Official Statement Airport Commission City and County of San ...

gross income of interest on such Series of Bonds for federal income tax purposes or, if applicable, the non-preference
status of such interest for federal alternative minimum income tax purposes.
Limitation on Covered Obligations
The Commission covenants and agrees that it will not issue or incur any obligation for borrowed
money payable from Net Revenues (i) which is subject to optional or mandatory purchase or tender for purchase prior
to maturity (other than at the option of the Commission), or (ii) which matures in less than 365 days from the date of
issuance thereof (collectively, "Covered Obligations") to the extent the aggregate principal amount of all such Covered
Obligations, at the time of issuance or incurrence thereof, would exceed 40% of the aggregate principal amount of all
obligations of the Commission for borrowed money payable from Net Revenues then outstanding. The limitation in
the foregoing sentence shall not apply to Covered Obligations described in (i) the scheduled maturity of which is not
subject to acceleration. The credit or liquidity facility in connection with any Covered Obligation any portion of the
repayment or reimbursement obligation with respect to which is on a parity with the Bonds shall be subject to the
limitations thereon described in the section entitled “Repayment Obligations” above.
Events of Default
The 1991 Master Resolution provides that “Event of Default” with respect to a Series of Bonds
means any one of the following events:
(a) if payment by the Commission in respect of any installment of interest on any Bond of such
Series is not made in full when the same becomes due and payable;
(b) if payment by the Commission in respect of the principal or accreted value of any Bond of
such Series is not made in full when the same becomes due and payable, whether at
maturity or by proceedings for redemption or otherwise;
(c) if payment of the purchase price of any Bond tendered for optional or mandatory purchase
in accordance with the provisions of the Supplemental Resolution providing for the
issuance of such Bond is not made in full as and when due;
(d) if the Commission fails to observe or perform any other covenant or agreement on its part
under the 1991 Master Resolution (other than the covenant or agreement to maintain
rentals, rates, fees and charges sufficient to meet the rate covenant with respect to the
Bonds), for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Commission by the Trustee,
or to the Commission and the Trustee by the Holders of at least 25% in aggregate Principal
Amount of Bonds of such Series then outstanding; provided, however, that if the breach of
covenant or agreement is one which cannot be completely remedied within the 60 days after
written notice has been given, it shall not be an Event of Default with respect to such Series
as long as the Commission has taken active steps within the 60 days after written notice has
been given to remedy the failure and is diligently pursuing such remedy;
(e) if the Commission is required pursuant to the rate covenant contained in the 1991 Master
Resolution to take measures to revise the schedule of rentals, rates, fees and charges for the
use of the Airport, and Net Revenues, together with any Transfer, for the Fiscal Year in
which such adjustments are made are less than the amount required by the rate covenant
with respect to the Bonds (See “Certain Covenants - Rate Covenant”);
(f) if either the Commission or the City institutes proceedings to be adjudicated a bankrupt or
insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it,
or files a petition or answer or consent seeking reorganization or relief under the federal
Bankruptcy Code or any other similar applicable federal or state law, or consents to the
C-22