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

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Capitalized terms used in this section “LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT” and not
otherwise defined shall have the meaning given to such terms as set forth in the Reimbursement Agreement.
Reference is made to Appendix H for the form of the Letter of Credit.
Letter of Credit
On the date of issuance of the 2010A Bonds, the Bank will issue in favor of the Trustee the Letter of Credit
in the amount of $219,378,185 (the “Original Stated Amount”) which is equal to the principal amount of the 2010A
Bonds plus 48 days’ interest calculated at a rate of 12% per annum based upon a 365-day year. The Letter of Credit
(subject to any reductions and reinstatements as provided therein) supports the payment when due of the principal
of, Purchase Price and interest on the 2010A Bonds.
The Letter of Credit will automatically expire on the earliest to occur of the close of business by the Bank
on: (i) February 8, 2013 (as extended from time to time) (the “Stated Expiration Date”); (ii) the earlier of (A) the
date which is 15 days after the 2010A Bonds have been converted to a rate other than a Weekly Rate or (the
“Conversion Date”) or (B) the date on which the Bank honors a drawing under the Letter of Credit on or after the
Conversion Date; (iii) the date which is five days following receipt from the Trustee of a certificate in of termination
as set forth in the Letter of Credit; (iv) the date on which the final Stated Maturity Drawing for the 2010A Bonds is
honored by the Bank; and (v) the date which is 15 days following receipt by the Trustee of a written notice from the
Bank specifying the occurrence of an Event of Default or Event of Termination under the Letter of Credit and
Reimbursement Agreement, and directing the Trustee or Paying Agent to cause a mandatory tender of the Bonds
(the earliest of the foregoing dates herein referred to as the “Termination Date”). “Business Day” is defined in the
Letter of Credit to mean any day other than (a) a Saturday or Sunday, (b) a day on which banks located (1) in the
city in which the principal office of the Trustee is located, (2) in the city in which the office of the Bank at which
drawings hereunder are to be honored are located, (3) in the city in which the corporate trust office of the Trustee at
which the Bonds may be tendered for purchase by the holders thereof is located, or (4) in the city in which the
principal office of the Remarketing Agents are located, are required or authorized to remain closed or (c) a day on
which The New York Stock Exchange is closed. Subject to the terms of the Letter of Credit, the Stated Amount
may be from time to time reduced and/or reinstated or adjusted.
All Drawings (as defined in the Reimbursement Agreement related to the Letter of Credit) under the Letter
of Credit will be paid with the Bank’s own funds. While in effect, the Letter of Credit entitles the Trustee to draw
on the Letter of Credit, on such dates and at such times as specified therein. Each Drawing honored by the Bank
under the Letter of Credit will immediately reduce the Stated Amount by the amount of such Drawing, subject to
reinstatement on the terms set forth in the Letter of Credit.
The obligation of the Bank to honor any Drawing under the Letter of Credit pursuant to the Reimbursement
Agreement is subject to, among other things, the condition precedent that the Bank receive (or waive the receipt of,
in the sole discretion of the Bank) a Drawing certificate in strict conformity with the Letter of Credit; and the
Termination Date has not occurred. Upon receipt of such Drawing certificate, the Bank will transfer to the Trustee,
in immediately available funds, the amount stated in the Drawing on such date.
Summary of Certain Provisions of the Reimbursement Agreement
The Commission and the Bank entered into the Reimbursement Agreement, which, among other things, sets
forth terms and conditions whereby the Commission is required to repay the Bank any amounts drawn by the Trustee
under the Letter of Credit and grants to the Bank a lien and charge on, Net Revenues, equal in right of payment to the
obligations of the Commission to pay principal of and interest on the Bonds.
The Reimbursement Agreement and the other documents, agreements and instruments described therein secure
the obligations of the Commission to the Bank. The Bank will issue the Letter of Credit pursuant to the terms and
provisions of the Reimbursement Agreement.
The Reimbursement Agreement contains various affirmative and negative covenants and events of defaults,
including, among other things, delivery of financial statements and reports.
24