Original Sale Agreement .................................... .4 Agreement .............................................................................................................. 5 Partial Invalidity ..................................................................................................... 5 Effective Date; Condition Precedent ...................................................................... 5 Governing Law ....................................................................................................... 5 Binding Effect ......................................... _____ ........................................................... 5 Execution in Counterparts ...................................................................................... 6 Fees and Expenses .................................................................................................. 6

FIRST SUPPLEMENTAL TO SERIES 2005A INSTALLMENT SALE AGREEMENT

THIS FIRST SUPPLEMENTAL TO SERIES 2005A INSTALLMENT SALE AGREEMENT, dated as of June 1, 2011 (this "Supplemental Sale Agreement"), by and between the CITY OF LOS ANGELES, a municipal corporation and charter city duly established and existing under the Constitution and the laws of the State of California (the "City"), and KADIMA HEBREW ACADEMY, a nonprofit corporation duly organized and existing under the laws of the State of California (as further defined in Section 1.01 of the Original Sale Agreement hereinafter mentioned, the "Corporation") supplements and amends the Installment Sale Agreement, dated as of August 1, 2005 (the "Original Sale Agreement"), by and between the City and the Corporation.

WITNESSETH: -------.,....,.~~~

WHEREAS, the City purchased from the Corporation certain real property and improvements of the Corporation located at 7011 Shoup Avenue, West Hills, California (the "Real Property"), as more fully described in and pursuant to the Installment Purchase Agreement, dated as of August 1, 2005 (the "Original Purchase Agreement"), by and between the City and the Corporation;

WHEREAS, the improvements situated on the Real Property consist of a renovated 62,000 square foot building and other educational facilities (the "Improvements" and, together with the Real Property, the "Facility");

WHEREAS, pursuant to the Original Purchase Agreement, the City is obligated to make ce1tain installment payments (the "Installment Payments") to the Corporation for the purchase of the Facility;

WHEREAS, the City sold the Facility to the Corporation pursuant to the Original Sale Agreement;

WHEREAS, pursuant to the Original Sale Agreement, the Corporation is obligated to make certain payments (the "Purchase Payments") to the City for the purchase of the Facility;

WHEREAS, the obligation of the City to make the Installment Payments is payable solely from the Purchase Payments and the other funds held by Wells Fargo Bank, National Association, as trustee (the "Trustee") under the Trust Agreement, dated as of August 1, 2005 (the "Original Trust Agreement");

WHEREAS, pursuant to the Original Trust Agreement, the City assigned to the Trustee the City's right to receive the Purchase Payments made by the Corporation under the Original Sale Agreement, and the Corporation assigned to the Trustee the Corporation's right to receive the Installment Payments made by the City pursuant to the Original Purchase Agreement;

WHEREAS, the Bonds were originally supported by an irrevocable, direct-pay letter of credit issued by Bank of America, N.A. (the "Bank of America Letter of Credit");

4836-0067-0729.1

WHEREAS, the Borrower wishes to provide as a Substitute Security the combination of an irrevocable letter of credit issued by California Bank & Trust (the "Letter of Credit") and an irrevocable standby letter of credit issued by Northern Trust Corporation (the "Support Letter of Credit");

WHEREAS, in order to accomplish the proposed substitution of the Bank of America Letter of Credit with the Letter of Credit and the Support Letter of Credit, the Corporation has requested the City's assistance in amending certain terms and covenants in the Original Purchase Agreement, the Original Sale Agreement and the Original Trust Agreement ("Amendments");

WHEREAS, the Corporation and the City have determined that the Amendments will require the execution and delivery of a Supplemental Installment Purchase Agreement, this Supplemental Sale Agreement and a Supplemental Trust Agreement, by and among the City, the Corporation and the Trustee (the "Supplemental Trust Agreement");

WHEREAS, pursuant to Section 9.08 of the Original Sale Agreement, the Original Sale Agreement may be amended by written agreement of the Corporation and the City, with the consent of the Trustee in accordance with the provisions ofthe Original Trust Agreement and the concurring written consent of the Bank in accordance with the provisions of the Reimbursement Agreement;

WHEREAS, the City and the Corporation have duly authorized the execution and delivery of this Supplemental Sale Agreement;

WHEREAS, Bank of America [and California Bank & Trust] have consented to the execution of this Supplemental Sale Agreement concurrently with the execution hereof by the City and the Corporation;

NOW, THEREFORE, fm and in consideration of the premises and the mutual covenants hereinafter contained, the pmiies hereto hereby formally covenant, agree and bind themselves as follows:

Section 1. Authority to Enter into Supplemental Sale Agreement. The City and the Corporation are hereby authorized to enter into this Supplemental Sale Agreement pursuant to Section 9.08 of the Original Sale Agreement.

Section 2. Re-Affirmation of the Corporation's Representations and Warranties under the Original Sale Agreement. The Corporation hereby represents and warrants to the City, that the Corporation's representations and warranties set forth in Section 2.01 of the Original Sale Agreement are true and correct as though made on the date of execution and delivery of this Supplemental Sale Agreement.

Section 3. Re-Affirmation of the City's Representations under the Original Sale Agreement. The City represents that its representations set forth in Section 2.02 of the Original Sale Agreement are tlue and correct as though made on the date of execution and delivery of this Supplemental Sale Agreement.

4836-0067 -0729.! 2

Section 4. Findings of the City. The City hereby finds and determines that (a) the program of educational and instructional services provided by the Corporation with the Facility serve public purposes and is necessary to meet the educational needs of the population served by the City; and (b) this Supplemental Sale Agreement and the transactions contemplated hereby are in the best interests of the City and the general public, promote the health, welfare and safety of the citizens of the City, and constitute necessary and proper governmental purposes.

Section 5. Definitions. Section 1.01 of the Original Sale Agreement is hereby amended as follows:

(a) The definition of"Available Moneys" is hereby amended in its entirety to read as follows:

"Available Moneys" means (a) Seasoned Funds, (b) moneys derived from drawings under the Letter of Credit, (c) moneys derived from drawings under the Support Letter of Credit, (d) remarketing proceeds, (e) the proceeds of any obligations issued or incurred by the City to refund the Series 2005A Certificates, (f) insurance proceeds or a condemnation award paid directly to the Trustee, or (g) investment income derived from the investment of moneys described in clause (a), (d), (e) or (f).

(b) The definition of "Business Day" is hereby amended in its entirety to read as follows:

"Business Day" means any day which is not one of the following: (a) a Saturday, Sunday or legal holiday as set forth by the Federal Reserve Bank of San Francisco, (b) any other day on which the corporate trust office of the Trustee or the office of the Bank designated for presentations of drawings under the Letter of Credit or the office of the Support Letter of Credit Bank designated for presentations of drawings under the Support Letter of Credit are authorized or required to be closed by the appropriate regulatory authorities, or (c) a day on which the New York Stock Exchange is authorized or required to be closed.

(c) The definition of "Reimbursement Agreement" is hereby amended in its entirety to read as follows:

"Reimbursement Agreement" means that cettain Letter of Credit and Reimbursement Agreement, dated as of June 1, 2011, between the Bank and the Corporation providing for the issuance of the Letter of Credit by the Bank.

(d) The definition of "Revenues" is hereby amended in its entirety to read as follows:

"Revenues" means all amounts received by the City or the Trustee for the account of the City and the Corporation pursuant or with respect to the Series 2005A Installment Sale Agreement, the Series 2005A Installment Purchase Agreement, the Tmst Agreement, the Letter of Credit or the Support Letter of Credit, including, without limiting the generality of the foregoing, Purchase Payments and Installment Payments (including both timely and delinquent payments, and any late charges, paid from whatever source), prepayments, insurance proceeds, condemnation proceeds, and all interest, profits or other income derived from the investment of

4836-0067-0729, I 3

amounts in any fund or account established pursuant to the Trust Agreement, but not including any moneys paid for deposit into the Rebate Fund and the Purchase Fund.

(e) Section 1.01 of the Original Sale Agreement is hereby amended to add the following definitions:

"Support Letter of Credit" shall mean that Support Letter of Credit issued by the Support Letter of Credit Bank guaranteeing the payments required to be made by the Bank under the Letter of Credit and naming the Trustee as the beneficiary.

"Support Letter of Credit Bank" shall mean Nmihern Trust Corporation, or any other commercial bank or other financial institution issuing a Support Letter of Credit then in effect.

Section 6. Amendment to Section 4.01 of the Original Sale Agreement. Subsection (c) of Section 4.01 of the Original Sale Agreement is hereby amended in its entirety to read as follows:

(c) Notwithstanding the foregoing, so long as the Letter of Credit and Support Letter of Credit are in effect and available for drawings by the Trustee to make payments of principal and interest to the Owners of the Series 2005A Certificates, the above described obligations of the Corporation shall be satisfied by the making of such drawings and the payment thereof by the Bank. During such period, payments of the Corporation may be made directly to the Bank by way of reimbursement of its corresponding obligations under the Reimbursement Agreement.

Section 7. Amendment to Section 4.08 of the Original Sale Agreement. The last sentence of subsection (a) of Section 4.08 of the Original Sale Agreement is hereby amended in its entirety to read as follows:

No new Reset Date and Interest Rate Mode, whether or not it represents a change in Interest Rate Modes, may be established hereunder unless the Letter of Credit and the Support Letter of Credit then in effect will by their terms continue in effect until at least 30 days following the next following Reset Date or until the maturity of the Series 2005A Certificates, if the Interest Rate Mode will extend through such maturity.

Section 8. Amendment to Section 4.09 of the Original Sale Agreement. Subsection (a) of Section 4.09 is hereby amended in its entirety to read as follows:

(a) The Corporation may, with the prior written consent of the Bank, elect at any time Series 2005A Certificates are Outstanding to have all of the Series 2005A Certificates be payable at the Fixed Interest Rate by giving written notice to the Trustee, the Tender Agent, the Bank, the Support Letter of Credit Bank and the Remarketing Agent of such election at least 35 and not more than 45 days prior to the proposed Conversion Date, which shall be an Interest Payment Date. The notice of election by the Corporation shall state the proposed Conversion Date, which shall be an Interest Payment Date and, in the case of the Bank, shall indicate the pmiion of the Series 2005A Certificates (if less than all) which are to be so conve1ied.

4836·0067 ·0729.1 4

Section 9. Amendment to Section 5.01 of the Original Sale Agreement. The last paragraph of subsection (a) of Section 5.01 ofthe Original Sale Agreement is hereby amended in its entirety to read as follows:

The Bank shall have approved such sale, transfer, consolidation or merger in writing and shall have made appropriate amendments to the Letter of Credit and the Suppoti Letter of Credit reflecting the same.

Section 10. Addition of Section 5.18 of the Original Sale Agreement. A new section 5.18 is hereby added to the Original Sale Agreement to read as follows:

Section 5.18. Supporting Letter of Credit.

(a) In order to secure payment of the Installment Payments when due or optionally or mandatorily prepaid and to cause the Bank to provide funds for purchase of optionally or mandatorily tendered Series 2005A Certificates, all for the purpose of enhancing the marketability of the Series 2005A Certificates, the Corporation hereby agrees to induce the Support Letter of Credit Bank to provide the Support Letter of Credit. The Support Letter of Credit shall be an obligation of The Suppmi Letter of Credit Bank to pay to the Trustee the Installment Payments (but not exceeding the stated amount of the Support Letter of Credit) due in the event that the Bank has failed to honor a properly presented drawing under the Letter of Credit or in the event the Bank has repudiated the Letter of Credit. The Suppoti Letter of Credit shall be held and administered by the Trustee pursuant to and in accordance with the provisions thereof and of the Trust Agreement.

(b) At its option, the Corporation may deliver to the Trustee a substitute Support Letter of Credit, and the Trustee shall accept the substitute Support Letter of Credit in place of the original Support Letter of Credit and return the original Support Letter of Credit to the Support Letter of Credit Bank if, but only if, the conditions set forth in Section 6.08 of the Trust Agreement have been met. Upon delivery of substitute Support Letter of Credit, all references to the Support Letter of Credit herein and in the Trust Agreement shall be deemed to be references to the substitute Support Letter of Credit.

Section 11. Agreement. Except as specifically supplemented and amended hereby, the Original Sale Agreement, shall remain in full force and effect as in existence as of the date hereof. After the effective date (as set forth in Section 12 hereof), any reference by the City or the Corporation to the Sale Agreement shall mean the Original Sale Agreement as amended by this Supplemental Sale Agreement.

Section 12. Partial Invalidity. If any one or more of the terms, provisions, promises, covenants or conditions of this Supplemental Sale Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions

4836-0067·0729< I 5

of this Supplemental Sale Agreement shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law.

Section 13. Effective Date; Condition Precedent This Supplemental Sale Agreement shall become effective on the date of its execution.

Section 14. Governing Law. This Supplemental Sale Agreement shall be governed by the laws of the State of California.

Section 15. Binding Effect. This Supplemental Sale Agreement shall inure to the benefit of and shall be binding upon the City, the Corporation and their respective successors and assigns, subject, however, to the limitations contained herein.

Section 16. Execution in Counterparts. This Supplemental Sale Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

Section 17. Fees and Expenses. The Corporation agrees to pay all expenses, legal fees and other costs incurred by the City relating to or arising from this Supplemental Sale Agreement.

[Signature page follows]

4836-0067-0729.1 6

IN WITNESS WHEREOF, the City and the Corporation have caused this Supplemental Sale Agreement to be executed in their respective names by their duly authorized representatives, all as of the date first above written.

Attest:

By __________________________ __ Deputy City Clerk

Approved as to form: Carmen A. Trutanich, City Attorney

By ________________________ __

Assistant City Attorney

CITY OF LOS ANGELES

By ____________________________ __

Richard L. Benbow, General Manager Community Development Department


[Signature Page to Supplemental Sale Agreement]

41!36·0067 ·0729 .1

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